  Network operators are reluctant to share traffic data due to security and
privacy concerns. Consequently, there is a lack of publicly available traces
for validating and generalizing the latest results in network and security
research. Anonymization is a possible solution in this context; however, it is
unclear how the sanitization of data preserves characteristics important for
traffic analysis. In addition, the privacy-preserving property of
state-of-the-art IP address anonymization techniques has come into question by
recent attacks that successfully identified a large number of hosts in
anonymized traces.
  In this paper, we examine the tradeoff between data utility for anomaly
detection and the risk of host identification for IP address truncation.
Specifically, we analyze three weeks of unsampled and non-anonymized network
traces from a medium-sized backbone network to assess data utility. The risk of
de-anonymizing individual IP addresses is formally evaluated, using a metric
based on conditional entropy.
  Our results indicate that truncation effectively prevents host identification
but degrades the utility of data for anomaly detection. However, the degree of
degradation depends on the metric used and whether network-internal or external
addresses are considered. Entropy metrics are more resistant to truncation than
unique counts and the detection quality of anomalies degrades much faster in
internal addresses than in external addresses. In particular, the usefulness of
internal address counts is lost even for truncation of only 4 bits whereas
utility of external address entropy is virtually unchanged even for truncation
of 20 bits.
