ARIN STAFF ASSESSMENT for Draft Policy 2012-8
Draft Policy 2012-8 “Aligning 8.2 and 8.3 Transfer Policy” (revised 26 November 2012)
Date of Assessment: 10 Dec 2012 (due to AC 12 Dec 2012)
1. Summary (Staff Understanding)
This draft policy would: (1) Set the minimum allocation size for M&A transfers to be no less than the original allocation size or the minimum allocation size defined in current policy (2) require there be no dispute as to the legitimacy of the current registration, (3) require the recipient to sign an RSA, and (4) require that the transferred resources be subject to ARIN policies.
A. ARIN Staff Comments
- This proposal formalizes existing staff practice. We currently require that:
- Transferred blocks to be equal to or larger than the minimum block size issued under current policy,
- That there be no dispute with respect to the current resource holder of the blocks to be transferred, and
- That the resources are placed under a RSA to complete the transfer, and hence subject to ARIN policies.
- The language of the draft policy uses the phrase “transferred resources” and “resources transferred” where it should be “resources to be transferred”
B. ARIN General Counsel - Legal Assessment
1. A number resource remnant in bankruptcy court could be less than the minimum allocation size. If that occurs it may be prudent to permit authority that a smaller remnant could be transferred under 8.2, as the resource is moving with the business assets. Since this is a 'corner case' it is not absolutely necessary it be addressed.
Not permitting smaller block transfers under 8.3 is a rationale judgment of the community, and the prior comment does not address 8.3.
2. It may be useful for the community to consider the possible impact of this policy on a recurrent factual and legal scenario that occurs under current policy. ARIN is seeing increased instances where bankruptcy orders issued by courts do not specifically address whether IP numbers are intended to be affected by the Court order (e.g. in an asset purchase agreement.) This is not difficult to address if it is the only Court order in a given bankruptcy matter. However, where multiple Court orders splitting business assets have been entered and no Court order specifically addresses which business unit has the number resources, ARIN requires greater clarity before it can process an 8.2 transfer. (This bankruptcy related problem can be avoided and 8.2 transfers facilitated by making clear that Court considers specific IP number resources associated with one or another of its Orders). The application of the proposed policy text would reinforce the necessity to require the entity seeking the 8.2 transfer to obtain a clarifying bankruptcy Court Order if the first orders are not transparent, or provide objective extrinsic proof that the numbers have been in use in a way consistent with the proposed transfer. If that is not the proponent’s intent it should be discussed further. “
3. Resource Impact
This policy would have minimal resource impact from an implementation aspect. It is estimated that implementation would occur within 3 months after ratification by the ARIN Board of Trustees. The following work would be needed in order to implement:
· Updated guidelines
· Staff training
4. Proposal Text
Date: 26 November 2012
Replace the first paragraph of section 8.2 with the following (second paragraph remains unchanged):
ARIN will consider requests for the transfer of number resources in the case of mergers and acquisitions under the following conditions:
* The new entity must provide evidence that they have acquired assets that use the resources transferred from the current registrant. ARIN will maintain an up-to-date list of acceptable types of documentation.
* The current registrant must not be involved in any dispute as to the status of the transferred resources.
* The new entity must sign an RSA covering all transferred resources.
* The transferred resources will be subject to ARIN policies.
* The minimum transfer size is the smaller of the original allocation size or the applicable minimum allocation size in current policy.
The base intent here is to lower confusion, raise clarity, and level the bar between 8.2 and 8.3 transfers. M&A transfers are distinct from specified transfers and not all of the same rules can apply - but many can and should. Therefor this policy change explicitly adds requirements which do not exist in 8.2 policy text today: Source must be the undisputed current registered holder, recipient must sign an RSA (and is subject to policy), and /24 minimum for IPv4, /48 for IPv6.
Changes following discussion at the ARIN XXX public policy meeting:
1) Changed the first bullet. This was an area for objections because it did not allow chain of custody transfers, so now instead of saying that the purchased company must be the current registrant holder it simply says that there can not be any dispute as to who the registered holder is.
2) Removed the " such that their continued need is justified" text from the second bullet, this was another area of debate at the meeting and justification is already covered in paragraph 2 of 8.2 (which remains unchanged).
3) Swapped the first two bullets.
4) Added "covering all transferred resources" to the RSA bullet, for clarity.
5) Swapped the third and fourth bullets.
3) Altered the IPv4 minimum allocation to bring it in line with 4.10 resources and any future exceptions.
Changes following PPML discussion in November 2012:
a) 'used' was changed back to 'use' in the first bullet to prevent a backdoor around specified transfers leveraging asset liquidation.
b) The third bullet was shortened for clarity (removed the word 'current' before 'policy')
c) The minimum transfer sizes are now pinned to policy rather than hard-set.
Timetable for implementation: immediate