[arin-ppml] Policy Proposal 108: Eliminate the term license inthe NRPM

michael.dillon at bt.com michael.dillon at bt.com
Wed Feb 17 12:48:09 EST 2010

> > Not if you understand the history of IP addressing. They 
> have always 
> > been loaned out to organizations who have technical
> A loan is a conditional transfer of property rights. 

I did not say "a loan was made", I said they have been
loaned out. Whether or not this loaning out constitutes
a conditional transfer of property rights depends entirely
on the nature of what was transfered, plus the nature of 
the agreement.

If I owned a male horse and loaned it to you for a day
at no charge, to impregnate your mare. Then at the end
of the day, even though a horse is clearly an object
of commerce which is bought and sold and whose ownership
is registered, nevertheless you no longer have any
right whatsoever to that horse. If you try to sue me
because the mare did not get pregnant, then you will
lose, because the nature of the agreement did not 
specify that you can keep the stallion until the mare
is pregnant.

Similarly when ARIN loans out IP addresses, the recipient
doesn't end up with much. They have no guarantee that they
can earn a profit on those addresses, indeed they have no
guarantee that other ISPs will route traffic for those
addresses. About all that ARIN does assert is that you can
configure those addresses into an IP network device, and
they will make it hum. You may not like the sound of the
hum, but that is not ARIN's problem.

The rights that are gained with an ARIN allocation are 
so restricted, and so minimal, that it is hard to see
how they could be interpreted as a property right or what
benefit anyone would get (other than lawyers) from any
attempt to apply property right law to IP address allocations.

> You can make any assertions you like about social ontology 
> ("not property") but that doesn't change the basic reality of 
> what is going on. A loan, lease or assignment always confers 
> specific rights upon the recipient of a resource and retains 
> specific rights for the person making the 
> loan/lease/assignment.

That is precisely why ARIN does not allocate any IP addresses
until the recipient has signed the RSA. If there is any doubt
as to the recipient's legal status, they have to sign another
RSA, just to be sure. This happened to us when the acquisition
of Radianz by BT went from a paper exercise to a reorganization
of people and corporate entities. Since it wasn't entirely clear
that the RADIANZ Americas, Inc. corporate entity was the same
one that had signed the RSA many years ago, we had to sign one
again a couple of allocations back.

If you want to see what specific rights are conferred, look
at the RSA. It's right here
and it has a short section entitled NO PROPERTY RIGHTS.

> Categorical, ideological assertions that addresses are "not 
> property" does nothing to clarify, or make more reasonable 
> and just, the conditions users and organizations face when 
> receiving addresses from ARIN.

Of course not. That's why the language is in both ARIN policy
and in the signed contract. Listen to the judge, man. He said
that if you didn't want the numbers without the property 
rights, you shouldn't have signed the dadburned contract.
But seein' as how you went ahead and signed the goldarned
thing, you ain't got no PROPERTY rights and if you show
your face in this courtroom again, it will be thutty days
or thutty dollars for you, sir!

> As I said before, this is because you have a rigid concept of 
> property rights and seem to be unaware of how that term is 
> used by people in law, economics, regulatory economics, and 
> policy. I respect your knowledge of the technical 
> configuration of routing and addressing, I just think in this 
> area you don't know what you're talking about. 

Oh, I do know what I am talking about, because I have discussed
this very issue with lawyers, including ARIN's esteemed counsel,
and more to the point, I have READ THE RSA TEXT. 

> > However, the ARIN contracts do not grant exclusive 
> assignment in the 
> > way that you are using the term.
> Now we are getting somewhere more reasonable. Yes, contracts 
> can be structured to allow the parties more or less rights, 
> more or less exclusivity, more or less transferability. But 
> that is a choice. So lets have a discussion about that.

Why? The RSA is not a derivatives contract. I have read the actual
text used in real-world derivatives contracts. They are very
complex contracts, much more complex than the RSA. We are not
talking about simple factoring of receivables here.

> It is 
> obvious that ARIN does not allow free transferability of the 
> rights it assigns, but this is just a policy decision it 
> makes and that policy could be modified in hundreds of ways. 

ARIN is not at liberty to do anything it chooses. Something as
fundamental as you are suggesting would have to be coordinated
with the other RIRs and involve IANA approval as well.

> > ARIN grants exclusivity
> > only insofar as they guarantee to you that they will not grant the 
> > same addresses to any other party. But your right to use 
> the addresses 
> > is always strictly limited to technical needs, and when 
> those needs go 
> > away, you no longer have a right to the addresses.
> > This is one of the reasons why ARIN contracts cannot be used to 
> > exchange property rights.
> Except, of course, when one business buys another (an obvious 
> exchange of property rights). 

No, that is NOT an exception. If one business buys the network
of another, then yes, the technical need for the addresses is
also transfered, however simply changing business ownership is
not sufficient. It is common in business sales, for the current
assets of the business (and liabilities) to be split in such a 
way that the new owner does not take all. 

This is why section 8 of the NRPM says this:

   Number resources are nontransferable and are not 
   assignable to any other organization unless ARIN 
   has expressly and in writing approved a request 
   for transfer. ARIN is tasked with making prudent 
   decisions on whether to approve the transfer of 
   number resources.

And later on in Section 8:

   ARIN will consider requests for the transfer of 
   number resources in the case of mergers and 
   acquisitions upon receipt of evidence that the 
   new entity has acquired the assets which had, 
   as of the date of the acquisition or proposed 
   reorganization, justified the current entity's 
   use of the number resource.

--Michael Dillon

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