[arin-ppml] Advisory Council Meeting Results - March 2011

Ted Mittelstaedt tedm at ipinc.net
Thu Mar 24 20:29:24 EDT 2011

On 3/24/2011 4:28 PM, David Farmer wrote:
> On 3/24/11 15:33 CDT, Ted Mittelstaedt wrote:
>> Org B can do due diligence with ARIN before the purchase and
>> if they don't and org a turns out to be a pig in a poke then
>> org B deserves what they get, in my book.
> If Org B ask ARIN about Org A, I'm not sure ARIN would tell them
> anything, at least nothing more than is already published in Whois. So
> what kind of due diligence is it that you think Org B would or should do
> with ARIN?

This is what LOAs are for.

Most likely this kind of transaction would work as follows:

Org A advertises out it's IPv4

Org B sees it and contacts Org A.  They feel each other out
until they arrive at a price that is contingent on validity.  Org
A then gives a LOI (letter of intent) listing pricing and a deadline,
and also gives Org B a LOA allowing Org B to act as Org A's agent
in dealing with ARIN.  Org B gives Org A an NDA that promises not to
reveal Org A's dirty underwear to the world.

Org B submits the LOA to ARIN and ARIN reports back that everything
is OK.  Org B then pays Org A and gets handed a second LOA that allows
them to execute all the paperwork with ARIN.  Org B does all that and
signs the transfer docs for Org A and then gets the IP addressing from

A LOA can easily be written to legally designate Org B to act as
a proxy for Org A in dealing with ARIN.  If ARIN refused to divulge Org
A's dirty underwear to Org B then it would be the same as ARIN refusing
to divulge Org A's dirty underwear to Org A.

Anyway, this is how you would do it directly.  Another way would be
to find an impartial 3rd party attorney that both Org A and Org B would
sign over power of attorney to and the 3rd party would escrow the
money and handle the transaction.  But of course this just fattens up
the wallets of some lawyer who probably already has swimming pools full 
of money anyway.

Both of these scenarios are legally equivalent from ARIN's POV of
having Org A ask about itself, or Org B ask about itself.  Org B can
say to ARIN "I'm the legal equivalent of Org A, are these numbers
I think I have, valid"  Then Org B can say to ARIN "I'm going to
execute a transfer for XXX numbers and here is my utilization
justification will you allow it?"  If the answer to both questions
is yes, then your good to go.

Obviously ARIN could require Org A to sign an LSRA as a condition of
transfer, but this is a pointless exercise, since if an LOA was in place 
Org B could do that for Org A anyway, 2 minutes before signing
the transfer paperwork and the actual RSA.  And in any case the RIR's
incentive is to get the numbers out of Org A's control since Org
A is just sitting on them doing nothing with them.

Although several posters said that if they were Org B they could
insist Org A sign a LSRA before selling, this is actually not a likely 
scenario.  The reason is that Org A is in the power
position.  They have something that Org B cannot get from anyone else.
They have absolutely no incentive to deal with the RIR. If Org B doesn't 
like this then they can stuff it and go elsewhere for their IPv4 
addresses.  Org A's can simply sit back and do nothing at all and let 
Org B do all the gruntwork and deal with the RIR and the paperwork.

I've been in these scenarios with other stuff that Org A is so lazy
that they don't even bother writing the LOA and the LOI and the NDA they 
make Org B do that, then if they like it they sign it.

It's like buying a used car without a title.  I've bought a number of
them like this over the years.  You save a lot of money because most
buyers are scared to death if the stuff isn't handed to them on a silver 
platter.  The DMV will tell you if the VIN is stolen and if it is not, 
then you buy the car and file for lost title.  But the chances of 
getting the seller to actually bother to file for lost title themselves 
is almost nil.


>> Ted
>> On 3/24/2011 8:26 AM, Chris Grundemann wrote:
> ...
>>> A scenario for illustration:
>>> Org B needs addresses.
>>> Org A tells Org B that they have addresses.
>>> Orgs A and B come to an agreement on price, etc.
>>> Org A writes an LoA for Org B to begin using the addresses.
>>> Org A files an LRSA with ARIN.
>>> ARIN finds that Org A is not authorized to hold nor transfer the
>>> addresses in question.
>>> Org B now has a number of problems...
>>> - wasted time
>>> - wasted money
>>> - using addresses that they must return
>>> - etc...
>>> I am not trying to argue one way or the other, just pointing out the
>>> piece of this that eluded me at first in case others missed it as
>>> well.
>>> ~Chris

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