[arin-ppml] IPv4 Transfer Policy Change

Mike Burns mike at nationwideinc.com
Sat May 21 22:29:56 EDT 2011

Hi Rudolph,

I considered restricting this proposal to legacy transfers, and I think these are the most fraught with trouble for Whois due to the uncertain legal rights that legacy holders have to transfer addresses without notifying ARIN.

Right now it is not ARIN policy that the seller of legacy addresses is required to sign an LRSA, but the purchaser must sign some form of RSA.

I decided to try to extend this policy to include addresses currently under RSA in an attempt to bring RSA holder rights more in alignment with those of legacy holders, by removing the utilization requirement for addresses held under RSA for 12 months.

I just think that overall, it would make for a better future if we can end the class schism between legacy and non-legacy holders. It seems that ARIN's yearslong efforts to induce legacy holders to sign an LRSA have borne little fruit, so I attempted to increase the inducement to legacy buyers to sign an RSA, not an LRSA, when they make a purchase. 

Since this would give legacy address buyers the right to resell their addresses to anybody, and the right to purchase needs-free, it was my intention that these buyers would see registration in Whois as outweighing any negative effect of signing an RSA.

But maybe I bit off too much, and I should have limited my proposal to recognizing needs-free transfers of legacy holders only.

But I suppose my answer to your question is if we allow the legacy buyer to purchase needs-free, but require them to sign an RSA which currently gives ARIN the right to revoke for underutilization, the needs-free aspect is threatened by an immediate post-purchase revokation by ARIN.


  ----- Original Message ----- 
  From: Rudolph Daniel 
  To: arin-ppml at arin.net 
  Sent: Saturday, May 21, 2011 11:24 AM
  Subject: Re: [arin-ppml] IPv4 Transfer Policy Change

  Question: What would be the effect of removing the needs requirement for the transfer of resources from a legacy holder;  and  any transfer from the legacy holder signs an RSA as mandatory requirement and thus remove LRSA. 

    No, this is an incorrect understanding of the ruling. The Plzak declaration is also
    not the final word on the subject. The exclusive right to transfer means that nobody
    else has the right to transfer them. It does not mean that they can be transfered
    regardless of policy or that ARIN must recognize a transfer outside of policy in the
    ARIN database.

    Legacy addresses were issued to a particular party for a particular purpose. Upon the end
    of that purpose or that party, they should be returned and are no longer legacy addresses.
    In the case of a transfer to a successor in interest through acquisition or merger, in some
    cases, the legacy status has been preserved, but, this is rare. In most cases, the receiving
    organization has been required to sign an ARIN standard RSA.

    It works this way... Legacy status is the intersection of the holder and the resources which
    were registered together by a registry preceding the RIR system. Once either of those
    conditions ceases, the resources are no longer in legacy status (in most cases).

    ARIN has an obligation to continue providing services to records with legacy status so long
    as that legacy status remains under the original terms of issue.

    ARIN has the right to reclaim addresses from defunct legacy organizations.

    > Given this, legal legacy transfers can occur where the purchased amount may not meet ARIN's need requirement.

    Not true. At least not if they want to be recognized by ARIN and have the transfer registered
    in whois.

    > If the buyer cannot meet the requirement, he will not register the addresses, although I have argued he will likely want the addresses registered to reflect his ownership of their rights.

    The unregistered addresses become subject to reclamation since they are no longer in
    use by the original organization under the original terms of issue.

    > But if there is no needs requirement, the disincentive is removed, the registration takes place, and the buyer signs an RSA.

    Ah, so you are once again confusing incentive with removal of disincentive. I can see how, to a limited extent, this
    might provide less of a disincentive for the recipient of a transfer from a legacy holder to register the transfer, but,
    I don't see how this is anything other than redundant to your point 1.

    > My proposal also reduces the disincentive to sign the RSA, as it removes the utilization requirement and frees the buyer to resell the addresses to anybody, with or without need. (Unless that buyer already has transferred a /12 equivalent).

    Yes, by neutering the RSA, you have removed some disincentives to sign it. However, I don't see neutering the RSA
    as a net positive in that regard. The community put section 12 into policy for a reason.

    > So I believe the net effect of the proposal is to make the RSA more attractive, and reduce the disincentive for registration of legacy transfers which do not meet the needs test.

    There is no such thing as a legacy transfer. There is a transfer of resources from a legacy holder, but, absent an
    awkward situation involving litigation these will almost always result in the space being handled as non-legacy
    if the transfer is recognized by ARIN.

    > Remember, these are the intentions of the proposal, although I know you disagree with my legal interpretation, and thus the effect.

    Yes... Your legal interpretation being contrary to statements made by ARIN counsel and John Curran, I
    am inclined to believe that it is not correct and therefore the effect of your proposal differs from your
    claimed effects.

    >> 3. Provides for explicit protections against review audits for RSA holders after one year, bringing RSA rights more in accord with LRSA rights.
    >> Uh, yeah, I don't see that as a good thing. Quite the opposite. However, I do agree that it is an intended
    >> consequence of the proposal.
    >>> 4. Reduces transaction costs for transferers
    >> I believe it will actually increase them.
    > The intent of the proposal is that transactional costs related to the needs analysis can be avoided. These may be large or small. I suppose you mean the prices will be higher due to speculation, though.

    Yes, I believe that the net price of the transaction will increase substantially. Further, the cost of
    needs analysis is built into the ARIN transfer fee which I do not think will change significantly
    as a result of this proposal. So, no price reduction and likely price increase. Doesn't look like
    a savings to me.

    >>> 5. Reduces ARIN costs for needs analyses
    >> Agreed, but, not necessarily something I see as a beneficial aspect.
    >>> 6. Aligns ARIN policy with most possible interpretations of the legal rights of legacy holders
    >> No, aligns ARIN policy with one possible interpretation of the legal rights of legacy holders.
    >> IMHO, not even the most probable one.
    > See "exclusive right to transfer" and the Plzak declaration that ARIN has no authority over legacy addresses.
    > Would it be fair to say "Aligns ARIN policy with legal interpretation most friendly to legacy holders?"
    > My point being this alignment presents the lowest risk toARIN of being sued for tortious interference in a contract.

    You have already been told multiple times that your interpretation of the words "exclusive right to transfer"
    is not correct. The Plzack declaration was substantially modified by later rulings in the Kremen case.

    >>> 7. Imposes a yearly limit on needs-free transactions intended to prevent cornering.
    >> Yes, but, this limit is effectively a no-op because anyone can create multiple entities needed
    >> to accomplish enough /12 transfers to meet their desires.
    > I trust ARIN staff to detect these with the same diligence applied to needs tests and section 12 reviews.

    It doesn't matter. If they are different organizations, ARIN can't claim that they aren't different organizations
    for policy purpose just because it's clear that they were created for the purpose of doing an end-run on
    the policy. ARIN must interpret the policy as written, even if that interpretation appears absurd, as in
    the case of the single aggregate clause in the transfer policy.


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