[arin-ppml] ARIN-prop-173 Revisions to M&A Transfer Requirements (Updated Version)

Lee Dilkie lee at dilkie.com
Thu Jul 5 18:04:06 EDT 2012


On 7/5/2012 5:43 PM, David Farmer wrote:
> I do not support this policy as written.
> However, I do support removing needs justification for all M&A transfers.
> I believe this can be simplified significantly, the legacy resource
> language is not necessary and can be eliminated.  All M&A transfers
> should not be required to demonstrate need as long as the transfer in
> question is a name or organization structure change, or a merger or
> acquisition were the number resources are transferred with all other
> assets or with a substantial portion of the assets an organization,
> especially including the equipment that utilizes the number resources
> in question.  If the number resources are the sole asset or the only
> substantial asset being transferred then an 8.3 transfer with needs
> justification should be required.
> I don't not believe it is necessary to make a distinction between
> legacy and non-legacy resources to accomplish the intended result of
> removing needs justification for M&A transfers.
> I do agree that needs justification on M&A transfers creates a
> significant disincentive for legacy resources holders to keep the
> registry properly updated.  But the policy change shouldn't be
> specific to legacy resources or resource holders, it should apply
> equally to all resources and resource holders.
> On 7/5/12 11:08 CDT, ARIN wrote:
>> ARIN-prop-173 Revisions to M&A Transfer Requirements
>> The proposal originator revised the proposal.
>> Regards,
>> Communications and Member Services
>> American Registry for Internet Numbers (ARIN)
>> ## * ##
>> ARIN-prop-173 Revisions to M&A Transfer Requirements
>> Proposal Originator - Marc Lindsey
>> Date - 5 July 2012
>> Policy type - Modification to existing policy
>> Policy term - Permanent
>> Policy Statement
>> Delete sections 8.1. and 8.2 in their entirety and replace them with the
>> following:
>> 8.1 Principles
>> ARIN will not change its registration databases to record the transfer
>> of number resources between organizations unless such transfer complies
>> with this Section 8. ARIN is tasked with making prudent, fair and
>> expeditious decisions when evaluating registration transfer requests.
>> It should be understood that number resources directly assigned or
>> allocated by ARIN are not 'sold' under ARIN administration. Rather, such
>> number resources are assigned by ARIN to an organization for its
>> exclusive use, provided the terms of the applicable Registration
>> Services Agreement between ARIN and the organization governing use of
>> such number resources continue to be met by such organization.  Number
>> resources administered and assigned by ARIN are done so according to
>> ARIN's published policies.
>> ARIN directly assigns and allocated number resources, based on justified
>> need, to organizations, not to individuals representing those
>> organizations.
>> The transfer policies in this Section 8 create certain exceptions and
>> exclusions for legacy numbers ("grandfather policies").  The grandfather
>> policies are intended to satisfy key policy objectives while promoting
>> greater participation in the ARIN community by organizations holding
>> legacy numbers.  The grandfather policies allow organizations holding
>> legacy numbers to retain some of the historic benefits attached to their
>> legacy numbers.
>> The benefits of the grandfather policies are not available for legacy
>> numbers if:
>> (a) they are voluntarily and permanently released by the original
>> registrant or its successor (or assign) to an RIR for re-issue to other
>> organizations; where such releases are supported by reliable evidence
>> retained by ARIN or the applicable RIR of the organization's informed
>> and voluntary consent or agreement to permanently release the
>> numbers; or
>> (b) the original registrant or its successor (or assign) of such number
>> enters into an LRSA or RSA expressly referencing the legacy numbers as
>> governed by the terms and conditions of an LRSA or RSA.
>> 8.2. Mergers and Acquisitions
>> When the transfer of any number resource is requested by the current
>> registrant or its successor or assign (the "new entity"), ARIN will
>> transfer the registration of such number resources to the new entity
>> upon receipt of evidence that the new entity has lawfully acquired the
>> number resources from the current registrant as the result of a merger,
>> acquisition, reorganization or name change.  ARIN will maintain an
>> up-to-date list of acceptable types of documentation.  Transfers under
>> this Section 8.2 shall not be contingent upon the new entity's
>> justification of need for the transferred numbers.
>> 8.2.1  If the transfer request pertains to non-legacy numbers or legacy
>> numbers governed by an LRSA or RSA at the time such transfer request is
>> first submitted to ARIN, the new entity shall be required to execute, in
>> its own name, an RSA covering the transferred numbers, and pay the
>> applicable registration fees.
>> 8.2.2 If the transfer request pertains to legacy numbers that are not,
>> as of the date that the request is first submitted to ARIN, governed
>> expressly by an existing RSA or LRSA, the transfer shall not be
>> contingent upon the new entity entering into or complying with an RSA,
>> LRSA or any other form of written agreement with ARIN.
>> For each transfer of legacy numbers under this Section 8.2.2, ARIN shall
>> assess, and the new entity shall pay, a one-time change charge as set
>> forth in the fee schedule unless the new entity elects, in its
>> discretion, to enter into an LRSA covering the transferred legacy
>> numbers and pays the applicable registration fees.
>> Add the following new definition to Section 2:
>> A "legacy number" means any number resource that meets the following two
>> conditions:
>> (1) the number resource was issued to an entity (other than a Regional
>> Internet Registry) or individual (either, the "original legacy holder")
>> prior to ARIN's inception on Dec 22, 1997 by or through an organization
>> authorized by the United States to issue such number resources; and
>> (2) the original legacy holder (or its legal successor or assign) of
>> such number resource has not voluntarily and permanently released the
>> number to a Regional Internet Registry for subsequent allocation and
>> assignment in accordance with such RIR's number resource policies and
>> membership (or service) agreements.
>> Rationale
>> The current version of 8.2 actually discourages legacy holders from (a)
>> updating the WHOIS database, and (b) paying fees to assist with records
>> management associated with the WHOIS database.  Some entities that
>> currently control resources do not attempt to update the WHOIS records
>> because the current transfer process puts at risk their ability to
>> retain and use their numbers.
>> Under the current process, a legacy holder or its lawful successor must
>> first prove that it is the lawful successor (which is necessary and
>> appropriate).  But it then must also justify its need to continue using
>> the numbers it obtained prior to ARIN's existence.  Once the successor
>> entity passes the needs hurdle, it is required by ARIN to execute an RSA
>> (not an LRSA) as if the numbers were newly allocated from ARIN's  free
>> pool.   The RSA (and LRSA) substantially alters the rights conveyed to
>> the successor and subjects its numbers to audit and possible revocation
>> under then-current policy.  There is, therefore, very little incentive
>> for an M&A successor entity to update the ARIN registry database
>> records.
>> For non-legacy registrants, the process should also be less burdensome
>> and uncertain.  Ensuring the continuity of a company's IP addressing
>> scheme as part of an M&A transaction should be within the control of the
>> entities directly involved.  ARIN's discretionary approval of transfers
>> in this context introduces an undesirable and unnecessary contingency.
>> Entities concerned about whether their M&A related registration database
>> record update request will be rejected by ARIN simply do not attempt to
>> fully update the records.
>> Minimizing the barriers for both legacy and non-legacy holders to update
>> the WHOIS database when changes are required to accurately reflect
>> normal corporate reorganization activities will help increase the
>> accuracy of the WHOIS database, which benefits the community as a whole.
>> Timetable for implementation - Immediate

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