[arin-ppml] Recommended Draft Policy ARIN-2016-9: Streamline Merger & Acquisition Transfers

[Scott Leibrand]

I support this policy: I think that text being removed has reached the end of its useful life, and keeping it in place will do more harm than good in the future. 

Scott

> On Mar 21, 2017, at 10:31 AM, ARIN <info at arin.net> wrote:
> 
> On 16 March 2017, the ARIN Advisory Council (AC) advanced the following Draft Policy to Recommended Draft Policy status:
> 
> ARIN-2016-9: Streamline Merger & Acquisition Transfers
> 
> The text of the Recommended Draft Policy is below, and may also be found at:
> 
> https://www.arin.net/policy/proposals/2016_9.html
> 
> You are encouraged to discuss all Recommended Draft Policies on PPML
> prior to their presentation at the next ARIN Public Policy Consultation
> (PPC). PPML and PPC discussions are invaluable to the AC when
> determining community consensus.
> 
> The PDP can be found at:
> https://www.arin.net/policy/pdp.html
> 
> Draft Policies and Proposals under discussion can be found at:
> https://www.arin.net/policy/proposals/index.html
> 
> Regards,
> 
> Communications and Member Services
> American Registry for Internet Numbers (ARIN)
> 
> 
> 
> Recommended Draft Policy ARIN-2016-9: Streamline Merger & Acquisition Transfers
> 
> Date: 21 March 2017
> 
> AC assessment of conformance with the Principles of Internet Number
> Resource Policy:
> 
> The proposal is technically sound and enables fair and impartial number policy by ensuring that new organizations involved in mergers and acquisitions may conduct such activities with a reduced procedural burden from ARIN. The staff and legal review noted three issues, all of which have been addressed. There is support for the proposal on PPML and concerns that have been raised by the community regarding the proposal on PPML or elsewhere have also been addressed.
> 
> Problem Statement:
> 
> In some 8.2 transfer situations, the current policy has the unwanted side effect of encouraging organizations not to update registration data, thus leaving the number resource in the name of a now defunct entity.
> 
> It is not uncommon for an entity which has bought another entity (with existing number resources) to leave Organizational data (Whois) in the name of the acquired company. The requirements in Section 8.2 put a justification burden on the acquiring organization, which was a legitimate protection while free pool assignments were available. It is worth revisiting Section 8.2 and looking for opportunities to simplify the policy in the interest of improving the registry data.
> 
> Consider the following:
> 
> 1. In the case where both organizations (acquirer, acquired) have justified their existing number resources from an issuer (e.g. SRI-NIC, GSI, ARIN) under the policies that were in force at the time of issuance, the number resources have already been justified once.
> 
> 2. ARIN does not customarily require organizations holding address space to document utilization except when they are asking ARIN to issue more space.
> 
> 3. Section 8.2 M&A is not asking ARIN to issue more space or provide authorization to acquire space in an 8.3 transfer. It is simply updating ARIN's database to reflect the current reality, that control of a company has changed.
> 
> Language that speaks of required return or transfer of space is of questionable enforceability in the context of the current RSA (section 6, "ARIN has no right to revoke any Included Number Resources under this Agreement due to lack of utilization by Holder").
> 
> Clauses that serve to scare organizations away from updating their information are counter to the goal of maintaining good data in Whois.
> Policy should allow ARIN staff to concentrate finite resources on ascertaining  chain of custody so as to minimize the chance of fraudulent transfers rather than auditing space already issued.
> 
> Policy statement:
> 
> Delete the bullet point in NRPM 8.2 that reads:
> 
> For mergers and acquisition transfers, the recipient entity must provide evidence that they have acquired assets that use the resources to be transferred from the current registrant. ARIN will maintain an up-to-date list of acceptable types of documentation.
> 
> Add this statement to list of conditions for clarity:
> 
> "The Internet number resources being transferred as part of an 8.2 transfer will not be subject to an additional needs-based assessment during the process of the 8.2 transfer."
> 
> Add this conditional to the bottom of 8.2 for linguistic clarity:
> 
> "AND one or more of the following:
> 
> The recipient must provide evidence that they have acquired the assets that use the resources to be transferred from the current registrant.
> 
> OR
> 
> The recipient must show that they have acquired the entire entity which is the current registrant."
> 
> Remove the following paragraph from Section 8.2 of the NRPM:
> 
> ARIN will proceed with processing transfer requests even if the number resources of the combined organizations exceed what can be justified under current ARIN transfer policy as defined in section 8.5. In that event, ARIN will work with the resource holder(s) to transfer the extra number resources to other organization(s) or accept a voluntary return of the extra number resources to ARIN.
> 
> These four changes will leave Section 8.2 looking like this:
> 
> 8.2. Mergers and Acquisitions
> 
> ARIN will consider requests for the transfer of number resources in the case of mergers, acquisitions, and reorganizations under the following conditions:
> 
> The current registrant must not be involved in any dispute as to the status of the resources to be transferred.
> 
> The new entity must sign an RSA covering all resources to be transferred.
> 
> The resources to be transferred 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 Internet number resources being transferred as part of an 8.2 transfer will not be subject to an additional needs-based assessment during the process of the 8.2 transfer.
> 
> AND one or more of the following:
> 
> The recipient must provide evidence that they have acquired the assets that use the resources to be transferred from the current registrant.
> 
> OR
> 
> The recipient must show that they have acquired the entire entity which is the current registrant.
> 
> Comments:
> 
> Timetable for implementation: Immediate
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