Over on the ARIN Public Policy Mailing List (PPML), a debate is raging about whether the Nortel-Microsoft sale of IPv4 addresses took place under ARIN's Specified Transfer Policy. We understand why ARIN's staff wants to spin it that way, but find it amazing that this debate has lasted more than a few minutes. It's obvious to those who have followed the story and read the documents that ARIN's transfer policy was not a factor in this sale. But in an attempt to contribute facts to the debate we provide here, verbatim, the Amended and Restated Asset Sale Agreement between Nortel and Microsoft. This is the redline version which shows the modifications ARIN was able to secure by intervening in the bankruptcy proceeding.

The document clarifies several issues. It shows that there was an agreement to sell the IPv4 addresses dated March 16 that was concluded without ARIN, and which never mentioned ARIN or its policies at all. After ARIN intervened some language in the  contract was modified. The new April 13 agreement notes only that ARIN was notified of the sale; that Microsoft agreed to enter into an LRSA with it, and that “Other than entry into the LRSA, no Consent from ARIN or any other regional internet registry is required for the purchase of Seller’s Rights…”

Conspicuously absent: there is no reference whatsoever to ARIN's Specified Transfer Policy.There is no reference to ARIN's Number Resources
Policy Manual (NRPM), or to the NRPM's section 8.3, which deals with transfers. There is no agreement of any kind between Nortel and ARIN. There is no reference to a needs assessment; indeed, the statement that “no consent from ARIN…is required for the purchase” implies that Microsoft did not require a “needs assessment.” Furthermore, the issuance of an LRSA to the buyer is not consistent with ARIN's transfer policy.

In short, ARIN was a hanger-on to this agreement, not the policy setter. And despite ARIN's obvious efforts to moderate the property rights claims of the seller and buyer, it succeeded only in placing a few figleafs here and there. Case closed.

3 thoughts on “Here's the actual sale agreement between Nortel and MSFT

  1. Milton –
    I believe it generally understood that this transfer was conceived independently of ARIN; I do not believe that anyone has asserted anything to the contrary.
    The fact that utilization of IPv4 address space will improve is indeed a benefit to the entire community, but only if done in compliance with the community's policies.
    ARIN specifically reiterated the existence of the Specified Transfer policy and our commitment to following it when processing transfer requests. We were also able to work with Microsoft so that the transfer of IP resources to Microsoft took place using the established policies. As you quoted above “Other than entry into the LRSA , no Consent from ARIN or any other regional internet registry is required for the purchase of Seller’s Rights…” Ergo, entry into the registration services agreement with ARIN is indeed required.
    I do agree it would would be great if future transfers considered the community developed policies earlier in the process; you should pleased to know that ARIN continues to perform outreach and education on the applicable Internet number resource policies which should make that much more likely to happen in the future.
    John Curran
    President and CEO

  2. Mr. Curran,
    It appears from my reading of the Asset Sale Agreement the author references that at least some of ARIN's established policies were clearly violated in this transfer. If no form of RSA, legacy or otherwise, was entered into by Nortel, and Microsoft only entered into an LRSA, as the court documents clearly indicate, then the transfer is in violation of 802.3. Given that, it also brings other claims of policy-adherence into question. Skeptical minds will surely doubt the validity of an after-the-fact “needs analysis”.
    I'm sure ARIN felt the need to create an appearance of propriety about this highly visible transaction and was able to negotiate minor concessions from Microsoft (i.e. the change of the word “sale” to an equivalent, but less offensive definition), in return for blessing the transaction and allowing Microsoft to pretend to be a good community player. To more discerning eyes, however, this smacks of special treatment obfuscated by feel-good press releases (Obama-care exemption, anyone?).
    Have we established precedent here for any legacy holder, without signing an RSA, to transfer his IP space to a buyer if that buyer only signs an LRSA? I'm sure ARIN's help desk would balk, and if the seller referenced the Nortel sale, the response would be “we aren't at liberty to discuss particular transactions”…

  3. E.W –
    ARIN didn't feel any need other than to reiterate the availability of the specified transfer policies. It was the involved parties which filed revised documents in court which better reflected ARIN's role in registration.
    Regarding precedent, that is indeed difficult to determine, since this matter was already defined by existence within a court proceeding. As I noted earlier, it would be best if future transfers considered the community developed policies as early in the process as possible, including the requirement that the resources come under a registration service agreement.
    John Curran
    President and CEO

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