IPv4 Mergers, Acquisitions, Reorganizations and Relocations

Original Language Español Date Published 11/03/2019 Last Modified 29/03/2019
Last Call for Comments Period Does not apply Date Ratified Does not apply Implementation Date Does not apply
Status Under discussion Download TXT PDF XML DOCX
See other versions 1.0 2.0 (compare)

Authors

Name: Jordi Palet Martinez
Email: jordi.palet@theipv6company.com
Organization: The IPv6 Company

Name: Edwin Salazar
Email: edwin.salazar@wifitelecom.ec
Organization: Wifitelecom

Name: Edmundo Cázarez
Email: edmundo.cazarez@nic.mx
Organization: NIC.MX

Proposal Data

Policy Type: LACNIC
Id: LAC-2019-2
Last version: 2
Presented at: LACNIC 31 Presentations:

Summary

This proposal modifies the mechanism for updating IPv4 resource records in case of company mergers, acquisitions, reorganizations and relocations.

Rationale

The merger, acquisition, reorganization or relocation of companies or parts of companies is a common occurrence in the Internet and technology sector, among both operators and other businesses.

This is also true for other types of organizations and sectors, all of them end-users of the RIRs.

The text of the existing policy is vague in its description of these activities and only considers mergers and acquisitions, without specifying whether it applies to complete or partial mergers or acquisitions.

This proposal seeks to simplify the text and clarify that all cases are valid. It also proposes leaving the supporting documentation up to the staff, as such documentation will not necessarily be the same in every case.

Text

Current text
2.3.2.17. Mergers, Acquisitions or Sales of ISPs or End Users

LACNIC's policies do not recognize the non-authorized sale or transfer of IPv4 address space and therefore such transfers shall be considered invalid, with the exception of those subject to the provisions of section 2.3.2.18, such transfers shall be considered invalid.

Should an ISP or end user change ownership due to a merger, sale, or acquisition, the new entity shall register these changes with LACNIC. If the name of the company is modified, legal documentation validating this change of name shall be submitted.

The information that may be requested includes, but is not limited to, the following:
• A copy of the legal document validating the transfer of assets.
• A detailed inventory of all assets used by the applicant for maintaining the IPv4 address space in use.
• A list of the applicant's clients that use portions of the allocated space.

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New text

2.3.2.17. Mergers, Acquisitions, Reorganizations or Relocations

Because LACNIC's policies do not recognize the non-authorized sale or transfer of assigned or allocated resources, such transfers will be considered invalid, with the exception of those subject to the provisions of section 2.3.2.18.

Nevertheless, LACNIC will process and register any IPv4 resource transfer that occurs as a result of a partial or complete merger, acquisition, business reorganization or relocation, regardless of whether the resources are held by an ISP or an end-user.

To initiate this change and proceed with the registration, legal documentation must be submitted which, at the discretion of LACNIC, supports the operation. Examples of such documentation include:
• A copy of the legal document validating the transfer of assets.
• A detailed inventory of all the assets used by the applicant for maintaining the resources in use.
• A list of the applicant's clients using the resources.

In addition, the need to maintain all the resources must also be justified, forcing the return of the surplus resources if applicable or, alternatively, the transfer of such surplus resources to third parties under the policies in force (2.3.3 and 2.3.4.). When resources are to be returned, LACNIC will determine the corresponding conditions and deadline.

Additional Information

In extreme cases, the non-existence of this policy might result in this issue being taken to the courts if LACNIC refuses to update the registry for any type of resources, and, based on the legislation currently in force in Uruguay, the courts might force LACNIC to modify the registry. We believe that having this policy would avoid this situation and allows maintaining control according to the wishes of the community. It would also avoid legal costs to both parties involved.

Timetable

Immediate implementation

References

Similar policies with varying levels of “openness” exist in other service regions such as ARIN and RIPE.

In addition, an equivalent policy proposal has been submitted in APNIC and another proposal is being prepared for AfriNIC.
• https://www.ripe.net/publications/docs/ripe-682
• https://www.arin.net/policy/nrpm.html#eight2

Public Comments by LACNIC Staff

LACNIC STAFF´S IMPACT ANALYSIS - Proposal LAC-2019-2 - versión 2

LACNIC Staff's Interpretation of the Proposal
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Applicability
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This proposal would apply in the case of mergers, acquisitions, reorganizations or relocations of organizations that have received IPv4 address assignments.

Modifications to the current text
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The proposal modifies subsection 2.3.2.17. Mergers, Acquisitions, Reorganizations or Relocations. The resulting text included in the Policy Manual would be as follows:

Because LACNIC’s policies do not recognize the non-authorized sale or transfer of assigned or allocated resources, such transfers will be considered invalid, with the exception of those subject to the provisions of section 2.3.2.18.

Nevertheless, LACNIC will process and register any IPv4 resource transfer that occurs as a result of a partial or full merger, acquisition, business reorganization or relocation, regardless of whether the resources are held by an ISP or an end-user.

To initiate this change and proceed with the registration, legal documentation at the discretion of LACNIC must be submitted that supports the operation. Examples of such documentation include:
• A copy of the legal document validating the transfer of assets.
• A detailed inventory of all the assets the applicant will employ to continue to use the resources.
• A list of the applicant's clients using the resources.

In addition, the need to maintain all resources must also be justified. Otherwise, the holder will be required to return any surplus resources, if applicable, or, alternately, to transfer such surplus resources to third parties under the policies in force (2.3.3 and 2.3.4.). If resources are to be returned, LACNIC will determine the corresponding terms and deadline.

LACNIC Staff Comments
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1. The proposal:
1.1. Changes “IPv4 addresses” to “assigned or allocated resources.”
1.2. Changes the subsection header from “Mergers, Acquisitions or Sales” to “Mergers, Acquisitions, Reorganizations or Relocations.”

2. Does not modify the suggested legal documentation to be submitted to LACNIC.

3. Requires justifying the need to maintain all resources, establishing that any surplus resources must be returned or transferred to third parties according to the policies in force (2.3.3 and 2.3.4.). If resources are to be returned, LACNIC will determine the corresponding terms and deadline.

4. Eliminates the mention of “inter-RIR” operations previously included in version 1, which LACNIC interprets to mean that mergers, acquisitions, reorganizations or relocations between LACNIC and other regions would not be allowed.

Official Sources
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Situation on other RIRs
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- RIPE NCC
RIPE NCC does not recognize the term “Inter-RIR merger” and would accept all transfers of Internet number resources to its service region, provided they comply with the policies relating to transfers within the corresponding service region. As for Internet number resource transfers from the RIPE NCC to another service region, RIPE NCC would follow the policies in force in the region to which the resources are to be transferred.
A proposal has been under discussion since March 2017: https://www.ripe.net/publications/docs/ripe-682

- APNIC
APNIC does not allow Internet number resource transfers as the result of “Mergers and acquisitions.” A similar proposal is currently under discussion: https://www.apnic.net/wp-content/uploads/2019/03/prop-130-v001.txt

- ARIN
ARIN policies would currently be incompatible, as the proposals only address mergers, acquisitions, reorganizations and relocations. If LACNIC were to have fully reciprocal inter-RIR transfer policies with a needs-based justification, these would be compatible with the ARIN policies in force. However, the limitations on the types of resources (e.g. legacy resources) or the types of transfers (e.g. mergers and acquisitions) mean that they are not reciprocal.
ARIN processes outgoing inter-RIR transfers according to Section 8.4, Transfers for Specified Recipients.

- AFRINIC
(To be confirmed)

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