Nortel, in bankruptcy, sells IPv4 address block for $7.5 million

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http://blog.internetgovernance.org/blog/_archives/2011/3/23/4778509.html

Nortel, in bankruptcy, sells IPv4 address block for $7.5 million

by Milton Mueller on Wed 23 Mar 2011 10:30 PM EDT | Permanent Link |
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Wake up call for our friends in the Regional Internet Registries. Nortel, the
Canadian telecommunications equipment manufacturer that filed for bankruptcy
protection in 2009, has succeeded in making its legacy IPv4 address block an
asset that can be sold to generate money for its creditors. The March 23
edition of the Dow Jones Daily Bankruptcy Report has reported that Nortel's
block of 666,624 IPv4's was sold for $7.5 million - a price of $11.25 per IP
address. The buyer of the addresses was Microsoft. More information is in its
filing in a Delware bankruptcy court. Now the interesting question becomes,
does the price of IPv4s go up or down from here? As the realities of dual
stack sink in, I'm betting...up.

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666,624 is kind of odd number, isn't it? That comes out to a
/13,/15,/19,/21 and a /22.

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Yeah, I was trying to work that out -- well done for persevering. :slight_smile:

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blocks that Nortel acquired over the years, presumable via corporate M&A.
However there isn't (as far as I can see) a list of the actual blocks. See
docket 5143 at http://chapter11.epiqsystems.com/NNI/docket/Default.aspx

Tony.

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Why would Microsoft need this many IP's? I could see the benefiting service providers much more.

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yay cloud.

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Microsoft runs Hotmail. Office Live and a bunch of other services you
might have heard of.

And if every common or garden snowshoer can get a /15, why can't a
legitimate corporation get some for itself? :slight_smile:

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Sounds like the pieces of their /8 that weren't in use or something like that.

Owen

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Exhibit B expressly indicates they were listed but filed under seal;
interesting to request that. Previous documents indicate they used a
third party to shop things around, who got a $200k retainer and is
getting paid 5% of the sale.

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In a message written on Thu, Mar 24, 2011 at 09:32:21AM -0400, Bret Clark wrote:

Why would Microsoft need this many IP's? I could see the benefiting
service providers much more.

I think the more interesting question is why would Microsoft pay
$7.5 million for something they can, at least for the moment, get
for free.

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That's a good question. Maybe they can't qualify under Arin rules. Another question will be: how is Arin going to handle it?

Im pretty sure that the RSA says that in the event of bankruptcy ips revert to the Arin pool. I understand that these were legacy addresses but.......

Aaron

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* Leo Bicknell

I think the more interesting question is why would Microsoft pay
$7.5 million for something they can, at least for the moment, get
for free.

A very interesting question indeed!

However, they can only get them for free from ARIN if they can document
an immediate demand. Perhaps they don't have an immediate demand, and
are simply stockpiling addresses for later use post ARIN depletion? Or
perhaps they hope to make a profit then by selling them to someone else.

Either way, it sure seems they're speculating that the market price of
an IPv4 address is going to rise to more than US$11.25.

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The *important* question is - do they *remain* legacy addresses under the
legacy address rules after the Microsoft acquisition, and thus re-sellable at a
later date? If so, we may have seen the first case of IP address speculation,
and the start of the bubble. I don't want to see how this bubble bursts..

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Just wondering if Microsoft has to justify the address space once they
change ownerships with Arin ?

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They can only get them _at all_ if they can document need. All receipt of address space, whether from the free-pool or through a transfer, is needs-based. Anything else would be removing a critical resource from use.

                                -Bill

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Anything that has ceased to be produced and has demand will go up in value. Just rename IPv4 as Pontiac GTO.

-Hank

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Docket #4435, Exhibit B has more information on the IP address
broker, Addrex, Inc., of Reston, Va. Here's the president and
related companies --

http://www.linkedin.com/pub/charles-m-lee/22/414/a94
http://www.denuo.com
http://www.addrex.net
http://www.depository.net

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* Bill Woodcock

They can only get them _at all_ if they can document need. All
receipt of address space, whether from the free-pool or through a
transfer, is needs-based.

I've understood that this claim is undisputed *only* for address space
that is covered by the ARIN LRSA or any other normal RIR agreement. (I
have no idea if that is the case for this particular address space or not.)

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They can only get them _at all_ if they can document need. All
receipt of address space, whether from the free-pool or through a
transfer, is needs-based. Anything else would be removing a critical
resource from use.

http://en.wikipedia.org/wiki/Canute

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I wonder if the bankruptcy court agrees with that. Does it have the power to order ARIN to accept this? "Send lawyers, guns, and money"...

    --Steve Bellovin, http://www.cs.columbia.edu/~smb