Speaking of Standards

With the end of IPv4 address allocations, it’s no surprise to see that blocks of the remaining IPv4 addresses will be put up for sale. In this case, though, I was surprised by the buyer. Nortel Networks, Inc., has petitioned the bankruptcy court to allow it to sell a block of 666,624 IPv4 addresses to none other than Microsoft for the nice price of $7.5 million.

The court document makes for interesting reading, and says this about the address block in question (“NNI” = “Nortel Networks Inc”):

The Internet Numbers consist of 666,624 IPv4 Numbers that were allocated to NNI’s predecessors in interest in the 1990s, which entities were ult imately merged into NNI. Of the 666,624 IPv4 Numbers proposed to be transferred to the Purchaser pursuant to the Agreement, 470,016 are available for immediate use by the Purchaser (the “Initial Legacy Numbers”), and the remaining 196,608 are currently being used in connection with the provision of transition services to existing purchasers of Nortel’s business lines, and would not be transferred to the Purchaser until those respective agreements terminate later this year (the “Subsequent Legacy Numbers”)

It also shows that the folks involved with Nortel’s bankruptcy realized that they had an asset here that was worth shopping around:

NNI began actively marketing the Internet Numbers in late 2010, following its research into the potential value of the assets and the opportunities to realize such value. …

On behalf of the Seller, Addrex forwarded solicitation materials to over eighty (80) potential purchasers in early December, 2010. The Seller signed non-disclosure agreements with fourteen (14) potential purchasers, who were then provided access to an electronic data room containing summary financial information, an initial process letter, chain of custody information, and draft agreements. The Seller received bids in January, 2011 from four (4) potential purchasers who bid for the entire portfolio of Internet Numbers, along with three (3) addit ional bids for less than all of the Internet Numbers. Pursuant to the bid process letter, the bids included a full markup of the draft sale agreement.

With the result of that process being this agreement for sale to Microsoft.

Given the end of IPv4 availability, my first response was to wonder why they didn’t go for an auction, but that, too, is addressed:

The Debtors believe that the sale of the Internet Numbers to the Purchaser without an auction is the best way to maximize value for their estates. As described above, the proposed Agreement is the result of an effort by Nortel to market the interests to numerous potential bidders and the Purchaser was selected as the highest and best bidder following the marketing process. Based on this marketing process, the Debtors have concluded that it is unlikely the Debtors would realize a higher purchase price for the Internet Numbers that would warrant the costs and delays associated with a further formal auction process.

I would wonder, though, if that decision was made before the actual end of IPv4 allocations back in February.

Regardless… I expect we’ll see more of this kind of thing going on as IPv4 addresses become scarcer commodities.

Note that this is a request to make the sale. The sale has not happened yet and there is a hearing on the matter coming up on April 26, 2011. So there still could be changes. (A fact pointed out by the President and CEO of ARIN in a comment to a post on another site.)

Note, too, that this nets out at around $11.23 / IP address, a fact pointed out by other posts.

Image credit: quinnanya on Flickr

Related posts:

1. Watch LIVE the 9:30am IPv4 Address Exhaustion Announcement by IANA, ICANN, ISOC
2. Shall we use “IPcalypse” or “IPocalypse” for the hype around the IPv4 address exhaustion?
3. XKCD Comic Takes on IPv6 and IPv4 Address Exhaustion
4. Point, Counterpoint: Should There Be A Free Market for IPv4 Addresses?
5. And So Begins The Last Dance of IPv4…

Tags: IPv4

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