FAQ – APIDT IPv4 Address Space Sale Process

1. Who designed APIDT’s IPv4 address space sale process?

International consulting firm KPMG and legal firm Maddocks were commissioned to advise the Trust in the design the sale process . Both teams involved have extensive experience in conduct and probity of large commercial transactions, including sales of public assets.

2. What were the principles for designing this sale process?

APIDT asked KPMG and Maddocks to design a process for sale of address space which would:

• Ensure an open, transparent and efficient process, meeting high standards of probity and accountability
• Maximise the funds raised to support the objectives of the Trust
• Ensure the opportunity to participate in the sale is open to multiple organisations, through a structured, staged approach.

3. What is a ‘Sale by Tender’?

The process chosen for the sale of the address space is called a ‘Sale by Tender’, and it was chosen in line with the guiding principles above. In a ‘Sale by Tender’ process, any participant can submit an offer, or tender, to purchase the item which is for sale.  The best tender or tenders are then chosen, according to known selection criteria, before the sale (or sales) then go ahead.

4. Is this an auction?

No. Like an auction, a Sale by Tender is a ‘competitive’ process, however in a Sale by Tender, each participant can only submit a single offer.  The successful offer (or offers) are then selected, and there is normally no chance for offers to be increased.

5. How is the purchase price set?

The price for IPv4 addresses is established by the market, and by the highest bid in this Tender process.  There is no official independent authority on the IPv4 market, but information may be obtained from recent industry reports available online. Tenderers are encouraged to complete their own pricing research and analysis before submitting a bid.

6. Who selects the best offer?

The successful offers will be finally selected by the Trustee, after assessment and shortlisting by KPMG and Maddocks according to established selection criteria and a process which ensures objectivity and independence.

7. What are the selection criteria?

The primary selection criteria for the successful tenders will be the price offered, on a per-address basis, along with any specified contractual terms or requirements.  For more information, please refer to the Sale Process document.

8. Who can submit a tender?

Any organisation which is incorporated in any part of the APNIC service region, or any existing member of APNIC, or of an APNIC-affiliated NIR member, will be able to participate. Regarding APNIC membership, more information is available here.

9. How will this sale be conducted?

The sale of address space by the APIDT will be conducted in three stages.  This method was chosen to ensure the opportunity to participate in the sale was open to multiple organisations. 

In each stage, one block of addresses will be offered for sale, as follows:

Stage 1: 43/9
Stage 2: 43.128/10
Stage 3: 43.192/11

10. How will the address space be subdivided for sale?

In each stage, the block of address space being sold will be subdivided into a number of smaller blocks, and tenders (offers) may be submitted for one or more of those blocks.

11. How much address space can I bid for?

In each stage, each participant will be able to submit a single offer, for any number of available blocks at the participant’s chosen price. Additionally, participants may indicate whether or not they are prepared to accept a smaller number of blocks, at that same price. It will not be possible to submit multiple, complex or conditional offers.

For more information, please refer to the Sale Process document.

12. Can I bid in multiple rounds of the sale?

Any participant who is successful in one stage of the sale will not be permitted to participate again in subsequent stages; however if unsuccessful, they may participate again in later stages.

13. What are the contractual terms?

The proposed contract of sale (Standard IPv4 Address Space Transfer Agreement) was published with the Request for Tenders document on 25 May 2020. Participants may state if they accept these terms, or if they propose variations, which must be fully detailed. Any variations will be considered in the selection process.

14. Can the contractual terms be changed?

A tenderer is not required to accept all the terms of the Standard IPv4 Address Transfer Agreement; and may submit a marked-up revision of that agreement, or its own proposed agreement. If it does so, then the tenderer’s proposal will be evaluated against other competing tenders, and against the Standard IPv4 Address Transfer Agreement, and if considered unacceptable or less desirable, may be rejected for that reason.

15. Will there be an opportunity for negotiation?

While the Trustee will reserve the right to negotiate with any short-listed tenderer (among other rights), it is not the present intention of the trustee to invite negotiations. Tenderers should proceed on an assumption that their tender will be considered final, and the Trustee will make its selection accordingly.

16. What is the selection process?

After validating and de-identifying the tenders, KPMG and Maddocks will jointly select a shortlist of tenders which are candidates to receive a transfer under APNIC transfer policies. Any shortlisted tenders that still require pre-approval will be required to submit a transfer application to APNIC or a NIR for assessment under the APNIC transfer policy.

17. What about the APNIC ‘needs assessment’?

Every address transfer requires a ‘needs assessment’ and approval under APNIC policies before it can proceed.  If a successful tenderer already has a “pre-approval” for the required amount of address space, then the transfer (and sale) can proceed without further review; however if not, then a transfer request will need to be submitted and approved by APNIC following the usual process before the transfer (and sale) can proceed.

18. What is the timing of the sale?

For Stage 1, tenders opened on 25 May 2020, and must be submitted by 22 June 2020 at 17:00 (UTC+10). It is expected that the shortlisting will be completed by 20 July 2020, and transfers completed by 28 August 2020. These dates are subject to variation according to circumstances.

Stages 2 and 3 will follow with similar timelines, with an aim to complete the entire process by the end of 2020. The dates for Stages 2 and 3 will be announced shortly.

19. How are conflicts of interest or potential conflicts of interest among WIDE Board and APNIC EC Members being handled?

Every person involved in the address sale process – including KPMG, Maddocks, APIDT, APNIC, and WIDE – have been asked to declare any conflict or potential conflict of interests. Those individuals found to have a conflict have not, and will not, participate in any business related to the development of the sale process and any internal discussions around the sale.

20. What other probity measures are in place for the sale?

APIDT is committed to a fair, transparent and accountable IPv4 address sale process, free from corruption and conflict of interests (or perception of these things).

KPMG will de-identify bidders in the early stages of the tender process and will ensure the tender process is conducted as agreed. Maddocks Lawyers will support by providing legal and probity advice.

Tenderers must not seek the assistance of staff, contractors, directors or EC members of KPMG, Maddocks, APIDT, APNIC or WIDE. All questions regarding the process will be channeled to APIDT via tenders@apidt.org or Scott Guse, KPMG. Any question and answer about the sale process that is regarded as material will be publicly published on www.apidt.org.

21. How is the sale and transfer completed?

To complete the sale after payment is received, the Trust will request the transfer(s) of the addresses, which would be processed and registered in the normal way by either APNIC or the relevant APNIC NIR.  The registry’s public whois database will then provide details of the new holder (the successful purchaser) of each transferred address block.

22. Will the purchase prices be disclosed?

The tender process will be confidential, and the Trustee does not intend disclosing the transaction price for individual transfers. However, for transparency the Trustee may disclose the total amount raised from any stage, if this does not disclose the amount paid in individual transactions.  The Trustee does intend to disclose the total funds raised after the entire sale process of all three stages is completed.

23. What happens after the sale?

After the transfers are completed, the address space is subject to normal APNIC address management policies, including the payment of APNIC annual membership fees.

Important note: APNIC membership fees are independent from and additional to the price paid for purchase of the address space.  More information on APNIC fees is available here.

24. Where can I find more background information about the sale?

The previous announcements and FAQ have more detail on the sale background.