[Comments-com-amendment-3-03jan20] Regarding the Proposed Amendment 3 to the .COM Registry Agreement

[Kellie Peterson]

As the Head of Domains for an ICANN accredited registrar I take issue with
the process by which this amendment has been negotiated and several changes
proposed.

Verisign operates from a position of extraordinary privilege with the
presumptive renewal of its highly lucrative contract to operate both .COM
and .NET TLDs. TLDs which represent three-quarters of all gTLD
registrations. This proposed amendment for the .COM contract, having been
negotiated without the prior consultation of the wider ICANN community,
represents a significant blind spot of the ICANN organization to uphold the
multi-stakeholder model.

The .COM TLD has benefited from a nearly three-decade head start on the
majority of its gTLD competition. During that time the company has enjoyed
the benefits of Moore’s Law, and yet still sought wholesale price increases
for its services. It is deeply flawed to believe that competition will
restrain wholesale prices. There is no competition for this specific
wholesale product as there might be with a physical good. Verisign has to
compete with no one, however, Registrars must compete on the razor’s edge
of what Registrants are willing to pay. Consider that Verisign has taken
every price increase opportunity afforded it.

Beyond objecting to the removal of price caps while Verisign maintains
presumptive renewal rights it is alarming to allow the ability to raise
prices for “extraordinary purposes” including the implementation of
Consensus Policies, etc. This is simply unacceptable. This is part of the
business of running a registry and technology company.

Finally, the proposed amendment would remove the stay on price caps through
2024 which ICANN and Verisign committed to in 2016:

(b) Section 7.3(d)(i) of the Agreement is hereby deleted and replaced in
its entirety by the following new Section 7.3(d)(i): “(i) from the
Effective Date through November 30, 2024, US $7.85;”

What good are such obligations if they are simply reverted at their
request? This erodes what is left of the trust the community has in the
ICANN organization.

Under prior agreement, Verisign was completely barred from operating a
Registrar. The lifting of this prohibition with the stipulation that they
may not have "a controlling or greater than 15% interest in a registrar
accredited in their TLD (.COM)" is not enough to prevent unfair
competition. You are failing to account for the very real possibility that
Verisign could sell domain names as a reseller (which does not require
accreditation) - even under cost - and still be profitable based on the
wholesale rate the third party Registrar must pay back to Verisign.

The $20MM USD payment Verisign is extending to ICANN for use “to support
ICANN's initiatives to preserve and enhance the security, stability, and
resiliency of the DNS” is questionable at best, and far worse in less
charitable optics when considering the shortfall of the ICANN budget. There
is a complete lack of accountability behind this payment and without
oversight, there is no guarantee it will be used for anything other than
general ICANN operations.

I urge ICANN to heed the community commentary regarding this proposed
amendment. The Internet community cannot afford the continued discounting
of our collective concerns as it has become the norm each time a public
comment period is opened.

Sincerely,

Kellie Peterson
Head of Domains
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