[Comments-org-renewal-18mar19] Comment by Telepathy, Inc. in opposition to the terms of the proposed .org agreement renewal

[Nat Cohen]

I am writing to oppose the terms of the proposed .org renewal agreement
for the reasons offered in the comment submitted by the Internet Commerce
Association at
https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q2/000006.html
and
as discussed in the CircleID article "The Spurious Justifications for
Eliminating Price Caps on .org and other Legacy Domains" located here:
http://www.circleid.com/posts/20190423_spurious_justifications_for_eliminating_caps_on_legacy_domains/

The legacy domain names, including .info and .org, were handed over to
ICANN as trustee to manage for the public benefit.  ICANN has betrayed that
trust by turning .org over to an organization, that no matter how worthy
its mission, will have the unchecked ability to extract vast sums from the
base of .org registrants, many of which are non-profits with worthy
missions in their own right.

Of the various rationale given in support of this policy, *that ICANN does
not want to "become a price regulator" is the most disingenuous and
pernicious*.  ICANN as a *trustee of the public interest* for the legacy
domains is, and always has been, and unless it abdicates its
responsibility, will continue to be a setter of prices within the legacy
extensions.  Has ICANN throughout its history been overstepping its
authority when it entered into agreements that included terms governing
pricing?

The US Department of Justice viewed ICANN's role as creating competitive
mechanisms, such as putting registry agreements out for rebid, to keep
prices low for registrants, and failing that, the DOJ clearly stated it was
ICANN's role to manage the TLDs in a manner that "*safeguards the interests
of registrants* in obtaining high quality domains *at the lowest possible
prices*." (
https://www.icann.org/en/system/files/files/baker-to-dengate-thrush-18dec08-en.pdf
)

The DOJ expressly stated that *ICANN should set price caps* in the absence
of putting out registries for competitive bid:

"Because ICANN's proposed registry agreement lacks any [pricing]
safeguards,... ICANN should consider revising the proposed registry
agreement, at least for instances where there is not competitive bidding to
operate a new gTLD, to include provisions designed to limit the ability of
the registry operator to exercise market power, i.e., *price caps*..."

The DOJ called for agreements that included *a maximum price and
limitations on price increases*:

"ICANN's requests for bids [to operate a new gTLD] should expressly call
for bids to specify *an initial maximum price* that would be charged by the
operator for domain registrations, as well as* limitations on price
increases *over time.."

The DOJ knew that relying on market forces and competition were not
adequate where registries had market power.  The DOJ found that .com and
other gTLD registry operators had *market power*:

"our investigation of the .com agreement found evidence that *other gTLD
registry operators may possess a degree of market power*.  The market power
inherent in other gTLDs is less than the market power in .com, but is still
material..."

and

"Further, *the introduction of new gTLDs is not likely to constrain the
market power by existing gTLDs*..."

On the one hand we have a registry talking point that ICANN should not
"become a price regulator".  On the other hand, the US Department of
Justice is castigating ICANN for not doing enough to protect registrants
since "ICANN has not come close to fulfilling its obligations to employ
competitive principles in its management of TLD registry operations."  As a
consequence, since ICANN has created an environment where registries have
market power "*ICANN should take steps to protect consumers from the
exercise of market power by gTLD operators*".

The nature of developed domain names as online brands, means that once
established there is no substitute for that domain name and the registrant
is locked into continued use of that domain name as long as it wants to
continue using its brand.  ICANN is creating a situation akin to the USPTO
allowing a private company the right to charge a trademark owner whatever
price it wishes for continued use of its trademark or else the trademark
owner would be forced to abandon the rights to that trademark.

I believe this commenter expresses the issue well:

This is basically sanctioning extortion, a domain name is closer to a
trademark, except a company is apparently not allowed to own it... instead
they *must keep "leasing" their trademark from a registrar*. What do I get
for improving my domain name (making my business known, improving public
trust, running a well known blog/ news site)? Clearly higher rent costs on
that same name.

https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q2/001439.html


The proposed agreement is not pro-competitive.  It is a set up for
extortion.  This approach should be rethought with appropriate price
safeguards established.
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