[council] ICANN Board resolution on Vertical Integration - dated 5 Nov 2010

[Bruce Tonkin]

From:  http://www.icann.org/en/minutes/resolutions-05nov10-en.htm

New gTLDs - Cross-Ownership Issues for Registries and Registrars 

Whereas, at the ICANN meeting in Nairobi in March 2010, the Board passed
a resolution indicating that as a default position that no co-ownership
would be allowed in new gTLDs, but that if the GNSO were to develop a
policy on the subject prior to the launch of new TLDs that the Board
would consider using the new policy for the new gTLD program
<http://www.icann.org/en/minutes/resolutions-12mar10-en.htm#5>.

Whereas, in May 2010, ICANN published version 4 of the Draft Applicant
Guidebook, which included a note that the Board encouraged the GNSO to
recommend policy on this issue, and that the Board would review this
issue again if the GNSO did not make recommendations in time for launch
of the new gTLD program
<http://www.icann.org/en/topics/new-gtlds/comments-4-en.htm>.

Whereas, the GNSO's Vertical Integration Working Group is divided on
whether registrars should be allowed to operate registries (and
consequentially whether registries should be allowed to operate
registrars). The VI-WG's "Revised Initial Report on Vertical Integration
Between Registrars and Registries" is posted at
<http://gnso.icann.org/issues/vertical-integration/revised-vi-initial-re
port-18aug10-en.pdf> [PDF, 2.42 MB].

Whereas, the GNSO VI working group's report includes a number of
proposals to address vertical integration for the new gTLD program, but
the VI-WG has not reached consensus as to which one to recommend
<http://gnso.icann.org/mailing-lists/archives/council/msg09754.html>.

Whereas, on 23 September 2010, ICANN's Governmental Advisory Committee
submitted its comments on v4 of the Applicant Guidebook, including
comments on the issue of registry-registrar separation
<http://www.icann.org/en/correspondence/dryden-to-dengate-thrush-23sep10
-en.pdf> [PDF, 44 KB].

Whereas, the Board has had over six months since Nairobi to consider the
issue, including consideration of the GNSO VI working group's
deliberations, and community comment including at the ICANN meeting in
Brussels in June 2010.

Whereas, the current set of agreements are not balanced in that while
recent contracts prohibit registries from acquiring registrars, ICANN
has never had a rule prohibiting registrars from applying for or
operating TLDs.

Whereas, while ICANN has individually negotiated contracts that recently
have included restrictions on registry ownership of registrars,
cross-ownership provisions have varied over time and no formal "policy"
on this topic has ever been recommended by the GNSO or adopted by ICANN.

Whereas, historical contract prohibitions on registries acquiring
registrars do not provide a compelling basis for principled
decision-making.

Whereas, the Board is committed to making fact-based decisions, and has
carefully considered available economic analysis, legal advice and
advice from the community.

Resolved, (2010.11.05.02), the Board directs the CEO to include the
following principles relating to registry-registrar cross-ownership in
the forthcoming version of the Applicant Guidebook.

1. ICANN will not restrict cross-ownership between registries and
registrars. Registry operators are defined as the registry operator and
all other relevant parties relating to the registry services.


2. Registry agreements will include requirements and restrictions on any
inappropriate or abusive conduct arising out of registry-registrar cross
ownership, including without limitations provisions protecting against:

a. misuse of data; or

b. violations of a registry code of conduct;


3. These provisions may be enhanced by additional enforcement mechanisms
such as the use of self-auditing requirements, and the use of graduated
sanctions up to and including contractual termination and punitive
damages.


4. ICANN will permit existing registry operators to transition to the
new form of registry agreement, except that additional conditions may be
necessary and appropriate to address particular circumstances of
established registries.


5. ICANN will have the ability to refer issues to relevant competition
authorities.


6. ICANN will have the ability to address possible abuses that may arise
out of registry-registrar cross-ownership through the consensus policy
process.