[registrars] .biz, .info & .org comments

[Marcus Faure]

As far as I remember, there has been a proposal for this already. We
should vote on that either via boardrooms or in Sao Paolo

Yours,
Marcus


> Thanks Marcus.  The problem we run into is that under our current Rules
> of Procedure, it takes about 3 weeks to issue an official RC statement.
> We have been talking about adding a fast track motion section to our
> Rules.  Are you interested in working on such a change?
> 
> Best,
> 
> Jon
> 
> -----Original Message-----
> From: Marcus Faure [mailto:faure at globvill.de] 
> Sent: Friday, August 25, 2006 4:34 AM
> To: Nevett, Jonathon
> Cc: Registrars Constituency
> Subject: Re: [registrars] .biz, .info & .org comments
> 
> 
> Jon,
> 
> I think most of us agree with the basics of what you are suggesting as
> basically we face the same issues that we considered problematic in
> the context of .com. It might be a good idea to issue an official RC
> statement. 
> 
> Yours,
> Marcus
> 
> 
> 
> > I have just filed the following comments on the proposed .biz, .info,
> &
> > .org agreements.  Please send in comments on your own or feel free to
> > endorse my comments by sending e-mails to the following addresses:  
> > 
> >  
> > 
> > biz-tld-agreement at icann.org
> > 
> > info-tld-agreement at icann.org
> > 
> > org-tld-agreement at icann.org
> > 
> >  
> > 
> > Thanks.  
> > 
> >  
> > 
> > Jon
> > 
> >  
> > 
> >  
> > 
> > On behalf of Network Solutions, LLC, I am writing to raise several
> > concerns with the proposed registry agreements to operate the .biz,
> > .info and .org registries.  This is not a comment on whether the
> > existing registry operators should continue to operate the respective
> > registries.  Indeed, we have no concerns with the performance of the
> > current operators.  Rather, our comments are limited to concerns with
> > the timing, approval process, and substance of certain provisions of
> the
> > draft agreements.   
> > 
> >  
> > 
> > I.                   ICANN Should Not Renew These Agreements At This
> > Time
> > 
> >  
> > 
> > Renewal of these proposed gTLD registry agreements at this time is
> > premature.  There is simply no policy or contractual reason that
> compels
> > ICANN to make a final decision now on these proposals:  The current
> .org
> > registry agreement does not expire until 2009 and the .biz and .info
> > agreements expire in 2007.  While the agreements may have been part of
> > longstanding contract negotiations, such discussions were conducted in
> > private without community input.  From the perspective of the ICANN
> > community, therefore, this is a fast-track review, which is
> unwarranted
> > for a number of reasons.
> > 
> >  
> > 
> > First, many of the provisions of the proposed .com Registry Agreement
> > with VeriSign about which concerns have been raised also are included
> in
> > these proposals.  For example, the automatic renewal provision in the
> > proposed .com agreement apparently has been used as a model for these
> > agreements.  In light of the fact that the U.S. Department of Commerce
> > ("DOC") - with the advice of the U.S. Department of Justice - is
> > reviewing the proposed .com agreement with a specific emphasis on the
> > competitive implications of the renewal and pricing provisions, it
> would
> > be inappropriate to renew the agreements at this time without waiting
> > for the benefit of these agencies' views.  Furthermore, ICANN should
> not
> > attempt to fast-track approvals of other gTLD agreements with similar
> > anti-competitive provisions, such as automatic renewal, in a misguided
> > attempt to add support for its proposed .com agreement. 
> > 
> >  
> > 
> > Second, the DOC also is considering whether to renew its Memorandum of
> > Understanding ("MOU") with ICANN.  As part of this process, the DOC
> > called for public input regarding ICANN's agreements with registries,
> > recognizing that the MOU also "contains a series of core tasks for
> > ICANN, which include establishing appropriate relationships with the
> > organizations that form the technical underpinnings of the Internet
> > [Domain Name System ('DNS')]."  Registry agreements are among ICANN's
> > most important contractual relationships underpinning the DNS.
> Because
> > the anticipated amendment of the MOU is inextricably intertwined with
> > the proposed registry agreements, the agreements should not be
> > considered until the underlying MOU is renewed.  
> > 
> >  
> > 
> > Third, ICANN's Generic Names Supporting Organization ("GNSO"), which
> is
> > responsible for developing ICANN policies, has established a Task
> Force
> > to review certain contract issues related to the renewal of registry
> > agreements.  The Task Force is working toward providing policy
> > recommendations to the ICANN Board on issues including (1) whether
> ICANN
> > should enter into registry agreements with automatic renewal
> provisions;
> > (2) whether there should be price caps for registries with and without
> > market power; and (3) whether a registry operator with market power
> > should pay ICANN more, less, or the same in a per-name fee than a
> > registry without market power.  Considering that this policy review is
> > well underway and that these contracts don't expire until 2007 (.info
> &
> > .biz) and 2009 (.org), there is no justification for this blatant
> > attempt to circumvent ICANN's bottom-up policymaking process.  
> > 
> >  
> > 
> > Troublingly, the proposed contracts provide a limitation against
> > subsequent consensus policies changing these contracts in regard to
> > most, if not all, of the issues under consideration by the Task Force.
> > Therefore, even if ICANN reaches consensus on these policy issues,
> they
> > would not apply to these registries if the contracts are approved
> prior
> > to the implementation of the policy.  Therefore, ICANN should not
> > finalize essentially permanent contracts that cannot be changed by
> > Consensus Policy, while key policy issues remain under review by the
> > Task Force.  
> > 
> >  
> > 
> > Recommendation - ICANN should await the outcome of the MOU and .com
> > review processes, as well as the ongoing GNSO Task Force evaluation,
> > before approving virtually irrevocable renewals.  If for some reason
> > ICANN elects not to wait for guidance from these reviews for the two
> > agreements that expire in 2007, the renewals either (1) should be
> > limited to one or two-year extensions of the existing contracts to
> allow
> > for the incorporation of inputs from these processes, or (2) should be
> > renegotiated to provide that any approved Consensus Policies that come
> > out of the existing GNSO Task Force should apply to these registries.
> > 
> > 
> >  
> > 
> > II.                Automatic Renewal Forgoes Competition and Threatens
> > Security
> > 
> >  
> > 
> > The proposed agreements provide for "automatic renewal" provisions,
> > virtually guaranteeing that the agreements would continue in
> perpetuity.
> > The only limitation on renewal is in the event of a repeated and
> > material breach of one of just three sections of the agreement.  Even
> > then, renewal would occur unless an arbitrator has ruled that an
> > operator has breached one of the three provisions and such breach had
> > not been cured within a reasonable time after the arbitrator's award.
> > The operators' control of the registries would be, therefore, of
> likely
> > infinite duration, and ICANN would be abandoning the bulk of its
> > responsibilities to oversee the operations of the registry operators
> and
> > to protect the DNS.  
> >  
> > 
> > The automatic renewal provisions in these agreements (and in the
> > proposed .com agreement) are very different than the renewal
> provisions
> > in the existing .biz, .info, and .org registry agreements, as well as
> > the presumptive renewal provision in the existing .com agreement.
> Under
> > the existing .biz, .org and .info registry agreements, the operator
> must
> > submit a Renewal Proposal to ICANN, which can decide to accept it at
> its
> > "sole discretion."  In the Renewal Proposal, each operator must
> justify
> > the renewal request with a detailed report on the registry operations,
> > proposed improvements or changes in price or other terms.  After a
> > requisite review period, ICANN, at its sole discretion, may seek
> > competing proposals, including a bid from the incumbent, weighing
> > factors such as its "enhancement of competition for registry
> services."
> > Again, the selection among the proposals is solely at ICANN's
> > discretion.
> > 
> >  
> > 
> > The existing .com agreement also requires VeriSign to submit a
> proposal
> > justifying why the contract should be renewed.  VeriSign would be
> > entitled to a four-year extension unless ICANN demonstrates that it is
> > in material breach of the agreement (which ICANN has alleged in the
> > pending litigation), it has not have provided a "substantial service"
> to
> > the Internet community in its performance, or it seeks to charge a
> price
> > higher than $6 (which it has in the proposed .com contract).  
> > 
> >  
> > 
> > By comparison, under the proposed renewal terms for .biz, .info and
> > .org, ICANN's discretion on renewal is essentially discarded.  There
> is
> > no longer any requirement on the operator to justify a renewal claim
> > based on performance, eliminating another important safeguard for
> ICANN
> > oversight.  Further, ICANN would no longer be able to seek competing
> > proposals at its discretion, let alone in the case of a material
> breach
> > of any, but three, provisions of the agreements.  
> > 
> >  
> > 
> > Awarding a registry contract to an operator in perpetuity is neither
> the
> > only means nor the best means to ensure infrastructure investment.
> The
> > term of the contract should be of sufficient length for the registry
> > operator to recover investments, whereas the assurance of a perpetual
> > franchise can easily lead an operator to believe that investment is
> > unnecessary.  Clearly, registry operators have been willing to invest
> in
> > and develop registries awarded without automatic renewal provisions.
> > Regular review of past performance and rebidding motivates good
> behavior
> > by ensuring accountability and the security and stability for the
> > registry.  The assurance of perpetual renewal of any TLD reduces
> > incentives to comply with ICANN's policies and principles and provide
> a
> > secure and stable registry.
> > 
> >  
> > 
> > ICANN staff members inappropriately cite the current .net and the
> > proposed .com registry agreements as justification for approving these
> > automatic renewal provisions in the .biz, .org, and .info agreements.
> > First, the .com agreement has not been approved and is facing a great
> > deal of scrutiny and criticism related to ICANN's proposed renewal
> > provision.  Second, as we all know, the .net agreement was approved
> and
> > signed by ICANN with no public review at all on these points and
> should
> > not be used as a fair precedent for future agreements. 
> > 
> >  
> > 
> > We do not oppose renewing registry agreements when the registry
> operator
> > has performed well during the term and the renewal is on competitive
> > terms.  ICANN's ability to carry out core principles such as promoting
> > security and stability, competition, transparency and accountability
> are
> > significantly restrained by automatic renewal provisions that
> foreclose
> > future review in all but the most extreme of circumstances.  One of
> the
> > best market mechanisms to introduce competition into registry
> > operations, and to ensure exemplary performance by registry operators,
> > is through competitive bidding for renewals.  The proposed renewal
> > provisions abandon any opportunity for ICANN to use that mechanism in
> > the future, for no reason.
> > 
> >  
> > 
> > Recommendation - ICANN should eliminate the automatic renewal
> provisions
> > in the proposed registry agreements.  To ensure meaningful contract
> > oversight by ICANN and to motivate good behavior, registry operators
> > should be required to justify renewals and meet certain continuing
> > qualifications and standards.  At a minimum, before ICANN approves a
> > contract with an automatic renewal provision, it should publicly seek
> a
> > panel of competition and security experts to opine on whether
> automatic
> > renewal provisions in sole source contracts create an incentive or
> > disincentive to invest in a registry.
> > 
> >  
> > 
> > III.             The Proposed Termination Provisions are Too Weak
> > 
> >  
> > 
> > Unlike the proposed .org, .biz and .info agreements, the terms of the
> > existing registry agreements provide a menu of options under which
> ICANN
> > can terminate the agreements before they expire.  These termination
> > rights provide ICANN with important tools to exercise its oversight
> > function, which unfortunately would not exist if the proposed
> agreements
> > were approved.
> > 
> >  
> > 
> > For example, under the current agreements, ICANN could terminate if
> the
> > registry operator is convicted of a felony or other serious offense
> > related to financial activities, is disciplined by the government for
> > dishonest acts or misuse of others' funds, or if an officer is
> convicted
> > as a result of financial malfeasance and is not immediately removed.
> > Similarly, ICANN could terminate if the operator has made a "material
> > misrepresentation, material inaccuracy, or materially misleading
> > statement" in its TLD application.  Indeed, ICANN has the right to
> order
> > sanctions against the registry operator if it failed to fulfill
> certain
> > contractual obligations related to the performance of the registry.
> The
> > failure to pay such sanctions could result in termination of the
> > agreement.  
> > 
> >  
> > 
> > The proposed terms of the .org, .biz and .info renewals, however,
> would
> > substantially circumscribe ICANN's termination rights as referenced
> > above, limiting ICANN to circumstances in which the operator is in
> > material breach of one of only three provisions and it fails to cure
> the
> > breach, loses at arbitration or court, and still has not corrected the
> > breach at the direction of an arbitration decision or court order.
> > 
> >  
> > 
> > Recommendation - Termination provisions should support ICANN's
> oversight
> > responsibilities.  The termination provisions in the proposed
> agreements
> > would enable ICANN to essentially abdicate its oversight in this area.
> > ICANN should strengthen its termination rights in these three proposed
> > agreements, as well as in all new registry agreements.  
> > 
> >  
> > 
> > IV.              Price Controls Should Be Addressed as a Policy
> Question
> > 
> >  
> > 
> > The existing .org, .biz and .info registry agreements contain pricing
> > controls on registry services that the proposed renewals would lift,
> > without explanation or analysis.  Instead, ICANN staff merely asserts
> > that the proposed lifting of these price controls came after
> "extensive
> > consideration and discussion."  Furthermore, it is unclear whether or
> > not the proposed contracts permit differential pricing by domain name.
> > Unfortunately, to date there has been no public consideration and
> > discussion of these important policy issues regarding pricing for gTLD
> > registries.  ICANN staff has not provided any policy analysis or
> > rationale for the lifting of the price caps, nor any evidence that
> > external experts have been consulted to arrive at the conclusion that
> > such pricing controls should be lifted or the economic and competition
> > implications of pricing controls.
> > 
> >  
> > 
> > On behalf of ICANN, the GNSO Task Force also is studying the policy
> > question of price controls for registry services.  The issues of
> whether
> > or not price caps should be imposed and whether differential pricing
> > should be permitted are of sufficiently broad enough importance to the
> > ICANN community at large that they should be addressed with the
> publicly
> > disclosed guidance of competition experts as part of a bottom-up
> > representation policymaking process.  
> > 
> >  
> > 
> > Recommendation - ICANN should seek independent advice, including from
> > competition authorities, on whether dominant and/or non-dominant
> > registries should be subject to price caps.  This independent
> evaluation
> > should be made public for the purposes of seeking input from the ICANN
> > community.  Once this guidance is received, the ICANN community would
> be
> > in a position to determine whether price caps are appropriate for the
> > specific registries at issue.  
> > 
> >  
> > 
> > V.                 Conclusion
> > 
> > The proposed registry renewals at issue attempt to undertake by
> > contractual fiat what ICANN has yet to decide with targeted expert
> > advice that is part of a transparent decisionmaking process.  To this
> > end, the Board must ensure the GNSO, as ICANN's policy arm, is
> afforded
> > a reasonable amount of time to complete a review of contractual policy
> > issues for gTLDs.
> > 
> > The stated goal of the GNSO's Policy Development Process is to
> determine
> > "what policies are appropriate, for the long-term future of gTLDs
> within
> > the context of ICANN's mission and core values."  By comparison,
> nothing
> > in ICANN's posting for public information on the proposed registry
> > renewals addresses how the terms of the agreement would support core
> > principles such as competition, transparency, security, and
> > accountability.  
> > 
> >  
> > 
> > ICANN's interest in moving forward on these proposals long before the
> > agreements expire is perplexing in light of the long-standing concerns
> > that members of the ICANN community have raised about proposed
> > provisions such as automatic renewals.  Network Solutions has
> advocated
> > a presumption against automatic renewal and weak termination terms
> that
> > remove ICANN's ability to encourage competition and to protect the DNS
> > in the face of demonstrated "bad behavior."  
> > 
> >  
> > 
> > We urge ICANN to first address through policymaking deliberations key
> > components of these proposed agreements before executing contracts
> that
> > cannot be subsequently altered via Consensus Policy.  
> > 
> >  
> > 
>