<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:st1="urn:schemas-microsoft-com:office:smarttags" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv=Content-Type content="text/html; charset=us-ascii">
<meta name=Generator content="Microsoft Word 11 (filtered medium)">
<o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags"
name="PersonName"/>
<!--[if !mso]>
<style>
st1\:*{behavior:url(#default#ieooui) }
</style>
<![endif]-->
<style>
<!--
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0pt;
margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman";}
a:link, span.MsoHyperlink
{color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{color:purple;
text-decoration:underline;}
p.MsoPlainText, li.MsoPlainText, div.MsoPlainText
{margin:0pt;
margin-bottom:.0001pt;
font-size:10.0pt;
font-family:"Courier New";}
@page Section1
{size:612.0pt 792.0pt;
margin:72.0pt 77.95pt 72.0pt 77.95pt;}
div.Section1
{page:Section1;}
-->
</style>
</head>
<body lang=EN-US link=blue vlink=purple>
<div class=Section1>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>Registrar Colleagues:<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>The Registrar Constituency .com Working Group set up by
Bhavin has drafted the following statement. Please feel free <st1:PersonName
w:st="on">to</st1:PersonName> sign on <st1:PersonName w:st="on">to</st1:PersonName>
the statement and <st1:PersonName w:st="on">to</st1:PersonName> post it <st1:PersonName
w:st="on">to</st1:PersonName> the ICANN website -- <st1:PersonName w:st="on">to</st1:PersonName>
post comments, please send an e-mail <st1:PersonName w:st="on">to</st1:PersonName>:
<font color=navy><span style='color:navy'><a
href="mailto:settlement-comments@icann.org"
title="mailto:settlement-comments@icann.org">settlement-comments@icann.org</a></span></font>.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>Thanks.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>Jon <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>We, the undersigned registrars, recommend against ICANN
signing the<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>proposed .com Registry Agreement. The following
reflects those issues<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>that are of foremost concern <st1:PersonName w:st="on">to</st1:PersonName>
registrars:<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'> <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>1. New Registry Services <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>The proposed .com contract locks ICANN and VeriSign in for
three years<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>on a version of the consensus policy covering the standards
and process<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>for consideration of new registry services. The new
registry services<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>consensus policy process that recently was approved by the
ICANN board<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>is untested, and it is likely that the ICANN community will
need <st1:PersonName w:st="on">to</st1:PersonName><o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>refine and improve it after it is implemented. A three
year lock will<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>unnecessarily handcuff ICANN and the ICANN community.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>We recommend the deletion of Sections 3.1(b)(v)(B) and
3.1(b)(v)(C), and<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>allowing the existing ICANN policy development and
refinement process <st1:PersonName w:st="on">to</st1:PersonName><o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>be used during the term of the agreement.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'> <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>2. Registry Agreement Renewal<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>According <st1:PersonName w:st="on">to</st1:PersonName> its
own Bylaws and the Memorandum of Understanding between<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>ICANN and the United States Department of Commerce, one of
ICANN's core<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>missions is <st1:PersonName w:st="on">to</st1:PersonName>
promote competition. We understand that the current .com<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>contract contains a "presumptive renewal"
provision, which by its nature<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>hinders competition. The proposed .com contract,
however, goes much<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>farther than the existing contract by strengthening the
presumptive<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>renewal and termination provisions on behalf of VeriSign,
thereby making<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>it virtually impossible for VeriSign <st1:PersonName w:st="on">to</st1:PersonName>
lose the .com registry and<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>impossible <st1:PersonName w:st="on">to</st1:PersonName>
reap the benefits of competition. VeriSign should be<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>appointed as the administra<st1:PersonName w:st="on">to</st1:PersonName>r
of the .com registry, not its owner.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>We recommend reverting from Section 4.2 of the proposed .com
agreement<o:p></o:p></span></font></p>
<p class=MsoPlainText><st1:PersonName w:st="on"><font size=3 face=Arial><span
style='font-size:12.0pt;font-family:Arial'>to</span></font></st1:PersonName><font
size=3 face=Arial><span style='font-size:12.0pt;font-family:Arial'> the renewal
terms of Section 25 of the current .com agreement, which<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>requires a six month review of a "Renewal
Proposal" provided by VeriSign<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>and only under terms that are in "substantial
conformity with the terms<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>of registry agreements between ICANN and opera<st1:PersonName
w:st="on">to</st1:PersonName>rs of other open TLDs.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>. ." ICANN also should strengthen the
termination provisions currently<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>contained in Section 6.1 of the proposed agreement by using
the relevant<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>text from Sections 16(B-E) of the current agreement.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'> <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>3. Registry Fees<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>The proposed .com contract would permit VeriSign <st1:PersonName
w:st="on">to</st1:PersonName> unilaterally raise<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>registration fees by 7% per year. The existing .com
contract and all<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>gTLD registry agreements (other than the .net agreement with
VeriSign,<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>which was entered in<st1:PersonName w:st="on">to</st1:PersonName>
without community input in violation of ICANN's<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>Bylaws) require the registries <st1:PersonName w:st="on">to</st1:PersonName>
cost-justify any price increases. In<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>an industry where the economics suggest that fees should be
going down<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>when there is competition, it is particularly troublesome
and<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>anti-competitive <st1:PersonName w:st="on">to</st1:PersonName>
grant a monopolist or a single source provider the<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>unilateral right <st1:PersonName w:st="on">to</st1:PersonName>
increase costs without justification.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>Unfortunately, these fee increases would result in cost
increases <st1:PersonName w:st="on">to</st1:PersonName><o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>individual registrants. We note that in the recent
competitive process<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>for .net, VeriSign significantly lowered its registry
fees. There is no<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>reason for unilateral cost increases for the larger .com
registry. <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>We recommend that the Board delete the current text of
Section<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>7.3(d)(ii) and replace it with Section 22(A) of the current
.com<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>agreement requiring VeriSign <st1:PersonName w:st="on">to</st1:PersonName>
justify and ICANN <st1:PersonName w:st="on">to</st1:PersonName> approve any<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>proposed fee increase. If there is a dispute between
ICANN and VeriSign<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>over a cost increase, ICANN should have the right <st1:PersonName
w:st="on">to</st1:PersonName> seek competitive<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>price proposals from other registry opera<st1:PersonName
w:st="on">to</st1:PersonName>rs <st1:PersonName w:st="on">to</st1:PersonName>
ensure that the ICANN<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>community receives the benefits of competition.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>4. New ICANN Fees<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>ICANN and VeriSign propose a new ICANN fee that would be
assessed on<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>VeriSign and passed on <st1:PersonName w:st="on">to</st1:PersonName>
the registrars. This fee would result in<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>excess of approximately $150 million dollars <st1:PersonName
w:st="on">to</st1:PersonName> ICANN, and would be an<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>end run around the existing ICANN budget approval
process. As proposed,<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>ICANN staff has removed an important check on the ICANN
budget process.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>All ICANN fees that impact registrants should be subject <st1:PersonName
w:st="on">to</st1:PersonName> the ICANN<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>budget approval process and should not only be the subject
of<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>negotiations between VeriSign and ICANN. <o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>In addition <st1:PersonName w:st="on">to</st1:PersonName>
the changes suggested in number 3 above, we recommend the<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>removal of Sections 7.3(g-h) in the proposed contract.
Any transaction<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>fees that ICANN needs <st1:PersonName w:st="on">to</st1:PersonName>
collect from registrars (and hence registrants)<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>should be assessed through the current transaction fees
charged by ICANN<o:p></o:p></span></font></p>
<p class=MsoPlainText><st1:PersonName w:st="on"><font size=3 face=Arial><span
style='font-size:12.0pt;font-family:Arial'>to</span></font></st1:PersonName><font
size=3 face=Arial><span style='font-size:12.0pt;font-family:Arial'> registrars
and be subject <st1:PersonName w:st="on">to</st1:PersonName> the existing
budget approval process.<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>While we understand the desire <st1:PersonName w:st="on">to</st1:PersonName>
finalize the litigation, it should not<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>be done so without a sufficient review process nor at the
expense of<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>major tenets of ICANN's mission. In its current form,
it is a bad<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>settlement for ICANN, the ICANN community, and the
public-at-large. We,<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>therefore, urge the ICANN Board <st1:PersonName w:st="on">to</st1:PersonName>
take advantage of the six month<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>review of a "Renewal Proposal" contemplated in the
existing .com<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>agreement, which doesn't expire until November 2007.
The Board should<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>use this time <st1:PersonName w:st="on">to</st1:PersonName>
review the complicated contracts in their entirety,<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>have a public comment period commensurate with the
importance of the<o:p></o:p></span></font></p>
<p class=MsoPlainText><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial'>issue, and make the changes necessary <st1:PersonName w:st="on">to</st1:PersonName>
improve the agreement.<o:p></o:p></span></font></p>
</div>
</body>
</html>