In a surprise announcement by the ICANN Board, new generic top level domain (gTLD) registries will be able to own registrars, deciding to opt not to create new rules prohibiting registrars from applying for or operating new gTLD registries.The Board’s action follows more than two years of ICANN community discussions, which has not resulted in consensus. In making its decision, the Board carefully considered expert economic advice, community comments, and numerous proposed approaches to registry-registrar cross-ownership.The new policy reverses previous policy where there was a clear separation between the registry and registrar for each of the gTLDs that were previously approved such as .COM and .TEL.The announcement was greeted favourably.”This is the only principled decision the ICANN Board could have come to, and they deserve a lot of credit for doing it. By ‘principled,’ I mean taking ICANN’s stated institutional principles and following them to their logical conclusion,” wrote Antony Van Couvering on the MINds + Machines blog.”The decision is a surprise (more below on that) and will fundamentally change and liberate what has become a stagnant commercial ecosystem.” Van Couvering continued. “Restrictions put in place to break up the monopoly of Network Solutions had long since become a burdensome and pointless legacy. ICANN has restored the issue of competition to where it belongs by reserving to themselves the ability to ‘refer issues to relevant competition authorities.'”The decision has all kinds of consequences, most of them good:

• VeriSign or any other registry can now run a registrar (at least in theory), while GoDaddy and other registrars can run a registry.
• Brand owners that start branded TLDs won’t have to navigate a ridiculous obstacle course just to register their own names for themselves.
• Small cultural-linguistic TLDs will now be able to set up a public-facing registrar to service their customers in their own language, instead of going begging to registrars to carry their small-volume TLDs.
• Most important, it means that new TLDs will be able to market themselves. For many new gTLDs, this ruling will mean the difference between slow death and a profitable business.”

“In the absence of existing policy or new bottom-up policy recommendations, the Board saw no rationale for placing restrictions on cross-ownership;” said Peter Dengate Thrush, Chairman of the Board. “Any possible abuses can be better addressed by properly targeted mechanisms. Co-ownership rules are not an optimal technique in this area.”Under the Board resolution, additional enforcement mechanisms have been added. New gTLD registry agreements are to include the following.

• Code of Conduct prohibiting any misuse of data or other abusive conduct arising out of registry-registrar cross-ownership.
• Robust auditing requirements.
• Graduated sanctions up to and including contractual termination and punitive damages.
• ICANN’s right to refer competition issues to appropriate government competition authorities.

To read the blog posting by Antony Van Couvering in full, see:
www.mindsandmachines.com/2010/11/the-wall-between-registries-and-registrars-comes-tumbling-down/To read the ICANN announcement in full, see:
icann.org/en/news/releases/release-09nov10-en.pdf
icann.org/en/announcements/announcement-09nov10-en.htm