Tag Archives: Internet Commerce Association

In Extending .Com RA, ICANN Board also Extended Price Freeze Through 2024 by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoWe have previously reported that, at is September 15th meeting, ICANN’s Board approved the proposed extension of the .Com registry Agreement (RA). What we did not know at the time was that the Board simultaneously approved an extension of the existing $7.85 ceiling on .Com wholesale prices through 2024.

That additional information recently became available when ICANN published its Preliminary Report | Regular Meeting of the ICANN Board for the September 15th meeting. The full text regarding the Board’s approval of the .Com RA extension is reproduced at the end of this blog, with key provisions related to wholesale pricing highlighted.

The key passage in that meeting narrative is:

The Vice Chair informed that Board that staff worked with Verisign to address this comment by proposing to revise the version of the amendment posted for public comment by adding additional language to extend the maximum price provision through 30 November 2024. The Board continued its discussion of the proposed amendment with the understanding that the amendment would be revised to reflect the noted change.

A revised version of the adopted RA extension language has also been published. The relevant language change reads as follows:

(b) Section 7.3(d)(i) of the Agreement is hereby deleted and replaced in its entirety by the following new Section 7.3(d)(i): “(i) from the Effective Date through November 30, 2024, US $7.85;”

There are two important caveats to keep in mind in understanding the import of this ICANN Board action:

  1. While the revised .Com RA now extends the price freeze through 2024, the issue could be raised again in negotiations between ICANN and Verisign if the US decides not extend the Cooperative Agreement (CA) in 2018, or does extend it but alters the pricing terms. That’s because the RA extension amendment also contains this provision—

Future Amendments. The parties shall cooperate and negotiate in good faith to amend the terms of the Agreement (a) by the second anniversary of the Amendment Effective Date, to preserve and enhance the security and stability of the Internet or the TLD, and (b) as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement between Registry Operator and the Department of Commerce.

Under that provision, if the CA is terminated or revised in 2018 that would lead to discussion of amendments to the RA necessary for consistency with the CA. The Department of Justice recently advised Senator Cruz that the RA extension has no effect on the .Com price freeze, and that NTIA has the authority to extend the price freeze through 2024.

So what ICANN’s Board has done with this action is, in effect, pre-approve an extension of the existing .Com price freeze in anticipation that the NTIA may extend it through 2024. But what NTIA will actually do in the next two years cannot be predicted at this time, and if that agency takes a different course of action then ICANN and Verisign will enter into new discussions to reconcile the RA and CA (or reconcile the RA with the expiration of the CA).

  1. By extending the RA now, rather than having it come up for renewal in 2018, the possibility of ICANN staff pushing Verisign to adopt URS or other new gTLD RPMs in .Com contract renewal negotiations – as they did last year for .cat, .pro, and .travel — has been eliminated. That was one of the principal considerations underlying ICA’s non-objection to the RA extension, along with an understanding that it would have no effect on the price freeze.

However, adoption of those RPMs by .Com was advocated by trademark and other interests who commented on the proposed RA extension, and could come up in the talks between ICANN and Verisign that the amended RA requires “to preserve and enhance the security and stability of the Internet or the TLD”.

But the question of whether and in what form URS should become an ICANN Consensus Policy applicable to legacy gTLDs like .Com will likely be addressed by the RPM Review Working Group when it issues its phase one preliminary report and recommendations in 2017, and its decision should have substantial impact on any subsequent security and stability discussions between ICANN and Verisign.

Here’s the relevant language of the Preliminary Report —

.COM Registry Agreement Amendment

Ram Mohan abstained noting potential conflicts of interest. The Vice Chair presented the agenda item. He gave the Board an overview of the proposed amendment to the .COM registry agreement to extend the term of the agreement to 2024. The original term of the registry agreement was set to expire in 2018. He reported that there were some concerns raised during the public comment period about clarifying whether the maximum price provision in the .COM registry agreement would continue. The Vice Chair informed that Board that staff worked with Verisign to address this comment by proposing to revise the version of the amendment posted for public comment by adding additional language to extend the maximum price provision through 30 November 2024. The Board continued its discussion of the proposed amendment with the understanding that the amendment would be revised to reflect the noted change.

The Vice Chair stated that another topic of concern raised during the public comment period was about moving the existing.COM registry agreement to the form of the New gTLD Registry Agreement. The Board considered this concern, and took note of the provision in the proposed amendment obligating Verisign to ICANN to negotiate in good faith in two years potential changes to the registry agreement in order to preserve and enhance the security of the Internet or the TLD.

The Board also discussed the extension of the term of the .COM registry agreement as it relates to other provisions in the existing .COM registry agreement that might allow for future changes of the agreement. As part of this discussion, the Board considered the provisions in the .COM registry agreement concerning renewals being upon similar terms of the largest five gTLDs, and provisions addressing the implementation of consensus policies developed through the GNSO policy development process.

As part of its deliberations, the Board also considered comments raised by some members of the community about whether approving the proposed amendment raised concerns about fairness and whether similarly situated parties were unjustifiably receiving different treatment.

The Board discussed the interplay between the proposed amendment to the .COM registry agreement and the Root Zone Maintainer Services Agreement (RZMA) approved by the Board on 9 August 2016. The Board considered whether the proposed resolutions needed to be revised to make sure the dates of the two agreements would be aligned as anticipated. After discussion, the Board took the following action:

Resolved (2016.09.15.09a), the text of the proposed resolution to amend the .COM registry agreement is modified to make approval of the amendment subject to the execution of the RZMA.

The Board adopted the following amended resolution regarding the proposed .COM amendment2:

Whereas, ICANN and Verisign engaged in discussions on a proposed amendment to the 1 December 2012 .COM Registry Agreement (“Amendment”) and agreed to extend the term of the Agreement to 30 November 2024 to coincide with the term of the Root Zone Maintainer Services Agreement in order to enhance the security, stability and resiliency of root zone operations.

Whereas, the proposed Amendment also requires Verisign and ICANN to cooperate and negotiate in good faith to: (1) amend the .COM Registry Agreement by the second anniversary date of the proposed Amendment in order to preserve and enhance the security of the Internet or the TLD; and (2) as may be necessary for consistency with changes to the Cooperative Agreement between Verisign and the U.S. Department of Commerce. All other terms and conditions in the existing Registry Agreement remain unchanged.

Whereas, ICANN commenced a public comment period from 30 June 2016 to 12 August 2016 <https://www.icann.org/public-comments/com-amendment-2016-06-30-en> on the proposed Amendment. Ninety-nine (99) comment submissions were posted by both individuals and organizations/groups.

Whereas, the Board carefully considered the comments and the staff summary and analysis of comments.

Whereas, ICANN conducted a review of Verisign’s recent performance under the current .COM Registry Agreement and found that Verisign substantially met its contractual requirements.

Resolved (2016.09.15.09b), the proposed amendment to the .COM Registry Agreement <https://www.icann.org/sites/default/files/tlds/com/com-amend-1-pdf-30jun16-en.pdf> is approved, subject to the RZMA being executed, and the President and CEO, or his designee(s), is authorized to take such actions as appropriate to finalize and execute the Amendment.

All members of the Board present voted in favor of Resolutions 2016.09.15.09a – 2016.09.15.09b. One member of the Board was unavailable to vote on the Resolutions. The Resolutions carried.

Rationale for Resolutions 2016.09.15.09a – 2016.09.15.09b

Why the Board is addressing the issue now?

On 1 December 2012, ICANN and Verisign, entered into a Registry Agreement under which Verisign operates the .COM top-level domain. The agreement is set to expire on 30 November 2018. ICANN and Verisign have negotiated a proposed Amendment, which was posted for a 42-day ICANN public comment period between 30 June 2016 and 12 August 2016. At this time, the Board is approving the proposed Amendment for the continued operation of .COM TLD by Verisign.

What is the proposal being considered?

The proposed Amendment: (1) extends the term of the .COM Registry Agreement to 30 November 2024 to coincide with the term of the Root Zone Maintainer Services Agreement (RZMA) between ICANN and Verisign; (2) commits Verisign and ICANN to cooperate and negotiate in good faith to amend the .COM Registry Agreement by the second anniversary date of the proposed Amendment in order to preserve and enhance the security of the Internet or the TLD; (3) commits Verisign and ICANN to cooperate and negotiate in good faith to amend the terms of the .COM Registry Agreement as may be necessary for consistency with changes to the Cooperative Agreement between Verisign and the U.S. Department of Commerce. All other terms and conditions of the existing Registry Agreement remain unchanged.

Which stakeholders or others were consulted?

ICANN engaged in bilateral negotiations with Verisign to agree to the terms of the proposed Amendment. The proposed Amendment was then published for public comment from 30 June 2016 to 12 August 2016. Following the public comment period, the comments were summarized and analyzed.

What concerns or issues were raised by the community?

There were 99 comment submissions from individuals and groups/organizations during the 42-day public comment period. Some commenters were generally supportive of the proposed Amendment while others raised concerns. A summary and analysis of the comments is provided below and also posted at <https://www.icann.org/en/system/files/files/report-comments-com-amendment-09sep16-en.pdf>.

What significant materials did the Board review?

As part of its deliberations, the Board reviewed various materials, including, but not limited to, the following materials and documents:

What factors has the Board found to be significant?

The Board carefully considered the public comments received for the proposed Amendment, along with the summary and analysis of those comments.

The Board acknowledges that some commenters were generally supportive of the proposed Amendment, and some expressed general support but also asked ICANN and/or Verisign to clarify the relationship of the Cooperative Agreement and proposed Amendment, particularly around pricing, and the provisions or topics that would be the subject of good faith negotiations by the second anniversary of the effective date of the proposed Amendment.

While the Board acknowledges the suggested changes to the proposed Amendment to specify what provisions will be discussed by the two-year anniversary of the proposed Amendment, the Board notes that the language as drafted in the proposed Amendment balances providing a commitment to engage in negotiations, while providing leeway to consider future topics related to preserving and enhancing the security and stability of the Internet or the TLD in this changing landscape.

With respect to revising the proposed Amendment to account for potential changes to, or cancelation of the Cooperative Agreement between Verisign and the Department of Commerce, the Board notes that the proposed Amendment already takes into account the Cooperative Agreement. The proposed Amendment includes language, requiring ICANN and Verisign to engage in good faith negotiations to make changes to the .COM Registry Agreement as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement.

The Board also acknowledges that there were several comments submitted relating to prices for .COM domain names. Some commenters suggested that the current price cap in the Registry Agreement must remain in place, while others recommended that prices must be reduced. The Board notes that Section 7.3(d) of the .COM Registry Agreement specifies the maximum price that Verisign can charge for registry services. The proposed Amendment does not change this provision.

The Board also acknowledges the comments submitted opposing the presumptive renewal right provision in the .COM Registry Agreement and suggestions that the presumptive renewal right should be taken away if certain events occur, such as an uncured material breach of the Registry Agreement. Others suggested that instead of extending the .COM Registry Agreement, it should be put out for a competitive public tender to ensure that the registrants are charged lower prices. The Board notes that the presumptive right of renewal in Section 4.2 of the .COM Registry Agreement is a provision that is in all of ICANN’s registry agreements. The provision allows a registry operator the right to renew the agreement at its expiration, provided that the registry operator is in good standing at the time of renewal as set forth under the terms of the presumptive renewal provision. This presumptive renewal provision is in place to ensure stability, security, and reliability in the operation of the TLD, i.e., to encourage long-term investment in robust TLD operations. This has served public interest by encouraging investment in the TLD registry infrastructure and improvements in reliability of the TLD operations. ICANN has previously described the rationale for presumptive renewal for registries: “Absent countervailing reasons, there is little public benefit, and some significant potential for disruption, in regular changes of a registry operator. In addition, a significant chance of losing the right to operate the registry after a short period creates adverse incentives to favor short-term gain over long-term investment. On the other hand, the community, acting through ICANN, must have the ability to replace a registry operator that is not adequately serving the community in the operation of a registry.”

The Board acknowledges the comments that the .COM Registry Agreement should be brought in line with new safeguards and intellectual property protections found in the New gTLD Registry Agreement. Some of the commenters noted that certain legacy gTLD Registry Operators have adopted the general form of the New gTLD Registry Agreement (e.g. .PRO, .CAT, .TRAVEL) including the additional enhancements and safeguards, and .COM should be required to do the same. Some suggested that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition. The Board notes that the proposed Amendment posted for public comment is a simple extension of the current term of the agreement, and moving to the form of the new gTLD Registry Agreement would require longer discussion and community consultation. Proposing a simple Amendment at this time to extend the term of the .COM registry agreement is intended to maintain the stable, secure, and reliable operations of the .COM TLD.

The Board also notes that the proposed Amendment provides a provision that commits ICANN and Verisign to cooperate and negotiate in good faith to amend the .COM Registry Agreement by the second anniversary date of the proposed amendment in order to preserve and enhance the security of the Internet or the TLD. This language was negotiated to provide an opportunity for future discussions that may be needed to discuss potential changes to preserve and enhance the security of the Internet or the .COM TLD.

The Board acknowledges comments asking for confirmation that Verisign will be required to implement future developed consensus policies that may provide for additional safeguards and enhancements. The Board notes that Section 3.1 (b) of the .COM Registry Agreement states that, “At all times during the term of this Agreement and subject to the terms hereof, Registry Operator will fully comply with and implement all Consensus Policies found at http://www.icann.org/en/general/consensus-policies.htm, as of the Effective Date and as may in the future be developed and adopted in accordance with ICANN’s Bylaws and as set forth below.”

The Board acknowledges the comments that opposed the early renewal of the .COM Registry Agreement and the linkage to the Root Zone Maintainer Agreement (RZMA). These comments noted that the root zone maintainer infrastructure should never have become “inextricably intertwined” with Verisign’s .COM operations. Some questioned how linking the two agreements would enhance the security, stability and resiliency of root operations and argued that the linkage represents a single source of failure. These commenters urged ICANN technical staff to begin exploring how some practical separation between root zone and .COM technical operations might be achieved if that eventuality ever arises, and to assure that such action does not pose a threat to the security and stability of the DNS.

The Board notes that Verisign has been providing “registration services” under its Cooperative Agreement with NTIA for many years, which was broadly defined to include root zone maintainer function and .COM Top Level Domain registry services. Given the unified nature of these two functions under the Cooperative Agreement, much of the infrastructure supporting the root zone maintainer function is “intertwined” with Verisign’s TLD operations for .COM. A key component of ensuring security of the root operations was making sure that those operations continued to benefit from its historic association with the .COM operations. This was achieved by the proposed simple extension of the .COM Registry Agreement to coincide with the term of the new RZMA. While the terms of the agreements are linked together in the sense that they would expire at the same time, the agreements do not contain any provisions linking the performance of the obligations under the .COM Registry Agreement with the obligations under the RZMA. In fact, the Root Zone Maintainer Services Agreement (“RZMA”), approved by the ICANN Board on 9 August 2016, includes provisions that provide the community the ability – through a consensus-based, community-driven process – to require ICANN to transition the root zone maintainer function to another service provider three years after the effective date of the agreement.

The Board acknowledges the comments suggesting that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition.

The Board notes that the Bylaws enumerate core values that should guide the decisions and actions of ICANN in performing its mission, and ICANN takes seriously its commitment to those values. As provided in the Bylaws, the “core values are deliberately expressed in very general terms, so that they may provide useful and relevant guidance in the broadest possible range of circumstances. Because they are not narrowly prescriptive, the specific way in which they apply, individually and collectively, to each new situation will necessarily depend on many factors that cannot be fully anticipated or enumerated; and because they are statements of principle rather than practice, situations will inevitably arise in which perfect fidelity to all eleven core values simultaneously is not possible. Any ICANN body making a recommendation or decision shall exercise its judgment to determine which core values are most relevant and how they apply to the specific circumstances of the case at hand, and to determine, if necessary, an appropriate and defensible balance among competing values.” When considering the comments and approval of the proposed Amendment, the Board has taken into consideration the relevant core values in order to balance the competing priorities.

The Board further acknowledges comments concerning competitive issues and providing a level playing field. Article II, Section 3 of ICANN’s Bylaws state, “ICANN shall not apply its standards, policies, procedures, or practices inequitably or single out any particular party for disparate treatment unless justified by substantial and reasonable cause, such as the promotion of effective competition.” The Board notes the .COM Registry Agreement contains many different terms that are not present in other registry agreements. These unique terms might be considered either favorable or unfavorable depending on one’s point of view. For example, the price control provision in Section 7.3 of the .COM registry agreement tightly controls the ability of the registry operator to raise prices in a manner that is not present in any other registry agreement.

Are there positive or negative community impacts?

ICANN conducted a review of Verisign’s recent performance under the current .COM Registry Agreement and found that Verisign substantially met its contractual requirements.

The Board’s approval of the proposed Amendment is intended to ensure the continued stable, secure, and reliable operations of the .COM TLD.

Are there fiscal impacts or ramifications on ICANN (strategic plan, operating plan, budget); the community; and/or the public?

There is no significant fiscal impact expected if the Board approves the proposed Amendment.

Are there any security, stability or resiliency issues relating to the DNS?

There are no expected security, stability, or resiliency issues related to the DNS if the Board approves the proposed Amendment

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
http://www.internetcommerce.org/icann-board-extends-dotcom-price-freeze-through-2024/

.Com RA Extension on ICANN Board’s 15/9 Agenda by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoThe “.COM Registry Agreement Amendment” is on the Main Agenda for this Thursday’s Regular Meeting of the ICANN Board.

The proposed extension of the RA was announced and put out for public comment on June 30th. The public comment period closed on August 12th and ICANN staff’s Report of Public Comments was due on September 15th, coincident with the Board meeting. The original due date for that staff Report was August 26th, but was pushed back to accommodate the large number of comments and the divergent views they expressed. ICANN staff, however, beat the September 15th deadline and filed their Report on September 10th.

The .Com RA is designed to synchronize the start and end dates of that Agreement with the new Root Zone Management Agreement (RZMA) that will be entered into by ICANN and Verisign and take effect on the day of the IANA transition, currently scheduled for October 1st. If the transition is delayed by Washington political maneuvering that will of course affect the start dates for both the extended .Com RA and the RZMA.

In its announcement of the proposed extension, ICANN explained:

Verisign has been providing “registration services” under its Cooperative Agreement with NTIA, which was broadly defined to include root zone management functions and Top Level Domain registry services. Given the unified nature of the present Cooperative Agreement, much of the root zone infrastructure itself is inextricably intertwined with Verisign’s TLD operations for .com as discussed in greater detail in the blog.

The extension of the term of the .com registry agreement is intended to maintain stable, secure, and reliable operations of the root zone not only for direct root zone management service customers (Registry Operators, Registrars and Root Server Operators), but also to maintain the security and stability of the Internet’s domain name system.

The referenced blog post was penned by Global Domains Division (GDD) head Akram Atallah and further explained:

Given the unified nature of the present Cooperative Agreement, much of the root zone infrastructure itself is “inextricably intertwined” with Verisign’s TLD operations for .com: the servers that provide root services are hosted at every .com resolution site (over 100 locations). These servers share bandwidth, routing and monitoring with the .com operations, and the servers use the same code base as the .com TLD name servers and are operated and maintained by the same operation and engineering group. On the provisioning side, the root zone’s provisioning system is derived from the .com Shared Registration System (SRS), using the structure, schema, and software used for .com provisioning operations. Verisign builds and signs the root zone today using the same cryptographic facilities used for .com as well as signing software derived from that used for signing .com. Importantly, Verisign’s root zone operations are also within the .com’s Denial of Service attack detection and mitigation framework including independent internal and external monitoring and packet filtering at all layers. A key component of ensuring security of the root operations was making sure that those operations continued to benefit from its historic association with the .com operations.

As noted, the volume of public comments was heavy and the views contradictory.

A great many comments were generated by domain registrants under the wholly mistaken impression that the RA extension would somehow lift the current wholesale price freeze on .Com and allow Verisign to immediately double prices or more (a move that would likely attract the immediate attention of the Department of Justice’s Antitrust Division as well as the Federal Trade Commission for possible abuse of market power). But those comments were based on a false premise, as the .Com price freeze is contained in an entirely separate document, the Cooperative Agreement between Verisign and the National Telecommunications and Information Administration (NTIA). That agreement runs through the end of November 2018 and, as the Department of Justice recently explained in a letter to Sen. Ted Cruz:

As you may know, Verisign may not extend the .com Registry Agreement without obtaining NTIA’s prior written approval. Amendment 30 of the Cooperative Agreement requires such prior approval and provides the standard for NTIA’s review. In pertinent part, Amendment 30 provides: “[t]he Department [of Commerce] shall provide such written approval if it concludes that approval will serve the public interest in (a) the continued security and stability of the Internet domain name system and the operation of the .com registry … , and (b) the provision of Registry Services … offered at reasonable prices, terms, and conditions.” We note that the current extension proposal contemplated by ICANN and Verisign does not change the price cap contained in the 2012 .com Registry Agreement, which will remain in effect through November 30, 2018. Nor does the current extension proposal alter the price cap in Amendment 32 of the Cooperative Agreement. Moreover, if NTIA were to approve an extension of the .com Registry Agreement, it would have the right in its sole discretion to extend the term of the Cooperative Agreement with the current price cap in place until 2024 at any time prior to November 30, 2018, the date on which the Cooperative Agreement is currently scheduled to expire. If this occurs, the $7.85 fee cap would be extended another six years to 2024. (Emphasis added)

The Internet Commerce Association ICA), which represents professional domain investors, took a stance of non-opposition to the proposed RA extension. For one thing, the RA is virtually certain to be extended to 2024 when it comes up for renewal in 2018 under the terms of its presumptive renewal clause, so there’s no real harm in effecting that extension two years earlier.

And for domainers there is a net benefit, as an extension – as opposed to a renewal – would deny any negotiating leverage to GDD staff who have shown a propensity to illicitly inject themselves into the policy process by pushing for the general acceptance of certain contract revisions as legacy gTLD agreements come up for renewal, and specifically for the new gTLD Rights Protection Mechanism (RPM) of Uniform Rapid Suspension (URS), that are not Consensus Policy.

There is currently a GNSO Council-authorized working group, which I Co-Chair, that is specifically tasked under its Charter to review the efficacy of the new gTLD RPMs, recommend any adjustments, and only then consider the question of whether they should become Consensus Policy and thereby be applicable to legacy gTLDs like .Com. That standard GNSO Policy Development Process (PDP) is the proper and established route for deciding the applicability of the new RPMs to legacy gTLDs, which is clearly identified as a policy decision .

Specifically, ICA stated on this point:

“Further, changing the end date of the .Com RA through an extension now rather than a renewal in two years will have the salutary effect of depriving ICANN Global Domain Division (GDD) staff of any opportunity to seek the imposition of Uniform Rapid Suspension (URS) or any other new gTLD Rights protection Mechanisms (RPMs) through contractual imposition as they did in 2105 in regard to the RAs for .Cat, .Pro, and .Travel. While the Board later stated, in approving the amended RAs, that “the Board’s approval of the Renewal Registry Agreement is not a move to make the URS mandatory for any legacy TLDs, and it would be inappropriate to do so”, we have no assurance that GDD staff does not still hold its previously stated position that, “With a view to increase the consistency of registry agreements across all gTLDs, ICANN has proposed that the renewal agreement be based on the approved new gTLD Registry Agreement as updated on 9 January 2014.” Further, notwithstanding Reconsideration Requests filed with the Board Governance Committee (BGC) by ICA, the Business Constituency (BC), and the Non-Commercial Users Constituency (NCUC), the BGC let the imposition of URS by ICANN staff via contract renegotiation stand.

Extending the .Com RA through 2024 through the proposed extension, rather than via a negotiated renewal, will preserve the question of whether the URS and other new gTLD RPMs should become Consensus Policies applicable to legacy gTLDs for decision by the Working Group established to review all RPMs at all gTLDs – which is precisely where this key policy question should be fully and objectively considered and decided by the ICANN community.” (Emphasis in original)

ICA’s comment letter also suggested that the presumptive renewal clauses of all gTLDs should be reviewed and revised to constrain potential future pricing abuses, stating:

While we have no general objection to ICANN’s practice of non-interference with the pricing policies of gTLD registries, we do believe that any registry’s abuse of pricing power should weigh against its right of presumptive renewal. We therefore believe that ICANN should amend all registry contracts to make clear that, at a minimum, a registry operator subject to successful government action for violations of antitrust or competition laws should face competitive rebid of its contract. Such amendment would further discourage all gTLD registries from engaging in abusive and anticompetitive market conduct.

Trademark interests, for their part, saw the proposed extension as a means of bypassing the bottom-up, multistakeholder consensus policy process and imposing the new RPMs by ICANN staff fiat. The comments of the International Trademark Association (INTA) opposed the extension on these grounds:

INTA was hopeful that ICANN and Verisign would fill this gap and level the playing field by bilaterally negotiating the inclusion of the Relevant Terms when the .COM Registry Agreement was to be renewed in 2018.5 Yet in the proposed amendment to the .COM Registry Agreement that is the subject of the current public comment period, ICANN has proposed to mechanically extend that agreement until 2024, without any effort to update Verisign’s terms at all. Instead, the proposed amendment merely requires ICANN and Verisign to cooperate and negotiate in good faith sometime in the next two years to amend the agreement to preserve and enhance the security and stability of the Internet and of the .COM gTLD. That is not enough. ICANN should acknowledge that the Relevant Terms are essential to preserve and enhance the security and stability of the Internet and of the .COM gTLD, such that the requirement that ICANN and Verisign negotiate in good faith to add further amendments within a two-year time period includes a requirement to implement the Relevant Terms at that time. Given the importance of the Relevant Terms, that requirement should be explicit – not implicit.

The comments of ICANN’s Intellectual Property Constituency (IPC) took the same tack:

The proposed 6-year extension should be accompanied by steps to promptly bring the .com registry agreement into closer harmonization with ICANN’s other registry agreements, including those entered into with new gTLDs and many legacy gTLDs since 2013 in accordance with the multi-stakeholder process in furtherance of ICANN’s mission… IPC urges ICANN and Verisign to publicly commit to making these changes within the next two years as part of the “future amendments” provision of the .com registry agreement extension.

Sadly, neither the INTA nor IPC comments even notes the existence of the Working Group to Review all RPMs in all gTLDs, even though both entities and many of their members are actively participating in it (indeed, INTA’s immediate Past President is another of the WG’s Co-Chairs). In 2015, when GDD staff successfully pushed for the incorporation of the URS in the renewal agreements for the legacy registries of .Cat, .Travel and .Pro, both organizations justified that result on the thin grounds that the registries’ acquiescence was “voluntary”. Now even that fictional fig leaf has been abandoned, with both organizations now on record that the .Com extension should be approved only if Verisign involuntarily commits now to take that step within the next two years – regardless of the recommendations of the WG regarding the adoption of the new RPMs as Consensus Policy.

ICANN’s Business Constituency (BC), for its part, also favored application of the new RPMs to .Com, but recognized that this must be accomplished via proper policy channels. The BC comment stated:

The BC believes that .COM should embrace the standardized new gTLD registry agreement at this time, instead of deferring that decision until 2024 when the proposed agreement will expire; or earlier than 2024, if any or all of these aspects of the standard new gTLD registry contract should become Consensus Policy as a result of WG recommendations that are subsequently adopted by ICANN’s Board. The BC acknowledges that there is an open legal question whether any of these aspects can be enforced against .Com registrants unless they become Consensus Policies or are adopted through a further amendment of the .COM registry agreement made subsequent to the one we are addressing in this comment letter. (Note: ICA is a BC member and the author contributed to, but was not the lead drafter of, the BC comment)

New gTLD competitors of .Com also used the comment window as an opportunity to inject that market rivalry into the policy process. Portfolio new gTLD operator Donuts stated:

Donuts is opposed to the extension of ICANN’s agreement with Verisign in its proposed form. By simply renewing the .COM agreement under its current terms, ICANN and Verisign will have missed a significant opportunity to fulfill ICANN’s self-defined mandate to increase competition in the DNS marketplace and preserve the security, stability and resiliency of the DNS by bringing provisions of the .COM agreement more in harmony with the contracts governing new gTLDs and many other legacy gTLDs that recently have been renewed.

Likewise, new gTLD .XYZ took a similar position, adding to it the claim that it could reduce .Com wholesale pricing by more than eighty percent yet still operate the most important gTLD in  a fully reliable, stable, and secure manner:

XYZ is firmly opposed to this early extension. ICANN should not passively go along with Verisign’s selfish goal of extending its unfair monopoly over the internet’s most popular top-level domain name. Instead, ICANN should act in the spirit of its Bylaws and work with the NTIA and United State Department of Commerce to put the rights to operate the .COM top-level domain to a competitive public auction among capable internet registry operators for the benefit of the public… Currently, Verisign is able to charge $7.85 per annual registration of .com domain names.  However, this price is grossly out of line with the actual cost per registration to a registry operator for each incremental registration. If the right to operate .COM were put to a competitive public tender, the market would show that the .COM registration fees to registrars could be below $2.00 per registration. In fact, if XYZ <https://xyz.xyz/> were allowed to take part in such a competitive public tender, XYZ would be prepared to offer registration fees to registrars in the range of $1.00 per registration.  This is in line with the market rate for registry services, which XYZ is very familiar with. XYZ would not only be able to operate .COM charging only $1.00 per registration, but it would be able to do so with a healthy, but reasonable, profit margin and with no impact on the operational stability, reliability, security, and global interoperability of the internet.

The .Com price freeze was imposed by the NTIA in 2012 following a full competition review by DOJ’s Antitrust Division, making it difficult to conceive that government regulators would have allowed a wholesale price at least four times greater than what was required for sound registry operation. (In 2012 ICA urged NTIA to lower .Com wholesale prices to the then lower level in place for .Net, and then index future price increases to the CPI, but NTIA declined to go that far.)

As for putting the RA out for competitive rebid, NTIA approved the then controversial presumptive renewal clause of the .Com RA ten years ago, in 2006, and since then essentially identical language has been incorporated into the standard new gTLD registry agreement. Absent a material and subsequently uncured breach of its registry agreement, both Verisign and every new gTLD operator would have grounds to immediately sue ICANN if it attempted to open their RAs to competitive rebid – and that situation will stand until either the Registry Stakeholder Group volunteers to rewrite that clause (a doubtful proposition), or antitrust regulators find the near-guarantee of perpetual renewal to undermine market competition.

Summing up, if the technical intertwining of the operation of the .Com registry and the management of the root zone functions justify aligning their contractual start and renewal dates then the ICANN Board should approve the RA extension on those merits alone and leave other issues to be settled in their proper forums.

That means that:

  • The imposition of new gTLD RPMs on legacy gTLDs should await the recommendations of the GNSO WG that is currently charged with addressing that issue – a major policy issue that should not be settled by GDD staff via contract negotiations.
  • .Com wholesale pricing should be reviewed by NTIA in consultation with the DOJ as the renewal date for the Cooperative Agreement approaches in November 2018.
  • Competition between .Com and “not com” new gTLDs should take place in the marketplace, where new gTLDs have already achieved millions of collective registrations.
  • Any adjustments of the presumptive renewal clauses in all gTLD agreements, including changes that address anticompetitive pricing behavior, should be addressed by ICANN through an open and transparent process that considers all relevant interests and objectives, and is not just a closed door negotiation between ICANN and registries.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
www.internetcommerce.org/com-ra-extension-on-board-agenda/

NTIA Revs up Rhetoric as IANA Transition Looms by Philip S. Corwin, Internet Commerce Association

Internet Commerce Association logoIt’s been almost six weeks since the NTIA announced “that the proposal developed by the global Internet multistakeholder community meets the criteria NTIA outlined in March 2014 when it stated its intent to transition the U.S. Government’s stewardship role for the Internet domain name system (DNS) technical functions, known as the Internet Assigned Numbers Authority (IANA) functions”, and thereby signaled the start of the last lap of the IANA transition marathon.

In the interim since that announcement ICANN held a well-regarded, policy focused mid-year meeting in Helsinki that saw the ICANN community begin to engage on multiple Work Stream (WS) 2 accountability measures that, while deemed not to require resolution prior to the transition, are nonetheless very important matters – including remaining legal jurisdiction questions, heightened transparency tools and powers, human rights, and ICANN staff accountability.

Also, several DC think tanks recently held programs on the transition, at which some speakers advocated the “test drive” approach first broached at a May Senate Commerce Committee hearing. That soft transition concept would somehow provide for a period in which both the transition of IANA functions control and new community accountability powers could be tried out, but with the U.S positioned to intervene if significant problems arose or if the WS2 issues were not resolved satisfactorily.  But advocates have yet to advocate a practical means by which this setting ICANN free while retaining residual control could be accomplished, and the clock is steadily ticking down to the September 30th expiration of the current and likely last IANA contract between NTIA and ICANN.

NTIA had already rebuffed the soft transition concept as unnecessary, impractical, and counterproductive, but last week it upped the pressure for transition completion. In remarks delivered last Thursday at the IGF-USA conference in Washington, Assistant Secretary of Commerce for Communications and Information Lawrence E. Strickling delivered a rousing defense of moving forward with the IANA transition, combined with a strong rebuke of transition critics, declaring:

I come here today to speak out for freedom. Specifically, Internet freedom. I come here to speak out for free speech and civil liberties. I come here to speak out in favor of the transition of the U.S. government’s stewardship of the domain name system to the global multistakeholder community. And I come here to speak out against what former NTIA Administrator John Kneuer has so aptly called the “hyperventilating hyperbole” that has emerged since ICANN transmitted the consensus transition plan to us last March…

Extending the contract, as some have asked us to do, could actually lead to the loss of Internet freedom we all want to maintain. The potential for serious consequences from extending the contract beyond the time necessary for ICANN to complete implementation of the transition plan is very real and has implications for ICANN, the multistakeholder model and the credibility of the United States in the global community…

Among the most persistent misconceptions is that we are giving away the Internet… Even more extreme (and wrong) is the claim that we are giving the Internet away to Russia, China, and other authoritarian governments that want to censor content on the Internet….

Another false claim is the fear that ICANN will move its headquarters abroad once the transition is complete and “flee” the reach of U.S. law. However, this ignores the fact that the stakeholder community has spent the last two years building an accountability regime for ICANN that at its core relies on California law and on ICANN to remain a California corporation.

ICANN’s own bylaws confirm that “the principal office for the transaction of the business of ICANN shall be in the County of Los Angeles, State of California, United States of America.” ICANN’s Board cannot change this bylaw over the objection of the stakeholder community…

Other claims keep popping up and I do not have time today to correct every misstatement being made about the transition. For example, after living for two years under an appropriations restriction that prohibits us from using appropriated funds to relinquish our responsibility for the domain name system, it is now asserted that this restriction prevents us even from reviewing the transition plan. Yet this claim ignores the fact that at the same time Congress approved the restriction, it also directed NTIA “to conduct a thorough review and analysis of any proposed transition” and to provide quarterly reports on the process to Congress.

In the last couple of weeks, I have heard new concerns about the possible antitrust liability of a post-transition ICANN. However, this concern ignores the fact that ICANN in its policymaking activities has always been and will continue to be subject to antitrust laws…

I could go on but let me close with some observations on the multistakeholder process. There is no question that within ICANN, the last two years have strengthened the multistakeholder model as it is practiced there. Moreover, the accomplishments of the process at ICANN are serving as a powerful example to governments and other stakeholders of how to use the process to reach consensus on the solutions to complex and difficult issues. However, as we work toward completing the transition, we must recognize that the multistakeholder model will continue to face challenges. It is important that we remain dedicated to demonstrating our support and respect for the multistakeholder approach in all the venues where it is used.

To some extent Secretary Strickling was downplaying unresolved questions that could evolve into significant problems.  For example, there are clearly portions of the ICANN community who do not see the transition and accountability plans as a final resolution, but merely as a waystation to moving ICANN out of U.S. jurisdiction. When I advocated in Helsinki that ICANN’s U.S. incorporation be enshrined in a Fundamental Bylaw during the course of WS2 there was vigorous pushback from some quarters. As I wrote back in May:

[E]ven as the transition draws closer, ICANN’s continued status as a non-profit corporation subject to U.S. law — its jurisdictional locus — is rapidly replacing the IANA contract as the new focus for displeasure by those who would have ICANN relocate to another jurisdiction — or even be transformed into a multilateral international intergovernmental organization (IGO), an outcome specifically prohibited under NTIA’s approval criteria. The resolution of this extended debate will have profound ramifications for the future viability of the MSM of Internet Governance (IG), as well as for Internet speech free from governmental interference exercised from the top level of the domain name system (DNS). Until this matter is resolved with finality it will remain a scab to be constantly picked at, always threatening to become a festering sore on the body politic of IG.

Indeed, during the panel discussion that followed Secretary Strickling’s remarks, one speaker opined that if the IANA transition marked ICANN’s “Constitutional moment”, the unresolved corporate jurisdictional question could become for it what the unresolved issue of slavery became for the United States – a cause of eventual civil war.

Nonetheless, with the goal line is sight, NTIA is clearly pressing for transition completion on October 1st. The strong language of Secretary Strickling’s remarks may also be motivated by a sense that NTIA now has the upper hand, given that the likelihood of an extended appropriations freeze preventing a transition in fall 2016 is increasingly doubtful. Last week the Washington Post reported:

Any chance Congress had this year of smoothly completing work on its annual spending bills is now all but dead, leaving Republican leaders to grapple with how to avoid a contentious fight in the weeks before the election over how to avoid the threat of a government shutdown… Republicans are now debating how long a stop-gap spending bill they need to move before the end of the fiscal year on Sept. 30 should last. Congress goes on a seven week recess after this week and will return after Labor Day.

That view was buttressed by a story in the Wall Street Journal:

Heading into this election year, Republican leaders pledged the GOP-controlled Congress would aim to do at least one thing: pass spending bills on time, without a lot of drama…But as Congress enters its last week in session before a seven-week break through Labor Day, the two chambers have yet to pass a single spending bill through both chambers….Congress will still have a few weeks in September to try to pass spending bills before the government’s current funding expires on Oct. 1. Most likely, lawmakers will be forced to pass a short-term spending bill keeping the government running through the election, likely until the end of the year or the first quarter of 2017.

This Congressional spending impasse is directly related to the fate of the IANA transition. The statutory language preventing NTIA from completing the transition expires at the end of FY 2016, which is one second before midnight on September 30th. One second later, at midnight on October 1st, NTIA will be free to hand off the IANA functions to ICANN, assuming that ICANN has completed its remaining pre-transfer obligations.

Prior to the summer recess the House passed a Department of Commerce appropriations bill extending the transition freeze for a year, but the Senate has not followed suit and the prospects for stand-alone DOC funding legislation now appear slim to none. In addition, the language of the FY 2016 freeze was written in a way that a simple FY 17 Continuing Resolution will not carry the freeze language forward into the new fiscal year; it would take an additional explicit provision being grafted on to the C.R. for the transition freeze to be extended. While that’s not impossible, it would be a heavier lift in a hyper-partisan Presidential election year.

Speaking of partisan politics, on July 12th it was reported that the 2016 draft GOP Platform blasts the Administration’s transition plans, stating,

The survival of the Internet as we know it is at risk… [President Obama] unilaterally announced America’s abandonment of the international Internet by surrendering U.S. control of the root zone of web names and addresses. He threw the Internet to the wolves, and they—Russia, China, Iran, and others—are ready to devour it… [Republicans] will therefore resist any effort to shift control away from the successful multi-stakeholder approach of Internet governance and toward governance by international or other intergovernmental organizations

The breakdown of the appropriations process and the failure of “test drive” proponents to provide a detailed blueprint for accomplishing a soft transition argue in favor of the IANA transition proceeding on October 1st. But when members of Congress return in September political passions will be running high, and opponents of the transition may well attempt a Hail Mary play — with NTIA ready to go all out to break it up and push the transition across the finish line. We’ll find out who prevails in late September.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
http://www.internetcommerce.org/ntia-revs-up-transition-rhetoric/

ICANN Board Decisions to become More Transparent by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoICA has long been an advocate for greater transparency in ICANN operations, especially in the decision-making activities of the Board. Back in May 2012, reacting to the announcement that the Board would no longer hold decisional sessions on the final day of each of the three yearly ICANN public meetings, we published a blog titled, “ICANN Board Meetings Should be Webcast Live”. Our view at that time was:

Just because all the ICANN meetings we have attended since ICA’s formation ended with a Board meeting doesn’t mean that particular scheduling is sacrosanct. But we think it’s very beneficial for the global Internet community that ICANN serves to be able to view its decision-making process – and that it’s a big plus for ICANN’s credibility and reputation to open that process to public view… Nowadays any public policy body that makes its decisions behind closed doors is going to be perceived as having something to hide… There’s a lot of U.S. DNA in the DNS. ICANN was created by the U.S. government and is a California non-profit corporation… Sessions of the U.S. House and Senate, and virtually every hearing and markup of every Congressional committee, are now Webcast in real time and then archived for future viewing.

ICANN should do no less. Every official ICANN Board meeting should be webcast in real time. When the Board is meeting telephonically then the Web audiocast should be available simultaneously. And all should be archived for future access and review. Only limited redactions should be made, such as when the Board is discussing internal personnel matters or when the proprietary and confidential information of a contracted party might be revealed, and then only if a rationale is provided. ICANN’s continued authority ultimately rests upon the consent of the networked, and in 2012 the networked expect open access to information about vital decisions with broad repercussions. And, as Supreme Court Justice Louis Brandeis once observed, sunlight is the best disinfectant.

Four years after we expressed that viewpoint, we’re happy to report that ICANN’s Board is finally taking a step toward meeting 21st Century expectations of information access. of At its meeting of May 15, 2016, ICANN’s Board adopted a Resolution on “Enhancing Openness and Transparency” that makes an overdue move toward providing transparency in regard to Board decision-making.

The operative portion of the Resolution reads as follows:

Resolved, the Board directs the President and CEO, or his designee(s), to work with the Board to develop a proposed plan for the publication of transcripts and/or recordings of Board deliberative sessions, with such plan to include an assessment of possible resources costs and fiscal impact, and draft processes to: (i) ensure the accuracy of the transcript; and (ii) for redaction of portions of the transcript that should be maintained as confidential or privileged.

Resolved, the Board expects to evaluate the plan in Helsinki, and if satisfactory to begin testing of the proposed processes relating to publication of transcripts and/or recordings of the Board’s deliberative sessions as soon as practicable after Helsinki.

The Rationale for the Resolution explains the Board’s reasons for adoption:

In support of the continued call for visibility into Board deliberations and processes, the Board has determined to make available transcripts or recordings, where appropriate, of the Board’s deliberative sessions. This effort to enhance openness is likely to also support the ICANN community in enhancing ICANN’s accountability, as it will reduce questions of how and why the Board reaches its decisions. This decision also directly supports ICANN’s previous efforts and the continued goal of operating as openly and transparently in its decision-making. ICANN is also acting consistently with the ICANN’s Bylaws, as set out in Article III, section 1 of the ICANN Bylaws, that, “ICANN and its constituent bodies shall operate to the maximum extent feasible in an open and transparent manner and consistent with procedures designed to ensure fairness.” 

There will be issues before the Board for which confidentiality is still required, and that may require redaction of parts or withholding of full transcripts, and it is important that the community and the Board understand how those decisions will be taken. To that end, the Board is directing the development of a plan, which would include proposed processes by which those redaction decisions for confidentiality and privilege are to be made. That plan should be developed as soon as practicable, and should be ready for Board consideration during ICANN56 in Helsinki.

In a contemporaneous blog post, Board Chairman Steve Crocker shed a bit more light on the Resolution:

We’ve all been talking about trust lately, and the workshop gave the Board an opportunity to take a hard look at what we can do to build trust between ICANN as an organization and all of its stakeholders. This is also an ongoing discussion, and one that we all have a stake in. During the workshop, we considered concrete steps that the Board could take to increase our transparency and accountability. We agreed to post the transcripts and/or recordings of our deliberative sessions and, as a result of this discussion, passed a resolution asking Göran and his team to develop a plan for the implementation of this new procedure, also making sure that we respect confidentiality, as necessary. We know there is a lot of interest in our meetings and discussions, and we look forward to reviewing Göran’s proposal in Helsinki.

We look forward to hearing about the proposed details of the transparency plan when we attend the Helsinki meeting in a few weeks – where the community will also kick off its own discussion of Work Stream 2 accountability measures, including greater transparency within every facet of ICANN operations.

Ideally, the Board transparency measures should take effect as soon as possible, and reasons for redaction should be kept to a minimum and explained in all instances. While transcripts and audio recordings are welcome steps, especially for telephonic meetings, our preference remains for real time webcasts of all physical meetings of the Board. Public portions of the agenda could be addressed first, with anything requiring redaction left for the end of the meeting.

That would let the sunlight of transparency and the electric light of the video image illuminate all future Board decisions. ICANN and its stakeholders will be better off for the transparency this change will bring to ICANN’s most important decision-making process.

This post by Philip Corwin from the Internet Commerce Association was sourced with permission from:
www.internetcommerce.org/icann-board-decisions-to-become-more-transparent/

U. S. Government Blasts China’s Draft Domain Regulations by Philip Corwin

Philip Corwin imageIn an unexpected move, the two top U.S. officials charged with the Obama Administration’s Internet policy have issued a joint statement severely criticizing draft Chinese domain policies. On May 16th, the State Department’s  Ambassador Daniel A. Sepulveda and NTIA’s Assistant Secretary for Communications and Information Lawrence E. Strickling issued an official statement titled “China’s Internet Domain Name Measures and the Digital Economy”. In it, they charge that “ the Chinese government’s recent actions run contrary to China’s stated commitments toward global Internet governance processes as well as its stated goals for economic reform”.

The focus of their ire are new proposed rules issued in March by China’s  Ministry of Industry and Information Technology. The officials describe them as:

draft measures that would require all Internet domain names in China to be registered through government-licensed service providers that have established a domestic presence in the country and would impose additional stringent regulations on the provision of domain name services …The most controversial provision of China’s draft domain name measures – article 37 – has attracted considerable international concern, as some have interpreted the article to mean that all websites with domain names registered outside China will be blocked, thereby cutting off Chinese Internet users from the global Internet.  

The statement also throws down the gauntlet in regard to China’s recent efforts to push alternative, government-centric models of Internet governance. In this regard, it states:

China’s approach to DNS management within its borders could still contravene, undermine, and conflict with current policies for managing top level domains that emerge from the Internet Corporation for Assigned Names and Numbers (ICANN), which follows a multistakeholder model in its community-based and consensus-driven policymaking approach.

While probably not affecting the content of the statement, the timing of its issuance may in part be to demonstrate a tough stance toward China’s DNS policy in advance of next Tuesday’s Senate Commerce Committee oversight hearing on the IANA transition and ICANN accountability. Committee member Ted Cruz has been peppering ICANN with questions regarding former ICANN CEO Fadi Chehade’s participation in China’s World Internet Conference (WIC) last December, and his agreement to become Co-Chair of the Advisory Committee to the 2016 WIC meeting. Many speakers at the 2015 WIC meeting defended Internet censorship and heightened government control.

Adding gasoline to the fire, the statement also lashes Chinese Internet censorship, stating in that regard:

The regulations would also appear to formalize an explicit system of online censorship by forbidding the registration of websites containing any one of nine categories of prohibited content, broadly and vaguely defined, and creating a blacklist of “forbidden characters” in the registration of domain names, adding an extra layer of control to China’s Great Firewall… What we do not accept is the exercise of aggressive authority over people’s use of the Internet or the ability of a government to prevent the world from reaching its people.  Sadly, this is exactly what Chinese authorities, through these recent measures, are trying to do. 

While such views have likely been advanced in confidential meetings between Chinese and U.S. officials, it is highly unusual to see such bold charges levied against another nation in an official statement.

China has yet to respond to the U.S. allegations, and it remains to be seen if it will moderate its position regarding the draft rules – or whether it will react to this criticism by digging in and implementing them. It is also unclear what effect implementation might have on burgeoning purchases of domain names by Chinese registrants, who have flooded the secondary domain market over the past year through high-dollar purchase of short letter and number domains, and who reportedly also account for more than half the purchases of domains originating from ICANN’s new gTLD program. The draft rules could make many registries and domain names off-limits for Chinese purchasers.

The full text of the statement follows—   

 

China’s Internet Domain Name Measures and the Digital Economy

May 16, 2016 by Ambassador Daniel A. Sepulveda and Assistant Secretary for Communications and Information Lawrence E. Strickling

Ambassador Daniel A. Sepulveda and Assistant Secretary for Communications and Information Lawrence E. Strickling

May 16, 2016

This post was cross posted to the State Department’s blog: https://blogs.state.gov/stories/2016/05/16/china-s-internet-domain-name-measures-and-digital-economy [1]

China is a force in the global digital economy and an important player in global Internet policy discussions. Today, more than 700 million people have access to the Internet in China, more than any country in the world. Several of the most valuable Internet-based companies call China home.  Global innovators and service providers from around the world, including from the United States, are eager to enter its market.

That’s why it is incredibly important that China use its power and influence in a manner that supports the continued development of the global Internet and the prosperity of its domestic digital economy.

Both of our countries participate actively in a range of international organizations and processes that discuss the global development and deployment of the Internet.  We have both argued that the current processes, which rely on the cooperation of all stakeholders including government, industry, and civil society, are working effectively for the Internet’s future development and management.

However, the Chinese government’s recent actions run contrary to China’s stated commitments toward global Internet governance processes as well as its stated goals for economic reform.

In late March 2016, China’s Ministry of Industry and Information Technology issued draft measures that would require all Internet domain names in China to be registered through government-licensed service providers that have established a domestic presence in the country and would impose additional stringent regulations on the provision of domain name services.

The regulations appear to create a barrier to access and force localization of data and domestic registration of domain names.  Whether driven by a motivation to increase control over Internet content in China or a desire to increase the quantity of Chinese-registered domain names, these regulations would contravene policies that have been established already at the global level by all Internet stakeholders (including Chinese).  If put into effect, these regulations would have potentially large and negative repercussions for everyone.

The regulations have led to expressions of concern in comments formally submitted by governments, including the United States, companies, and other stakeholders around the world that support an open and interoperable Internet.

The most controversial provision of China’s draft domain name measures – article 37 – has attracted considerable international concern, as some have interpreted the article to mean that all websites with domain names registered outside China will be blocked, thereby cutting off Chinese Internet users from the global Internet.  While Chinese authorities have clarified that the intent of the article would be to prohibit access to Chinese-registered domain names that are acquired from registries/registrars that are not in compliance with Chinese regulations, concerns remain that the language in its current form is vague and open to differing interpretations.  Even if applied to Chinese-registered domain names, China’s approach to DNS management within its borders could still contravene, undermine, and conflict with current policies for managing top level domains that emerge from the Internet Corporation for Assigned Names and Numbers (ICANN), which follows a multistakeholder model in its community-based and consensus-driven policymaking approach.

Other concerns with the measures include requirements for forced data localization and real name verification for the registration of Internet addresses.  For instance, the draft measures appear to mandate that all Internet domain name registrars, registries, root server operators, and others, maintain zone files in China, thereby compelling firms to create a system for their China operations, which is entirely separate from their global operations.  This forced localization, though not unprecedented in China, would potentially create new barriers to the free flow of information and commerce across borders and consequently infringe upon internationally recognized commitments on free expression and trade.  The regulations would also appear to formalize an explicit system of online censorship by forbidding the registration of websites containing any one of nine categories of prohibited content, broadly and vaguely defined, and creating a blacklist of “forbidden characters” in the registration of domain names, adding an extra layer of control to China’s Great Firewall.

The United States supports the open global Internet as a platform for free expression and economic and human development worldwide, and we support the growth of China’s digital ecosystem within that context. We welcome the Chinese adoption and creation of Internet-based technologies and services.

What we do not accept is the exercise of aggressive authority over people’s use of the Internet or the ability of a government to prevent the world from reaching its people.  Sadly, this is exactly what Chinese authorities, through these recent measures, are trying to do.  Such efforts will not only create undue burdens and challenges for enterprises, both Chinese and foreign, operating in China, but they will also diminish the view of China as a constructive partner in the development of the global Internet.  Furthermore, they will hinder Chinese technology and services from achieving acceptance outside of China.

We have listened to company concerns, consulted with diplomatic partners, and shared our views directly with the Chinese government, while calling for China to continue dialogue with a broad group of stakeholders as its draft regulations are revised.

The digital economy has become one of the most powerful engines for global economic growth.  If left unchanged, China’s regulations would undermine some of the most fundamental aspects of the Internet – openness, reliability, and interoperability – within China.  By creating its own rules for domain name management, China is threatening to fragment the Internet, which would limit the Internet’s ability to operate as a global platform for human communication, commerce, and creativity.

Lawrence E. Strickling [2] serves as Assistant Secretary of Commerce for Communications and Information and Administrator of the National Telecommunications and Information Administration. Ambassador Daniel A. Sepulveda [3] serves as U.S. Coordinator for International Communications and Information Policy at the U.S. Department of State.

Topics:

National Telecommunications and Information Administration
1401 Constitution Ave., NW Washington, DC 20230

commerce.gov | Privacy Policy | Web Policies | FOIA | Accessibility | usa.gov

Source URL: http://www.ntia.doc.gov/blog/2016/china-s-internet-domain-name-measures-and-digital-economy

Links:
[1] https://blogs.state.gov/stories/2016/05/16/china-s-internet-domain-name-measures-and-digital-economy
[2] http://www.ntia.doc.gov/legacy/about/bio_strickling.html
[3] http://www.state.gov/r/pa/ei/biog/bureau/209063.htm
[4] http://www.ntia.doc.gov/category/domain-name-system

This blog post by Philip Corwin from the Internet Commerce Association was sourced with permission from:
www.internetcommerce.org/u-s-blasts-chinas-draft-domain-regulations/

ICANN and VeriSign Reach Deal for Ten Year .Com Agreement Extension by Philip Corwin, Internet Commerce Association

Internet Commerce Association logo: On February 11th VeriSign held its Fourth Quarter and Full-Year 2015 Earnings Call with stock analysts. In the course of the call VeriSign revealed that it had reached tentative agreement with ICANN to extend the .Com Registry Agreement (RA) by ten years, with the extension’s start coinciding with the effective date of the IANA contract transition. The current .Com RA is scheduled to terminate on November 30, 2018, with VeriSign having a presumptive right of contract renewal so long as it has effectively managed the premier gTLD and has not materially breached the RA.

Our review of the analyst call yields this preliminary analysis:

  • Verisign has negotiated an agreement with ICANN that would establish a new 10-year Root Zone Maintainer Agreement (with ICANN stepping into NTIA’s shoes) and link it to a 10-year extension of the separate .Com RA, both of which would commence on the date of the IANA transition. (So, if the transition occurs on October 1, 2016 – the date on which the current Congressional appropriations freeze on transfer of the IANA contract lapses — the expiration date of the .Com registry agreement would change from November 30, 2018 to October 1, 2026.)
  • The deal requires approval of the ICANN and VeriSign Boards, and then of the NTIA. It will be subject to public comment.
  • The deal does not lift the .Com price freeze contained in a separate Cooperative Agreement between VeriSign and NTIA. VeriSign retains its existing contract rights to petition for pricing relief if market conditions change sufficiently to restrain its .Com pricing power.

As we presently understand the situation, the Cooperative Agreement between VeriSign and the NTIA that imposed the .Com price freeze would remain unchanged and in place through late 2018, and any request by VeriSign to ease the pricing restrictions would be reviewed by NTIA and not by ICANN. That is important, because in 2012 ICANN’s Board approved a .Com renewal agreement that would have permitted four separate seven percent price increases during its six year term, and it was NTIA that imposed the price freeze urged by ICA. It’s also worth noting the near-final ICANN Accountability Proposal that will be delivered to ICANN’s Board next month restricts ICANN’s mission and core functions so that it cannot take on regulatory powers, including those of a competition authority.

ICA will carefully monitor this developing situation as it moves toward the public comment stage, when we will have an opportunity to review the actual written terms of the proposed agreement.

Our preliminary understanding of the agreement is based on the following statements made by VeriSign CEO D. James Bidzos during yesterday’s call:

ICANN and VeriSign are in the final stages of drafting the new Root Zone Maintainer Agreement to perform this Root Zone Maintainer role as a commercial service for ICANN upon the successful transition of the IANA functions… To ensure that root operations continue to perform at the same high level during the expected 10-year term of the Root Zone Maintainer Agreement, ICANN and VeriSign are in discussions to extend the term of the .com Registry Agreement to coincide with the expected 10-year term of the Root Zone Maintainer Agreement, ensuring that the terms of the two agreements are the same, will promote the stability of root operations, and will remove potential instability that might otherwise arise if the terms did not coincide…

While ICANN and VeriSign are in the final stage of preparing the Root Zone Maintainer Agreement and the .com Registry Agreement extension documents, there are several important steps that still need to occur including completing the drafting of the agreements, posting them for public comment and obtaining approvals from ICANN’s and VeriSign’s Board of Directors.

Additionally, under the Cooperative Agreement, we may not enter into the contemplated extension of the .com Registry Agreement without the prior written approval of the Department of Commerce. If the department does not approve the extension, then the current .com Registry Agreement will remain unchanged. We will provide periodic updates, as appropriate, on our progress toward these objectives…

So, first of all, I think it helps to just understand that we’re not actually changing the terms of the .com Registry Agreement. And this is not a renewal. This is an extension… In order to ensure the same steady, available, uninterrupted, secure and stable environment that we’ve been providing for three decades as a Root Zone Maintainer, it is also anticipated – we are discussing – the extension of the .com Registry Agreement for 10 years.

So at that point, should all of these conditions that I described earlier, for example, approval of ICANN’s Board of Directors and VeriSign’s Board of Directors, no changes whatsoever can be made to the .com Registry Agreement without the consent of the NTIA.

So subject to those approvals and the transition occurring, then we would have 10-year concurrent terms for the Root Zone Maintainer Agreement and the .com Registry Agreement. So what you would see is essentially a change of the date, the term, of the .com Registry Agreement.

That’s essentially the change. From an investor viewpoint, instead of a renewal in 2018, you would see a 10-year term that starts with the effective date of the two changes, the Root Zone Maintainer Agreement and the extended .com Registry Agreement. So, instead of November 30, 2018, you would see a date that is 10 years from the effective date of those two…

So, again, qualifying all of this to say that if we conclude our negotiations, we get all the necessary approvals, the triggering event that marks the “effective date” would then be the IANA transition occurring… The target date is September of 2016… I would just reiterate again that what we’re contemplating here, what we’re working towards, is an extension of the .com agreement. So, the terms wouldn’t change in the .com agreement…

So let me just say that, first of all, the terms of the .com agreement will not change, and the presumptive right of renewal, of course, would remain in the .com agreement. The .com agreement doesn’t actually address pricing. That’s addressed separately in the Cooperative Agreement.

The Amendment 11 of the Cooperative Agreement is the section that describes our contractual relationship with NTIA with respect to the root zone maintainer role. And that is the portion that it’s contemplated would essentially move into a new contract, the RZMA that we’re negotiating with ICANN.

Amendment 32 is a separate part of the Cooperative Agreement that addresses pricing with respect to our ability to seek a price change if we think it’s justified by market conditions. So I certainly don’t anticipate that that would change. That would remain. So VeriSign’s right to seek relief from price controls based on market conditions that would warrant it would remain…

I think the extension means that the date changes on the agreement. But any change to the agreement requires the consent of the NTIA. And so, I can’t speak for NTIA. This is their process. The part of the process we’re involved in would be to negotiate the Root Zone Maintainer Agreement with ICANN to present that along with a .com contract that has the date extended and present that to NTIA.

This is, of course, in response to their March 2015 request for a way to transition the root zone maintainer role and to take NTIA out of that process. So that will be up to them when they see it. So I think that’s what they asked for and that’s what they’re looking for. This is not a renewal in the sense that all of the normal things that happen during a renewal would happen. So I don’t quite see it that way…

I anticipate that we would have our Amendment 32 rights to petition based on changing market conditions for price relief. And also that, certainly, the agreement calls for the ability for VeriSign to seek so-called cost-justified price increases and that includes things like cost of implementing Consensus Policies or specific threats to the DNS that are extraordinary that we have to respond to – unanticipated expenses associated with responding to threats. So I don’t see those changing at all… What we’re doing here is we’re seeking an extension to the .com Registry Agreement. The Cooperative Agreement expires in 2018, and we are not seeking any change to that. That is up to NTIA. That is their process, their contract, so I would certainly defer to them… It expires in 2018, but it’s up to NTIA to decide at that point what happens.

 (Emphasis added)

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
http://www.internetcommerce.org/ten-year-dotcom-extension/

Final RPM Report Follows ICA Comment and Sets Stage for UDRP Review by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoDomain registrants have long voiced their desire for a comprehensive review and subsequent reforms of the Uniform Dispute Resolution Policy (UDRP). That goal is now in sight, and is set to proceed in the manner recommended to ICANN by ICA.

On January 11, 2016 ICANN policy staff submitted to the GNSO Council the “Final Issue Report on a Policy Development Process to Review All Rights Protection Mechanisms in All Generic Top-Level Domains”. That Final Report is culmination of a public comment process that started last October, in which ICA actively participated, considering how a review of the rights protection mechanisms (RPMs) for the new gTLD program should be related to an unprecedented review of the UDRP, the only ICANN Consensus Policy that has never been subjected to scrutiny since its creation. Domain registrants desiring a balanced approach to their rights versus those of trademark owners have a big stake in both reviews. RPMs should recognize and protect the rights of both domains and trademarks.

In its December 1st comment letter, ICA stated its preference for a sequential review process:

ICA prefers a separate and sequential approach for the reviews and subsequent reports and recommendations, with the RPM review preceding and thereby informing the UDRP review.

ICA further explained its practical and policy reasons for that preferred two-part approach:

Both domain registrants and trademark owner complainants deserve, after nearly two decades of unexamined use, a UDRP review and reform process that is accorded adequate time for comprehensive review and development of subsequent recommendations. This review of necessity must be preceded by the RPM review, as it was the intent of the GNSO Council in 2011 that the UDRP review be informed by that of the RPMs and by any changes made to them….We fully expect that there will be substantial interest in completing the RPM review prior to the opening of any second round of new gTLDs, and that consideration provides another reason for structural separation. If the RPM and UDRP reviews were addressed together, substantial pressure could arise to truncate the UDRP portion lest it delay the timing and adoption of final RPM recommendations. As a result this first-ever UDRP review could get short shrift and inadequate attention.

That ICA suggestion was essentially adopted by ICANN staff. In this regard, the Final Report suggests the following procedure:

Following review of community feedback received regarding the three options for a RPM review that were presented in the Preliminary Issue Report for public comment, ICANN staff recommends that the GNSO Council launch a PDP in accordance with what was presented as the third option in the Preliminary Issue Report: namely, to conduct a policy review of all the RPMs in two phases. The initial phase would focus on a review only of the RPMs developed for the New gTLD Program, and the second phase would focus on a review of the UDRP. The second phase may also include any issues identified during the first phase of the PDP that are more appropriately considered during the second phase. Cumulatively, the results of both phases of the PDP would be a full review of all RPMs developed to date for all gTLDs….Staff recommends that the work in the initial phase of the RPM PDP be performed by a standalone PDP Working Group that liaises with the recently launched PDP Working Group on New gTLD Subsequent Procedures as there may be overlapping issues arising during the work of both groups that would warrant careful coordination. Staff does not recommend folding in a review of the RPMs that were developed for the New gTLD Program into the scope of work for the New gTLD Subsequent Procedures PDP due to the likely complexity and size of that PDP….Staff also recommends that, upon completion of Phase One, the PDP Working Group submits a First Initial Report to the GNSO Council that is also published for public comment….The second, subsequent phase of work in the RPM PDP would be a review of the UDRP, ideally carried out by the same PDP Working Group….Staff believes that a benefit of this two-phased approach is a better alignment of the timing of the work on reviewing the New gTLD Program RPMs with the operational reviews of the New gTLD Program17 (including the CCT Review) and the PDP on New gTLD Subsequent Procedures. (Emphasis added)

The GNSO Council has already proceeded in harmony with that suggested approach. During its meeting of January 21st, Council adopted a Charter for The New gTLD Subsequent Procedures PDP Working Group that specifically prohibits it from addressing the RPMs, stating:

Second-Level Rights Protection Mechanisms: Proposing recommendations directly related to RPMs is beyond the remit of this PDP. There is an anticipated PDP on the “current state of all rights protection mechanisms (RPMs) implemented for both existing and new gTLDs, including but not limited to the UDRP and the URS…”. Duplication or conflicting work between the New gTLD Subsequent Procedures PDP and the PDP on RPMs must be avoided. If topics related to RPMs are uncovered and discussed in the deliberations of this PDP, those topics should be relayed to the PDP on RPMs for resolution. To assure effective coordination between the two groups, a community liaison, who is a member of both Groups, is to be appointed jointly by both Groups and confirmed by the GNSO Council. (Emphasis added)

That means that review of all the new gTLD RPMs—the Trademark Clearinghouse (TMCH) and related Sunrise and Trademark Claims service periods; Uniform Rapid Suspension System (URS); and Post-Delegation Dispute Resolution Procedures (PDDRPs) — should be the sole preserve of a new Working Group (WG) on all RPMs in all gTLDs. Following that review, it will proceed to review the UDRP and consider whether it should be reformed.

The GNSO Council will likely take up a Motion to establish that RPM WG, as well as adopt its Charter, at its next meeting scheduled to take place on February 18th.

Once Council takes that next step, ICA intends to fully engage in the review of the new gTLD RPMs and, of course, the UDRP review. ICA will advocate an approach that, while fully respecting the legitimate rights of trademark owners, brings greater balance to the exercise of all the RPMs and that helps to make the application of the UDRP a more consistent and predictable process in the future. We will of course keep our members comprehensively informed as the reviews proceed, and will solicit their feedback and guidance as critical questions emerge.

This article was sourced with permission from the Internet Commerce Association website here.

ICA Tells ICANN That Comprehensive UDRP Review Should Follow RPM Analysis by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoOn November 30th ICA filed its comment letter regarding the “Preliminary Issue Report on a GNSO Policy Development Process to Review All Rights Protection Mechanisms in All gTLDs” that was published for public comment on October 9, 2015.

ICA’s complete comment can be viewed at forum.icann.org/lists/comments-rpm-prelim-issue-09oct15/msg00021.html, and all 24 filed comments are available at forum.icann.org/lists/comments-rpm-prelim-issue-09oct15/index.html.

The principal question raised by the Report was whether the review and possible adjustment of new gTLD RPMs and the review and potential reform of the UDRP should be combined or separated. On that key decision, our comment letter said that the RPMs should be addressed prior to the UDRP review for these reasons:

We believe that the RPM review and the UDRP review each constitutes a highly complex array of interrelated questions and judgments, and that trying to combine the two into a single mega-review will tax any Working Group (WG) inordinately.

In particular, the UDRP review will constitute the first comprehensive inquiry into ICANN’s oldest Consensus Policy. It may address structural issues; such as whether ICANN should enter into uniform contractual agreements with all UDRP providers, whether there should be clear boundaries to prevent individual dispute providers’ Supplementary Rules from influencing decisional outcomes, and whether an internal appeals procedure should provide an avenue for a ‘UDRP Supreme Court’ to address and reconcile disparate decisions by different providers on nearly identical fact patterns.

…Both domain registrants and trademark owner complainants deserve, after nearly two decades of unexamined use, a UDRP review and reform process that is accorded adequate time for comprehensive review and development of subsequent recommendations. This review of necessity must be preceded by the RPM review, as it was the intent of the GNSO Council in 2011 that the UDRP review be informed by that of the RPMs and by any changes made to them. Further, as staff notes at page 8 of the Report, one result of “this approach is the fact that community consideration of the more general overarching issue concerning the comprehensiveness of all the RPMs as a set of aggregate protections for trademark holders in all gTLDs, as well as the issue of whether any of the new RPMs should be considered Consensus Policies like the UDRP, will necessarily be postponed to the second phase of work”. Unlike staff, we do not view that consideration as a drawback but as a far more responsible approach than considering integration of any of the new gTLD RPMs in legacy gTLD without knowing whether or in what manner they may be altered.

We agree with staff that “One benefit of this two-pronged approach is better alignment of the timing of the work on reviewing the new RPMs with the operational reviews of the New gTLD Program (including the CCT Review) and, conceivably, a new PDP on New gTLD Subsequent Procedures”. We fully expect that there will be substantial interest in completing the RPM review prior to the opening of any second round of new gTLDs, and that consideration provides another reason for structural separation. If the RPM and UDRP reviews were addressed together, substantial pressure could arise to truncate the UDRP portion lest it delay the timing and adoption of final RPM recommendations. As a result this first-ever UDRP review could get short shrift and inadequate attention.

Many of the other groups and individuals who filed comments also took the view that the RPM and UDRP reviews should be separate, with the RPMs teed up first.

What did surprise us was the reluctance of the trademark community to even contemplate a review of the UDRP, much less consider any changes based on nearly twenty years of experience with it.

The International Trademark Association (INTA) asserted that it is “is strongly opposed to opening the Uniform Dispute Resolution Policy (UDRP) to review as the UDRP has been functioning efficiently and well for over fifteen years. It is important to maintain this effective mechanism which combats the most blatant instances of cybersquatting within the domain name system. Any review or subsequent modifications could jeopardize the benefits that the UDRP is intended to provide to trademark owners.” Having attended INTA conferences along with thousands of others, and seen the money invested in global branding as well as the sector’s political influence, it strains credulity to believe that trademark owners could be “rolled’ in the course of a UDRP review.

ICANN’s Intellectual Property Constituency (IPC) warned “that the complexity of any review would be immense and the drain on resources considerable, with a risk of creating new problems via an overly complicated review process… the IPC has a serious concern that if a review were to be carried out, there is a risk of a polarization of views into two camps – each with a fear that the other camp would either dilute or overly strengthen the UDRP. Improvements sought by one side would be seen as potentially abusive to registrants, improvements sought by the other as potentially diluting the effectiveness of a mechanism for resolving disputes efficiently… if a review of the UDRP as a policy is to be considered, an “Expert Group” should be assembled to carry out this review.” For ICA’s part, we think that, just like war is too important to just be left to the generals, UDRP review and reform is too important to just be left to “experts” and must include participation by those with broader views of the UDRP’s impact on domain registrants and free expression, among other key considerations.

And UN agency and accredited UDRP provider the World Intellectual Property Organization (WIPO) opined that “the UDRP continues to function as intended. In its harmonized criteria and universal application, this anti-cybersquatting mechanism has come to be recognized as an international policy success… Destabilization of the predictable UDRP framework may have a range of unintended consequences. It would disrupt the body of precedent carefully developed by hundreds of panelists from across jurisdictions in tens of thousands of cases… Each day, the UDRP demonstrates the flexibility to meet the demands of an evolving DNS; it does not need system-wide updates that would imprudently limit this flexibility”. To the contrary, domain investors would respond that this “flexibility” is code for a lack of any binding precedent that makes the UDRP more of a casino game in a world of proliferating UDRP providers.

We are pleased that ICANN’s Business Constituency, of which ICA is a member, took a more balanced approach, stating, “While the BC believes that the UDRP is working well overall, it now seems timely to engage in a review of its performance with an eye toward considering possible improvements, so long as that UDRP review commences after completion of the RPM review.”

In response to the trademark community’s message of opposition and excessive caution, ICA added this final point to our comment’s Executive Summary, to wit:

Finally, we have strong disagreement with the view expressed by a minority of commenters that the UDRP review anticipated by the GNSO Council’s Resolution of December 15, 2011 should not proceed at all, and that any such undertaking would be unduly arduous and dangerous. The UDRP is the only ICANN Consensus Policy that has never been reviewed. Like any human undertaking, it is not perfect and was drafted by individuals who could not have known how it would be implemented in practice. Any UDRP review should of course be fully informed by the actual record of UDRP practice and experience of participants, and should proceed carefully. But we are confident that a good faith UDRP review that considers the legitimate rights and interests of both registrants and complainants, as well as related public policy issues, can produce a more balanced and consistent system that preserves the fundamental virtues of the UDRP while yielding modifications that benefit all affected parties.

ICA looks forward to participating in both the RPM and UDRP reviews. ICANN staff is scheduled to deliver a Report summarizing comments and suggesting next steps by December 10th. Following receipt of that report, the GNSO Council will decide on a way forward and, if ICA’s and other commenters’ proposed procedure is followed, will consider a draft Charter for an RPM review working group in the initial months of 2016.

Throughout the coming review processes, ICA will be an active participant seeking to protect the legitimate rights and interests of domain investors and developers and to bring greater balance between trademark and domain rights.

Here’s the rest of our comment letter’s Executive Summary:

Executive Summary

  • ICA prefers a separate and sequential approach for the reviews and subsequent reports and recommendations, with the RPM review preceding and thereby informing the UDRP review.
  • ICA reiterates all of the points made and views expressed in our prior RPM comment letter of April 30, 2015.
  • ICA believes that the URS has been largely effective in achieving its intended goals. We would strongly oppose any alterations that could make it a substitute for, rather than a narrow supplement to, the UDRP. In addition, the initiation of a PDP to determine whether the URS and other new gTLD RPMs should become Consensus Policies for all gTLDs, and the full consideration of the multiple transitional issues accompanying any such decision, illustrates again that the decision of GDD staff to seek imposition of the URS in contract renewal negotiations with legacy gTLDs was a direct and impermissible intrusion into the policy realm reserved to GNSO Council by ICANN’s Bylaws. ICANN’s Board should therefore instruct GDD staff to cease and desist from any such attempts during the time that these PDPs are open and active, and should refuse to approve any legacy gTLD renewal contract that contains any provision of new gTLD RPMs.
  • The language of Trademark Claims notices may deter legitimate noninfringing domain registrations at new gTLDs. This situation can be partly but not completely addressed by providing more comprehensive information in the notice to the prospective registrant, and also clarifying under what circumstances the post-notice registration of a domain will be considered to constitute “bad faith” for UDRP and URS purposes.
  • Labels that generate a Trademark Claims notice should not be expanded beyond the present system of exact matches of the trademark, plus domain labels recovered in UDRP or court actions under the ‘Trademark-plus-fifty’ implementation measure.
  • The right of first refusal for a premium domain name during or after the sunrise period should be conditioned on whether the trademark is unique or a dictionary word, and if a dictionary word whether the gTLD label is related to the goods and services for which it is registered.
  • Our responses to the report’s UDRP questions emphasize the need for a mechanism, perhaps via an optional internal appeal, to establish greater predictability and consistency in decisions dealing with similar facts; better protection for free speech, especially legitimate noncommercial criticism; more equitable time periods for respondents to choose counsel and draft answers; a fairer means of allocating cases among UDRP providers and their panelists; and establishment of a uniform laches policy barring complaints in defined circumstances.
  • Our additional comments on the UDRP address the need for clear guidelines and meaningful penalties to determine and deter attempted Reverse Domain Name Hijacking; greater transparency requirements for UDRP providers; and establishment of an ICANN-maintained centralized database of UDRP decisions and other relevant information.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
http://www.internetcommerce.org/rpm-udrp-review/

The TPP and the DNS by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoOn November 5, 2015 the Office of the U.S. Trade Representative (USTR) released the official text of the Trans-Pacific Partnership (TPP). That text consists of 30 separate Chapters totaling more than 2,000 pages, and is accompanied by four additional Annexes and dozens of Related Instruments. Only those who negotiated it are likely to have a detailed understanding of all its provisions, and even that probably overstates reality.

The TPP’s intellectual property (IP) provisions are contained in Chapter 18, which runs for a mere 74 pages. While the majority of these provisions address patents, copyrights, and trademarks, Article 18.28 deals with Domain Names (its full text is reproduced at the end of this article). While of direct relevance to the domain name industry as well as the trademark sector, these provisions were not deemed sufficiently important to merit a single word of explanation in the IP Rights issue paper or fact sheet issued by USTR.

There are twelve signatory nations to the TPP – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. Article 18.28 requires each of them to do two things with regard to domain names:

  1. Make available for its country code top level domain (ccTLD) a dispute resolution procedure, modeled upon the principles of ICANN’s Uniform Dispute Resolution Policy (UDRP), that is designed to provide expeditious and low cost resolution, is fair and equitable, is not overly burdensome, and does not bar access to judicial redress; and
  2. Provide online public access to a reliable and accurate database of domain registrants in its ccTLD in accordance with each nation’s laws and relevant administrative policies regarding privacy and personal data protection.

Neither of these provisions is earth-shattering, and to some degree they are even positive for the domain sector. Most major ccTLDs already provide access to non-judicial dispute resolution between trademark rights holders and domain registrants, and some even go beyond TPP’s requirements. The .US ccTLD, for example, which had already adopted the UDRP, announced in June 2104 that it was adopting the Uniform Rapid Suspension (URS) procedure which was developed for ICANN’s new gTLD program but is not yet a Consensus Policy applicable to legacy gTLDs. Further, the .US versions of both UDRP and URS require the rights holder to only demonstrate that “the domain name(s) were registered or are being used in bad faith”, while the ICANN versions require evidence of both bad faith registration and use. From a registrant’s point of view, the most positive element of the TPP language is its emphasis on a “fair and equitable” process and its preservation of court access.

As for online access to registrant data, the TPP’s deference to law and policy regarding privacy and personal data protection does not appear to attempt to influence the ongoing attempt by ICANN stakeholders to fashion a new database policy to replace WHOIS. Nor does it require ccTLDs to prohibit the use of privacy and proxy services (which are permitted, for example, by the .AU registry).

So Article 18.28 seems to at least satisfy the “do no harm” standard.

These provisions do not take effect until a signatory nation take the additional steps required under its law to formally adopt the TPP. In the U.S. that requires Congressional approval. President Obama’s November 5th letter to the House and Senate leaders concludes with this statement:

“Consistent with the Trade Priorities Act, I am sending this notification at least 90 days in advance of signing the TPP Agreement.  My Administration looks forward to working with the Congress in developing appropriate legislation to approve and implement this TPP Agreement.”

The TPP faces stiff political opposition within the U.S. Most Democrat members of Congress are opposed to it due to strong resistance from unions and other interest groups.

While we don’t see them as being in the camp of either U.S. political party, the Electronic Frontier Foundation (EFF) recently declared that the publication of TPP’s IP provisions “confirms our worst fears about the agreement, and dashes the few hopes that we held out that its most onerous provisions wouldn’t survive to the end of the negotiations”. EFF took a far more jaundiced view than our own regarding the domain name provisions, observing that it “requires countries to adopt an equivalent to ICANN’s flawed Uniform Domain-Name Dispute Resolution Policy (UDRP), despite the fact that this controversial policy is overdue for a formal review by ICANN” (Note: Such UDRP review is expected to commence in the first half of 2016.)

With the U.S. elections just a year away, U.S. Presidential and Congressional electoral politics are converging to bear on the TPP’s prospects. Presidential Contender Bernie Sanders is a long-time and highly vocal detractor of the pact. His official position states that he:

“Opposed NAFTA, CAFTA, permanent normal trade relations (PNTR) with China, the TPP, and other free-trade agreements. These deals kill American jobs by shifting work overseas to nations which fail to provide worker protections and pay extremely low wages.”

Meanwhile, Hillary Clinton, who pronounced the TPP to be the “gold standard” of modern trade deals while serving as Secretary of State in the Obama Administration, reversed that stance on October 7th, shortly after the final text was published on WikiLeaks, stating:

“As of today, I am not in favor of what I have learned about it. I have said from the very beginning that we had to have a trade agreement that would create good American jobs, raise wages and advance our national security. I still believe that’s the high bar we have to meet. I’ve been trying to learn as much as I can about the agreement, but I’m worried. I appreciate the hard work that President Obama and his team put into this process and recognize the strides they made. But the bar here is very high and, based on what I have seen, I don’t believe this agreement has met it.”

That position, alleged by some to constitute a “flip-flop “, caused the Washington Post to opine in an editorial:

“Bowing to pressure from the Democratic Party’s ascendant protectionist wing, would-be presidential nominee Hillary Clinton has come out against President Obama’s freshly negotiated Trans-Pacific Partnership (TPP) trade agreement. The most hopeful thing to be said about this deeply disappointing abandonment of the president she served, and the internationalist tendency in Democratic ideology she once embodied, is that it is so transparently political… To be sure, Ms. Clinton salted her anti-TPP statement with qualifiers: “What I know about it.” “As of today.” “I am not in favor of what I have learned about it.” And so on. In other words, there is still a chance that later on, if or when she’s president, and it is to her advantage, she may discover some decisive good point in the TPP that would let her take a different position without, technically, contradicting herself. Cynical? Perhaps, but as we said, that’s the hope.”

On the Republican side, leading Presidential contender Donald Trump has made his TPP opposition clear, stating inimitably in a November 9th interview, ““The deal is insanity. That deal should not be supported and it should not be allowed to happen.” While Jeb Bush has voiced support for TPP, others vying for the GOP nomination do not appear to be eager to take a hard position that could antagonize an already disaffected and generally anti-establishment voter base, particularly within its “Tea Party” contingent. More establishment Republican corporate interests tend to favor the TPP, but even in that camp there are notable industries and major companies with strong concerns about various aspects of the agreement.

Congress voted in June 2015 to give the President “fast track” trade promotion authority for the TPP, but that does not mean that a vote will come quickly — just that the TPP text cannot be amended by Congress. The earliest Congress might vote on TPP is Spring 2016. But given that 2016 will be a politically charged year with control of the House, Senate, and White House all theoretically up for grabs, neither party is anxious to take a vote that could alienate millions of potential voters. So there’s a good chance that the final decision on TPP will be left to the next President and Congress sometime in 2017.

The TPP’s signatory nations do not include the largest economic power on the western shore of the Pacific, China, and that omission is to some extent meant to deliberately counter that nation’s economic designs for the Pacific Rim. As former U.S. Treasury Secretary Lawrence Summers just described that strategy:

“The Council on Foreign Relations, hardly a source of xenophobic or radical ideas, recently issued a report drafted by leading U.S. diplomats condemning this country’s efforts to build up China within the international economic order and calling for a “balancing strategy” that includes “new preferential trading arrangements. . .that consciously exclude China.” No small part of the case being made by the Obama administration for the Trans-Pacific Partnership (TPP) trade deal involves the idea that it will promote competitiveness vis-a-vis China and reduce China’s influence in determining global trade rules.”

But global investment flows route around trade policies just like the Internet routes around obstacles, and Chinese investors are today taking actions that may elevate the status of domain names in future trade agreements. Domain name registrations have recently been hitting record levels and, as reported in The Domains, most of the demand seems to be coming from purchasers in China who want to diversify out of equities and real estate and now view domains as an asset class with multiple valuable attributes, including good price appreciation potential.

That changing economic role for domains gives hope that, when the next multinational trade pact is under development, the domain investment industry will be well positioned to make its own case that domains must be viewed not just through the prism of potential trademark infringement but as a valuable intangible asset unto itself, and one that is equally deserving of uniform international recognition and protections.

 

***

Domain Name Provisions of the TPP:

 

Article 18.28: Domain Names

  1. In connection with each Party’s system for the management of its country-code top-level domain (ccTLD) domain names, the following shall be available:

(a) an appropriate procedure for the settlement of disputes, based on, or modelled along the same lines as, the principles established in the Uniform Domain-Name Dispute-Resolution Policy, as approved by the Internet Corporation for Assigned Names and Numbers (ICANN) or that:

(i) is designed to resolve disputes expeditiously and at low cost;

(ii) is fair and equitable;

(iii) is not overly burdensome; and

(iv) does not preclude resort to judicial proceedings; and

(b) online public access to a reliable and accurate database of contact information concerning domain-name registrants,

in accordance with each Party’s law and, if applicable, relevant administrator policies regarding protection of privacy and personal data.

  1. In connection with each Party’s system for the management of ccTLD domain names, appropriate remedies17 shall be available at least in cases in which a person registers or holds, with a bad faith intent to profit, a domain name that is identical or confusingly similar to a trademark.

17 The Parties understand that such remedies may, but need not, include, among other things, revocation, cancellation, transfer, damages or injunctive relief.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
http://www.internetcommerce.org/the-tpp-and-the-dns/

ICA Asks ICANN BGC to Reconsider Approval of Legacy gTLD Registry Agreements Containing URS by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoOn October 13th ICA filed a formal Reconsideration Request (RR) asking ICANN’s Board Governance Committee (BGC) to rethink The Board’s approval of the renewal registry agreements (RAs) for .Travel, .Cat and .Pro. All three renewal agreements contain Uniform Rapid Suspension (URS) and other rights protection mechanisms (RPMs) drawn from the new gTLD program. Those RPMs are in the contracts largely because staff of ICANN’s Global Domain Division (GDD) started the RA renewal process by proposing their inclusion “to increase the consistency of registry agreements across all gTLDs”. ICA had previously filed comments on all three proposed RAs protesting the inclusion of the URS, as did the large majority of all those who commented.

The explanations of the Board Resolutions approving the three RAs, accomplished with no formal vote on the Consent Agenda of its September 28th meeting, contains the comforting words that “the Board’s approval of the Renewal Registry Agreement is not a move to make the URS mandatory for any legacy TLDs, and it would be inappropriate to do so”. However, it also includes the highly questionable assertion that the inclusion of the URS in the Renewal RAs is based on the bilateral negotiations between ICANN and the Registry Operator, where Registry Operator expressed their interest to renew their registry agreement based on the new gTLD Registry Agreement…and transitioning to the new form of the registry agreement would not violate established GNSO policy“.

There are two major problems with that reasoning:

  • First, there is no equality of bargaining position between a registry that needs its contract renewed, and that often is seeking to obtain beneficial amendments to its prior RA, and GDD staff who take RPM inclusion as their starting point and insist on that throughout the negotiation process as the price of reaching a deal. The assertion that these Registry Operators “expressed their interest” in adopting the URS is a convenient fiction when, by their own admission, GDD staff proposed it at the start of negotiations. The very fact that all three of these registries adopted the RPMs is circumstantial evidence that the action was coerced and hardly voluntary.
  • Second, and more important for preserving ICANN’s multistakeholder bottom-up policy development process, GDD staff subverted it by making what is incontrovertibly a policy decision on a critical question that has not yet been addressed by the community. Now that the Board has condoned this GDD staff initiative they are free to pursue the same RPMs end with every legacy gTLD when their contracts come up for renewal – including .Org, .Net and .Com.

As ICA explained in its RR:

“We believe that this attempt by ICANN contracting staff to create de facto Consensus Policy via individual registry contract, absent a relevant Policy Development Process (PDP), is a glaring example of the type of top down, unaccountable action that should be targeted by enhanced accountability measures accompanying the IANA transition proposal. Contracts with legacy gTLDs can contain and enforce Consensus Policy, but it is an impermissible violation of ICANN’s Bylaws for contracts to attempt to create Consensus Policy.

… We further note that ICANN staff has just issued, on October 9th, the “Preliminary Issue Report on a GNSO Policy Development Process to Review All Rights Protection Mechanisms in All gTLDs”. This report will be considered by the GNSO Council and the ICANN community at the upcoming ICANN 54 meeting in Dublin, Ireland and, following a public comment period scheduled to end on November 30th, will result in a Final Staff report being issued on or about December 10th.

That Final Report will probably provide the foundation for the initiation of one or more Policy Development Processes (PDP) addressing whether the new gTLD RPMs should be adjusted and, more relevant to this reconsideration request, whether they should be adopted as Consensus Policy and applied to legacy gTLDs and/or integrated with the UDRP. Indeed, the Preliminary Issue Report notes (at pp.22-23):

“These [potential] issues would be specific topics to be addressed as part of their Charter by the PDP Working Group, in addition to the more general, overarching issues such as:

  • Whether any of the new RPMs (such as the URS) should, like the UDRP, be Consensus Policies applicable to all gTLDs, and the transitional issues that would have to be dealt with as a consequence.”

This passage of the Preliminary Issue Report constitutes further and new material evidence, provided directly by ICANN policy staff, that the question of whether the URS should become a Consensus Policy applicable to all gTLDs is an overarching policy matter, and that it is wholly inappropriate for GDD staff to seek imposition of it on legacy gTLDs as the starting point for registry renewal agreement negotiations because doing so creates de facto consensus policy via contract. It also identifies the presence of “transitional issues” that have in no way been considered in pressing for the inclusion of the URS in the three renewal agreements that are the focus of this reconsideration request.

Unless and until the URS is adopted as a Consensus Policy for all gTLDs, ICANN staff should not be initiating the registry agreement renewal process with any legacy gTLD by suggesting that new gTLD RPMs be the starting point for contract negotiation as, given the inequality in bargaining power, this can have the effect of making the URS a de facto Consensus Policy notwithstanding the fact that the regular order PDP outlined in and required by the Bylaws has not been followed. Such GDD staff actions make a mockery of and undermine the integrity of the GNSO’s upcoming PDP review of RPMs.ICA will continue to use all available means to assure that the policies imposed on the registrants of more than 100 million legacy gTLD domains are determined through the policymaking process mandated by ICANN’s Bylaws and not set by the whims and coercive pressure of GDD staff.

BGC action on a RR is generally supposed to take place within 30 days of its filing. The RR process is constructed in a manner to provide multiple procedural grounds for summary dismissal without ever reaching the merits of the situation. While that unfortunate avoidance tactic could be utilized, we are hopeful that the importance of this precedent-setting situation, as well as the fact that a similar RR was jointly filed by ICANN’s Business Constituency (BC) and Non-Commercial Stakeholder Group (NCSG), will convince the BCG to do the right thing and address the RRs on their substantive merits.

And we will of course comment upon the recently issued Preliminary Report on Rights Protection Mechanisms in All gTLDs and participate in any subsequent policy development process (PDP) to ensure that RPM Consensus Policies are balanced, and respectful of the procedural and substantive due process rights of domain registrants.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
www.internetcommerce.org/rr-on-urs/