Tag Archives: Philip Corwin

Domain Name Aftermarket, ICANN and Governance

Phil Corwin Resigns From ICA and Starts With Verisign

Philip Corwin imageLong time legal counsel for the Internet Commerce Association, Philip Corwin, last week announced he’d resigned from his Virtualaw LLC, through which he worked with the ICA, and this week it was announced why. Corwin has taken up a new opportunity to work in Verisign’s legal department as Policy Counsel.

As he is now working for a body that has a contract with ICANN, Corwin has also resigned from a number of positions he held including the ICANN Business Constituency and his position representing it on the GNSO Council. He will continue in his role as co-chair of the RPM Review Working Party Group.

Corwin through the law firm Virtualaw LLC, which he founded in Washington D.C., worked for the ICA for 11 years and in that time penned many articles and more importantly worked hard on developing policies within the ICANN community, particularly for domain name investors.

Zak Muscovitch will take over Corwin’s role with the ICA until a permanent replacement is found.

ICANN and Governance

Report on ICANN 59 Johannesburg by Philip S. Corwin, Internet Commerce Association

Internet Commerce Association logoThe 59th ICANN meeting was held in Johannesburg, South Africa from June 25th to 29th. Under ICANN’s new meeting schedule this mid-year gathering is the somewhat shorter “B” session devoted to intensive policy development work. This report details my engagement as ICA Counsel on your behalf and current and expected benefits to ICA members.

The meeting’s first day was exclusively dedicated to the ongoing efforts of the Work Stream 2 (WS2) ICANN accountability process. It deals with issues that, while important, did not have to be resolved prior to the IANA transition that took place on October 1, 2016. Many WS2 issues, such as greater transparency through improved community access to internal ICANN memos and documents, have been completed or are close to it. ICA members have identified greater ICANN accountability and transparency as a priority goal, and our continued engagement in this process will help maximize the benefits.

The most contentious subject remains ICANN’s jurisdictional status as a California-based, U.S. non-profit corporation. While a minority of Jurisdiction subteam members continue to seek exploration of alternative incorporation venues, discussions in Johannesburg appear to have established that the majority of members believe that it’s past time to accept U.S. jurisdiction given that the entire new accountability structure meshes with California law, and that there is no consensus for considering alternatives nor any compelling reason to do so. That outcome is consistent with ICA’s preference that ICANN remain situated in the U.S. to provide continued certainty as to applicable law and judicial oversight of its operations. The subteam will continue exploring jurisdiction issues that arise in regard to ICANN contracts and non-U.S. offices.

All of the ongoing policy development process (PDP) working groups held long open sessions in Johannesburg, including the two that I co-chair. The first, which is nearing completion after three years of work, involves the access of International Intergovernmental Organizations (IGOs – mostly UN agencies) to the UDRP and URS. IGOs, backed by the Governmental Advisory Committee (GAC), have been pushing for their own separate versions of those proceedings, based on broad claims of judicial immunity, in which a domain registrant would not have access to judicial review of an adverse initial decision but just another arbitration-type proceeding if they thought the initial decision was ill-founded. After engaging an independent legal expert regarding the scope of IGO jurisdictional immunity, the WG determined that there was no sound basis for the IGO’s broad immunity claims and instead is focusing on assuring that IGOs have ready access to the UDRP and URS as well as means to file via third parties and thereby safeguard the actual scope of their immunity. As we work toward wrapping up our efforts this fall, we are considering what to do if an IGO were to succeed in asserting immunity in a post-UDRP decision judicial process and thereby got the court action dismissed. Current UDRP language would let the UDRP decision be enforced upon dismissal of the judicial action brought by the domain registrant, but we are considering changing that to provide the domain registrant with a de novo review by an arbitrator in that narrow circumstance in order to assure a meaningful registrant appeal while respecting judicially determined IGO immunity. This WG is aiming to conclude its deliberations and submit a final report prior to the next ICANN meeting. ICA members will benefit from the WG’s insistence that domain registrants continue to have access to available judicial redress from an adverse UDRP decision regardless of the Complainant’s identity, as well as potential creation of a new review forum where one might not be otherwise available under current practice.

The other WG that I co-chair is the one reviewing all rights protection mechanisms (RPMs) in all gTLDs. This is the PDP that will commence the first-ever review of the UDRP in mid-2018. But for now we are focused on the RPMs created for the new gTLD program, and in Johannesburg we heard reports from two subteams examining sunrise registrations for trademark owners as well as trademark claims notices sent to those seeking to register a domain that’s an identical match to a trademark submitted to the Trademark Clearinghouse. That WG’s three hour session ended with a productive dialogue in which registries and registrars provided their perspective on operational aspects of these RPMs. ICA members have identified meaningful UDRP reform as their top policy priority, and my participation as a WG co-chair helps provide assurance that the review process will be balanced and comprehensive.

ICANN’s GNSO policymaking Council also held several sessions during the meeting. I serve on the Council as one of two elected representatives of ICANN’s Business Constituency. One issue of growing concern to Council members is a push by the GAC and other ICANN constituencies to address certain issues relating to gTLDs through a Cross-Community Working Group (CCWG) rather than via a GNSO PDP. While the PDP process welcomes the participation and input from anyone in the ICANN community, the ultimate decisions are made by the GNSO as this is the foundation of the bottom-up multistakeholder policy process rooted in the private sector and civil society rather than governments. The hot topic on which this debate is centered involves geographic names in new gTLDs, with governments pressing to have rights of pre-approval for almost any map name including villages, streams, and any landmark of cultural significance. On both process and substance, Council members reaffirmed their commitment to defend GNSO primacy on gTLD policy and to resist governmental overreach lacking a sound basis in law or policy.
The other hot issue discussed at ICANN 59 was the European Union’s (EU) General Directive on Privacy Regulation (GDPR), which will become effective in the spring of 2018. GDPR could subject registries and registrars to massive fines for revealing now-public WHOIS data, and there was extended discussion in Johannesburg regarding potential means of by which these contracted parties might comply with the Directive while continuing to collect and make available WHOIS data. ICANN staff is also investigating whether some GDPR exception can be granted for WHOIS data given its key role in consumer and IP protection.

ICANN 60 will take place in late October in Abu Dhabi. That is the week-long Annual General Meeting, and many of these same issues will be revisited there. I have just been re-nominated for a final term as one of the Business Constituency’s two representatives on the gTLD policy-making GNSO Council, and if I am re-elected (as appears very likely) I will commence that final two-year term at ICANN 60. My participation at this high-level of the ICANN policy process increases the stature of the ICA within the ICANN community and also provides enhanced access to Board members, senior staff, and internal information flows.

ICANN 60 will also see the retirement of ICANN’s current Board Chairman, Steve Crocker, and we are waiting to see who will replace him to lead post-transition ICANN’s Board. So stay tuned because all these developments can affect the domain marketplace and your rights in your portfolio.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
https://www.internetcommerce.org/report-on-icann-59-johannesburg/

ICANN and Governance

ICA Supports ICANN Transparency Improvements by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoThe Internet Commerce Association fully supported the insistence of ICANN’s community that the IANA Transition had to be accompanied by substantial improvements in ICANN Accountability.

Some of those improvements were deemed to be necessary preconditions to the Transition. They included substantial revisions of ICANN’s Bylaws to reflect new community powers, such as the ability to veto budgets or remove Board members. Those were Workstream One Accountability measures.

But Workstream Two measures, to be accomplished post-Transition, are in many instances just as important. And that is particularly true of the steps necessary to make ICANN a far more transparent organization so that stakeholders can be fully aware of all that is going on and how decisions are reached.

That’s why ICA just filed a letter in strong support of the “CCWG-Accountability Work Stream 2 – Draft Recommendations to improve ICANN’s Transparency” published for public comment on February 21, 2017. Its most important recommendations relate to transforming ICANN’s Document Information Disclosure Policy (DIDP) – ICANN’s version of the US Freedom of Information Act (FOIA) – into a far more robust and useful tool.

At present the DIDP is a weak and loophole-riddled procedure, allowing ICANN staff far too much discretion to dribble out shreds of data while denying most of a disclosure request under broad and subjective exemptions. As stated in our letter:

Accountability requires transparency. No organization can be held accountable if it is permitted to impose excessive constraints on the release of internal documents and the vital information they contain to affected stakeholders. Our experience in attempting to use the current DIDP is that it fails to provide an adequate response to reasonable information requests in a timely manner. That is because  the broad exceptions contained in it, combined with the excessive interpretative discretion allocated to ICANN staff, facilitates the withholding of important information to requesting parties simply because its disclosure might embarrass ICANN or raise further questions about its decisions and actions.

We therefore enthusiastically support the great majority of the recommendations made with the aim of converting the DIDP into a far more robust and useful procedure.

The Draft recommendations also propose useful improvements in the areas of documenting and reporting on ICANN’s interactions with all governments; transparency of Board deliberations; and enhanced whistleblower protections for ICANN employees.

Now that the comment period is concluded, we hope the subgroup will quickly resume its activities, fully consider all comments, and deliver a final set of recommendations as quickly as possible. These important transparency enhancements should be adopted and implemented at the earliest feasible time. Then the next time we contemplate filing a DIDP request we can be confident of actually receiving the requested data, with denial a narrow exception rather than a general rule.

You can read the full text of our letter here.

Domain Name Registrants, Domain Name Registry

ICA Oks Proposed .US 1&2 Character Domains and Privacy Service by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoAs we had noted last month, the .US ccTLD, which has been operated by Neustar under an NTIA contract since 2001, had solicited comment on proposals to release one and two character domains and to begin offering a privacy service to .US registrants – as well as to re-designate certain existing domains as “premium”.

After some spirited internal discussion by ICA members, we filed a comment letter expressing our consensus view on these proposals.

In regard to the proposed release of one and two character domains, ICA took a position of non-opposition, provided that two key conditions were met to assure that the plan sets a positive precedent:

  • Retention in the final plan of equal access during the solicitation period by both trademark owners and the general public.
  • NTIA requiring, as part of its approval of the plan, that substantially all of the revenues generated by the release of these 1 and 2 character domains be devoted to public relations efforts to raise awareness of the .US ccTLD and of the value and benefits of .US domain registrations, with such efforts undertaken within a reasonable period after receipt of those funds.

Turning to the proposed offering of a privacy service, we agreed that the current prohibition of such services was a key issue suppressing registration in the .US TLD, and that it also likely led to some submission of inaccurate WHOIS data. We therefore supported the proposal, including its availability to commercial entities, as one that would address these shortcomings while meeting the goal of providing registrants with the protection they demand and also addressing the legitimate concerns of law enforcement.

Finally, there was one part of the premium name proposal that we opposed, that being the reclassification of approximately 100,000 currently authorized .US domains as “premium” under a tiered pricing approach. While noting the details were less objectionable than domain reclassification programs we have seen proposed in the past, we nonetheless believe that implementation of such a plan by a “legacy TLD” would set a worrisome precedent. We also stated our belief that the prices of existing and authorized domains, especially those of legacy TLDs, should be set in the robust, competitive and efficient secondary domain marketplace and not unilaterally imposed by registry operators.

Neustar and its Stakeholder Council will now review all comments received and then decide on next steps. That hopefully will lead to submission of the one and two character domain release program, and the proposed privacy service, to NTIA for review and approval.

Our complete comment letter follows:

Internet Commerce Association

1155 F Street, NW 

Suite 1050

Washington, DC

January 16, 2017

By Email to stakeholdercouncil@neustar.us

Re: Proposed usTLD Premium Domain Name Plan and Privacy Service Plan

Dear Neustar and members of the usTLD Stakeholder Council:

I am writing on behalf of the members of the Internet Commerce Association (ICA). ICA is a not-for-profit trade association representing the domain name industry, including domain registrants, domain marketplaces, and direct search providers. Its membership is composed of domain name registrants who invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN. ICA members own and operate approximately ten percent of all existing Internet domains on behalf of their own domain portfolios as well as those of thousands of customers.

We note that Philip Corwin of Virtualaw LLC serves as a member of the usTLD Stakeholder Council. Mr. Corwin also serves as Counsel to the ICA, and we appreciate the fact that through his service the views of domain investors and developers are given voice within the Council.

This letter addresses the proposed usTLD Premium Domain Name Plan as well as the Privacy Service Plan, both of which were published for public comment on December 15, 2016. ICA members have been fully briefed by our Counsel in order to gain a full understanding of the proposed plans that are the focus of this comment letter, and have engaged in vigorous and robust discussion of them. This comment letter represents the consensus views of our membership on these matters.

Executive Summary

  • ICA does not oppose the proposed release of premium 1 and 2 character .US domains so long as it is subject to two key conditions.
  • ICA opposes the reclassification of currently authorized .US domains as it would set a dangerous precedent for all legacy TLDs, and is unnecessary given the existence of a robust and competitive secondary domain marketplace.
  • ICA supports implementation of the proposed privacy service plan.

 

Response to Stakeholder Council Questions

Response to questions regarding the Premium Domain Name Plan

The Stakeholder Council has posed three questions regarding the Premium Domain Name Plan. Our short answers are below, followed by narrative explanations of our position in the General Discussion section.

  • Should the usTLD policy be revised to allow the release of 1 and 2 character domains? – ICA does not oppose the release of 1 and 2 character .US domains, subject to the two conditions described below.
  • Should the usTLD registry operator include currently unregistered and registered name as premium names? (The premium plan will not affect existing registrants’ domain names, nor will it affect transfers of existing names.) – ICA opposes the re-characterization of approximately 100,000 existing or authorized .US domains, for the reasons set forth below.
  • What, if any, impact would the introduction of 2 character names at the second level have on the legacy city.state.us registrations in .US? Please explain any concerns you have in detail. – ICA does not believe that the proposed introduction of 2 character domains at the second level would have any appreciable adverse effect upon legacy city.state.us registrations in the ccTLD.

Response to questions regarding the Privacy Service Plan

The Stakeholder Council has posed three questions regarding the Privacy Service Plan. Our short answers are below, followed by narrative explanations of our position in the General Discussion section.

  • Do you support the implementation of privacy services for .US domain name holders?—ICA supports such implementation.
  • What issues, if any, will registrars have with implementing privacy services as set forth in the plan?—ICA does not foresee registrars encountering any significant implementation difficulties for the proposed plan.
  • Does the plan adequately address the concerns of law enforcement while preserving the expected level of privacy of registrants who request the service?—ICA believes that the proposed plan adequately addresses all legitimate concerns of law enforcement agencies.

General Discussion

Release of 1 and 2 Character Domains

ICA does not oppose the release of presently reserved 1 and 2 character .US domains pursuant to the proposed plan as a means to generate press attention to the .US ccTLD, as well as to generate revenues that can fund public relations effort with the same goal. As proposed, this program should be of benefit to both current .US registrants and the registry operator if it drives greater public awareness of the .US namespace, strengthens the secondary market value of .US domains, and leads to an overall increase in .US domain registrations. While .US may never gain the market share of other prominent ccTLDs in their home markets, we nonetheless believe that there is considerable upside potential in overall .US registration totals.

ICA endorses the proposal to hold an open 30-day solicitation period prior to the domain names being available on a first-come, first-served basis that would not include an exclusive access period specifically for registered marks, but would include messaging that would highlight the benefit for any company or companies with 1- or 2-character registered marks to acquire these names prior to the general 30-day first-come, first-serve launch; with this solicitation period open on an equal basis to both trademark holders and the public. Under the plan, any domain name that garners two or more interested purchasers goes to a closed auction and any domain name with a single applicant is registered at the listed price, without any additional application fees or increased registration fees during the Open Solicitation period.

We agree with Neustar’s conclusion that there is no clear current standard or common practice for the release of such short domain names by a ccTLD, that a traditional Sunrise procedure would require significant additional resources, and that the names that could correspond to registered marks would generally be acronyms that could legitimately apply to a wide range of entities or individuals.

The equal access proposed to be provided to trademark owners and members of the general public, including domain investors/developers, is a key criterion for ICA’s members. Trademark owners will of course be protected against any infringing misuse of the released domains by the usTLD Dispute
Resolution Policy, and the usTLD Rapid
Suspension Dispute Policy – both of which are somewhat more stringent that corresponding ICANN rights protection mechanisms (RPM) policies – and by applicable trademark law.

ICA’s non-opposition to the release on 1 and 2 character .US domains is conditioned upon two requirements to assure that the plan sets a positive precedent:

  1. Retention in the final plan of equal access during the solicitation period by both trademark owners and the general public.
  2. NTIA requiring, as part of its approval of the plan, that substantially all of the revenues generated by the release of these 1 and 2 character domains be devoted to public relations efforts to raise awareness of the .US ccTLD and of the value and benefits of .US domain registrations, with such efforts undertaken within a reasonable period after receipt of those funds.

In regard to that final condition, we note that even now, while Neustar is a public company, a review of Neustar’s most recent 10-Q and 10-K filings with the SEC yields no broken out data concerning the revenue generated through acting as the .US registry operator. Now that Neustar has agreed to be acquired by Golden Gate Capital and is expected to become a private entity by the third quarter of 2017, even that level of financial transparency will soon be gone. Therefore, only NTIA will likely be in a position to have knowledge of the total revenues generated by the sale of 1 and 2 character .US domains, as well as the level of expenditures on .US public relations efforts. Based upon the market valuation of short domain names at major registries, we would anticipate that those revenues will aggregate in at least the millions of dollars. We further note that part 2 the 2014 .US registry agreement entered into by Neustar contemplates that, in the event of any future expansion of the usTLD space, the fees levied for services by Neustar as Contractor should consider “cost plus a fair and reasonable profit”, but not a windfall profit.

Dedication of the realized revenues to such PR efforts would be consistent with Neustar’s statement that a major objective of the release is to “Generate revenue from the sale of .US Premium Domains that will be directly used to fund future marketing, promotion and community-building campaigns to build and grow the .US namespace”. While we trust that Neustar will undertake such efforts if the plan is approved, only NTIA will be in a position to verify that these campaigns are undertaken in a manner that substantially utilizes all of the revenues within a reasonable time period following their generation.

Premium General Availability “Tiered Pricing” Program

ICA is strongly opposed to this portion of the proposal, which would reclassify approximately 100,000 currently authorized .US domains as “premium” within the following categories:

  • All three letter domain names (17,576) and all three number domains (1,000), excluding names on the restricted list (i.e. 888.us, 877.us, 866.us, etc.)
  • All nouns under eight letters, excluding names with negative connotations or on the “7 Dirty Words” restricted list
  • All verbs under eight letters, excluding names with negative connotations or on the “7 Dirty Words” restricted list
  • Top 10,000 words in the English language, excluding names with negative connotations or on the “7 Dirty Words” restricted list (price varies)

We take this position notwithstanding the fact that, now that Neustar has identified the categories of domains it would reclassify as premium, sophisticated domain investors could readily seek to acquire both presently registered as well as unregistered .US domains within these categories in anticipation of implementation of the plan and a potential increase in secondary market value. We also recognize that the proposed high/low pricing model is less objectionable than domain reclassification programs we have seen proposed in the past, given that it would not affect current registrants or their renewal or transfer costs; that currently registered domain names identified as premium will incur a premium fee only if they expire, go through the redemption process and become available for re-registration again by new or different customers; and that the premium pricing would typically be a one-time event with annual renewal fees being the same as for non-premium domains.

Nonetheless, we believe that implementation of such a plan by a “legacy TLD” would set a worrisome precedent. Other registry operators might well cite approval of this portion of the .US proposal as basis for similar plans by legacy gTLDs, including more radical versions featuring tiered pricing of both acquisitions and renewals.

While new gTLDs established via ICANN’s recently implemented program have complete latitude to adopt any premium pricing model they wish to, these gTLDs are entrepreneurial efforts risking private capital; and domain registrants who choose to acquire their domains do so with full knowledge of the present registry rules, and that they can change at any time. .US, by contrast, is a long-established ccTLD – indeed, it is the Internet’s first ccTLD, created in 1985 and originally administered by Jon Postel; and has been administered under NTIA contract by Neustar since 2001. Reclassification of .US domains should not be permitted 32 years after the registry’s creation and 16 years after Neustar was selected as registry operator. That is particularly true when the registry is a governmental resource that should broadly benefit the general public.

As a general proposition, we believe that the prices of existing and authorized domains, especially those of legacy TLDs, should be set in the robust, competitive and efficient secondary domain marketplace and not unilaterally imposed by registry operators. We have also received informed feedback that even the proposed high/low program could present substantial administrative difficulties for registrars.

Further, the proposal would appear to clash with certain provisions of part 1 of the 2014 .US registry agreement between Neustar and NTIA. These include requirements that registry fees be “fair and reasonable”; as well as conflict of interest provisions that require Neustar to “take measures to avoid any activity or situation that could compromise, or give the appearance of compromising, the impartial and objective performance of the Contract”, with the resulting conflicts policy required to address “possible direct or indirect financial gain from Contractor’s policy decisions”.

We also substantially oppose the breadth of the related proposal that .US Premium Names may also be allocated on a non-cash or discount-cash basis, to support organizations or activities that will help to spread awareness, growth and use of the .US domain through a .US Premium Development Program open to big brands, individuals, commercial or non-commercial businesses and government entities. While .US is charged with advancing certain public purposes as a ccTLD, any domain discounting program should be narrowly restricted to charitable non-profit and governmental entities, with all others required to pay market prices and standard annual fees.

Privacy Service Plan

ICA agrees with the view of the .US Stakeholder Council that identifies “the lack of privacy and proxy services as a key issue suppressing registration in the .US TLD”. The lack of privacy services is a strong deterrent to potential registrants with legitimate privacy objectives, including the avoidance of spam and harassment.

We also agree that “In the absence of privacy services, risk-averse registrants may choose to attempt to submit false or inaccurate information into WHOIS’ and that  with “the implementation of privacy services, the WHOIS database may be more accurate and allow law enforcement to obtain the information it needs”.  And we concur that the availability or privacy protections will likely boost .US registrations by “international corporations, global media publications, global nonprofit organizations, churches, sports teams, families, small businesses, blogs, home businesses, retail stores, social media messaging sites, and gaming sites – the demographic of registrants who are most likely to be affected by the existing prohibition on privacy and proxy services”.

Therefore, we support a change of registry policy in this regard, and believe that the privacy plan meets the goal of providing “registrants with the protection they demand ensuring to also address the concerns of law enforcement”.

The positive aspects of the proposed registry level plan are that it will allow the registry operator to maintain firm control of the centralized authoritative database of WHOIS information; be built into the registry software, compliant with all .US policy and security standards; and enable Neustar to provide one-stop access to law enforcement agencies, rights holders, and others with lawful requests in near real time. This approach will also cause the least disruption to registrar business models.

We also agree that such privacy service should be available to commercial entities. This is consistent with recently adopted, carefully developed ICANN policy in this area; ICA’s Counsel participated in development of the policy and is now part of its implementation group. Barring such a service for commercial entities would negate much of its potential benefit for no justifiable reason, given that legitimate requests for registrant data will be honored. Such an unnecessary carve out would also raise administrative burdens and associated costs.

By remaining the privacy provider, Neustar will be best positioned to both ensure registrant privacy while assuring that the authoritative contact information can be accessed by law enforcement and other authorized parties with a lawful request.

Conclusion

We appreciate the opportunity to provide these comments on the proposed .US Premium Domain Name and Privacy Service Plans. We hope they are helpful to the further consideration of this matter by Neustar and the usTLD Stakeholder Council.

Sincerely,

Jeremiah Johnston

President and Member of the Board, Internet Commerce Association

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
http://www.internetcommerce.org/ica-comments-on-dot-us/

Domain Name Disputes, Domain Name Registrants, Domain Name Registry, ICANN and Governance

Time for a Board-Imposed Moratorium? — .Mobi Trades URS for $Cash by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoOnce again, staff of ICANN’s Global Domains Division (GDD) has used a legacy gTLD’s contract renewal process to impose Uniform Rapid Suspension (URS) on that gTLD — despite the fact that the URS is not an ICANN consensus policy applicable to legacy gTLDs.

And, once again, the registry operator acquiescing to URS is reaping significant financial benefits as a reward for its acquiescence.

The leaders of GDD are well aware that the URS is the subject of an ongoing policy development process (PDP) responsible for determining its efficacy and whether it has been properly administered and – most important – recommending whether or not it should become a Consensus Policy required of all legacy gTLDs, and what appropriate legal and transition arrangements should accompany that potential decision. Yet, as conceded by GDD head Akram Atallah during the Hyderabad Public Forum, their negotiating position for every legacy gTLD RA renewal negotiation is this: “So basically the negotiations are – the registries come and ask for something and we tell them please adopt the new gTLD contract”. In other words, to get the RA changes you want or need you must accept the URS.

On December 23, 2016 ICANN published for public comment the “Proposed Renewal of .MOBI Sponsored Registry Agreement”, with a February 1st comment filing deadline. The notice contains GDD’s standard flimsy and non-convincing rationale that, “The renewal proposal is a result of bilateral discussions between ICANN and Afilias Technologies Limited (the Registry Operator for the .MOBI TLD).” While the discussions were clearly between two parties and therefore bilateral, they took place behind closed doors and out of sight of the ICANN community that is supposed to make the policy decisions that impact it. Further, bilateral does not equate to balanced when the decisive power in these discussions is clearly held by GDD staff, with their ability to approve or deny requested RA modifications as well as hold out financial rewards to compliant registry operators.

The .Mobi gTLD was originally established as a “sponsored” registry to serve global users of mobile phones, but the revised registry agreement (RA) will largely shed that status and generally transition .Mobi to the standard new gTLD RA. Afilias, the registry operator, will see its annual registry fixed fee cut in half, down to $25,000 from the current level of $50,000. In addition, the approximately 690,000 .Mobi domains will become subject to the standard $0.25 per domain annual transaction fee; .Mobi domains are currently subject to a price-linked variable fee ranging from $0.15 to $0.75 per transaction.

We saw this same type of cash benefits for URS acquiescence horse trade take place recently with .XXX. ICA’s comment letter on that RA revision implored GDD to respect the ongoing PDP process, stating:

The 2016 launch of the PDP Review of All Rights Protection Mechanisms in All gTLDs, which is tasked with recommending whether new gTLD RPMs should become Consensus Policy for legacy gTLDs, makes it particularly inappropriate for GDD staff to continue seeking that de facto policy result in non-transparent, bilateral RA negotiations that contravene the policymaking process set forth in the Bylaws… GDD staff should demonstrate their clear commitment to ICANN’s bottom-up policymaking process by ceasing and desisting from seeking top-down imposition of new gTLD RPMs in legacy gTLD RA negotiations until the RPM Review WG has completed its work reviewing those RPMs and its final recommendations – including whether those RPMs should become Consensus Policy — have been acted upon by the GNSO Council and ICANN Board.

Clearly, GDD staff were unmoved by that entreaty and are determined to seek imposition of URS on every legacy gTLD coming up for contract renewal.

As  stated in our .XXX comment letter, these closed door contract renewal negotiations are particularly odious when financial incentives are utilized, resulting in a situation where “two parties with no central role in ICANN’s policy development process are effectively permitted to collude in closed door negotiations on a decision with broad policy implications. With each legacy TLD revision in which GDD staff succeeds in imposing new gTLD provisions that are not yet ICANN Consensus Policy they  create de facto consensus policy, one negotiation at a time. This is wrong and it should stop.”

As noted, this proposed RA, if approved, will affect about 690,000 registered domains at a legacy gTLD by imposing a new gTLD rights protection mechanism (RPM) that was adopted as an “implementation measure” and was not supposed to be applied to any legacy gTLD unless and until it was adopted as Consensus Policy. In retrospect it appears that the “bait” was leading the community to believe the new gTLD RPMs would only be applicable to new gTLDs and off-limits for legacy ones until a PDP changed that, and the “switch” occurred when GDD started pressing them on legacy gTLDs in RA renewal negotiations from 2015 onward.

But the real test of GDD’s illicit strategy of incremental de facto policymaking will come later this year, when the .Net RA comes up for renewal. We have no idea whether Verisign will be seeking any substantial revisions to that RA that would provide GDD staff with substantial leverage to impose URS, nor do we know whether Verisign would be amenable to that tradeoff.

But we do know that there are 15.2 million .Net domains registered at present, and that it would be unconscionable and highly controversial to impose a policy change of this magnitude on the second most populous legacy gTLD when the PDP jury is still out on whether URS should become Consensus Policy. Unlike the lesser gTLDs on which URS has been imposed by contractual fiat, .Net domains constitute longstanding platforms for business and speech dating back to ICANN’s inception, and many command substantial secondary market valuations. If URS is to come to .Net it should only be through community consensus as set out in ICANN’s Bylaws, not a backroom deal.

Further, the publication of any revised .Net RA will likely occur just prior to the time that the RPM Review PDP will be debating whether URS and the other new gTLD RPMs should become Consensus Policy.  So if the revised .Net RA contains the URS that would constitute a gross interference by GDD staff in the ICANN community’s policy process, with severely prejudicial effects. Indeed, it seems likely that GDD staff is seeking to create enough “facts” to dictate the PDP’s outcome.

It is now unquestionably clear that GDD staff lacks sufficient propriety to cease and desist from making policy changes through RA negotiations notwithstanding its corrosive effect upon the perceived legitimacy and primacy of the ICANN policymaking process. The real question of the moment is whether ICANN’s Board will do the right thing and intervene by declaring a moratorium on this tawdry practice until the community members comprising the PDP working group make their own informed and unpressured decision on whether URS should become a Consensus Policy.  

Will the ICANN Board members demonstrate their respect for the integrity of ICANN’s policymaking process, and the sensitivity of the unfolding situation, to understand that continued toleration of this GDD practice undermines confidence in ICANN’s commitment to bottom up, community-based consensus policy development? Or will they continue to cover for GDD staff with narrow technocratic and self-serving legalistic fictions? We shall soon find out.

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
www.internetcommerce.org/mobi-trades-urs-for-cash/

Domain Name Registry, ICANN and Governance

Thanksgiving Day Comment Labels .XXX RA Revision a Turkey by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoFollowing up on its critical statement delivered to the ICANN Board at the recent Hyderabad public meeting, ICA submitted a Thanksgiving Day comment letter decrying the insertion of URS into the .XXX Registry Agreement (RA) via contract negotiation and declaring—
“GDD staff should demonstrate their clear commitment to ICANN’s bottom-up policymaking process by ceasing and desisting from seeking top-down imposition of new gTLD RPMs in legacy gTLD RA negotiations until the RPM Review WG has completed its work reviewing those RPMs and its final recommendations – including whether those RPMs should become Consensus Policy — have been acted upon by the GNSO Council and ICANN Board.”

While the Global Domain Division (GDD) continues to maintain that such acceptance of new gTLD RPMs by older TLDs is strictly voluntarily and agreed to in balanced bilateral negotiations, that version of events lacks credibility when GDD staff starts each negotiation by taking the position (in the words of its head), “SO BASICALLY THE NEGOTIATIONS ARE — THE REGISTRIES COME AND ASK FOR SOMETHING AND WE TELL THEM PLEASE ADOPT THE NEW gTLD CONTRACT”. That is especially true in this instance, when the registry operator stands to reap very substantial financial rewards by agreeing with that GDD suggestion.

While the .XXX RA received only a few comments, we are pleased that our colleagues in the Business Constituency BC) once again stood firmly for the principle that policy decisions must emerge from the ICANN community through the standard bottom-up policy development process, stating:
The BC sustains its procedural objection to these proposals, through which GDD staff unilaterally seeks to establish a new status quo for registry agreements. By substituting its judgment for established policy, we respectfully believe that staff exceeds its powers and overrides safeguards intended to preserve transparency and inclusion within the multi-stakeholder community… Although the BC has been a strong advocate for the new RPMs as applied to new gTLD registries, this PDP continues to consider fundamental questions about how the new RPMs should function and how they could evolve in the future.
The GNSO may ultimately articulate a Consensus Policy that calls for different measures for legacy gTLDs than are now being used with the new gTLDs. If the GDD persists in forcing registries to adopt these preConsensus Policy RPMs, it may widely implement procedures that do not align with the GNSO’s ultimate conclusions. Further, as ICANN policy staff has recognized, application of the RPMs to legacy gTLDs raises certain transition issues that are not addressed by implementation via contract. Finally, in the absence of such RPMs being Consensus Policy, registrants may have legal grounds to question their imposition…. Moreover, the ICANN Bylaws reserve the power to set gTLD policy to the GNSO. The new RPMs have not, in their current form, received the uniform support from GNSO constituents and, as discussed above, have not undergone the procedure set forth in the Bylaws to become Consensus Policies. While greater consistency as between registry agreements is a worthwhile goal, and convenient for ICANN in terms of contractual compliance, it cannot supersede consistency of action in accord with ICANN’s Bylaws.

Unfortunately, the Intellectual Property Constituency (IPC) continues to endorse the GDD’s fiction of voluntary registry adoption, stating in its comment:
The IPC applauds ICM Registry LLC (ICM) and other Registry Operators that choose to implement rights protection mechanisms (RPMs) contained in the base New gTLD Registry Agreement. The IPC also encourages Registry Operators to voluntarily adopt industry best practices beyond the minimum rights protections required by ICANN, such as adding new restrictions against abusive registrations and suspension mechanisms, implementing blocking prior to registration, and creating new dispute procedures… The IPC also encourages ICANN to educate Registry Operators that the required RPMs are not a “ceiling” but a “floor”–the minimum required– and the Internet community is best served by Registry Operators that strive to go above and beyond the minimum by adopting industry best practices. ICANN need not undertake a policy development process for Registry Operators to voluntarily implement new RPMs.

The IPC overall appears to take the somewhat shocking and dangerous position that an ICANN-accredited registry can at any time unilaterally invent and enforce registration restrictions, suspension mechanisms, blocking mechanisms, and entirely new dispute procedures simply by labeling them “rights protections” without regard to relevant ICANN policy or registrant legal rights.

The ICA comment concludes with this statement:
“Given the history of flimsy and self-serving justifications by GDD staff and the ICANN Board for similar actions taken in 2015, we are under no illusion that this comment letter will likely be successful in effecting removal of the URS and other new gTLD RA provisions from the revised .XXX RA. Nonetheless, we strenuously object to this GDD action that intrudes upon and debases ICANN’s legitimate policymaking process, and urge the GDD and Board to reconsider their positions, and to ensure that GDD staff ceases and desists from taking similar action in the context of future RA renewals and revisions until the RPM Review WG renders the community’s judgment as to whether the URS and other new gTLD RPMs should become Consensus Policy and such recommendation is reviewed by HNSO Council and the ICANN Board.”

ICA will continue to monitor this proposed RA revision – and all subsequent renewals of legacy gTLDs (including the 2017 renewal of .Net) – and to speak out against staff actions that subvert ICANN’s established policymaking process.

The full text of our comment letter follows—

VIRTUALAW LLC

Philip S. Corwin, Founding Principal 1155 F Street, NW  Suite 1050

Washington, DC 20004 202-559-8597/Direct

202-559-8750/Fax

202-255-6172/Cell

psc@vlaw-dc.com

November 24, 2016

By E-Mail to  comments-xxx-amendment-12oct16@icann.org

Internet Corporation for Assigned Names and Numbers 12025 Waterfront Drive, Suite 300

Los Angeles, CA 90094-2536

Re: Proposed Amendment to .XXX Registry Agreement to Transition to New Fee Structure and to Adopt Additional Safeguards

Dear ICANN:

I am writing on behalf of the members of the Internet Commerce Association (ICA). ICA is a not-for-profit trade association representing the domain name industry, including domain registrants, domain marketplaces, and direct search providers. Its membership is composed of domain name registrants who invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN itself. ICA members own and operate approximately ten percent of all existing Internet domains on behalf of their own domain portfolios as well as those of thousands of customers.

This letter addresses the Proposed Amendment to .XXX Registry Agreement to Transition to New Fee Structure and to Adopt Additional Safeguards that was published for public comment on October 12, 2016.

Executive Summary

·         ICA has no objection the phased registry fee reduction contained in the revised RA.

·         However, the net annual benefit of $281,500 to be realized by ICM registry brings into question whether its agreement to other GDD-proffered provisions of the RA was truly “voluntary”, given the large financial benefit to it and the ability of GDD staff to deny a final agreement unless their initial negotiating position was agreed to by ICM.

·         The 2016 launch of the PDP Review of All Rights Protection Mechanisms in All gTLDs, which is tasked with recommending whether new gTLD RPMs should become Consensus Policy for legacy gTLDs, makes it particularly inappropriate for GDD staff to continue seeking that de facto policy result in non-transparent, bilateral RA negotiations that contravene the policymaking process set forth in the Bylaws.

·         No further action should be taken by ICANN in regard to the proposed RA for this sponsored TLD until there is clear evidence that IFFOR, the policy-setting entity for .XXX, has reviewed and approved it.

·         GDD staff should demonstrate their clear commitment to ICANN’s bottom-up policymaking process by ceasing and desisting from seeking top-down imposition of new gTLD RPMs in legacy gTLD RA negotiations until the RPM Review WG has completed its work reviewing those RPMs and its final recommendations – including whether those RPMs should become Consensus Policy — have been acted upon  by the GNSO Council and ICANN Board.

Reduction of Per Transaction Registry Fee
ICA has no objection to the principal material benefit provided by the revised RA to ICM Registry, the registry operator for .XXX, which is a phased reduction of its per transaction registry fee from the current level of $2.00 to the standard registry fee of $0.25 by mid-2018. The initial high level fee was based upon ICANN concerns that this adult content sponsored TLD (sTLD) could result in substantial litigation and related expenses for ICANN. Those concerns have not been realized, and there no longer seems to be any substantive reason to continue charging eight times the standard registry fee to the operator of .XXX. GDD should properly have approved the phased fee reduction without pressing for additional unrelated concessions by ICM as conditions for approval.

 

This 87.5 reduction will, based upon a published report that .XXX currently holds 170,000 domains, will be worth $297,500 in annual reductions at that level of sTLD domain registrations, bringing the annual fees paid by ICM to ICANN down from $340,000 to $42,500. As the revised RA also contains an increase in the quarterly fee payable to ICANN from $2,500 to $6,500, the total net annual benefit at current registration levels will be reduced to $281,500.

 

The very substantial financial benefit to be reaped by ICM Registry – aggregating to an additional $2.815 million in retained revenue over the decade following full implementation – illustrate precisely why the concept of “voluntary” agreement by a registry seeking beneficial changes in its RA in closed door, non-transparent negotiations with GDD staff is a false but convenient fiction. In this instant case we have two negotiating parties. ICM Registry, presented with the opportunity for retaining substantial additional domain revenues, and already subject to Uniform Rapid Suspension (URS) and other new gTLD rights protection mechanisms (RPMs) at its .adult, .porn and .sex new gTLDs, cannot be expected to take the integrity of maintaining bottom-up, multistakeholder policy development into account and elevate it over its own financial interest. And GDD staff has already illustrated their willful blindness to the policy implications of pressing legacy gTLDs to adopt new gTLD (RPMs).

Thus, two parties with no central role in ICANN’s policy development process are effectively permitted to collude in closed door negotiations on a decision with broad policy implications. With each legacy TLD revision in which GDD staff succeeds in imposing new gTLD provisions that are not yet ICANN Consensus Policy they  create de facto consensus policy, one negotiation at a time. This is wrong and it should stop.

De Facto Consensus Policy Through Non-Transparent Contract Negotiations

The underlying policy issue created by GDD pursuit of the imposition of new gTLD RPMs on legacy gTLDs through contract negotiations was raised to a high profile within the ICANN community in 2015 when the revised RAs for .travel, .cat and .pro were challenged by multiple segments of the ICANN Community.

ICA’s comment letter of June 21, 2015 stated in part:

The ICA is strongly opposed to the inclusion of new gTLD rights protection mechanisms (RPMs), particularly Uniform Rapid Suspension (URS), in this renewal agreement (RA) for a legacy gTLD. 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…. The potential addition of these RPMs to legacy gTLDs through this inappropriate avenue will have a substantial and deleterious effect on ICANN’s policymaking process going forward, will create a new and dangerous precedent whereby de facto Consensus Policy can be created by contractual fiat in violation of ICANN Bylaws, and will substantially and adversely affect third parties around the world consisting of the existing registrants of more than one hundred million legacy gTLD domains.

In addition to ICA, that general line of reasoning was echoed by the Electronic Frontier Foundation, IP Justice, and ICANN’s Business Constituency (BC) and Non-Commercial Stakeholders Group (NCSG).

On July 31, 2015 GDD staff published its Report of Public Comments regarding the Proposed Renewal of .TRAVEL Sponsored TLD Registry Agreement. In defense of the inclusion of the URS in the proposed .Travel Registry Agreement and other RAs, the report stated:

Although the URS was developed and refined through the process described here, including public review and discussion in the GNSO, it has not been adopted as a consensus policy and ICANN staff has no ability to make it mandatory for any TLDs other than those subject to the new gTLD registry agreement. Accordingly, ICANN staff has not moved to make the URS mandatory for any legacy TLDs, and it would be inappropriate for staff to do so. In the case of .TRAVEL and other legacy TLD registry agreement renewals (.JOBS) and proposed renewals for .CAT and .PRO registry agreements, inclusion of the URS was developed as part of the proposal in bilateral negotiations between the registry operator and ICANN.  (Emphasis added)

This self-serving justification takes the position that GDD’s opening position in these negotiations is not an attempt to make any particular revision “mandatory”, and that a registry’s agreement to a GDD request is entirely “voluntary” within the context of balanced, bilateral negotiations. It is true that under ICANN’s new standard registry agreement any registry operator has a presumptive right of renewal of its RA – but only of the exact same RA, with no material changes in its terms and conditions. But all three of the registries accepting URS in their 2015 renegotiations sought and received material beneficial changes in their RAs that GDD staff had the exclusive power to approve, and to condition upon the acceptance of other unrelated revisions.

To the collective dismay of ICA and other parties that objected to the 2015 actions, ICANN’s Board chose to back GDD staff rather than defend the community-based policymaking process. On February 3, 2016, in response to “Reconsideration Requests 15-19 (the ICANN Business Constituency & the ICANN Noncommercial Stakeholder Group (NCSG)) and 15-20 (The Internet Commerce Association)”, ICANN’s Board adopted the Board Governance Committee’s denial of the two referenced Requests.

That action was based upon the flimsy rationale that—

The inclusion of the new gTLD RPMs in the Renewed Registry Agreements is part of the package of agreed-upon terms resulting from the bilateral negotiations between ICANN and each registry operator, and not, as Requesters claim, a “unilateral decision by ICANN contractual staff.” The Requesters present no evidence to the contrary – i.e., that applying the new gTLD RPMs to the Renewed Registry Agreements was based on a unilateral decision by ICANN staff. The Requesters suggest that the Board should have reviewed all of ICANN staff’s communications with the .CAT, .TRAVEL, and .PRO registry operators in order to confirm that the negotiations were in fact bilateral. Such contention, however, does not support reconsideration. 

The Board’s decision was based upon the false premise that the negotiations between a registry operator requesting material and beneficial alterations in its RA can be bilateral and balanced when GDD staff have placed requested changes on the table at the start of negotiations and have the unrestricted power to deny the requested RA changes unless their requests are acceded to. The Board also failed to review the full record of communications between the negotiating parties to judge whether the final draft agreement was coerced by GDD staff.

The myth of “voluntary” acquiescence to GDD negotiating demands is even more stark in the present case, in which ICM stands to benefit in the amount of almost $300k per annum simply by acquiescing to them. The disparity in bargaining power is even more pronounced in the instant case, in which ICM has sought and will receive substantial continuing monetary benefits. The interest of the ICANN community in maintaining a transparent and bottom-up policy development process was not represented by either party to this negotiation.

GDD Continues to press for RPM Adoption as a Condition of Negotiation Agreement

Notwithstanding the lack of full transparency in the current comment request, there is little doubt that inclusion of the URS was done at the behest of the GDD in its negotiations with ICM.

In the three RAs at issue in 2015, the request for public comment clearly stated:

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.

In the current instance the history of how agreement to the URS came about is vague, with the request for comment stating only:

During the course of discussions, ICM informed ICANN that ICM would agree to add both additional safeguards contained in the form new gTLD Registry Agreement, and a phased implementation of a reduction of fees based on ICM’s compliance with the terms of the .XXX Registry Agreement.

The mystery of whether URS inclusion in the revised .XXX RA was sought by GDD was cleared up at the Public Forum held at ICANN 57 in Hyderabad, India on November 8, 2016. During the Forum I made a statement (included in the Appendix at the end of this letter) regarding the proposed revisions.

In response, GDD head Akram Atallah stated:

SO BASICALLY THE NEGOTIATIONS ARE — THE REGISTRIES COME AND ASK FOR SOMETHING AND WE TELL THEM PLEASE ADOPT THE NEW gTLD CONTRACT. AND IF THEY PUSH BACK ON IT AND THEY SAY THEY DON’T WANT SOMETHING, WE CAN FORCE THEM TO TAKE IT. (Emphasis added)

In Mr. Atallah’s defense, the raw transcript may be mistaken and the word he used in the second sentence may have been “can’t”. If that was his assertion, we must question its real world accuracy based upon the feedback we have received from contracted parties regarding the tough negotiating position that ICANN’s GDD and Legal staff take in such RA revision discussions.

Yet, regardless of whether ICM eagerly embraced URS or initially resisted it, Mr. Atallah was quite clear in his response that, in each and every negotiation in which a registry “asks for something”, GDD staff tells them “Please adopt the new gTLD contract” as its initial bargaining position – even though that contract contains multiple provisions which remain “implementation details” and have not been adopted as “Consensus Policy” through proper GNSO procedures and Board adoption.

Launch of the PDP Review of All Rights Protection Mechanisms in All gTLDs

From a policy development perspective, the principal difference between last year’s actions and the instant case is the intervening creation of the PDP Review of All Rights Protection Mechanisms in All gTLDs. The Working Group’s (WG) Charter was approved by the GNSO Council on March 15, 2016.

That Charter’s “List of Potential Issues for Consideration in This PDP” includes this overarching one:

Should any of the New gTLD Program RPMs (such as the URS), like the UDRP, be Consensus Policies applicable to all gTLDs, and if so what are the transitional issues that would have to be dealt with as a consequence?

The actions of GDD staff in proposing adoption of new gTLD registry provisions by incumbent gTLDs severely prejudices the work of the PDP by creating de facto policy decisions in advance of its preliminary report and recommendations. Further, the GDD’s position in RA negotiations is materially flawed in that it fails to consider and address important “transitional issues”, including the necessary legal steps to bind legacy gTLD registrants to use of the URS when it has not been adopted as a Consensus Policy through proper PDP methodologies.

I spoke to this matter in my Public Forum Statement at ICANN 57, stating:

SO I’LL END WITH THIS QUESTION: I DON’T KNOW WHAT THE RPM WORKING GROUP IS GOING TO RECOMMEND ON URS BECOMING CONSENSUS POLICY. MY OWN MIND IS COMPLETELY OPEN ON THIS POINT DEPENDING ON WHAT OUR WORK FINDS AND WHAT CHANGES MIGHT BE MADE IN IT.

BUT IF WE WERE TO RECOMMEND THAT URS SHOULD NOT BE CONSENSUS POLICY … WOULD GDD STAFF CONTINUE THIS PRACTICE IN NEGOTIATIONS? IF THE ANSWER IS NO, THEN I MAINTAIN IT’S INAPPROPRIATE FOR THEM TO DO IT NOW. AND IF THE ANSWER IS THAT THEY’RE GOING TO KEEP DOING IT EVEN IF WE COME OUT AGAINST IT BEING CONSENSUS POLICY, THEN DOESN’T THAT RENDER THAT PART OF OUR CHARTER WORK A SOMEWHAT IRRELEVANT EXERCISE IN FUTILITY?

In response, Mr. Atallah stated:

IF THE POLICY COMES BACK AND SAYS THAT THE URS IS NOT SOMETHING THAT WE WANT TO HAVE AS A POLICY, OF COURSE, WE WOULD SUPPORT THAT.

Although the response is a tad ambiguous, read in its best light it indicates that GDD staff might cease their practice of suggesting adoption of new gTLD RPMs by legacy TLDs in RA renewal or revision negotiations if the WG recommends against their adoption as Consensus Policy.

If that is a correct reading of GDD’s position, then the proper action for it to take going forward is to cease and desist from urging legacy gTLDs to adopt those RPMs in RA negotiations while the RPM Review WG is active, because a recommendation of the WG that the RPMs not become Consensus Policy would merely be an extension of the status quo. If it is an incorrect reading, then the PDP deliberations of the WG on this central question are indeed an irrelevant exercise in futility and make a mockery of ICANN’s purported commitment to a bottom-up policymaking process.

For the record, ICA has taken no position on whether URS or any other relevant new gTLD RPM should become ICANN Consensus Policy applicable to .Com and other legacy gTLDs. Our position on that matter shall be based upon the PDP’s review and findings regarding the actual implementation of the URS, and particularly whether it is being uniformly administered as a narrow supplement to the UDRP in which bad faith registration and use are demonstrated by clear and convincing evidence. Our position will also be dependent on whether any alterations of the URS are recommended – and, in particular, whether a domain transfer option is recommended with its potential to turn the URS into a rapid and inexpensive means of hijacking valuable legacy domains.

(For the record, while I am one of three Co-Chairs of the RPM Review WG, that position gives me a co-equal voice solely on administrative matters, and no authority whatsoever to steer that very large WG to any particular policy recommendation.)

Lack of IFFOR Review and Approval of the Revised RA

The revised RA on which we are commenting also raises unique issues insofar as .XXX is a sponsored TLD for which a governing, policy-setting organization was required due to the controversial nature of the adult content hosted at .XXX domains.

That organization, the International Foundation for Online Responsibility (IFFOR) is, according to its own description, constituted as follows:

IFFOR comprises a Board, Policy Council and staff which work together in developing and approving IFFOR’s work.

The Board comprises three members, on two-year terms, one of whom is chosen by ICM Registry.

The Policy Council comprises nine members, representing four stakeholder groups. Five members represent the sponsored community for dot-xxx domains, and then there is one representative for each of the other groups that represent: free expression; child advocacy; privacy and security. The ninth member is chosen by ICM Registry.

The staff comprises an Executive Director and Manager of Public of Participation, and an Ombudsman.

Most important for the present circumstance, IFFOR develops policies that apply to all owners of .XXX domain names, and its Baseline Policies contain a provision that is directly relevant to the same trademark protection concerns that underlie the URS:

  1. Prohibition on Abusive Registrations

No registrant may register an abusive string in the sTLD including, without limitation, strings that infringe the intellectual property rights of a third party, including common law trademark rights; strings that are obvious variants of well-known trademarks not belonging to the registrant; first and last names of an individual other than the individual or his/her agent or names that suggest the presence of child abuse images. (Emphasis added)

IFFOR is referenced in the request for public comment in the following way:

Additionally, ICANN reviewed the most recent IFFOR audit report of the Registry Operator’s CRS and found that the system is not only fully functional, but exceptionally functional and compliant for its intended purposes. ICM conveyed its belief that IFFOR’s Audit Report and trend analysis demonstrate effectiveness regarding mitigating abuse on the .XXX gTLD and further maintained that the .XXX gTLD no longer carries risk, for either ICANN or the Internet stakeholders initially concerned with the launch of .XXX. ICM explained that the data shows that the system has been enhanced beyond its original capabilities and has now demonstrated high levels of utility for its operation and ease of use, which is evidenced by a pattern of decline in cases.

However, there is no further indication that IFFOR had any role in reviewing and approving the proposed RA, despite the presence of RPM provisions that relate to trademark protection and therefore are clearly within IFFOR’s existing Policy remit. Additionally, the fact that IFFOR’s Audit Report found that .XXX no longer carries risk for ICANN (a conclusion that ICANN implicitly accepted given its agreement to reduce registry fees by 87.5%), as well as that IFFOR’s existing anti-infringement policy is effectively preventing significant infringement, plus the fact that .XXX are restricted solely to members of the Sponsored Community, calls into question why the URS was even introduced into the RA negotiations — save for GDD’s preexisting decision to seek its imposition in each and every RA renegotiation.

Given the lack of any clear evidence that the revised RA has been reviewed or approved for IFFOR, final action by ICANN should be deferred until that process occurs.

Conclusion

Unfortunately, while we have no objection to granting ICM the .XXX registry fee reduction it has justifiably sought, we must object to the proposed RA’s approval given GDD’s imposition of extraneous new gTLD RA provisions into a legacy TLD agreement, and the consequent de facto creation of policy in regard to matters that are presently under consideration by a GNSO-chartered PDP.

Given the history of flimsy and self-serving justifications by GDD staff and the ICANN Board for similar actions taken in 2015, we are under no illusion that this comment letter will likely be successful in effecting removal of the URS and other new gTLD RA provisions from the revised .XXX RA. Nonetheless, we strenuously object to this GDD action that intrudes upon and debases ICANN’s legitimate policymaking process, and urge the GDD and Board to reconsider their positions, and to ensure that GDD staff ceases and desists from taking similar action in the context of future RA renewals and revisions until the RPM Review WG renders the community’s judgment as to whether the URS and other new gTLD RPMs should become Consensus Policy and such recommendation is reviewed by HNSO Council and the ICANN Board.

We appreciate the opportunity to provide these comments on the proposed revision of the .XXX RA. We hope they are helpful to the further consideration of this matter by ICANN and its community.

Sincerely,

Philip S. Corwin

Counsel, Internet Commerce Association

 

Appendix – Transcript of Public Comments of Philip S. Corwin at ICANN 57 Public Forum, Hyderabad, India, November 8, 2016 (raw transcript edited for accuracy)

 

>>PHILIP CORWIN: GOOD MORNING. PHILIP CORWIN. I WEAR MANY HATS IN THE ICANN WORLD ONE OF THEM AS A COUNCILLOR FOR THE BUSINESS CONSTITUENCY ON THE GNSO COUNCIL. ANOTHER IS CO-CHAIR OF TWO WORKING GROUPS INCLUDING ONE REVIEWING ALL RPMs AT ALL GTLDS. BUT THE HAT I’M WEARING FOR THIS STATEMENT IS THAT OF COUNSEL TO THE INTERNET COMMERCE ASSOCIATION.

YOU ALL RECALL THAT LAST YEAR GLOBAL DOMAINS DIVISION STAFF NEGOTIATED .CAT, PRO AND TRAVEL, REGISTRY AGREEMENT RENEWALS ALL OF WHICH INCLUDED SO-CALLED VOLUNTARY ADOPTION OF UNIFORM RAPID SUSPENSION. ICA PROTESTED THAT AS DID MANY OTHERS SAYING THAT IT WAS MAKING POLICY THROUGH CONTRACT NEGOTIATIONS. WE FILED A RECONSIDERATION REQUEST AS DID THE BC AND THE NCSG JOINTLY. AND THAT HASN’T HAPPENED VERY OFTEN. AND I WANT TO NOTE HERE THAT MY BC COLLEAGUES FAVOR ADOPTION OF URS AS CONSENSUS POLICY BUT TOOK A VERY PRINCIPLED STAND AGAINST GETTING TO THAT RESULT THROUGH THIS MANNER.

BUT GDD AND THE BOARD IN THAT PROCESS SAID THAT, OF COURSE, IT WOULD BE WRONG TO FORCE URS ON REGISTRY OPERATORS THROUGH NEGOTIATIONS BUT THAT THESE RESULTS WERE VOLUNTARY AND, THEREFORE, OKAY.

NOW, ON OCTOBER 12th, ICANN PUBLISHED FOR PUBLIC COMMENT A RENEWAL AGREEMENT FOR .XXX IN WHICH THEY TOO AGREE TO URS FOR A 87% REDUCTION IN THEIR REGISTRY FEES. ONE HAS TO WONDER WHAT A REGISTRY OPERATOR WOULDN’T AGREE TO IN EXCHANGE FOR THAT TYPE OF REDUCTION.

SO I’LL END WITH THIS QUESTION: I DON’T KNOW WHAT THE RPM WORKING GROUP IS GOING TO RECOMMEND ON URS BECOMING CONSENSUS POLICY. MY OWN MIND IS COMPLETELY OPEN ON THIS POINT DEPENDING ON WHAT OUR WORK FINDS AND WHAT CHANGES MIGHT BE MADE IN IT.

BUT IF WE WERE TO RECOMMEND THAT URS SHOULD NOT BE CONSENSUS POLICY — [TIMER SOUNDS.] CAN I JUST FINISH THIS? — WOULD GDD STAFF CONTINUE THIS PRACTICE IN NEGOTIATIONS? IF THE ANSWER IS NO, THEN I MAINTAIN IT’S INAPPROPRIATE FOR THEM TO DO IT NOW. AND IF THE ANSWER IS THAT THEY’RE GOING TO KEEP DOING IT EVEN IF WE COME OUT AGAINST IT BEING CONSENSUS POLICY, THEN DOESN’T THAT RENDER THAT PART OF OUR CHARTER WORK A SOMEWHAT IRRELEVANT EXERCISE IN FUTILITY? THANK YOU VERY MUCH.

>>AKINORI MAEMURA: THANK YOU VERY MUCH. [APPLAUSE] ANYONE TAKES? NO?

>>CHERINE CHALABY: AKRAM, DO YOU WANT TO MAKE A COMMENT ON THAT, PLEASE?

>>AKRAM ATALLAH: SURE, THANK YOU. SO BASICALLY THE NEGOTIATIONS ARE — THE REGISTRIES COME AND ASK FOR SOMETHING AND WE TELL THEM PLEASE ADOPT THE NEW gTLD CONTRACT. AND IF THEY PUSH BACK ON IT AND THEY SAY THEY DON’T WANT SOMETHING, WE CAN FORCE THEM TO TAKE IT. IT’S A NEGOTIATION BETWEEN TWO PARTIES, AND I THINK IT’S WITHIN THE REMIT OF THE CORPORATION TO NEGOTIATE ITS CONTRACTS. IF THE POLICY COMES BACK AND SAYS THAT THE URS IS NOT SOMETHING THAT WE WANT TO HAVE AS A POLICY, OF COURSE, WE WOULD SUPPORT THAT. THANK YOU.

>>PHILIP CORWIN: I APPRECIATE THE LAST PART OF YOUR STATEMENT, AKRAM. THANK YOU VERY MUCH.

 

(Emphasis added)

This article by Philip Corwin from the Internet Commerce Association was sourced with permission from:
www.internetcommerce.org/xxx-ra-revision-a-turkey/

Domain Name Disputes, Domain Name Registrants, Domain Name Registry, ICANN and Governance

Dirty Deed: URS Coming to .XXX by Philip Corwin, Internet Commerce Association

Internet Commerce Association logoICANN Global Domain Division (GDD) staff are at it again, engaging in top down policy decision-making through contract negotiations with older registries that pre-date the new gTLD program. The latest example is the announcement of a “Proposed Amendment to .XXX Registry Agreement to Transition to New Fee Structure and to Adopt Additional Safeguards” that would provide the adult content gTLD with an 87% percent reduction in its per transaction registry fees to ICANN — in exchange for implementing Uniform Rapid Suspension (URS) and other unidentified rights protection measures (RPMs).

We’ve seen this dirty movie before. Back in 2015 ICANN announced that the negotiated renewal registry agreements (RAs) for .Cat, .Travel and .Pro would all contain the URS because GDD staff had made the policy decision that legacy gTLD RAs should be “consistent” with the new gTLD RA. That position was adopted even though the new gTLD RPMs had been established as provisional implementation details, and the question of whether they should become Consensus Policy applicable to legacy gTLDs was to be explored and decided upon in the proper, bottom up consensus fashion by a then-pending working group (WG) to review all RPMs (that WG since launched in spring 2016).

That 2015 imposition of the URS via contract negotiations was overwhelmingly opposed by those who commented on the proposed RA. For example, the Electronic Frontier Foundation (EFF) weighed in with a letter taking the position that “ICANN should not apply URS to the .travel domain, or to any additional domains, by the unaccountable means of staff inserting new conditions into the renewal of the registry operator’s contract. Rather, the public policy implications of such a move demand that a full PDP be undertaken first.”

When GDD staff published the Report of Public Comments on .Travel in July 2015, it addressed the controversy with this self-exculpatory rationale:

Although the URS was developed and refined through the process described here, including public review and discussion in the GNSO, it has not been adopted as a consensus policy and ICANN staff has no ability to make it mandatory for any TLDs other than those subject to the new gTLD registry agreement. Accordingly, ICANN staff has not moved to make the URS mandatory for any legacy TLDs, and it would be inappropriate for staff to do so. In the case of .TRAVEL and other legacy TLD registry agreement renewals (.JOBS) and proposed renewals for .CAT and .PRO registry agreements, inclusion of the URS was developed as part of the proposal in bilateral negotiations between the registry operator and ICANN. (Emphasis added)

GDD subsequently approved the three revised RAs with the URS included. In response, ICA as well as ICANN’s Business Constituency (BC) and Non-Commercial Stakeholder Group (NCSG), appealed the decision by filing formal Requests for Reconsideration. ICANN’s Board finally acted on those requests in February 2016, in a decision stating:

The Requesters’ claims do not support reconsideration. The inclusion of the new gTLD RPMs in the Renewed Registry Agreements is part of the package of agreed-upon terms resulting from the bilateral negotiations between ICANN and each registry operator, and not, as Requesters claim, a “unilateral decision by ICANN contractual staff.” … the Board’s approval of the Renewal Registry Agreements[s] for .CAT, .PRO, and .TRAVEL] is not a move to make the URS mandatory for any legacy TLDs, and it would be inappropriate to do so.

The Board’s rationale requires the suspension of disbelief that a legacy registry operator can “voluntarily” agree to accept a new gTLD RPM that is proposed by GDD staff in exchange for an alteration of its RA that the registry operator believes is essential for the successful and more profitable operation of the registry. Of course, there is no way to know exactly what occurs during such negotiations, as they are closed door proceedings. And in the instance of the proposed .XXX amendment, there is also no way to know if GDD staff took an initial negotiating position urging adoption of provisions of the new gTLD registry contract, since the Announcement is conspicuously silent in providing any explanation of who broached the subject. But there’s no reason to believe that GDD has ever backed away from its consistency viewpoint, and urging supplicant registries in need of RA changes to adopt URS seems awfully close to a mandate. So add lack of transparency to deliberate interference in the policymaking process.

In the present instance, ICM Registry was laboring under a $2 per domain transaction fee imposed by ICANN in 2011 to “account for anticipated risks and compliance activities”. Those risks and activities never materialized at .XXX in any significant way, and ICM has since launched the new gTLDs of .Porn and .Sex paying only the standard $.25 transaction fee. As the request for public comment on the proposed changes states:

In February 2016 and pursuant to Section 4.3 of the .XXX Registry Agreement, ICM requested to engage in good faith negotiations regarding possible changes to the terms of the Agreement, including, without limitation, to Section 7.2 regarding fees and payments to ICANN. ICM’s request is that ICANN amend the .XXX Registry Agreement to lower the per transaction registry fee from $2.00 per transaction to the per transaction fee contained in the new gTLD Registry Agreement.

The proposed Amendment to the .XXX RA states in part:

  1. A new Section 3.1(i) is hereby added to the Agreement as follows: “(i) Protection of Legal Rights of Third Parties. Registry Operator must specify, and comply with, the processes and procedures for registration-related ongoing protection of the legal rights of third parties as set forth Appendix 8 attached hereto (“Appendix 8”). (Emphasis added)

And that Appendix 8 reads as follows:

.XXX AGREEMENT APPENDIX 8 MINIMUM REQUIREMENTS FOR RIGHTS PROTECTION MECHANISMS

  1. Rights Protection Mechanisms. Within 30 days following the first Registry Level Transaction Fee Adjustment Approval Date, Registry Operator shall implement and adhere to the rights protection mechanisms (“RPMs”) specified in this Specification. In addition to such RPMs, Registry Operator may develop and implement additional RPMs that discourage or prevent registration of domain names that violate or abuse another party’s legal rights. Within 30 days following the first Registry Level Transaction Fee Adjustment Approval Date, Registry Operator will include all RPMs required by this Appendix 8 and any additional RPMs developed and implemented by Registry Operator in the registry-registrar agreement entered into by ICANN accredited registrars authorized to register names in the TLD.
  2. Dispute Resolution Mechanisms. Within 30 days following the first Registry Level Transaction Fee Adjustment Approval Date, Registry Operator will comply with the following dispute resolution mechanisms as they may be revised from time to time:
  3. the Trademark Post-Delegation Dispute Resolution Procedure (PDDRP) adopted by ICANN (posted at www.icann.org/en/resources/registries/pddrp). Registry Operator agrees to implement and adhere to any remedies ICANN imposes (which may include any reasonable remedy, including for the avoidance of doubt, the termination of the Registry Agreement pursuant to Section 6.1(a) of the Agreement) following a determination by any PDDRP panel and to be bound by any such determination; and
  4. the Uniform Rapid Suspension system (“URS”) adopted by ICANN (posted at www.icann.org/en/resources/registries/urs), including the implementation of determinations issued by URS examiners. (Emphasis added)

We in no way fault ICM Registry for pursuing a reduction in registry fees that were eight times the standard rate. We do fault GDD staff for once again pursuing policy changes though RA negotiations – as well as ICANN’s Board, which ignored the community’s protests over interference in the policy process and blessed this unsavory practice last year.

ICA will of course file a protesting comment letter by the deadline, but we are under no illusions on the outcome. Staff will again maintain that the proposed RA resulted from balanced and bilateral negotiations and that all provisions were voluntarily acquiesced to — and if asked again, the Board will almost surely back them.

Fortunately, GDD staff will not have the same opportunity in regard to .Com in this decade, as the recent ICANN Board approval of that RA’s extension through 2024 should assure that the RPM Review WG will be the body that decides whether and in what form the URS will come to .Com and other major legacy gTLDs. Assuring that the standard policy process would apply to .Com was a significant reason for ICA’s non-objection to that RA extension, and that assurance seems even more valuable after the publication of the proposed .XXX amendment.

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

ICANN and Governance

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/

Domain Name Registry, ICANN and Governance

.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/

ICANN and Governance

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/