Time for a Board-Imposed Moratorium? — .Mobi Trades URS for $Cash

Once 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.

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