NTIA

6
Oct

In Extending .Com RA, ICANN Board also Extended Price Freeze Through 2024

We 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

 

20
Sep

ICANN Board Approves .Com RA Extension

ICANN has just released the Approved Board Resolutions from its meeting of Thursday, September 15th, and one of its major actions was to approve the proposed extension of the .Com registry Agreement (RA) through November 2024. The complete text of the Resolution and the rationale for its adoption can be found at the end of this post.

Wholesale prices of .Com domains are unaffected by the RA extension and remain frozen at $7.85 through the end of November 2018 under the terms of the separate Cooperative Agreement between Verisign and the NTIA. As the Department of Justice explained in an August 31st letter to Sen. Ted Cruz, once the RA is extended the NTIA will have full leeway to extend the price freeze through 2024.

ICA had filed a public comment, in which we indicated non-opposition to the proposed extension so long as it did not affect .Com pricing or get tied to policy decisions that should not properly be injected into contract negotiations between ICANN and registries.

As stated in the Executive Summary of ICA’s comment letter:

  • ICA has no objection to the proposed .Com RA extension as it simply provides the same additional six year contract term that Verisign would be entitled to in 2018 under its contractual right of presumptive renewal. It will have the salutary effect of preventing GDD staff from attempting to impose the URS and other new gTLD RPMs on .Com during a time when an active ICANN Working Group is exploring the policy question of whether any of these RPMs should become Consensus Policy applicable to legacy gTLDs.
  • Our non-objection is based on our understanding that the contract term extension will have no impact on the pricing of .Com domains, as the current price freeze they are subject to is contained in the separate Cooperative Agreement between Verisign and the NTIA.
  • 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.
  • While the proposed RA extension is justified by the present intermingling of .Com and Root Zone technical operations, given that the related RZMA between ICANN and Verisign contemplates the possibility of future termination or transition, we would urge ICANN to take steps to assure that the intermingling does not continue to such an extent that would make the exercise of those options technically infeasible or contrary to the security and stability of the DNS.

As ICA anticipated, trademark interests such as the International Trademark Association (INTA) and ICANN’s Intellectual Property Constituency (IPC) opposed approval of the proposed RA extension unless Verisign committed in advance to adopt the rights protection mechanisms (RPMs) created for the new gTLD program. Some new gTLD registry operators took a similar position. The question of whether those RPMs should become applicable to legacy gTLDs like .Com is presently being considered by an ICANN working group reviewing all RPMs in all gTLDs, and it is expected to issue a draft report and recommendations in mid-2017. That GNSO-created policy review group is the proper place for such issues to be transparently studied and decided, rather than in closed door negotiations between ICANN staff and registry operators.

In explaining its decision, the Board noted that some commenters had wanted the Board to specify what additional subjects should be discussed by ICANN and Verisign in potential negotiations between now and 2018, but it refused to do so, explaining:

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.

The Board also noted the comments that had called for it to impose the new gTLD RPMs as part of this approval, and explained why it had declined to do so:

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’s explanation also contains this very relevant language:

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….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.

Summing up, ICA commends the Board for not entangling a simple extension of the .Com RA intended to assure the security and stability of the DNS with policy decisions that are being properly addressed in an ongoing ICANN working group. Although the extension commits both ICANN and Verisign to engage in such additional discussions as are necessary for consistency with any changes to, or the termination or expiration of, the Cooperative Agreement between NTIA and Verisign, any such discussions will likely take place after the RPM Review WG has rendered its consensus on whether any of the new gTLD RPMs should become Consensus Policy and, equally important, whether any of them should be modified going forward.

*****

Text of ICANN Board Resolution and Rationale—

 

.COM Registry Agreement Amendment

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 (2016.09.15.09), the proposed amendment to the .COM Registry Agreement <https://www.icann.org/sites/default/files/tlds/com/com-amend-1-pdf-30jun16-en.pdf> [PDF, 100 KB] 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.

Rationale for Resolution 2016.09.15.09

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 theTLD; (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> [PDF, 200 KB].

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 athttp://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 theICANN 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

 

 

13
Sep

.Com RA Extension on ICANN Board’s 9/15 Agenda

 

The “.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 CANN 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.

 

 

 

 

 

2
Sep

DOJ to Cruz: .Com Price Freeze can be Extended to 2024

On August 31st the Department of Justice (DOJ) sent a response to the August 12th letter from Senator Ted Cruz and some Congressional colleagues to the head of the Antitrust Division. In that letter Cruz et al asserted that if the pending extension of the .Com registry Agreement (RA) was granted in combination with the consummation of the IANA transition, that DOJ could be prevented from having “meaningful input into the prices that Verisign charges for registering a domain name within the .com domain for an extended period”. Based on that assertion, Cruz and his colleagues requested DOJ “to conduct a thorough competition review of the agreement before any oversight transition is undertaken and any agreement extension is approved”.

DOJ’s response makes clear that it will retain meaningful input into .Com pricing after the occurrence of either the .Com RA extension, IANA transition, or both; and that the National Telecommunications and Information Administration (NTIA), in consultation with DOJ, can extend the .Com wholesale price freeze through 2024 if it chooses to do so.

The operative part of the letter states:

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 DOJ response does not commit it and NTIA to take any particular action on .Com pricing prior to the current November 2018 termination of the Cooperative Agreement (CA), but it does make clear that NTIA has the discretionary power to extend the CA and the price freeze that it contains. NTIA could undertake such an extension if the Boards of both ICANN and Verisign approve the RA extension, as the letter makes clear that the extension requires NTIA review and approval before it can take effect. However, NTIA may well decide to leave the decision on whether to extend the CA and retain or adjust the price freeze to the next Administration, and that decision will likely be based upon a full review by the Antitrust Division.

In a related development on the antitrust front, ICANN General Counsel John Jeffrey has just sent a letter to the Wall Street Journal stating:

The Internet Corporation for Assigned Names and Numbers (ICANN) does not enjoy an “antitrust exemption.” ICANN is not, and never has been exempted from antitrust lawsICANN has not been granted an antitrust exemption by any of its contracts with NTIA. No ruling in ICANN’s favor has ever cited an antitrust exemption as the rationale.(Emphasis added)

That belts-and-suspender concession comports with the views of most antitrust experts that ICANN’s claim to an antitrust exemption was tenuous at best even when the U.S. government exercised direct oversight of the organization, was substantially diluted when the relationship loosened under the current Affirmation of Commitments, and would conclusively disappear entirely upon consummation of the IANA transition. However, that position is at complete odds with the one that ICANN took as recently as 2012, in a lawsuit brought by YouPorn owner Manwin Licensing in regard to the then-controversial .XXX gTLD, when it asserted (and when Mr. Jeffrey was likewise General Counsel):

ICANN cannot, as a matter of law, be liable under the antitrust laws with respect to the conduct alleged in the Complaint because ICANN does not engage in “trade or commerce.”…[ICANN] does not sell Internet domain names, it does not register Internet domain names, and it certainly is not an Internet pornographer. ICANN does not make or sell anything, it does not participate in any market, and its Bylaws expressly forbid it from participating in any of the markets referenced in the Complaint.(Emphasis added)

That antitrust immunity was rejected a few months later by the Federal District Court hearing the litigation, when it decisively stated:

The Court finds the transactions between ICANN and ICM described in the First Amended Complaint are commercial transactions.

ICANN established the .XXX TLD. ICANN granted ICM the sole authority to operate the .XXX TLD. In return, ICM agreed to pay ICANN money.

This is “quintessential” commercial activity and it falls within the broad scope of the Sherman Act. Even aside from collecting fees from ICM under the contract, ICANN’s activities would subject it to the antitrust laws. (Emphasis added)

Given that in the intervening four years ICANN has established more than a thousand additional gTLDs for which it collected a third of a billion dollars in application fees and receives continuing fees from, and that the impending IANA transition will sever the final tangential relationship between the U.S. government and ICANN, this week’s antitrust concession may well reflect a decision by ICANN Legal that it no longer made sense to play a losing hand – especially when assertions of weakened DOJ antitrust authority threaten to delay or scuttle the transition.

So the clear weight of these important letters is that the .Com wholesale price freeze will stay in place and can be extended by NTIA through 2024, and that ICANN has abandoned any claim to antitrust immunity.

 

 

16
May

U. S. Government Blasts China’s Draft Domain Regulations

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

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

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

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

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

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

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

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

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

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

The full text of the statement follows—   

 

China’s Internet Domain Name Measures and the Digital Economy

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

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

May 16, 2016

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Topics:

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

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

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

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

 

23
Apr

Second Draft CWG-IANA Stewardship Proposal Out for Public Comment — April 24th Explanatory Webinar Scheduled

Late on the evening on April 22nd the CWG-Stewardship on the IANA Naming Functions issued its second Draft Proposal for a 28-day public comment period that closes on May 20th. Information about the Proposal can be found in a news announcement and at the public comment page.

ICANN has scheduled a 90-minute explanatory webinar on the proposal on Friday, April 24th at 6:00 and 14:00 UTC. Individuals who wish to participate should refer to the Webinar announcement for registration instructions.

ICA is concerned that the 28-day comment period, cut by thirty percent from the standard 40-day period used for other ICANN matters, may be insufficient to address a document of this importance and length. That is particularly true because several sections of the 90-page draft are marked as “Under Development” or “Draft and Under Development” indicating that this remains an incomplete work in progress.

Indeed, the explanation provided by the CWG notes that, During the Public Comment period, the CWG-Stewardship will continue to assess the implications of the proposed post-transition structure (section IV) and the fulfillment of NTIA requirements (section V). These sections depended largely on the completion of Section III and therefore are in outline form only at this time.” (Emphasis added)

The referenced Section III of the Proposal is the very important “PROPOSED POST-TRANSITION OVERSIGHT AND ACCOUNTABILITY”. In this regard the CWG explains that the critical details will be based on the unfinished work of the separate CCWG-Accountability:

DEPENDENCIES ON THE CCWG-ACCOUNTABILITY

The CWG-Stewardship’s proposal has dependencies on and is expressly conditioned upon the CCWG-Accountability process. Specifically, the proposal requires ICANN accountability in the following respects:

  • Ability for the community to have more rights regarding the development and consideration of the ICANN budget;
  • Empowering the multistakeholder community to have certain rights with respect to the ICANN Board, including the ICANN Board’s oversight of the IANA operations, specifically, the ability to appoint and remove members of the ICANN Board, and to recall the entire Board;
  • The IANA Function Review, created to conduct periodic and special reviews of the IANA Functions, should be incorporated into the ICANN bylaws;
  • The CSC, created to monitor the performance of the IANA Functions and escalate non-remediated issues to the ccNSO and GNSO, should be incorporated into the ICANN bylaws.
  • Accountability processes that the CCWG-Accountability is enhancing, such as the Independent Review Panel, should be made applicable to IANA Functions and accessible by TLD managers, if they wish to take advantage of these mechanisms.
  • All of the foregoing mechanisms are to be provided for in the ICANN bylaws as “fundamental bylaws” requiring community ascent in order for amendment.

The CCWG-Accountability is expected to deliver its own draft proposal for a similarly truncated public comment period later this month. However, the CCWG has penciled in a possible second comment period on the Accountability proposal that could begin around July 1 — while the CWG has no plans for a second comment period on the Stewardship proposal even though the draft that was just published has large holes in it.

The CWG’s current plan going forward is to analyze the comments following the close of the input period and then deliver a final draft for review, consideration and approval by ICANN Supporting Organizations and Advisory Committees around June 8th, with submission to the IANA Coordination Group (ICG) scheduled for just seventeen days later on June 25th.

At some future point the final package assembled by the ICG will have to be reconciled and combined with the final Accountability proposal and delivered to the ICANN Board for review and approval, an event currently projected to occur around August 30th. After that, implementation of those accountability measures required to be in place prior to the IANA transition would start, and the NTIA would review the full package and decide whether it effectively met the principles contained in its March 2014 announcement of the IANA transition.

Congressional appropriations language remains in effect that prohibits the NTIA from facilitating the transition prior to September 30th and requires that it provide Congress with 45 days advance notice of any intent to transfer oversight of the IANA root zone functions.

 

10
Dec

Breaking: U.S. Government Funding Bill Delays IANA Transition

On the evening of Tuesday, September 9th, Congressional leaders unveiled a 1,603 page, $1.01 trillion FY 2015 appropriations bill to fund the U.S. government through the end of September 2015. One provision of the omnibus bill would delay the IANA transition until after the September 30, 2015 expiration of the current contract between the NTIA and ICANN.

Language in the bill states:

SEC. 540. (a) None of the funds made available by this Act may be used to relinquish the responsibility of the National Telecommunications and Information Administration during fiscal year 2015 with respect to Internet domain name system functions, including responsibility with respect to the authoritative root zone file and the Internet Assigned Numbers Authority functions.

(b) Subsection (a) of this section shall expire on September 30, 2015.

That language, a modified version of the “Duffy Amendment” that was contained in the House version of the National Defense Authorization Act, would allow NTIA to start spending funds on a transition after exercising its first option to extend the contract.

In addition, the explanatory report language of the Commerce-Justice-State portion of the omnibus spending bill, in which the above language is contained, states the following:

Internet governance.-The agreement reiterates House and Senate language regarding the Internet Corporation for Assigned Names and Numbers (ICANN) and Internet Assigned Numbers Authority (IANA) matters and modifies Senate language by directing NTIA to inform appropriate Congressional committees not less than 45 days in advance of any such proposed successor contract or any other decision related to changing NTIA’s role with respect to ICANN or IANA activities. In addition, NTIA shall submit a report to the Committees on Appropriations within 45 days of enactment of this Act regarding any recourse that would be available to the United States if the decision is made to transition to a new contract and any subsequent decisions made following such transfer of Internet governance are deleterious to the United States.

This language appears to require NTIA to inform Congress 45 days prior to extending the IANA contract or taking any other decision in regard to it; as well as to submit a report to Congress within 45 days after the spending bill’s enactment regarding whether the US would have any post-transition recourse if subsequent decisions were deleterious to the U.S.

This final bill language has already been negotiated with and accepted by Senate Democratic and House Republican leaders and is likely to be enacted and sent to President Obama by the weekend. It is unlikely that the White House would veto the bill and risk a government shutdown over this IANA language (although other provisions could become sticking points between the Administration and Congress).

Rumors were already circulating in Washington that NTIA was prepared to extend the current IANA contract by at least six months in recognition of the fact that it may be impossible for the ICANN community to design and stress test enhanced accountability measures by the end of the current contract term, much less have them in place by then. So the bill may have little effect on the actual timetable for the transition. It remains to be seen what reaction to its enactment comes from ICANN, the ICANN community, and other nations.

7
Sep

ICANN’s Comment Period on Accountability Process Seeks Scope Limitations

Bowing to unprecedented community pressure in the form of a unanimous letter questioning its staff-developed Accountability Process, as well as a reconsideration request filed with the Board, on September 5th ICANN issued a notice titled “Public Comment Invited: Enhancing ICANN Accountability Process”. The notice opens a 21-day public comment period on that staff proposal.

However, ICANN staff apparently cannot resist asserting some form of top-down control even what that very conduct is at issue, and the notice and accompanying explanation contain attempts to restrict and unduly channel the scope of community comment.

The explanation instructs that the scope of the comments should be narrowly focused:

This public comment period is focused on addressing questions about the design of the Enhancing ICANN Accountability Process – not about the potential solutions or outcomes of the review….issues and solutions are not under discussion here. The question for this public comment discussion is: Are there any final modifications or improvements needed to the Enhancing ICANN Accountability process design to allow for this discussion to proceed?

The question that ends that excerpt clearly asserts that the staff-designed plan should be the starting point for comments focused on “modifications and improvements” to it. But many in the community feel that the staff proposal is unduly complex and deliberately designed to dilute its views, while granting ICANN’s Board excessive latitude to reject any and all recommendations that are eventually produced. A fully open comment period should allow suggestions for replacement of all or part of the staff’s proposed Process. Besides, how can you untangle the design of a process from the issues it is addressing and their potential solutions?

Additionally, notwithstanding its admonition to focus on process, ICANN itself uses the notice to assert limitations on the substance of what may be produced by whatever final Process is ultimately adopted. And it relies on its characterization of statements made by the U.S. government at this past week’s Istanbul IGF meeting as the foundation for that assertion. The explanation asserts:

This process is intended to deal with focused systemic issues caused by the changing historical relationship with the United States, including for example, by stress testing against internal or external captures or takeovers, and safeguards against capture at all levels, which is a pre-condition of the IANA stewardship transition. Statements made by the NTIA since posting clarify that this process is limited to ensuring ICANN remains accountable in the absence of its contractual relationship with the U.S. Government. This process could potentially include an evolution of the AoC, but does not replace or duplicate existing ICANN accountability processes such as the Accountability and Transparency Reviews that deal with routine execution of tasks.

ICANN is an evolving organization with existing review mechanisms that ensure it continues to evolve to events not related to the changing relationship with the U.S. Government.

…In the previous public comment and public sessions, community members have identified many possible solutions of how to enhance ICANN accountability, such as the development of new community driven redress mechanisms. These proposed issues and solutions as they pertain to the changing relationship with the US are expected to be addressed by the process. (Emphasis added)

Likewise, the notice further asserts that a major factor underlying the opening of the comment period was:

The emphasis made by the U.S. government at ICANN’s Town Hall Meeting at the Internet Governance Forum (IGF) in Istanbul that the enhancement of ICANN’s accountability mechanisms be narrowly focused on those related to the IANA Functions Stewardship Transition, that is reiterating its focus is on the changing historical contractual relationship with the US, and that both the transition and accountability processes be delivered simultaneously by September 2015 when the IANA contract expires. (Emphasis added)

It is quite difficult to parse these statements and comprehend what ICANN actually believes is in scope for this comment period. A narrow focus on the termination of the clerical role played by the U.S. in reviewing proposed IANA functions root zone changes seems completely at odds with envisioning comments on the Affirmation of Commitments (AoC). The accountability concerns that drove the recent unprecedented community actions are based in the widely held views of many stakeholders that ICANN’s existing accountability measures are inadequate — and that ICANN may exercise its right to terminate the AoC between it and the U.S. once the IANA transition is completed. Even if AoC termination does not occur, ICANN may face growing pressure to expand the counterparty end of the AoC so that it is no longer an agreement solely between it and the U.S. And, as the AoC is the basis for the periodic Accountability and Transparency Reviews, one cannot discuss one and ignore the other.

Another confusing aspect of the guidance is its concession that new community driven redress mechanisms are within the scope of the Accountability Process. Overall, the coming termination of the unique U.S. oversight tied to periodic re-awarding of the IANA functions contract is the most fundamental change to ICANN since its creation, and a fair and open process would deem almost any suggestion for enhanced accountability as within scope.

So far as U.S. remarks made this past week in Istanbul, the IGF 2014 website does not appear to provide a transcript of the September 2nd Town Hall meeting referenced above, and ICANN’s own IGF webpage contains no mention of the event, so it is not clear whether ICANN’s characterization of Secretary Strickling’s remarks is fully accurate. But it is not unusual for U.S. officials to tailor their remarks for overseas audiences, and the one that gathered in Istanbul would probably equate any extension of the IANA contract beyond September 2015 as indicative that the U.S. may not intend to complete the transition.

In any event, ICANN’s characterization of Secretary Strickling’s remarks is at some considerable variance his last official statement on this subject made in the U.S. and posted at the NTIA website, his July 22nd remarks at the American Enterprise Institute. He told that audience:

We have not set a deadline for this action.  While the current contract with ICANN expires in September 2015, we have repeatedly noted that we can extend the contract for up to four years if the Internet community needs more time to develop a proposal that meets the criteria we have outlined.  In the meantime, our current role will not change…Also this spring, in response to community discussions at its Singapore meeting, ICANN announced a separate process to address ways to improve its overall accountability.  Specifically, this process will examine how ICANN can strengthen its accountability mechanisms to address the absence of its historical contractual relationship with NTIA.  This important accountability issue will and should be addressed before any transition takes place. (Emphasis added)

As can be seen, in those remarks Secretary Strickling reiterated that September 2015 is a goal and not a deadline ( a point he also emphasized in Congressional testimony); and that the accountability process, while separate from the IANA transition discussions, should address ICANN’s “overall accountability” and should be completed before the transition is made final.

There is a transcript of a separate IGF Istanbul session on Core Internet Values in which Secretary Strickling made some interesting observations on the current process:

Now I think as we move forward, our commitment to the multistakeholder process, I hope people feel, has been very concretely demonstrated by our announcement in March to transition out of our remaining role in terms of our stewardship of the IANA functions.  And I do think that this is really putting our many where our mouth is, in terms of the United States support of the multistakeholder process.  We’re watching with great, almost amusement as the community takes this on.  I think it’s a real test to the community of the multistakeholder model and can they organise themselves?  Can they now focus on the important issues and get to consensus?  I think upon the successful completion of this, and I do expect a successful completion, this process will be much stronger for what the community is going through right now as they try to wrestle with all of the different issues that are emerging about how broad the analysis has to be and how they go about bringing together all the different interests of ICANN in one place on what is perhaps the most fundamental Question ICANN has had to face since its creation back in 1998.  (Emphasis added)

Indeed, the ICANN community has organized itself as never before around the fundamental questions of what kind of robust and enforceable accountability measures ICANN requires in the aftermath of U.S. withdrawal from IANA functions oversight, and the design of the process for determining that. And the community has done this in spite of, and in reaction to, continued efforts of ICANN staff to control the structure, scope, and timing of the Accountability Process. The stakes are very high — as Secretary Strickling confirmed, this is “the most fundamental Question ICANN has had to face” since its creation.

So what happens next? True to form, ICANN staff is pressing ahead with its staff-designed Process instead of properly putting it on hold during the comment period, declaring:

The Enhancing ICANN Accountability mechanisms will remain operational through this comment period but will not address the substantive issues of enhancing ICANN accountability in the absence of the U.S. Government contract until the end of the 21-day public comment period. Any changes to the process structure instituted following the 21-day public comment period will be implemented accordingly. (Emphasis added)

Meanwhile, the segments of the community that filed the Reconsideration Request for Board review of staff actions have wisely elected to leave it in place and not withdraw it until they can see whether this comment period results in meaningful alterations of the Accountability Process.

It must be noted that the community is being given only three weeks to comment on an Accountability Process of which it has no clear or common understanding. On September 3rd the same stakeholders that signed the unanimous letter questioning the Process submitted a detailed letter of inquiry asking for specific information about it. That letter contains twenty separate questions, many of which include multiple additional sub-questions, and there is no guarantee that a response will be received from ICANN staff during the comment period. How can one submit final comments on a Process that is not fully understood?

In addition, the comment period closes at midnight on Saturday, September 27th – and the opening meetings of the ICANN 51 meeting in Los Angeles start on Saturday, October 11th, just two weeks to the day after that. So time is very short and the community is unlikely to have detailed answers to its questions about the staff plan until late in the comment period, if then.

Given the present situation the best course for the stakeholders who came together and brought the pressure to obtain this comment period is to continue to press forward and build consensus on key aspects of the Accountability Process they want and the scope of what it should address – and ignore ICANN staff attempts to impose any artificial deadlines or limitations on the scope, or the substance and timing, of the Process. After all, if the community had accepted ICANN’s August 14th process as the fait accompli that staff intended, instead of coming together and pushing back, there wouldn’t even be a public comment period opening now.

 

1
Sep

Stress Test: Reconsideration Request on Accountability Process Filed with ICANN Board

In a rapid follow-up to the unprecedented joint letter sent on August 26th by all members of the ICANN community questioning the proposed Accountability Process imposed by ICANN staff, three of the groups that signed that letter have now submitted a formal Reconsideration Request (RR) to the ICANN Board. The August 29th RR – submitted jointly by the Business Constituency (of which ICA is a member), Registry Stakeholders Group, and Non-Commercial Stakeholders group – requests that ICANN “confer with the community as soon as possible to address these concerns and amend its plan in such a way that the community input is taken into account as the plan goes forward. Specifically, ICANN should make modifications and clarifications to its plan to reflect the widely shared concerns of the community that can reasonably be implemented.”

The RR process is one of three currently available accountability measures available to ICANN stakeholders. The others are an Independent Review Panel (IRP) and the filing of a complaint with the Ombudsman. ICANN’s Board has contended that the findings of an IRP are merely advisory and non-binding, and the Ombudsman has investigatory powers but no authority to make or change policy, administrative or Board decisions. The RR is thus the only means available for requesting that the Board intervene against arbitrary staff action that materially injures the ICANN community.

One of the ideas that have been floated for the evaluation of enhanced accountability measures recommended by the final Accountability Process is subjecting them to a hypothetical “stress test” to determine their likely efficacy. The manner in which ICANN’s Board handles this RR will constitute a real world stress test of the RR’s effectiveness as an accountability mechanism, and will inform the subsequent debate about necessary enhancements.

The RR contains multiple allegations of an extremely serious nature that add up to a searing critique of staff actions. Here is a sampling of the key charges, quoting directly from the RR:

  • We have been materially and negatively affected by the staff’s decision to proceed with their proposed plan finalized in the 22-Aug-2014 ICANN announcement on Enhancing Accountability: Process and Next Steps. The staff-proposed plan did not properly take into account community concerns and did not provide a public comment period whereby the community could provide reaction to the staff plan. By taking this action, we have been materially harmed, as our questions, concerns, and ideas have not been adequately considered in the required multi-stakeholder process. Further, the community has no say in the appointment of the Public Experts Group (“PEG”) or the seven outside “expert” advisors to be appointed by the PEG. Yet, the seven advisors could steer consensus and outcome that will have a direct impact on the community….The staff-imposed plan is a top-down approach that calls into question the fairness of enhancing accountability process and the legitimacy of its decisions. It also creates a disturbing precedent that could embolden future actions by staff or the ICANN Board to circumvent and ignore the bottom-up, multi-stakeholder process.
  • This plan, imposed on the community without transparency and without the opportunity for public comment, creates inconsistency, disregards proper ICANN procedure, injects unfairness into the process, and defeats the purpose of the entire accountability examination.
  • The staff development and imposition of its accountability plan as described above failed to uphold ICANN’s stated core values, mission, and promises that the accountability plan would be community driven and based on the public interest as expressed through a bottom-up process.
  • ICANN neither sought nor supported participation in the development of this plan, and specifically excluded the community from the drafting and decision-making opportunities behind the staff plan.
  • The formulation of staff’s plan went on behind closed doors and excluded the opportunity for the community to influence the plan. The community was not provided with the rationale for the staff plan until after the plan had been posted as final and its implementation had begun.
  • The decision to impose this plan, to which so many in the community were openly objecting, showed a lack of neutrality, integrity, objectivity, and fairness on the part of staff. Staff failed to follow any documented policy and created its own plan without addressing the concerns about its conflict of interest in the matter.
  • Staff failed to include the input of those who are most affected by staff’s accountability plan: the community members who participate at ICANN in hopes of getting a fair opportunity to influence policy in a democratic, open, transparent process.
  • Staff failed to integrate the input obtained from the initial public comment period in the formulation of its plan. Then staff did not provide any opportunity for public comment on its plan once it was finally published. ICANN has failed to be accountable to the Internet community.
  • Staff failed to operate in an open, transparent or fair manner.
  • The views, concerns, needs, and ideas of the community ICANN was established to serve were not adequately considered in the formulation of the staff plan. Nor were ICANN’s Bylaws and promises to operate in an open, transparent, and bottom-up manner followed in this process.

The business sector and civil society have been coalescing around core Principles for the IANA transition and accompanying enhancements of ICANN accountability. The U.S. Congress will be returning from recess next week and will undoubtedly be hearing from Internet-related businesses and public interest organizations in regard to the staff-imposed Accountability Process, which seems designed the type of sweeping reforms contained in those Principles. This may result in sharp questioning of the NTIA – which must sign off on any proposed transition plan, and has publicly stated that it must be accompanied by acceptable accountability measures – about why ICANN has violated its own multistakeholder process and commitment to transparency. Additional Congressional reaction is also possible. As ICANN’s own Governmental Advisory Committee signed the joint letter we expect that many other governments have and will continue to receive similar input.

Meanwhile, ICANN’s CEO and Board Chairman sent an August 28th response to the signers of the August 26th letter. While the tone of their letter is civil it does not commit to any reopening of or revisions to the staff-imposed Process. Indeed, it appears to reiterate that the disgruntled parties should engage with the process as is:

We look forward to receiving your list of clarifying questions and concerns and we will respond in kind. As we have since this process began last spring, we appreciate all of the community comments received to date and encourage broad participation in the Cross Community Group – the key forum for generating the substantive issues this accountability process will address.

The process as outlined and complemented with the information in the FAQs enables the substantive dialogues to begin soon, to remain interrelated with the IANA Functions Stewardship Transition process well underway. (Emphasis added)

ICANN has also indicated its dedication to “full speed ahead” adoption and implementation of the staff-imposed Process through the August 28th publication of a “Call for Candidates: Seeking Advisors to the ICANN Accountability & Governance Coordination Group”. The notice sets a very near-term deadline of September 10th for the submission of nominations so that the Public Experts Group (PEG) – of which NTIA head Larry Strickling is one of four members – can complete the final selection of ”advisors” before the final 2014 ICANN meeting scheduled for October 12th-16th in Los Angeles. As noted above, one of the allegations in the RR is that “the community has no say in the appointment of the Public Experts Group (“PEG”) or the seven outside “expert” advisors to be appointed by the PEG. Yet, the seven advisors could steer consensus and outcome”.

Further questions arise regarding the staff decree that the Advisors are supposed to “bring an external, independent voice to this process to assure that best practices are brought in from outside of the ICANN community”. An accompanying FAQ sheds no light on what it means to be from “outside” the ICANN community, but makes clear that the “Coordination Group should make recommendations based on consensus taking into account advice of the advisors” and that the “advisors are not limited to engaging with the Coordination Group”. So it appears that these Advisors are supposed to have considerable impact on the final report and recommendations, and will have wide latitude to engage with parties outside the Coordination group – including governments and the media – but are to have little or no actual real world experience with ICANN. Many would rightfully ask why individuals who are part of the ICANN community, understand its operations and internal dynamics, and have expertise in relevant areas should be automatically deemed ineligible to act in this advisory capacity? This staff decision seems designed to ensure that the selected Advisors operate in the world of theory rather than actual ICANN practice.

The final sign that ICANN leadership may be circling the wagons and doubling down on the staff plan is its August 29th announcement of a September 2nd “Enhancing ICANN Accountability and Governance Town Hall Meeting” taking place at the IGF meeting in Istanbul. It explains, “The Town Hall Meeting will provide an opportunity for an open dialogue to address and clarify any remaining questions about the Enhancing ICANN Accountability and Governance Process.” (Emphasis added)

It is worth recalling that ICANN’s rationale for separating the IANA transition from the enhanced accountability processes was that the first involved the global stakeholder community while the second was an internal ICANN matter and therefore should be discussed and determined solely within the ICANN community. That rationale was questionable given that ICANN is wide open to participation by anyone. Some suspected that it was adopted in anticipation of trying to push the transition through before any significant accountability improvements were decided, much less implemented. But it is the official rationale put out there by ICANN.

Now that every group within the ICANN community has signed a joint letter expressing concerns about the substance of the fait accompli Accountability Process promulgated by staff as a on August 14th — with that community letter promising additional detailed questions within seven days – that action has become the focus of intense disagreement between ICANN the corporation and its community. This dispute should be resolved internally.

While an ICANN session discussing and taking questions about the proposed Process during the IGF meeting seems unobjectionable, the notion that “all remaining questions” can be answered in a 90-minute session in Istanbul is preposterous. They cannot. There are too many questions to be answered in an environment that may be as much PR event as substantive dialogue. And this is a session at which many members of the ICANN community will not be present, while many in the audience will have little or no understanding of ICANN’s procedures and Bylaws and the events leading up to this impasse.

There can be little doubt that the attempt of ICANN staff to impose an Accountability Process over the objections of and without sufficient input from the ICANN community has introduced tremendous unnecessary stress into the entire relationship between the corporation and its community. How the Board handles this RR will determine whether that stress is relieved in a constructive manner or is further exacerbated. It will also be highly instructive on the questions of whether the present RR process provides any real accountability – and, if not, what should be developed to replace it.

 

The text of the RR follows:

 

Reconsideration Request Form

1. Requester Information

Name: Steve DelBianco, Business Constituency vice chair for policy coordination, on behalf of:

The Business Constituency;

The Registries Stakeholder Group; and

The Non-Commercial Stakeholders Group (NCSG)

Address: 1920 Virginia Ave, McLean, VA 22101 USA

Email: sdelbianco@netchoice.org

Phone Number (optional): +1.703.615.6206

2. Request for Reconsideration of (check one only):

X Staff action/inaction

3. Description of specific action you are seeking to have reconsidered.

We ask the Board Governance Committee (BGC) to reconsider the ICANN staff’s imposition of its

“Accountability Plan”, the final version of which was posted to ICANN’s website on 22-Aug- 2014,

which is also the date that the staff Rationale for the plan was initially posted to the public.

Among others, the community groups represented here had called for a community-developed

Accountability Plan, and yet were not allowed to participate in the drafting of staff’s plan. At the

London ICANN #50 meeting in June, staff promised the community that the plan would be

community-developed, transparent, open, and bottom-up in its formulation. The plan imposed on 22-

Au-2014 had none of those promised attributes.

ICANN staff also failed to take into account the statement of the 4 GNSO Stakeholder Groups at the

London #50 meeting noting ICANN’s conflict of interest and calling for an independent accountability

mechanism to be developed. Indeed staff has not responded in any way to the statement of the 4

GNSO Stakeholders Groups in the London Public Forum in June. In summary:

1. The BCG should reconsider the staff decision to impose a plan of this significance without

allowing a public comment period on the staff-developed plan.

2. The BCG should reconsider the staff decision to impose a plan that failed to address widely

shared community concerns as expressed in numerous public comments, discussions at

ICANN #50, and stated community reactions to the infographic.

4. Date of action/inaction:

The final version of staff’s Accountability Plan was posted to ICANN’s website on 22-Aug-2014,

which is also the date that the staff rationale for the plan was initially posted to the public.

ICANN provided an “Infographic” foretelling certain aspects of its plan to select members of the

community on 14-Aug-2014. Community leaders told ICANN staff at that time that their groups were

not aligned with staff’s plan, and staff responded and stated it was “fixing” its plan. The community

waited for the so-called “fixed” plan, which was posted as Final on 22-Aug-2014, and which did not

address the stated community concerns in any meaningful way. The rationale for this plan was not

provided by staff until the plan was final on 22-August, at which point its implementation was already

Staff did not allow a public comment period for any community discussion, shaping, or even support

to occur for its Accountability Plan prior to its adoption and implementation. Staff did not address the

many concerns that had been expressed about ICANN’s conflict of interest in controlling the process

to hold itself “accountable”. Staff did not clarify the roles in its accountability plan to ensure that

stakeholders are the decision makers in matters they are subject to.

5. On what date did you became aware of the action or that action would not be taken?

On 22-Aug-2014, when staff finally posted the plan and its rationale to its website, and it did not

address community concerns as promised, and its implementation had begun, we became aware that

the plan staff intended to implement would not meet the community’s needs and redress measures

would be required.

6. Describe how you believe you are materially affected by the action or inaction:

We have been materially and negatively affected by the staff’s decision to proceed with their proposed

plan finalized in the 22-Aug-2014 ICANN announcement on Enhancing Accountability: Process and

Next Steps.

The staff-proposed plan did not properly take into account community concerns and did not provide a

public comment period whereby the community could provide reaction to the staff plan. By taking this

action, we have been materially harmed, as our questions, concerns, and ideas have not been

adequately considered in the required multi-stakeholder process.

Further, the community has no say in the appointment of the Public Experts Group (“PEG”) or the

seven outside “expert” advisors to be appointed by the PEG. Yet, the seven advisors could steer

consensus and outcome that will have a direct impact on the community, since the Coordination Group

is directed to make recommendations based upon consensus, taking into account the advice of the

advisors. Worse still, the staff-imposed plan would allow the ICANN Board to reject or selectively

accept recommendations of the Coordination Group, again bypassing the multi-stakeholder process.

The staff-imposed plan is a top-down approach that calls into question the fairness of enhancing

accountability process and the legitimacy of its decisions. It also creates a disturbing precedent that

could embolden future actions by staff or the ICANN Board to circumvent and ignore the bottom-up,

multi-stakeholder process.

7. Describe how others may be adversely affected by the action or inaction, if you believe that

this is a concern.

In addition to an adverse effect upon us, the staff-imposed plan has an adverse effect upon other

constituencies and upon other members of the community. This plan, imposed on the community

without transparency and without the opportunity for public comment, creates inconsistency,

disregards proper ICANN procedure, injects unfairness into the process, and defeats the purpose of the

entire accountability examination. All members of the ICANN community and users of the Internet

have a stake in the outcome of the enhancing accountability process and may be harmed if the process

does not take into account their views and is the result of a staff-imposed plan rather than a

community-driven plan.

8. Detail of Staff Action – Required Information

The staff development and imposition of its accountability plan as described above failed to uphold

ICANN’s stated core values, mission, and promises that the accountability plan would be communitydriven

and based on the public interest as expressed through a bottom-up process.

Specifically, the staff action is in violation of several core values in ICANN’s bylaws, whereby

ICANN promises it will behave in an open, transparent, and bottom-up fashion in the formulation of

the organization’s policies and operations.

In Article I, Section 2 of its Bylaws, ICANN promises to engage with the community in the

development of policy in a bottom-up and open manner at all levels. And in the Section 3 of its

Bylaws, ICANN promises to operate in a transparent and fair manner. Through this staff action,

ICANN has failed in its commitment to the Internet community that it will operate in an open,

transparent, fair, and bottom-up fashion in the formulation of crucial policy.

ICANN Bylaws – Article I, Section 2 – Core Values:

4. Seeking and supporting broad, informed participation reflecting the functional,

geographic, and cultural diversity of the Internet at all levels of policy development

and decision-making.

ICANN neither sought nor supported participation in the development of this plan, and specifically

excluded the community from the drafting and decision-making opportunities behind the staff plan.

7. Employing open and transparent policy development mechanisms that (i) promote

well-informed decisions based on expert advice, and (ii) ensure that those entities

most affected can assist in the policy development process.

The formulation of staff’s plan went on behind closed doors and excluded the opportunity for the

community to influence the plan. The community was not provided with the rationale for the staff plan

until after the plan had been posted as final and its implementation had begun. At several GNSO

Council meetings since June and also during several “community leaders” calls, staff were asked to

engage with the community on the development of the plan and those requests were ignored.

8. Making decisions by applying documented policies neutrally and objectively, with

integrity and fairness.

The decision to impose this plan, to which so many in the community were openly objecting, showed a

lack of neutrality, integrity, objectivity, and fairness on the part of staff. Staff failed to follow any

documented policy and created its own plan without addressing the concerns about its conflict of

interest in the matter.

9. Acting with a speed that is responsive to the needs of the Internet while, as part of the

decision-making process, obtaining informed input from those entities most affected.

Staff failed to include the input of those who are most affected by staff’s accountability plan: the

community members who participate at ICANN in hopes of getting a fair opportunity to influence

policy in a democratic, open, transparent process. Staff kept all decision-making on the development

of the accountability plan behind closed doors and entirely within their control, beginning after the

initial comment period ended in June until the plan was imposed on the community in August.

10. Remaining accountable to the Internet community through mechanisms that

enhance ICANN ‘s effectiveness.

Staff failed to integrate the input obtained from the initial public comment period in the formulation of

its plan. Then staff did not provide any opportunity for public comment on its plan once it was finally

published. ICANN has failed to be accountable to the Internet community through mechanisms such

as the public comment period by failing to consider those comments initially and by failing to permit a

comment period on the plan it developed internally. Providing an advance “infographic” to a small

handful of insiders and asking for their alignment does not meet an acceptable standard for public

ICANN Bylaws – Article III, Section 1 – Transparency

ICANN and its constituent bodies shall operate to the maximum extent feasible in an

open and transparent manner and consistent with procedures designed to ensure

Staff failed to operate in an open, transparent or fair manner. Decisions and drafting were all done

internally by staff with no opportunity for the public to shape the staff plan in any meaningful way.

Staff’s rational was not provided until 22 August, after the plan was already considered final by staff

and its implementation was underway.

9. What are you asking ICANN to do now?

ICANN should confer with the community as soon as possible to address these concerns and amend its

plan in such a way that the community input is taken into account as the plan goes forward.

Specifically, ICANN should make modifications and clarifications to its plan to reflect the widely

shared concerns of the community that can reasonably be implemented.

10. Please state specifically the grounds under which you have the standing and the right to

assert this Request for Reconsideration, and the grounds or justifications that support your

The views, concerns, needs, and ideas of the community ICANN was established to serve were not

adequately considered in the formulation of the staff plan. Nor were ICANN’s Bylaws and promises

to operate in an open, transparent, and bottom-up manner followed in this process. The communities

represented here participate in the process with the expectation that the process will be fair, open,

transparent, and bottom-up in its operation. Many of our members spent significant time drafting and

submitting comments that were not considered by staff and the needs and objectives of our entire

stakeholder communities are not reflected in the plan developed by staff.

We legitimately represent the bottom-up process with our members devoting significant energy to

ICANN, and that gives us standing to assert this request for reconsideration.

11. Are you bringing this Reconsideration Request on behalf of multiple persons or entities?

(Check one)

X Yes: Business Constituency, Registries Stakeholder Group, and Non-Commercial Stakeholders

Group

____ No

11a. If yes, Is the causal connection between the circumstances of the Reconsideration

Request and the harm the same for all of the complaining parties? Explain.

Yes, our members are participants in the GNSO at ICANN and each of our groups signed on to the

London #50 Statement (below) of the GNSO regarding the ICANN accountability crisis.

Do you have any documents you want to provide to ICANN?

The ICANN #50 Statement of the GNSO 4 Stakeholder Groups on ICANN Accountability (26 June

2014):

GNSO Constituencies Issue Unanimous Joint Statement on ICANN Accountability

Letter from ICANN communities on ICANN Accountability Plan:

http://www.circleid.com/posts/20140828_icann_community_issues_letter_questioning_icann_accountability/

(28 August 2014)

Terms and Conditions for Submission of Reconsideration Requests

The Board Governance Committee has the ability to consolidate the consideration of Reconsideration

Requests if the issues stated within are sufficiently similar.

The Board Governance Committee may dismiss Reconsideration Requests that are querulous or

Hearings are not required in the Reconsideration Process, however Requestors may request a hearing.

The BGC retains the absolute discretion to determine whether a hearing is appropriate, and to call

people before it for a hearing.

The BGC may take a decision on reconsideration of requests relating to staff action/inaction without

reference to the full ICANN Board. Whether recommendations will issue to the ICANN Board is

within the discretion of the BGC.

The ICANN Board of Director’s decision on the BGC’s reconsideration recommendation is final and

not subject to a reconsideration request.

29-Aug-2014

_________________________________ _____________________

Signature                                                                             Date

28
Aug

GNSO, ccNSO, GAC, ALAC and SSAC Issue Unprecedented Joint Letter Questioning ICANN’s Staff-Imposed Accountability Process

In another unpredicted development the entire community of ICANN stakeholders has sent a joint letter to CEO Fadi Chehade and the ICANN Board that strongly questions the “Enhancing ICANN Accountability and Governance – Process and Next Steps” document published by ICANN staff on August 14th over widespread community objections. Signatories to the August 26th letter (text below) include the GNSO Council and all of the GNSO’s stakeholder groups and constituencies, the Country Code Name Supporting Organization, the At-Large Advisory Committee, the Security and Stability Advisory Committee – and, most surprisingly, the Governmental Advisory Committee.

The letter states that “substantial questions and concerns remain unanswered, including around the process to date and the plan as constructed” and promises to deliver a “list of clarifying questions and comments within seven days” so that the signatories “not only understand the proposed approach, but are able to endorse it”. In other words, the current Accountability Process lacks the endorsement of any stakeholder group within ICANN.

In addition to this letter and the detailed questions to be delivered to ICANN next week, a number of ICANN stakeholder groups are preparing to file a formal Reconsideration Request to ICANN’s Board by the required 14-day (August 28) deadline in which the Board will be asked to review and reverse or modify the staff plan on the grounds that both its substance and the process by which it was created have materially harmed their interests. In an ironic twist those stakeholders are requesting that the Board hold the staff accountable for the alleged violations arising from publication and adoption of this non-endorsed Accountability Process.

Comments filed with ICANN as well as other community input indicated a strong preference for the establishment of a standard Cross-Community Working Group (CCWG) to develop the vital enhanced accountability measures that are supposed to accompany any proposal for facilitating the IANA functions transition away from US control, with experts available to facilitate the work of that CCWG at its request. Instead, ICANN’s staff are trying to unilaterally impose an overly complicated tripartite construct that  resembles a Rube Goldberg machine.

The staff proposal would segregate community discussion into an Accountability & Governance  Cross Community Group that would have a restricted ability to appoint participants to the Accountability & Governance Coordination Group in which the real decisions would be made, and which would issue a final report and recommendations. Meanwhile, a separate Accountability & Governance Public Experts Group (PEG) would appoint up to seven “experts” to the decision-making group. Many within the ICANN community view the proposed structure as designed to dilute the strength of any final recommendations for new enhanced accountability measures; especially the establishment of an independent appeals mechanism with the power to reverse decisions that violate ICANN Bylaws, and to discipline Board members and staff. It is highly doubtful that anything as robust as the “KEY PRINCIPLES FOR COORDINATION OF INTERNET UNIQUE IDENTIFIERS” that are attracting increasing support among Internet companies, trade associations, and civil society could ever emerge from such a process.

In addition, the staff-imposed Process contains this key language:

Following public comment, the Coordination Group will submit its final report to the ICANN Board. The ICANN Board will immediately and publicly post the final report, consider whether to adopt all or parts of it, and direct the CEO to implement those parts it has accepted once that decision is made. ICANN staff should be involved in assessing feasibility and flagging implementation concerns as early as possible in the recommendation development process to allow for alternatives to be identified.  To be clear, ICANN’s goal is to have this work develop recommendations that are capable of implementation, and not solely to go through the exercise of a review.  Any decision by the Board to not implement a recommendation (or a portion of a recommendation) will be accompanied by a detailed rationale.

As described, ICANN staff will have free rein to assess “feasibility” and to flag “implementation concerns” throughout the process, and the Board will be able to cherry-pick the final recommendations and reject anything it cares to, with no standard for  rejection and subject only to the requirement that it provide some rationale for its decision. It is almost impossible to envision anything that imposes enhanced accountability  and binding disciple on the Board and staff resulting from such a Process.

On August 19th, five days after imposing this Process as a fait accompli without any opportunity for public comment, ICANN announced the members of the PEG. They are:

  • Mr. Brian Cute – CEO of The Public Interest Registry
  • Ms. Jeanette Hofmann – Director, Alexander von Humboldt Institute for Internet and Society, in Berlin, Germany
  • Amb. Janis Karklins – Latvian Ambassador
  • Hon. Lawrence E. Strickling – NTIA Administrator and Assistant Secretary for Communication and Information of the U.S. Department of Commerce

It is particularly disquieting to see Secretary Strickling on this list as it may be viewed by some parties as implying US government endorsement and support for an ICANN staff-originated  Process that was imposed over the objections and concerns of ICANN community leaders and that has subsequently elicited widespread pushback from the entire community. This is not how the much vaunted multistakeholder model is supposed to operate.

Just two months ago all of the GNSO constituencies issued a joint statement at ICANN’s London meeting in which they called for “the Board to support community creation of an independent accountability mechanism that provides meaningful review and adequate redress for those harmed by ICANN action or inaction in contravention of an agreed upon compact with the community” and asked “the ICANN Board and Staff to fulfill their obligations and support this community driven, multi-stakeholder initiative”.

Instead of supporting the community’s desire for an Accountability CCWG, the staff has indicated its apparent mistrust of the community through this attempt to impose its own Accountability Process that many believe will dilute any final recommendations — and even then allow the Board to reject any of them for any reason whatsoever. That staff attempt has resulted in this new and broader message to ICANN that extends well beyond the boundaries of the GNSO, including the GAC. It appears that ICANN’s staff is driving unprecedented unity within the ICANN community – unfortunately, that unity is based on unanimous and extremely serious concerns about staff actions on a matter of overarching importance.

The road ahead on Accountability will either follow the flawed path developed by staff – with active community participation in substantial doubt – or, even if significant modifications are achieved through united community resistance, the forthcoming Process may well be marred by lingering mistrust as a result of this high-handed staff action. All of this is very unfortunate and was totally avoidable if ICANN had simply allowed for bottom-up development and made adequate solicitation of public comment before adopting a final Accountability Process.

 

The text of the letter follows:

 

August 26, 2014

Fadi Chehadé, CEO, ICANN

Dr. Stephen Crocker, Chair, ICANN Board of Directors

Dear Fadi, Steve and ICANN Directors,

Regarding ICANN’s announcement on August 14, 2014, Enhancing Accountability: Process and Next Steps, the Supporting Organisation, Advisory Committee, Stakeholder Group and Constituency chairs formally request additional time and opportunity to review and discuss the proposal contained in the announcement and in the subsequent FAQ’s published on August 22, so that next steps can be confirmed with increased support from the ICANN community.

Recognizing that the ICANN plan is a brand new construct that was announced without a corresponding public comment period, substantial questions and concerns remain unanswered, including around the process to date and the plan as constructed.

The undersigned Supporting Organisation, Advisory Committee, Stakeholder Group and Constituency leaders are currently engaging our respective groups’ bottom-up, consensus processes at this time to develop and finalize a list of questions that will require clarification or correction. As a result, additional opportunity is needed to ensure understanding of the proposal and the ways in which it is responsive to the interests and working methods of the ICANN stakeholder groups. We commit to submitting to ICANN staff our list of clarifying questions and comments within seven days of this letter.

Since the Enhancing Accountability process will affect ICANN’s future, as well as the range of stakeholders impacted by its decisions, we trust that this request will be received positively and lead to further engagement on this important matter to ensure that the SOs, ACs and SGs and Cs not only understand the proposed approach, but are able to endorse it.

Signed,

Elisa Cooper, Commercial Business Users, Commercial Stakeholder Group

Olivier Crépin-LeBlond, At-Large Advisory Committee

Rafik Dammak, Non-Commercial Stakeholder Group

William Drake, Non-Commercial Users

Keith Drazek, Registry Stakeholder Group

Heather Dryden, Governmental Advisory Committee

Patrik Fältström, Security and Stability Advisory Committee

Byron Holland, Country Code Names Supporting Organization

Tony Holmes, Internet Service Providers, Commercial Stakeholder Group

Michele Neylon, Registrar Stakeholder Group

Jonathan Robinson, Generic Names Supporting Organization Council

Kristina Rosette, Intellectual Property, Commercial Stakeholder Group