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19
Dec

.US Requests Public Comment on Premium Domains and Privacy Service

It has been my honor for the past two years to have been a member of the .US TLD Stakeholder Council http://www.neustar.us/ustld-stakeholder-council and, in that capacity, to provide the perspective of domain investors and developers to the operation of the USA’s ccTLD.

On Thursday, December 15th .US issued two important requests for public comment. The first relates to the potential release of 1 and 2 character .US domains, and is particularly significant for domain investors and other potential end users. The second relates to the potential allowance of .US domain registrants to utilize privacy protection services for the first time.

The comment period for both requests closes on January 16, 2017. Anyone can file a comment, and ICA is soliciting feedback from its members as it considers filing its own.

 

Here is some background information provided by Neustar on the two proposals. Full PDFs containing additional information are available through the hyperlinks below—

usTLD Premium Domain Name Plan http://www.neustar.us/ustld-stakeholder-council/ustld-premium-domain-name-plan/

The usTLD Stakeholder Council (“Council”) and Neustar, Inc. (“Neustar”), the registry operator for the usTLD, is seeking public comment on the Council’s recommendation to Neustar to release one and two character domain names in connection with the usTLD Premium Domain Name (“PDN”) plan. The primary goal of the proposed PDN Plan is to increase the use and awareness of the .US brand in the consumer marketplace. Additionally, the PDN Plan provides the opportunity for Neustar to allocate .US Premium Names to support organizations or activities that will help spread awareness or encourage growth of the .US domain.

Background

As part of an overall effort by Neustar, to raise awareness and use of the .US domain, the PDN Plan would make available to the public at a premium price certain high-value, highly-visible, premium .US domain names (“.US Premium Domains”), some of which are currently designated as “reserved” (including one- and two-character .US domain names), and others that would be newly designated as such. Given the level of investment, buyers of high value premium domain names typically put these names to good use – building web properties that are heavily marketed and promoted. This is beneficial to the entire namespace, getting the most coveted names circulated.

While intended to protect existing intellectual property rights and preserve the legacy locality namespace, the release and implementation of a premium name space will foster new growth for the .US domain extension using current best practices and allocation standards. Throughout the plan, all policies and restrictions regarding two-character state and territorial abbreviations or numbered domain names are recommended to still be in effect.

THE .US PREMIUM DOMAIN NAME PLAN (PDF)

For more details, please review the full text of the plan.

Questions

The Council is seeking public comments on the following questions:

Should the usTLD policy be revised to allow the release of 1 and 2 character domains?

Should the usTLD registry operator include currently unregistered and registered name as premium names? (The premium plan will not affect existing registrants’ domain names, nor will it affect transfers of existing names.)

What, if any, impact would the introduction of 2 character names at the second level have on the legacy city.state.us registrations in .US? Please explain any concerns you have in detail.

 

.US TLD Privacy Service Plan http://www.neustar.us/ustld-stakeholder-council/ustld-privacy-service-plan/

The usTLD Stakeholder Council (“Council”) and Neustar, Inc. (“Neustar”), the registry operator for the usTLD, is seeking public comment on its recommendation to allow for the implementation of a registry-based wholesale privacy registration service in the .US Top Level Domain. Stakeholders at the 2015 usTLD Stakeholder Town Hall identified the lack of privacy services as a key issue suppressing domain name registration in the .US TLD. In an increasingly competitive landscape, in which many of the competitors to .US allow some type of privacy or proxy service, Neustar and the Council want to increase domain name registrations to ensure a robust, healthy namespace and believe that the implementation of such services will put .US on an equal footing with its closest competitors in both the generic and country code top-level domain namespaces.

Background

Neustar operates registry services for the usTLD pursuant to a contract with the Department of Commerce. Currently, that contract does not allow for the provision of privacy services. When a registrant buys a domain name, registry policy in line with industry standards require registrars to obtain and provide to the registry, the registrant’s contact information, including name, physical address, email address, and phone number. This information is publically available in the WHOIS database, a searchable directory that holds all the contact information for domain name registrants. The WHOIS database is freely searchable by anyone with access to the internet. In these times of increased awareness of the dangers of identity theft and other threats, many registries and registrars offer privacy services to their registrants. A privacy service lists alternative, reliable registrant contact information in WHOIS, while keeping the domain name registered to its beneficial user, the registrant.

The Council is requesting your comments on a plan that will be submitted to the Department of Commerce that will request authority under the contract to allow privacy services to be implemented for .US.

THE .US PRIVACY SERVICE PLAN (PDF)

For more details, please review the full text of the plan.

Questions

The Council is seeking public comments on the following questions:

Do you support the implementation of privacy services for .US domain name holders?

What issues, if any, will registrars have with implementing privacy services as set forth in the plan?

Does the plan adequately address the concerns of law enforcement while preserving the expected level of privacy of registrants who request the service?

 

 

30
Nov

Thanksgiving Day Comment Labels .XXX RA Revision a Turkey

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

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

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

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

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

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

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

The full text of our comment letter follows—

VIRTUALAW LLC

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

Washington, DC 20004 202-559-8597/Direct

202-559-8750/Fax

202-255-6172/Cell

psc@vlaw-dc.com

 

 

 

November 24, 2016

 

 

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

 

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

Los Angeles, CA 90094-2536

 

 

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

 

 

Dear ICANN:

 

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

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

 

 

Executive Summary

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

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

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

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

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

 

 

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

 

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

 

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

 

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

 

De Facto Consensus Policy Through Non-Transparent Contract Negotiations

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

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

The ICA is strongly opposed to the inclusion of new gTLD rights protection mechanisms (RPMs), particularly Uniform Rapid Suspension (URS), in this renewal agreement (RA) for a legacy gTLD. We believe that this attempt by ICANN contracting staff to create de facto Consensus Policy via individual registry contract, absent a relevant Policy Development Process (PDP), is a glaring example of the type of top down, unaccountable action that should be targeted by enhanced accountability measures accompanying the IANA transition proposal. Contracts with legacy gTLDs can contain and enforce Consensus Policy, but it is an impermissible violation of ICANN’s Bylaws for contracts to attempt to create Consensus Policy…. The potential addition of these RPMs to legacy gTLDs through this inappropriate avenue will have a substantial and deleterious effect on ICANN’s policymaking process going forward, will create a new and dangerous precedent whereby de facto Consensus Policy can be created by contractual fiat in violation of ICANN Bylaws, and will substantially and adversely affect third parties around the world consisting of the existing registrants of more than one hundred million legacy gTLD domains.

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

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

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

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

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

That action was based upon the flimsy rationale that—

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

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

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

 

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

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

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

With a view to increase the consistency of registry agreements across all gTLDs, ICANN has proposed that the renewal agreement be based on the approved new gTLD Registry Agreement as updated on 9 January 2014.

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

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

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

In response, GDD head Akram Atallah stated:

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

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

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

 

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

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

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

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

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

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

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

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

In response, Mr. Atallah stated:

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

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

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

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

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

 

Lack of IFFOR Review and Approval of the Revised RA

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

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

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

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

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

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

 

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

 

  1. Prohibition on Abusive Registrations

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

 

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

 

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

 

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

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

 

 

Conclusion

 

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

 

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

 

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

 

 

Sincerely,

Philip S. Corwin

 

Counsel, Internet Commerce Association

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(Emphasis added)

22
Nov

ICA on the Record at ICANN 57 Hyderabad

At the recent ICANN 57 meeting held in Hyderabad, India a full Public Forum session was held on Tuesday, November 8th. Utilizing the open mike, ICA Counsel Philip Corwin addressed the ICANN Board regarding the recent announcement that ICM Registry had agreed to adopt the new gTLD rights protection mechanism (RPM) of Uniform rapid Suspension (URS) at the .xxx adult content registry in exchange for ICANN’s agreement to reduce its registry fee by a hefty 87.5%. This is the first time since the controversial revised registry agreements (RA) for .cat, .pro and .travel were unveiled last year that staff of ICANN’s Global Domain Division (GDD) have used the RA negotiations process to achieve expansion of new gTLD RPMs into gTLDs that preceded the program.

 

Corwin pointed out that the ongoing Policy Development Process (PDP) to review all RPMs at all gTLDs, which he co-chairs, is tasked with recommending whether the URS and other new gTLD RPMs should become ICANN Consensus Policy and therefore applicable to legacy gTLDs – but that GDD’s practice of requesting their adoption by registry operators seeking RA renewals or revisions undermined the primacy of the ICANN community in making such policy decisions.

 

In his response to Corwin’s statement, GDD head Akram Atallah conceded that GDD continues to press legacy registries to adopt the new gTLD RPMs, stating “THE REGISTRIES COME AND ASK FOR SOMETHING AND WE TELL THEM PLEASE ADOPT THE NEW gTLD CONTRACT”.  However, he also indicated that GDD might respect the determinations of the WG, further stating, “IF THE POLICY COMES BACK AND SAYS THAT THE URS IS NOT SOMETHING THAT WE WANT TO HAVE AS A POLICY, OF COURSE, WE WOULD SUPPORT THAT.”

 

ICA will be filing a comment letter on the proposed .XXX RA by the deadline of November 24th.

 

Here is the edited-for-clarity transcript of the Public Forum statement and exchange—

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

25
Oct

Dirty Deed: URS Coming to .XXX

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

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

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

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

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

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

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

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

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

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

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

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

And that Appendix 8 reads as follows:

.XXX AGREEMENT APPENDIX 8 MINIMUM REQUIREMENTS FOR RIGHTS PROTECTION MECHANISMS

 

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

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

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

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

 

20
Oct

NTIA Approves .Com RA Extension

Verisign has just filed a Form 8-K with the U.S. Securities and Exchange Commission (SEC) revealing that the National Telecommunications and Information Administration (NTIA) has approved the extension of the .Com registry Agreement through November 30, 2024.

We previously reported that, on September 15th, ICANN’s Board approved the .Com RA extension’ and simultaneously approved an extension of the existing $7.85 ceiling on .Com wholesale prices through 2024. Notwithstanding that price cap extension, the wholesale pricing of .Com domains could be revisited by ICANN and Verisign if NTIA does not extend the separate Cooperative Agreement (CA), currently in force through  November 30, 2018; or does extend it but with a different pricing control.

As described in the SEC filing, the NTIA action took the form of two separate amendments to the CA, as follows:

On October 20, 2016, Verisign and the U.S. Department of Commerce (the “DOC”) entered into Amendment Number Thirty-Three (33) (“Amendment 33”) to the Cooperative Agreement between Verisign and the DOC. Except as modified by Amendment 33, the terms and conditions of the Cooperative Agreement, remain unchanged. Amendment 33 relieves, releases and discharges Verisign from all root zone operation, management and maintenance responsibilities, obligations or requirements under the Cooperative Agreement, including but not limited to, those contained within Amendments 11 and 31. Following this release, the RZMA between Verisign and ICANN became effective.

On October 20, 2016, Verisign and the DOC entered into Amendment Number Thirty-Four (34) (“Amendment 34”) to the Cooperative Agreement between Verisign and the DOC. Except as modified by Amendment 34, the terms and conditions of the Cooperative Agreement, remain unchanged. Under the terms of Amendment 34, the DOC approves the amendment to the Registry Agreement as in the public interest, which extends the term of the Registry Agreement to coincide with the eight-year term of the RZMA. In addition, the DOC retains the right to conduct a public interest review for the sole purpose of determining whether the DOC will extend the term of the Cooperative Agreement before it expires on November 30, 2018. Verisign agrees to cooperate with such a review and to work in good faith to reach mutual agreement with the DOC to resolve issues identified in such review and to work in good faith to implement any agreed upon changes as of the expiration of the current term of the Cooperative Agreement. (Emphasis added)

The Root Zone Maintainer Service Agreement (RZMA) referenced in both amendments was the major component of the CA. With its termination, and transfer of the RZMA counterparty role from NTIA to ICANN, about all that remains of the CA is the wholesale price cap. So in essence when the NTIA decides whether to extend the CA beyond 2018 or let it terminate it will be deciding whether .Com should continue to be subject to a wholesale price cap. If the NTIA conducts a public interest review to determine whether the CA will be extended beyond 2018 it will likely solicit input from the public.

The NTIA’s approval of the .Com RA extension also contains the caveat that “This approval is not intended to confer federal antitrust immunity on Verisign with respect to the .com Registry Agreement, as amended.” However, it is highly unlikely that Verisign would ever face antitrust scrutiny for its .Com pricing while it is charging a government-imposed wholesale price.

In addition to its SEC filing, Verisign has also just published a separate FAQ document providing its explanation of these developments; it is published in full at the end of this post. Let’s focus on these two questions and answers:

Q: Will the Department of Commerce extend the Cooperative Agreement?

A: The Department of Commerce has reserved the right to conduct a public interest review to determine whether the Cooperative Agreement should be extended.

Q: Will the public interest review result in changes to Verisign’s pricing for .com domain name registrations?

A: The purpose of the public interest review will be solely to determine whether the Cooperative Agreement should be extended. (Emphasis added)

That second answer is factually correct, yet incomplete – because a decision to terminate the CA would end the U.S. government imposed price cap on .Com. As we noted when reporting on the ICANN Board’s approval of the .Com RA, its adopted Resolution contained this language:

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.

The .Com RA extension became effective on October 1, 2106 when the IANA transition occurred, so ICANN and Verisign are now committed to review the RA and amend it to make it consistent with any future changes to the CA. As we read that Resolution provision, if NTIA decides not to extend the CA, or extends it with a different price control provision, the RA would no longer be consistent with it and good faith negotiations would ensue to make it so.

The direct relationship between the CA and the continuation of the .Com price freeze was outlined in the August 31st letter from the Department of Justice to Sen. Cruz, which stated:

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)

As the last sentence makes clear, if NTIA determines not to extend the CA and lets it expire then the $7.85 fee cap would no longer be in effect.

Now it’s true that since DOJ wrote that letter ICANN’s Board approved the RA extension accompanied by an amendment to the RA extending the $7.85 price cap through 2024. But it’s also true that the very same RA obligates ICANN and Verisign to engage in good faith negotiations to bring the RA into consistency with any changes in the CA – and its termination would certainly be a major change.

The bottom line is that NTIA’s approval of the .Com RA extension constitutes the last official act to extend Verisign’s role as registry operator through at least 2024, and probably beyond as it does not alter the RA’s presumptive renewal clause.

But it does not determine .Com pricing beyond 2018, as whether the price cap or some other form of pricing control continues past 2018 depends on the NTIA’s future  decision on whether and in what form to extend the CA. And that NTIA decision will be followed up by ICANN-Verisign negotiations to render the RA consistent with the CA.

 

Here’s the full text of Verisign’s FAQ document on today’s development:

 

Frequently Asked Questions

Q: Has the Cooperative Agreement been amended to remove Verisign’s root zone

maintainer obligations?

A: Yes, those functions will now be performed by Verisign for ICANN under the

Root Zone Maintainer Service Agreement, which ICANN posted for public review at

https://www.icann.org/iana_imp_docs/63-root-zone-maintainer-agreement-v-1-0

Q: Who will authorize changes to the root zone file?

A: ICANN will authenticate and verify submitted changes, which are then submitted to

Verisign for publication, per the RZMA.

Q: Has the term of the .com Registry Agreement been extended?

A: Yes, the Department of Commerce has approved the extension as in the public

interest. The registry agreement term now ends on November 30, 2024.

Q: Was the Cooperative Agreement extended?

A: No. However, the Department of Commerce has the right, in its sole discretion, to

extend the Cooperative Agreement before it is scheduled to expire on November 30,

2018.

Q: Will the Department of Commerce extend the Cooperative Agreement?

A: The Department of Commerce has reserved the right to conduct a public interest

review to determine whether the Cooperative Agreement should be extended.

Q: Will the public interest review result in changes to Verisign’s pricing for .com

domain name registrations?

A: The purpose of the public interest review will be solely to determine whether the

Cooperative Agreement should be extended.

Q: What happens if issues arise during the public interest review?

A: The parties have agreed to work in good faith to reach mutual agreement to resolve

any issues.

 

2
Aug

Court of Appeals Avoids “Doomsday Effect” in Iran ccTLD Decision

Earlier today the U.S. Court of Appeals for the DC Circuit issued its decision in Weinstein vs. Iran, a case in which families of terror victims sought to have ICANN turn over control of Iran’s .IR ccTLD to plaintiffs. In a unanimous decision the three judge panel stated, “On ICANN’s motion, the district court quashed the writs, finding the data unattachable under District of Columbia (D.C.) law. We affirm the district court but on alternative grounds.”

In reaching its decision, the Court opined (but did not decide) that a top level domain constitutes an attachable property interest. Nonetheless, the Court used its statutory authority to avoid a result  that could have led to a “doomsday effect” for ICANN and all Internet users by creating technical instability in the DNS, as well as undermining confidence in ICANN and possibly leading to an end of voluntary participation in its root zone by many entities, who might then go on to establish an  alternate DNS and thereby “split the root”.

In my view, this result avoids the possibility of a major erosion of confidence and participation in ICANN by ccTLD operators by making clear that a respected Court of Appeals in the U.S. possesses adequate technical understanding of the DNS to avoid a legal decision that could lead to technical and political instability – many nations would not wish to continue in a DNS coordinated by a U.S. non-profit corporation if it could be ordered by a U.S. court to transfer control of any nation’s ccTLD. This decision will also hopefully tamp down calls by some parties for ICANN’s place of incorporation to be moved outside of the U.S. by demonstrating that ICANN’s jurisdiction does not create a threat to other nation’s ccTLDs. Remaining jurisdiction issues will be addressed in work stream 2 of ICANN’s ongoing accountability process.

While the plaintiffs could seek Supreme Court review of the decision, the  Supreme Court would likely  be unwilling to take the case given the rarity of the legal question it presented, and the lack of any split in Circuit Court decisions on it.

The operative portion of the decision states:

We assume without deciding that the ccTLDs the plaintiffs seek constitute “property” under the FSIA and, further, that the defendant sovereigns have some attachable ownership interest in them. Nonetheless, pursuant to the terrorist activity exception, the court has the “authority” to “prevent appropriately the impairment of an interest held by a person who is not liable in the action giving rise to a judgment”—i.e., we are expressly authorized to protect the interests of ICANN and other entities. 28 U.S.C. § 1610(g)(3). Because of the enormous third-party interests at stake—and because there is no way to execute on the plaintiffs’ judgments without impairing those interests—we cannot permit attachment. 

The plaintiffs demand, in effect, that ICANN delegate management of the “.ir” ccTLD28 so that they can “sell or license the operation of the ccTLD[] to a third party.” Appellants’ Reply Br. at 26. As explained, the power to operate a ccTLD includes the power to register (or remove) domain names from that registry. Thus, an entity seeking a “.ir” domain name will have to register through the plaintiffs or their designee—a process in which the ccTLD manager can extract a fee. The plaintiffs’ plan plainly impairs the interests of “person[s] who [are] not liable in the action giving rise to [the] judgment” in myriad ways. 18 U.S.C. § 1610(g). 

First, requiring ICANN to delegate “.ir” to the plaintiffs would bypass ICANN’s process for ccTLD delegation, which includes ensuring that the incoming manager has technical competence and a commitment to serving the Iranian Internet community’s interests. The plaintiffs and, more importantly, their prospective designee may not possess that technical competence or commitment. Granted, the plaintiffs are “aware that the . . . court can—and should—protect the interests of third parties” and they “welcome the opportunity to work together with the district court and ICANN to ensure a smooth transition.” Appellants’ Reply Br. at 26. But even if the plaintiffs are able to show adequate competence and commitment, the act of forced delegation itself impairs ICANN’s interest in “protect[ing] the stability . . . [and] interoperability . . . of the DNS.” Decl. of John O. Jeffrey, App’x 24.2 ¶ 5.

Recall that a change in the root zone file will only affect the routing of a search for “.ir.” But a change in the root zone file does not also transfer the information stored on the ccTLD server. To ensure that any delegation occurs seamlessly, ICANN requires that the incoming manager provide a plan to preserve the stability of the ccTLD, which plan explains how existing registrants will be affected. According to ICANN, the current ccTLD managers in the defendant countries will not voluntarily transfer information regarding their registrants and, because the relevant servers are located abroad, we are powerless to so require them. If ICANN is required to direct an end-user looking for “.ir” web pages to the plaintiffs’ server but the plaintiffs are unable to direct them to the requested SLD, the Internet’s stability and interoperability are undermined. 

The impairment does not end there. As the plaintiffs recognize, ICANN occupies its position only because “the global community allows it to play that role.” Appellants’ Br. at 34 (emphasis added). “[T]he operators of . . . top level domains” can “form a competitor to ICANN and agree to refer all DNS traffic to a new root zone directory.” Id.; see also Br. for United States as Amicus Curiae at 13 (“As a technological matter, nothing prevents an entity outside the United States from publishing its own root zone file and persuading the operators of the Internet’s name servers to treat that version as authoritative instead.”). This result, known as “splitting the root,” is widely viewed as a potentially disastrous development; indeed, some regard it as the beginning of “ultimate collapse of Internet stability”—a “doomsday scenario for the globally accessible” network and, thus, for ICANN. Harold Feld, Structured to Fail: ICANN and the ‘Privatization’ Experiment, in WHO RULES THE NET?: INTERNET GOVERNANCE AND JURISDICTION 351 (Cato Inst. 2003). Whether that description of a split root is accurate need not concern us; ICANN’s interests, as a third party “not liable in the action giving rise to [the] judgment,” 18 U.S.C. § 1610(g)(3), are sufficient for us to protect them pursuant to section 1610(g)(3) of the FSIA. See Appellee’s Br. at 34 (“[F]orced re-delegation of the Subject ccTLDs would . . . wreak havoc on the domain name system.”); see also Br. for United States as Amicus Curiae at 13 (“[T]he result would be devastating for ICANN, for the [current] model of Internet governance, and for the freedom and stability of the Internet as a whole.”). 

But given that the ICANN-administered DNS is the beneficiary of substantial network effects, how could such a doomsday scenario arise? And why would forced delegation hasten its arrival?  In light of the plaintiffs’ recognition that ICANN’s control “stems only from the fact that the global community allows it to play that role,” Appellants’ Br. at 34, and considering that the delegation of the three defendant sovereigns’ ccTLDs could likely antagonize the global community, see Br. for United States as Amicus Curiae at 13 (“It is not difficult to imagine that a court-ordered change to the authoritative root zone file at the behest of private plaintiffs would prompt members of the global Internet community to turn their backs on ICANN for good.”), we believe the doomsday scenario is not beyond imagining. 

For the foregoing reasons, the judgment of the district court is affirmed. (Emphasis added)

1
Aug

TMCH Review Recommends Status Quo

On July 25th ICANN announced the publication of the Draft Report of the Independent Review of the Trademark Clearinghouse (TMCH). This study was coordinated for ICANN by the Analysis Group, in conjunction with researchers from the Center for Internet and Society at Stanford as well the University of Pennsylvania’s Wharton School.

The Report’s Executive Summary provides a background on its origin and purpose:

The Trademark Clearinghouse (“TMCH”) was established in March 2013 and serves as central repository for information to be authenticated, stored, and disseminated, pertaining to the rights of trademark holders in ICANN’s New Generic Top-Level Domain (“new gTLD”) program. Analysis Group was commissioned by ICANN to undertake an independent review of TMCH services based on the Governmental Advisory Committee (“GAC”) recommendation in May 2011 that a comprehensive, post launch review be performed. The purpose of this review is not to make policy recommendations, but to assess the strengths and weaknesses of the TMCH services in conjunction with the specified areas for review proposed by the GAC. Specifically, our review is focused on the TMCH matching criteria, as well as the Claims Service and Sunrise Services. (Emphasis added)

That section makes clear that, while public comments on the draft report will be accepted through September 3rd, this Report was triggered by GAC concerns expressed before the Applicant Guidebook for the new gTLD program was even completed, and is not the work product of a GNSO-created working group and therefore will not directly result in the establishment of any new ICANN policy.

However, this Report will be of use to the Working Group (WG) established to review all Rights Protection Mechanisms (RPMs) in all generic Top Level Domains (gTLDs), of which I am one of three Co-Chairs. A sub-team of the WG is currently engaged in identifying available data to inform its policy discussions focusing on the TMCH and the related Claims Service and Sunrise Registration programs. The full WG will engage in an intensive review of all the available data relating to these subjects, including this Report, and then will reach its own consensus conclusions on policy recommendations.

As summarized by ICANN, the Report made three key findings (which are reproduced below along with relevant quotes from the Report’s Executive Summary) :

  • Expanding Matching Criteria to include non-exact matches may be of limited benefit:The dispute rate of completed registrations that are variations of trademark strings is very low. – “We also find that trademark holders infrequently dispute registrations that are variations of trademark strings. Given the low dispute rates, an expansion of the matching criteria may bring little benefit to trademark holders and only harm non trademark-holder domain registrants, who may be deterred from registering trademark string variations that would otherwise not be considered a trademark infringement by trademark holders or authorities who make such determinations.”
  • Extending the Trademark Claims Service may have diminishing value:Registrations of names matching trademarks decline after the required 90-day Claims service period ends. – “[E]xtending the Claims Service period or expanding the matching criteria used for triggering Claims Service notifications may be of limited benefit to trademark holders and may be associated with costs incurred by other stakeholder groups, such as registries, registrars, and non-trademark-holder domain registrants. Although our data do not permit us to perform a cost-benefit analysis of extending the Claims Service or expanding the matching criteria, the tradeoffs felt by different stakeholder groups should be considered when weighing those policy decisions. The effectiveness of Claims Service notifications depends on how many registration attempts are being made. We find that registration activity declines after the 90-day Claims Service period ends, so any additional months added to the Claims Service period will likely have diminishing value.”
  • Few trademark holders utilize the Sunrise period:Most users of the Trademark Clearinghouse submit proof of use to gain access to the Sunrise period. However, across eligible trademark holders, fewer than 20 percent have used the Sunrise period to date. – “[W]e find that although trademark holders expressed valuing the Sunrise period through questionnaire feedback and many trademark holders apply for Sunrise eligibility by submitting proof of use when recording their marks in the TMCH, many trademark holders do not utilize the period. This could be due to the expense of Sunrise registrations or because other protections of the TMCH services, such as the Claims Service, reduce the need for trademark holders to utilize Sunrise registrations.”

These are valuable findings and observations and will receive due consideration by the RPM Review WG.

In regard to any proposed expansion of the matching criteria, I lean against that option for two separate reasons. First, the TMCH is supposed to be a repository of registered trademarks meeting certain qualitative criteria, and permitting the registration of inexact matches would erode its value as a global trademark database. Second, after all the divisive debate within ICANN over adoption of Trademark-plus-Fifty, which permits trademark owners to register inexact matches of their marks in the TMCH corresponding to typosquat or domain-plus-product/services domains that were recovered in trademark litigation or a UDRP actions, the actual registration of Trademark-plus-Fifty terms in the TMCH has been quite low.

Finally, the Report was unable to quantify the extent to which the transmission of Claims Notices by registrars to individuals attempting to register domains that matched marks in the TMCH was either deterring infringing registrations, or causing non-infringing registrations to be abandoned out of fear of unwarranted resulting legal action. In this regard the Report states:

Although it is possible that the Claims Service and matching criteria may help deter rights-infringing registrations that are exact matches to trademark strings recorded in the TMCH, it is also possible that some good-faith registrations are being deterred by the current Claims Service system, which may be detrimental to the registration activity of non-trademark-holder domain registrants. Limitations of our data do not allow us to definitively conclude whether Claims Service notifications have a deterrent effect on either type of registration activity.

In relation to this inconclusive analysis, the report also documents that:

  • As of April 1, 2016, there were 40,465 records in the TMCH, of which 32,528 were current and have been verified to have accurate and correct information meeting TMCH guidelines.
  • There were 113.2 million unique download requests for TMCH records between October 2013 and February 2016 (note: registrars download a record each time there is an attempted registration of a new gTLD domain — but registrars may also download records when no registration attempt has been made).
  • Roughly 26,405 unique, verified trademarks in the TMCH (81% of all verified trademarks in the TMCH) have been downloaded during the Claims Service period at least once.
  • 93.7% of the 1.8 million registration attempts that received a Claims Service notification were abandoned, and only 6.3% went on to complete the domain registration. Of the nearly 114,000 registrations receiving a notification that were completed, only 0.3% were subject to subsequent domain disputes as of December 2015.

In regard to that very low dispute rate involving completed registrations of domains that triggered generations of a Claims Notice, the Report suggests possible reasons:

There are several possible reasons why the dispute rate on Claims Service notifications is so low. First, bad-faith registrations may be largely abandoned when a Claims Service notification is received, so very few domains are registered that trademark holders would wish to dispute. Second, there may be a lag between the time a domain is registered and discovered by a trademark holder and when a dispute is filed, causing us to see some registrations as non-disputed when they may become disputed in the future (i.e., we do not observe a dispute in the dispute data because it is limited to disputes that occurred before the end of 2015). Third, trademark holders may be generally less concerned by the domain registrations in the Claims Service data, either because the domain names are low-priority for disputes or because exact match registrations made in new gTLDs are less threatening to trademark holders than registrations in legacy TLDs like .com.

To evaluate whether the first explanation explains our results, we would need information on the domain names that were attempted in abandoned registrations. However, the Claims Service data only contain domain names for completed registrations. Therefore, we are unable to evaluate the characteristics of abandoned registration attempts.

I have been concerned since Spring 2015 that receipt of a highly legalistic Claims Notice may have scared off potential new gTLD registrants with no infringing intent but who are not sophisticated about trademark law, writing at that time:

No doubt there have been attempts by intentional cybersquatters to register trademarked names that have been effectively deterred when they received a Claims Notice and realized that the trademark owner would be notified of the domain registration immediately and might well take some form of legal response.

But there also may have been lots of potential registrants for non-infringing uses of short and meaningful generic dictionary words as domain labels who were spooked enough when they received the Claims Notice to abandon the registration. While the Claims Notice does provide a prospective registrant with information regarding the Jurisdiction where the trademark is registered and the class of Goods and Services that the trademark covers, most prospective registrants of non-infringing domains are not well versed in trademark law, don’t want to have to spend money to consult a lawyer to see if their registration will be infringing or not, and don’t want to risk being hit with a cease-and-desist letter, UDRP or URS filing, or a trademark infringement lawsuit. The same could be true even for potential registrants well versed in trademark law who simply don’t wish to expose themselves to a potential legal action, regardless of its merits — especially since continuing on to registration after receipt of the Notice might be alleged to constitute proof of bad faith registration…the TMCH has almost surely been quite effective in deterring infringing domain registrations at new gTLDs. But it appears to also have been a substantial damper on total new gTLD domain registrations. The unanswered question is how big of a headwind it has been.

The RPM Review WG may well try to find a more definitive answer to that question, and one promising area of inquiry is finding out what relevant data may lie outside of the TMCH in any records of attempted and abandoned registrations held by registrars. The WG may also consider making the language of the Claims Notice more understandable and less intimidating for the domain purchasing general public.

Overall, the Report provides much useful data and analysis for the Working Group’s further consideration, as it proceeds to comprehensively review the new gTLD PRMs and considers whether to recommend any modifications of them.

 

 

18
Jul

NTIA Revs up Rhetoric as IANA Transition Looms

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

3
Jun

ICANN Board Decisions to become More Transparent

 

“Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” – U.S. Supreme Court Justice Louis D. Brandeis

 

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

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

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

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

The operative portion of the Resolution reads as follows:

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

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

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

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

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

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

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

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

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

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

 

 

18
May

ICA Counsel Confirmed As Co-Chair of RPM Review WG

During its regular monthly meeting on Thursday, May 12th, ICANN’s GNSO Council confirmed the appointment of ICA Counsel Philip S. Corwin to be a Co-Chair of the Review of all Rights Protection Mechanisms (RPMs) in all gTLDs PDP Working Group (WG). Corwin represents ICA on ICANN’s Business Constituency (BC) and is one of the BC’s two representatives on the Council.

Corwin is one of three Co-Chairs selected by the WG’s membership. The others two are:

  • Scott Evans, trademark Counsel at Adobe, which he represents on the BC. He is also immediate Past President of the International Trademark Association (INTA), and former Chair of ICANN’s Intellectual Property Constituency IPC).
  • Kathy Kleiman, an attorney at the Virginia-based firm of Fletcher, Heald and Hildreth, and an active member of ICANN’s Non-Commercial Users Constituency (NCUC).

The RPM Review will be conducted in two phases.  In Phase One (expected to run through January of 2018), the WG will study the rights protection measures created for the new gTLD program, and also make recommendations regarding whether any changes should be made. That review will proceed in this order:

  • the Post-Delegation Dispute Resolution Procedures (PDDRPs);
  • the Trademark Clearinghouse (TMCH) and the associated availability through the TMCH of Sunrise period registrations and the Trademark Claims notification service; and
  • the Uniform Rapid Suspension system (URS)

After completion of Phase One, the WG will move on to Phase Two in which it will review and consider modifications of the Uniform Dispute Resolution Policy (UDRP). Consideration will also be given in this second phase to whether any of the new gTLD RPMs, including URS, should become Consensus Policies applicable to .Com and other legacy gTLDs.

Several ICA members have already joined the WG and other members of the domain investment community are encouraged to do so. ICA has also established its own internal working group to develop policy positions regarding the UDRP, including proposals for its modification, so that ICA’s positions are well developed by the time the Phase 2 UDRP review commences in early 2018.