On behalf of the American Internet Registrants Association (AIRA), I am writing in
response to certain draft documents which were released for public comment on September
29, 1999, by the U.S. Department of Commerce (DOC), the Internet Corporation for
Assigned Names and Numbers (ICANN) and Network Solutions, Inc. (NSI). These
draft documents include a Registry Agreement, a revised Registrar Accreditation Agreement,
a revised Registrar License and Agreement, Amendment No. 19 to the Cooperative Agreement
between DOC and NSI, and Amendment No. 1 to the Memorandum of Understanding between
DOC and ICANN (collectively, the “Proposals”). The Proposals are an affront to
sound public policy. The various Agreements, none of which have been reviewed
or approved by the ICANN Supporting Organizations or Advisory or other Board Committee,
repudiate the Administration's commitment to the Internet Public, and to Congress,
that NSI's monopoly would end, and that Internet Domain Name registrations would
be subject to competition. The Registry Agreement provides NSI with nothing
less than windfall monopoly profits at the expense of all Internet registrants.
It also ensures the continuation of unacceptable service.
If NSI's monopoly
tenure were to continue, the Internet community can expect that NSI will not: update
zone files more than twice daily; update the WhoIs database more than once per year;
implement real-time processing; install mechanisms for refunds; or grant volume discounts.
These are but some of the bitter fruits that would result from the Department
of Commerce's refusal to end NSI's monopoly.
If implemented, the Proposals will
have deleterious long-term effects on the relationships among NSI, the gTLD registry,
each registrar, and the community of registrants. The negative consequences likely
to result from the Proposals include the following:
Excessive cost to
registrars and registrants. Amendment 11 to the contract between the Department
of Commerce and NSI limited the fees which NSI may charge competing registrars (for
registry access) to "no more than a dollar amount per registration/year to be specified
in a further amendment reflecting NSI's costs and a reasonable return on its investment."
The $6 fee that registrars must pay NSI for each registration was the result of protracted
"11th hour" negotiations, and had nothing to do with NSI's costs. (It is inconceivable
that the actual cost of providing registry access exceeds $.05 per registration.)
The Agreement providing for this fee patently violates the Independent Offices Appropriation
Act, 31 U.S.C. Sec. 9701, which delimits the fees which may be charged for government
services (Domain Name Registrations) to the cost of providing that service.
Moreover, the Agreement incorporating this fee was never raised or addressed at a
public hearing, as DOC's own regulations require. The $6-per-registration fee awarded
to NSI is, in short, a breathtaking violation of public trust at the expense of the
Internet community. ICANN should suspend this Agreement, conduct public hearings
on NSI's costs of providing registry access services, and approve only a fee consistent
with law. In the interim, ICANN should set a fee for registry services no higher
than $.05 per registration, with a proviso that the fee may be adjusted upward or
downward after a lawful rate is formally determined.
No customer service
improvements. NSI is not obligated to meet customer satisfaction standards
or requirements. Rather, it is obligated merely to comply with ICANN-established
standards to the extent practicable. The Registry Agreement does not provide any
standards for quality, performance or functionality. In fact, the draft agreement
provides that under no circumstances will NSI be obligated to implement any performance
or functional changes for the first three years of the term of the Registry Agreement,
or until November 2002 at the earliest. NSI’s ability to scale beyond the testbed
registrars must be addressed prior to the consummation of a long-term commitment.
Limited access to the database. NSI and its registry successor
will have access to data submitted by each registrar. NSI is required only
to make certain limited information available in response to queries, though the
nature and maximum number of such queries are not defined adequately in the Registry
Agreement. Under the current language, NSI will make the WhoIs database inaccessible
or unreasonably inconvenient to other registrars.
No competitive procurement
alternative available. An open and competitive procurement process would provide
registrars with better terms regarding price and service. Indeed, under the
Competition in Contracting Act, the Department of Congress was obligated to open
the registry function to public competitive bids. No companies other than NSI,
however, were given the opportunity to submit competitive proposals in direct
violation of Competition in Contracting Act. Apart from this contravention
of federal law, the Registry Agreement trashes one of ICANN’s basic objectives: to
introduce competition to the DNS.
AIRA recommends that ICANN adopt the following
changes to ensure the stability of the Internet and to facilitate the introduction
of an open and competitive procurement process to select a gTLD registry by May 2001.
No lesser amendments will be acceptable to AIRA registrants. ICANN, its Board
of Directors and the entire industry are likely to benefit from such a process.
In particular, all registrars and registrants will benefit from lower prices, higher
standards of service, improved access rights, and rational terms of service.
Recommended
Amendments:
Registry Agreement
1. Modify Paragraph 22 (A) as follows:
(A)
ICANN shall, in accordance with Section 4, adopt an open, transparent procedure for
designating a Successor Registry.
2. Modify Paragraph 23 as follows:
23. Expiration
of this Agreement. The Expiration Date shall be eighteen months after the Effective
Date, unless extended as provided below. In the event that NSI completes the legal
separation of ownership of its Registry Services business from its registrar business
by divesting all the assets and operations of one of those businesses within 18 months
after Effective Date to an unaffiliated third party that enters an agreement enforceable
by ICANN and the Department of Commerce (i) not to be both a registry and a registrar
in the Registry TLDs, and (ii) not to control, own or have as an affiliate any individual(s)
or entity(ies) that, collectively, act as both a registry and a registrar in the
Registry TLDs, the Expiration Date shall be extended for an additional four years.
For the purposes of this Section, "unaffiliated third party" means any entity in
which NSI (including its successors and assigns, subsidiaries and divisions, and
their respective directors, officers, employees, agents and representatives) does
not have any equity ownership or the ability to exercise any control, either directly
or indirectly through one or more intermediaries. "Control," as used in this Section
23, means any of the following: (1) ownership, directly or indirectly, or other interest
entitling NSI to exercise any of the voting power of an entity; (2) the power, directly
or indirectly, to elect any of the board of directors (or equivalent governing body)
of an entity; or (3) the ability, directly or indirectly, to direct or cause the
direction of any management, operations, or policies of an entity.
Amendment No.
19 to the Cooperative Agreement
Modify Paragraph 10 as follows:
10. Expiration
Date.
The Expiration Date of this Agreement shall be eighteen months after the
date this Amendment is signed, unless extended as provided below. In the event that
NSI completes the legal separation of the ownership of its Registry Services business
from its registrar business by divesting all the assets and operations of one of
those businesses, within 18 months after the date of this Amendment to an unaffiliated
third party that enters an agreement enforceable by the Department of Commerce (i)
not to be both a registry and a registrar in the Registry TLDs, and (ii) not to control,
own or have as an affiliate any individual(s) or entity(ies) that, collectively,
act as both a registry and a registrar in the Registry TLDs, the Expiration Date
shall be extended for an additional four years. For the purposes of this Section,
“unaffiliated third party” means an entity in which NSI (including its assigns, subdivisions,
and divisions, and their respective directors, officers, employees, agents and representatives),
does not have any equity ownership or the ability to exercise any managerial or operational
control, either directly or indirectly through one or more intermediaries. “Control,”
as used in this Section I.B.10, means any of the following: (1) ownership, directly
or indirectly, or other interest entitling NSI to exercise any of the voting power
of an entity; (2) the power, directly or indirectly, to elect any of the board of
directors (or equivalent governing body) of an entity; or (3) the ability, directly
or indirectly, to direct or cause the direction of any management, operations, or
policies of an entity.
Thank you for your consideration.
Sincerely,
William
H. Bode
General Counsel