* * * C O R R E C T E D C O P Y
* * *October 26, 1999
Ms. Becky Burr
National Telecommunications
and Information Administration
U. S. Department of Commerce
1401 Constitution
Ave., N. W.
Washington, D.C. 20230
Ms. Esther Dyson
Interim Chairperson
Internet
Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina
del Rey, CA 90292
Dear Ms. Burr and Ms. Dyson:
AT&T has reviewed the proposed
agreements between the Department of Commerce ("DOC"), Network Solutions, Inc. ("NSI"),
and ICANN and we offer the following comments regarding the proposed agreements.
Our review and comments are based on our present uses of the WHOIS database and zone
files, and our understanding of the services which will be available via competitive
registrars.
We are concerned that the proposed conditions within these agreements
will seriously limit the capability of competitive registrars to compete with NSI,
thus limiting the benefits to the end users of domain names.
We realize
that the agreements have been endorsed as a package, but in fact, the complexity
of trying to sort out overlapping and intertwined conditions raises serious concerns
on our part about the time frame which has been allowed for review and comment.
We urge that the Department of Commerce (DOC) extend the comment period, and in fact,
engage in a two step comment period. First, the comment period should extend
past the upcoming ICANN board meeting so that the community of stakeholders can provide
comments until the Board meeting itself, and the Board can take comments at the actual
open meeting prior to the ICANN board meeting. It is likely that some of the
comments submitted by the stakeholders may call for modifications or adjustments.
Should that be the case, it is important to allow adequate time for fair consideration
by all parties.
Separation of the Registry and Registrar functions:
Key to
creating competition is the separation of the registry and registrar functions.
In order to ensure that NSI does not leverage its position as the exclusive registry
unfairly, complete divestiture is necessary. Otherwise, NSI will continue to
have an unfair advantage as a competing registrar.
We have not seen clear descriptions of how this separation will work.
Nor have we seen a description of the proposed safeguards necessary to ensure
separation.
We are also concerned that the possible sale of the registry
business will result in revenue which will go to the registrar; if that is the intent,
that would seem to provide a very large subsidy to the registrar, rather than ensuring
a benefit to the NSI shareholders. If the estimate of over $1 billion
of value for the registry business is correct, the sale of the registry
will unfairly benefit NSI with the financial resources to expand, develop and maintain
its registrar business well beyond its competitors. We need to
remember that NSI is in essence a “franchise government-supported monopoly” without
competition, and therefore, the DOC and ICANN must make competition its foremost
priority and establish a sound framework for competitive environment.
Although we understand that the goal is to encourage NSI to sell
the registry business, the sale of the registry business should benefit the NSI shareholders
and not NSI as a registrar. The NSI registrar should not receive an unfair
"windfall" subsidy which will undermine the competitive environment.
We strongly
believe that restrictions are needed in the use of funds in the situation described
above. Although there is an incentive for NSI to sell the registry business,
there is no requirement or mandate to do so. Therefore,
effective safeguards must be established immediately to protect the other registrars
from the potential misuse of NSI's role as registry and registrar. Moreover,
procedures must be instituted which will monitor and enforce these safeguards.
Exclusive
Agreements
Amendment 11 to the Cooperative Agreement prohibited NSI from entering
into exclusive agreements with its "customers" (effectively, domain name resellers)
for a period of 18 months from the Phase I deployment of the SRS. The proposed Amendment
19 to the Cooperative Agreement eliminates this limitation of exclusivity.
It
appears that Section 2 could be interpreted to read that the exclusivity prohibition
no longer applies. If this is the case, we object and urge that the DOC and
ICANN modify Amendment 19 to maintain the limitation on NSI's ability to enter into
exclusive contracts. Exclusive contracts lock in customers for an extended
period of time, and therefore could significantly impair the ability of competition
to develop.
Prepayment
Under its proposed Registrar Accreditation Agreement,
NSI is required to abide by the same terms requiring prepayment as the competitive
registrars. However, we note in the contract that NSI is given a grace period
of four (4) months. As a result, NSI would be treated differently than any
other new registrar, and would once again gain an unfair competitive advantage.
Given the existing resources of NSI, we believe NSI can either solve this problem
immediately or find a workable solution for the interim period. No such four
(4) month grace period is being extended to the new registrars. NSI should not be
treated differently from new registrars. The solution is not to extend
a similar grace period to the new registrars, but rather require NSI to comply with
prepayment. The other registrars have been willing to accept the requirement
of prepayment, recognizing the value of such practices to the stakeholder community.
In the spirit of fair competition, NSI should likewise be immediately required
to implement prepayment.
Registrar Accreditation Fees
As previously discussed
at a public meeting, , NSI will account for at least two thirds of all registrar
level fees in the foreseeable future. Reading Section II.L.2 of the Registrar
Accreditation Agreement, this is the level of funding which is needed before approval
of any changes. In essence, NSI is put in sole charge of approving fee changes,
with no safeguards or participation by other registrars who are also affected by
these changes.
We are unaware of any other situation where movement from monopoly
to competition is underway where the responsible governmental entity would accept
such direct control by the affected entity who is being required to accept competition.
We urge DOC and ICANN to modify this provision to ensure participation by a reasonable
and representative number of registrars in the decision making process. It might
be reasonable to have NSI, three to four large registrars, and perhaps three to five
smaller registrars, for a total number of seven to nine, provide recommendations
in this particular area. Once competition ensures that a number to exceed
6 or 7 registrars make up two-thirds of registrar-level fees, this can be modified.
Performance and Quality of Service Requirements
Our review of the Registry
Agreement did not identify standards for quality, performance or functionality for
the registry in serving the registrars. We have consulted briefly with representatives
of the testbed registrars and understand that there were situations where performance
was not optimal. We are also experienced in dealing in other settings involving
monopoly entities, with similar situations and requirements and we are well aware
that, even with good intentions, failure to adequately provide recovery, trouble
shooting, and prompt reinstatement can occur. We are even aware in those other
situations, of documented instances where the “incumbent’s like service” was treated
in a preferential manner to the new entrant. We understand that some
of the registrars are providing you with a proposed list of performance requirements
that should be incorporated into the Agreement (see Attachment A).
We support
the need for performance metrics for NSI, as the registry, in its agreements with
the registrars. DOC and ICANN should ensure that the process also provides a process
for appeals, escalations for failure to meet the performance requirements, and effective
penalties that will be imposed upon NSI for non-performance. We are aware that during
the testbed period, information was in essence considered confidential and
could not be disclosed. However, information about non performance needs to
be made public. Our own experience in dealing with the transition
from monopolies in other settings is that availability of this information is a significant
incentive to improved performance.
The registrars should have an administrative
process to follow, and should not have to resort to legal action in court to ensure
compliance with reasonable performance standards by NSI. Further, NSI
should not be able to provide better conditions and service to their own registrar,
and should be required to provide the same level of performance and services which
they provide to preferred customers.
There are a number of examples
where it appears that treatment of NSI is preferential: for instance, in 6.16
of the Registrar License and Agreement, we note that the registrars
are required to give extensive indemnification to NSI in a variety of situations
and circumstances. No similar, nor reciprocal relief is available
to the registrars, in the event of failure of NSI to fulfill it’s obligations.
Further, Section 5.4, Non–Payment of Registration Fees allows NSI to stop accepting
new registrations and/or delete the domain names associated with invoices not paid
in full from the Registry database. We assume this reference is to accredited
registrars who are otherwise in compliance with the accreditation procedures.
Certainly, situations do develop where payments are delayed within administrative
processes, or even by late delivery by postal service. There is no reference
to notice before such actions may be taken. This remedy seems unduly harsh and arbitrary.
At a minimum, NSI should be required to give notice that payment has not been received.
Further, we urge DOC and ICANN to consult with the registrars further about a more
reasonable time frame, such as notice, followed by a slightly longer time period;
something like a time frame of 5-7 days seems more reasonable, after notice.
Although
NSI as a registrar has existing preferred customer contracts, NSI should
not be allowed to gain a competitive advantage over new entrants by nature
of their “size”. Caution must be exercised to ensure that new entrants are
given the kind of fair and equitable treatment which will ensure that competition
can develop and survive. Even if the playing field is equal where everyone
is subject to the same rules, during the transition period, NSI will still have a
competitive advantage. This should be acknowledged and its effects minimized.
Ownership and control of essential resources, such as WHOIS and zone files
The agreements seem to provide continued control by NSI
over the WHOIS database and the zone files. Access to the WHOIS database is
described as query based, or bulk file. It is not clear to us that the needs of trademark
owners such as ourselves, are addressed in the two methods. We
saw no definition of what “query based access” encompasses, and seek clarification
of that. We also note that the provision of bulk access for a fee
not to exceed $10,000 could be interpreted to encompass access of a few dozen, a
hundred, or a few thousand inquiries.
Famous trademark holders require complex
access to search the WHOIS database for trademark violations. We suggest that
DOC and ICANN should further clarify these areas to ensure that the needs of these
stakeholders are understood and addressed. For third parties building
searchable databases, we are assuming that the effort to provide a ceiling of a $10,000
fee is reasonable for NSI. There seems to be no requirement that new start
up registrars would have to make their WHOIS databases available at a fee less than
$10,000. We suggest that DOC and ICANN give further consideration to
guidelines for bulk access fees which are more reasonable for the start up competitive
Registrars/WHOIS providers.
It also appears
that registrants are able to “opt out” of making contact information available when
the bulk file transfer occurs. We raise significant concern about this. For the most
part, the registrants are commercially oriented, or are holding themselves out to
engage in communications with the public. Under no circumstances should they be allowed
to withhold contact information. Complete identifying contact information must
be provided.
We object to the apparent assumption
that the registry owns the zone files and that registrars own the WHOIS data.
This data has been publicly available since its inception, and we urge that it continue
as a public resource.
In Amendment 19 to the Cooperative Agreement,
3, it is not clear that NSI has any restrictions on how they can use the personally
identifiable data. NSI has to provide notice about what they will
use the data for, but there is no indication that they are restricted in their
uses. For instance, given the database of several million names, they could market
other ancillary services to the entities identified in the database. This would present
a unfair competitive model to the other new entrants. NSI should not be allowed
to market other services. It may be that at some time in the future,
bundling of additional services by NSI might be acceptable, but we are cautious about
the lack of competition and the ability of the incumbent provider of services, with
significant brand recognition, to trade on that recognition to the detriment of new
entrants.
AT&T supports the requirement of an interactive and reintegrated WHOIS
service. We note that there is a commitment that should such a reintegrated
WHOIS not emerge from other competitive sources, the NSI registry is committed to
such reintegration and provision of an interactive and reintegrated WHOIS service,
under this agreement. Our comments address the functionality proposed,
regardless of who provides it. While the functions described seem to
be responsive to some types of inquiries by individual users, it does not seem
fully useful to copyright and trademark owners. As described, it is limited
to inquiries based on SLD name, and does not include date of creation nor searches
based on owner name. It also does not include technical contact, administrative
contact, or billing contact information—all part of today’s WHOIS database information
In subsection B, “to ensure operational stability of the registry,” NSI is allowed
to temporarily limit access provided that they immediately notify the Department
of Commerce in writing or electronically of the nature and reason for the limitation.
The Department of Commerce can require NSI to limit this “outage” to no longer than
three business days, by objecting in writing or electronically, if their objection
is not unreasonable. We are concerned that there seems to be no
incentive for NSI to maintain a stable, always up access, since there are no identified
penalties for multiple events or occurrences of “ outages. We operate
“always on” databases and services ourselves, and understand heavy traffic requirements
such as those which NSI cites; however, “outages” of three days are unacceptable
in any competitive environment. Such “outages” would severely and negatively
impact competitive registrars, and the Internet community who use and rely
on the WHOIS database.
A reintegrated WHOIS database is an essential and necessary
service to the Internet stakeholder community, including but not limited to the public
at large. The concepts described in section C appear to be largely acceptable,
however, we urge that ICANN and DOC should make it clear how they will support the
development of reintegration of the WHOIS database and commit to consult closely
with the trademark owners, copyright owners, and business users.
Artificial
and arbitrary deadlines:
We do not understand, nor support the proposed deadlines,
and the rush to meet the artificial deadline of the ICANN board meeting. As
noted above, these contracts are complex and overlapping. The time frame for
evaluation of the comments received is far too short. We urge DOC and ICANN
to extend the comment evaluation period to enable full and thorough consideration.
We do not recommend a long extension, but do suggest that it is very important to
ensure that the Board has heard from the affected stakeholders on their questions
and concerns.
If the issue is allowing the ICANN Board the time to fully consider
the implications of the agreement, then the open meeting just prior to the Board
meeting itself should allow for further input from the stakeholder community.
The Board can meet in executive session during November at a later date to
consider the comments and review the recommendations of the community of stakeholders,
and make a final determination at that later time. This allows a slightly expanded
time frame for consideration and comment, which seems useful to us, given the complexity
of the contracts, the extensive nature of their impact, and the scope of the implications
of these considerations.
When market dominance exists, and competition does not,
it takes time and commitment to move into a competitive environment. In short,
competition isn’t built in a day; and we urge DOC and ICANN to extend the comment
period to enable full and thorough consideration, and due process of law.
Marilyn
S. Cade, Director
Internet and E-Commerce Advocacy, AT&T
cc: Andrew Pincus,
Department of Commerce
Mike Roberts, ICANN