Internet Commerce Association Comment on AGP Limits Policy

[Phil Corwin <pcorwin@xxxxxxxxxxxxxxxxxx>]

BUTERA & ANDREWS
Attorneys at Law
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-1701
202-347-6875
Philip S. Corwin, Partner
pcorwin@xxxxxxxxxxxxxxxxxx<mailto:pcorwin@xxxxxxxxxxxxxxxxxx>


By E-Mail

November 20, 2008

Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601

Re: Comment on AGP Limits Policy

Dear Members of the ICANN Board:

This comment letter is submitted by the Internet Commerce Association (ICA) in 
regard to ICANN's October 20th notice establishing a thirty day period for 
public comments on ICANN's draft implementation plan for the Add Grace Period 
(AGP) Limits Policy.

ICA is a not-for-profit trade association representing the direct search 
industry. Its membership is composed of domain name registrants that 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. The 
ICA is an International Member of ICANN's Commercial and Business Constituency 
and presently has more than 120 members located in the United States and 
thirteen other nations.

ICA Support for Ending Abusive Domain Name Tasting

As noted in your notice, "The intent of the Policy is to limit the behavior 
known as domain tasting through modifications to the AGP process."

ICA has consistently supported actions by ICANN and entities affiliated with it 
to end abusive domain name tasting and any associated intentional trademark 
infringement. Our activities in this regard have included:

 *   Submission of a March 15, 2007 comment letter in support of Public 
Interest Registry's (PIR) proposal to impose a "restocking fee" of 5 cents per 
name deleted during the .org AGP for registrars deleting more than 90 percent 
of their registrations on a monthly basis. The subsequent implementation of 
this policy has resulted in approximately an 85 percent decline in .org 
deletions during the AGP.

*        Adoption in September 2007 of an ICA Member Code of Conduct that 
includes the following provision -- Domain Name Tasting: Members should be 
supportive of changes in ICANN policy or self-driven registry initiatives that 
end abusive domain name tasting, including such market-based approaches as a 
restocking fee.  All activity related to domain name registration should 
respect all other areas of the Code of Conduct, most notably including 
protection of intellectual property rights.

 *   Submission of a January 28, 2008 comment letter in which we opined upon 
the GNSO's  Initial Report on Domain Tasting as follows -- The ICA believes 
that abusive domain tasting is an unintended and insupportable misuse of the 
add/grace period and should be ended. Because the practice of domain tasting is 
an economic phenomenon based upon the fact that thousands of names can be 
registered for a short term at no cost we believe that the best means of 
curbing abusive tasting is to impose a price that is minimal for a single or 
small group of domain names but substantial for thousands of test 
registrations. The imposition of a nominal non-refundable registration fee by 
ICANN, perhaps enhanced by individual actions by TLD registries, should be 
tried and evaluated before taking the more radical step of totally eliminating 
the add/grace period.
 *   Submission of a March 26, 2008 comment letter regarding registry policies 
on domain tasting. In that letter we supported proposals by Neustar (for .biz) 
and Afilias (for .info) to modify the terms of their AGP policies to address 
domain tasting. However, we did oppose adoption of a final GNSO motion on this 
subject as premature and also stated "we cannot support action by the ICANN 
Board to impose a single anti-tasting policy on all gTLD registry operators 
that provide for an AGP because such a "one size fits all" policy discourages 
registry experimentation and incorrectly presumes that the conditions at each 
registry are essentially identical and that a single approach to curb tasting 
will have the same effect across all registries."

Now that the GNSO has made a recommendation on domain tasting and the Board has 
resolved to implement it through this proposed policy we shall confine our 
comments to the efficacy of the proposal to achieve its goal.

The Proposed Policy

This proposal must be addressed in the context of the very effective steps that 
have already been taken by ICANN to address domain tasting. The FY 09 budget 
adopted by the ICANN Board in June 2008 includes a nonrefundable fee of 20 
cents per name for all deleted names that exceed 10% of a registrar's monthly 
transactions with a registry, or 50 deletions, whichever is greater. As 
announced by ICANN on November 13th --

 "Following implementation of the Board approved budget provision that affects 
the "domain tasting fee," names added and subsequently deleted during the 
five-day AGP declined from approximately 17.6M in June 2008 to 2.8M in July 
2008. Of the 2.8M AGP deletes in July, approximately 2.6M were subject to the 
registrar-level transaction fee defined by the provision. Therefore, it is 
expected that the quantity of AGP deletes will continue to decline until few or 
none are subject to the transaction fee."

Thus, steps already taken by ICANN have reduced excess domain tasting by 84% 
and are expected to result in a continuing reduction until few if any 
registrars exceed the defined deletion thresholds.

The October 20th proposal seeks to build on this progress by prohibiting 
registry operators from refunding registration fees to any registrar when its 
monthly deletions exceed the exact same thresholds that already trigger 
non-refunding of the ICANN fee. That is, it imposes a further economic sanction 
based on precisely the same criteria. A registry could seek exemption from 
application of the restriction only upon written demonstration of unforeseeable 
and non-recurring "extraordinary circumstances" that caused the excess 
deletions. Registry operators would be required to keep copies of all exemption 
requests, and to furnish data to ICANN upon request and subject to 
confidentiality requirements. ICANN staff will collect and analyze operator 
reports and provide summary information to the GNSO every six months during the 
first two years following implementation of this policy. ICANN will also 
investigate reports of unequal treatment of registrars by registry operators as 
well as allegations that operators are abusing the policy's intent. At the end 
of the initial two-year implementation period ICANN will advise the GNSO 
whether it believes that any modifications of the policy should be considered.

ICA Position

Notwithstanding our stated concerns in March 2008 regarding imposition of a 
one-size-fits-all AGP policy on all registries, we stand in general support of 
the proposed policy and expect that it will be highly successful in ending 
abusive domain tasting. This new policy essentially adds a second economic 
penalty to the nonrefundable ICANN fee imposed on excessive monthly deletions 
as determined subject to the exact same criteria. As the actions already taken 
by ICANN have resulted in an 84 percent decline in excess deletions and are 
anticipated to eventually lead to a near-100 percent reduction, this additional 
economic penalty will probably assure achievement of that goal. While we would 
have preferred to leave some leeway for registry experimentation in light of 
the highly effective action already taken by ICANN, we recognize that the Board 
has already rejected that option.

Conclusion

Thank you for your consideration of our views in this matter. We are pleased 
that ICANN has already taken effective action to curb abusive domain tasting 
and any associated intentional trademark infringement, and that it is now 
implementing further actions to achieve that goal.



Sincerely,

Philip S. Corwin

Counsel, Internet Commerce Association





Philip S. Corwin
Partner
Butera & Andrews
1301 Pennsylvania Ave., NW
Suite 500
Washington, DC 20004
202-347-6875 (office)

202-347-6876 (fax)

202-255-6172 (cell)

"Luck is the residue of design." -- Branch Rickey