Re: [alac] 3rd settlement draft

[ICANN At-Large - Denise Michel <michel@xxxxxxxxx>]

> D R A F T
>
> Concerns on the proposed ICANN / Verisign settlement
> from the At Large Advisory Committee
>
> 1. We believe that it would be more appropriate to separate the lawsuit 
> settlement from the contract renegotiation. If the settlement requires 
> changes to the contract, ICANN and Verisign can amend the current 
> contract to reflect settlement terms.
>
> 2.  We are concerned about the loss of accountability and oversight both 
> of the community over ICANN and of ICANN over Verisign.  The external 
> oversight of ICANN's budget currently provided by the registrars will no 
> longer exist. The settlement provides no meaningful checks on Verisign's 
> behavior, unless they misbehave so badly that ICANN  voids their 
> contract. As the registrars have pointed out, the proposed "consensus 
> process" is new and untested.
>
> 3. We are concerned about the use and misuse of personal data.  Under 
> the agreement, Verisign is allowed to do whatever data mining they want 
> of COM zone usage and access.  For example, they could sell DNS traffic 
> data about pepsi.com to Coca Cola, or about greenpeace.com and other 
> political sites to governments whose policies they oppose. As a trustee 
> for the Internet community, ICANN should provide appropriate protections 
> for the community's data. We are also concerned that such data mining 
> would be illegal in countries with data privacy laws.
>
> 4.  We believe that the proposed price increases for the COM registry 
> are inappropriate, since the registry is no longer required to offer any 
> justification for them.  We are also concerned about the tripling of 
> ICANN's per-domain fee.  Although the incremental cost to each 
> individual user will be low, the aggregate cost to users will be in the 
> tens of millions of dollars per year.  Market forces can have an effect 
> on .COM registry prices in two ways: (a) periodic rebids, and (b) a 
> substitute service. The current proposal does away with the rebidding, 
> and we doubt that .BIZ or .INFO or ccTLDs are a substitute for current 
> registrants who already have branded their .COM address.
>
> 5. We are concerned by the lack of economic and legal analysis of the 
> effects of the proposed settlement. To the extent that the .COM registry 
> is a  monopoly, it requires stricter regulation than if it is not. 
> Analysis by a qualified economist of the price sensitivity and 
> substitutability of .COM and other domains, based on the extensive 
> historic data, should help understand the situation. Similarly, 
> qualified legal analysis of the likelihood of success of ICANN's and 
> Verisign's suits would help quantify the legal risks and costs the 
> settlement would avoid.
>
> 6. The proposed settlement makes Verisign the permanent source of the 
> majority of ICANN's revenue.  By making itself dependent on an entity 
> not accountable to the public, ICANN endangers its independence and 
> hence endangers ICANN's public trust.
>
> 7. We share ICANN's concerns with the current budget and planning 
> process, which depends in large part on registrar approval and quarterly 
> financial contributions from numerous sources. We endorse a budget and 
> funding mechanism that would provide ICANN greater certainty in the 
> budget planning process and reduce the administrative burden on ICANN of 
> billing and collections. Nevertheless, we believe very strongly that 
> ICANN should consult with the registrant and At Large community before 
> it fundamentally reshapes its funding mechanism through new contracts 
> with the registries. Ultimately, funds paid to ICANN from registrars or 
> registries come from us, the At Large community. We encourage ICANN to 
> engage the community in a larger conversation about how it should be 
> funded and how its budgets should be created and approved.
>
> 8.  We are deeply concerned by the lack of transparent process.  The 
> current (2001) .COM contract had a specific renewal timeline that has 
> been ignored, since the settlement includes a new contract that would 
> void the current one. ICANN offered no timetable or process for 
> consideration of the proposed settlement until forced to by the CFIT 
> lawsuit.  The community does not know whether it has a  month or a year 
> to collect its input and offer its advice, nor whether it may be 
> possible to modify the proposed settlement or it simply has to be 
> accepted or rejected.
>
> 9.  With these considerations in mind, the ALAC advises the board to 
> reject the proposed settlement, to seek qualified advice on the econmic 
> and legal aspects of any proposed settlement, and to seek a settlement 
> that addresses our concerns.