[gnso-vi-feb10] Neustar Proposal for Short Term Solution

["Neuman, Jeff" <Jeff.Neuman@xxxxxxxxxx>]

Neustar respectfully submits this proposal for consideration by the Vertical 
Integration Working Group. This proposal provides exceptions and rules we 
believe will be helpful to the WG as it undertakes an analysis of market 
structure, considers community input, and studies the impact on competition and 
consumers in the traditional domain name market.

Since our founding, Neustar has been committed to the principles of neutrality 
and serving our customers, not competing with them. We believe the current 
policy of vertical separation has proven to be highly successful for the 
existing "traditional" domain name market. Based on that model, Neustar has 
long opposed vertical integration of registry and registrar functionality and 
cross-ownership within a TLD, including providers of back-end registry services.

Neustar could live with a reasonable interpretation of the current Board 
resolution mandating strict separation for new TLDs. However, Neustar 
recognizes in certain limited cases the strict vertical separation rules may 
require some flexibility. In the spirit of reaching a consensus position, 
Neustar now proposes the following compromise language that we believe 
establishes appropriate exceptions and necessary contractual protections.


                        A.        Definitions



"Affiliate" shall mean a specified person or entity that directly or indirectly 
through one or more intermediaries, Controls or is Controlled by, or is under 
common Control with, the person or entity specified.



"Affiliated Registrar" shall mean an ICANN-Accredited Registrar that is an 
Affiliate of the Registry Operator.



"Affiliated RSP" shall mean an RSP that is an Affiliate of an ICANN-Accredited 
Registrar.


"Community-based TLD" shall mean a gTLD that is operated for the benefit of a 
clearly delineated community and that has actually passed the comparative 
evaluation by ICANN during the new gTLD process, regardless of whether there 
was any string contention remaining after the applications have successfully 
completed previous evaluation stages.



"Control" (including the terms "controlling", "controlled by" and "under common 
control with") shall mean the possession, direct or indirect, of the power to 
direct or cause the direction of the management and policies of a person or 
entity, whether through the ownership of voting or debt securities, by 
contract, or otherwise.  As used in this definition, the term "control" means 
the possession of beneficial ownership of more than fifteen percent (15%) of 
the equity interests or more than fifteen (15%) of the interests entitled to 
vote for the election of, or serve as, the board of directors or similar 
managing authority of the entity.



"Registry Operator" shall mean the entity that enters a Registry Agreement with 
ICANN for the TLD.  For purposes of the Agreement, any policies applicable to 
Registry Operator shall apply to all Affiliates of Registry Operator unless 
otherwise stated.


"Registry Services" are, for purposes of the Registry Agreement, defined as the 
following: (a) those services that are operations of the registry critical to 
the following tasks: the receipt of data from registrars concerning 
registrations of domain names and name servers; provision to registrars of 
status information relating to the zone servers for the TLD; dissemination of 
TLD zone files; operation of the registry DNS servers; and dissemination of 
contact and other information concerning domain name server registrations in 
the TLD as required by this Agreement; (b) other products or services that the 
Registry Operator is required to provide because of the establishment of a 
Consensus Policy as defined in Specification 1; (c) any other products or 
services that only a registry operator is capable of providing, by reason of 
its designation as the registry operator; and (d) material changes to any 
Registry Service within the scope of (a), (b) or (c) above. [THIS IS THE 
DEFINITION CURRENTLY IN THE DAG]



"Registry Services Provider" (RSP) shall mean any entity performing any 
material "Registry Services" on behalf of the Registry Operator, including but 
not limited to shared-registrations-services, DNS, WHOIS or any other material 
Registry Services defined by the Registry Operator.



"Single Registrant TLD" shall mean a TLD in which (i) all domain name 
registrations are registered to a single person, business or other entity and 
not to any party other than the single person, business or other entity, and 
(ii) proxy and anonymous domain name registrations are not offered.




B.        Principles

1.         Registry Operator or its Affiliate may serve as an ICANN-Accredited 
Registrar in any top-level domain other than the TLD for which Registry 
Operator or its Affiliate serves as the Registry Operator.

2.         Neither Registry Operators nor its Affiliates may serve as a 
Registrar in the TLD unless the TLD is a: (a) Single-Registrant TLD, or (b) 
Community-based TLD; provided that in a Community-based TLD, (i) the total 
number of domain name registrations sponsored by the Affiliated Registrar does 
not exceed 30,000 and (ii) the Registry Operator complies with the rules set 
forth for RSPs in Section 4 below.

3.         Registry Operator must use only ICANN-accredited registrars in 
registering domain names, provided that Registry Operator shall have the 
flexibility to determine eligibility criteria for Registrars in its TLD; 
provided further that such criteria shall be applied equally to all 
ICANN-accredited Registrars.

4.         Rules for RSPs.  An RSP may be a Registrar in the TLD provided the 
following rules shall apply to Affiliated RSPs:


a)                  In the event the RSP Controls pricing, policy or the 
selection of registrars for the TLD, then the restrictions applicable to the 
Registry Operator shall also be applicable to the RSP and any of its Affiliates.



b)                  In addition, in the event that RSP or any of its Affiliates 
is a Registrar for the TLD, the following restrictions shall apply:



1.      Affiliated Registrar may not receive directly or indirectly 
preferential pricing from Registry Operator (i.e., direct pricing, rebates, 
discounts, marketing contracts, etc.).



2.      RSP must have strict controls on use of data for any purpose other than 
acting as the RSP and must have information "firewall" between data in the 
registry and its Registrar Affiliate.



3.      No confidential information of the Registry Operator obtained by the 
RSP may be shared with registrar Affiliate of RSP except as necessary to 
perform the Registry Services and only for such purpose.



4.      RSP shall not provide any access to any Registry Data to its Registrar 
Affiliate, and RSP itself will not use, confidential user data or proprietary 
information of an-ICANN-accredited registrar served by Registry Operator, 
received by RSP in the course of providing Registry Services, except as 
necessary for registry management and operations.



5.      In the case where an RSP has a Registrar Affiliate providing Registrar 
services in the TLD, such RSP will conduct internal neutrality reviews on a 
regular basis. In addition, it will agree to cooperate with an independent 
third party ("Auditor") performing Annual Independent Neutrality Audits ("AIN 
Audits"), to be conducted each calendar year. All costs of the AIN Audits will 
be borne by RSP. The AIN Audit is intended to determine whether Back-end 
Operator has been in compliance, and will utilize such tests and techniques as 
the auditor deems appropriate to determine that compliance.



6.      Strict Penalties/Sanctions will be applied to any entity violating 
these policies.  Sanction Program can use old Appendix Y of .com agreement as 
an example 
(http://www.icann.org/en/tlds/agreements/verisign/registry-agmt-appy-com-16apr01.htm).


5.         Selection of Registrars by Registry Operator.  Registry Operator 
shall have the ability to set up criteria (access requirements) for Registrars 
in the TLD at it sole discretion; provided that such requirements are 
reasonably related to the purpose of the TLD.





Jeffrey J. Neuman
Neustar, Inc. / Vice President, Law & Policy
46000 Center Oak Plaza Sterling, VA 20166
Office: +1.571.434.5772  Mobile: +1.202.549.5079  Fax: +1.703.738.7965 / 
jeff.neuman@xxxxxxxxxxx<mailto:jeff.neuman@xxxxxxxxxxx>  / 
www.neustar.biz<http://www.neustar.biz/>
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