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

[Jon Nevett <jon@xxxxxxxxxx>]

Thanks Jeff.  This is very helpful proposal.  So far we have two models to 
start our substantive discussions.  Does anyone else plan on offering a 
proposal?  I agree with Roberto that we could test each of the proposals with 
the list of hypotheticals that Milton/Mike/Avri circulated, as opposed to all 
of us responding to a survey.  

Best,

Jon



On Apr 1, 2010, at 2:56 PM, Neuman, Jeff wrote:

> 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  / www.neustar.biz     
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