RE: [gnso-vi-feb10] Please Answer Jeff's Questions (new thread)

["Tim Ruiz" <tim@xxxxxxxxxxx>]

Mike,

Hard to argue with your answers. Correct or not, the Overton window has
been re-set.

Tim

-------- Original Message --------
Subject: [gnso-vi-feb10] Please Answer Jeff's Questions (new thread)
From: "Michael D. Palage" <michael@xxxxxxxxxx>
Date: Thu, May 13, 2010 10:54 am
To: "'Stéphane_Van_Gelder'" <stephane.vangelder@xxxxxxxxx>
Cc: "'Avri Doria'" <avri@xxxxxxx>, <Gnso-vi-feb10@xxxxxxxxx>

Stephane,
I have no issue with what the Board did, I have an issue in how they did
it. 
The Nairobi resolution will appear in DAG#4, what Jeff and I are seeking
is clarification as to what it means.

If the resolution is so black and white as both you and Avri believe,
take Jeff up on his challenge of answering the questions we originally
posed to the Board. Listed below are my answers to these questions below
in BLUE:

1. The resolution states "there will be strict separation of entities
offering registry services and those acting as registrars" 
A.  What is your definition of “entities offering registry
services”?

To answer this question on needs to look no further than the .COM
registry agreement that specifically defines Registry Services as:"a)
those services that are both (i) 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 zone servers;
and dissemination of contact and other information concerning domain
name server registrations in the TLD as required by this Agreement; and
(ii) provided by the Registry Operator for the .com registry as of the
Effective Date; (b) other products or services that the Registry
Operator is required to provide because of the establishment of a
Consensus Policy (as defined in Section 3.1(b) above); (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.  Only Registry Services defined in (a) and (b) above
are subject to the maximum price provisions of Section 7.3, below."

B.  Is that meant to cover just “front end” registries (i.e., those
under direct contract with ICANN), or back-end as well (eg., those
subcontractors of registry operators under contract with ICANN).

Given the broad scope of how Registry Services is defined in the .COM
agreement, this would apply to both front-end and back-end. Not only
that but given the broad wording of this definition as previous defined
by ICANN in its contractual agreements, this would appear to require
that ICANN consider another escrow agent should Iron Mountain decide to
stay an ICANN accredited registrar. The definition talks about
“dissemination of contact and other information concerning domain name
server registrations in the TLD as required by this Agreement. Given
that information is disseminated in accordance with Appendix 2 of
agreement, providing escrow services would also appear to fall under
this broad definition of Registry Service. 

C.  Would entities offering “registry services”, include those that
may be providing a portion, but not all of the registry services?  For
example, if an entity is simply providing DNS services for a new TLD,
but not the SRS functions, would they be considered under the Board
resolution to be “offering registry services”?  If yes, where in
your opinion is the line of demarcation?

Yes, DNS services appears to fall within the context of the Registry
Services definition with regard to “dissemination of TLD zone
files.” 

2.  With respect to the phrase "...strict separation of entities
offering registry services and those as registrars":

A. Does this apply to just the new TLD for which a registrar applies to
perform the registry function or does that mean if you are a registry
for one TLD, you cannot be a registrar with respect to any other gTLD
(new or existing)?

Not totally clear on this question. 

B. Does the term “registrars” apply to resellers of registrars as
well or literally just registrars
Sticking with existing ICANN legal agreements, registrars should be
interpreted as ICANN accredited registrars.

3.  The resolution uses the phrase "No cross ownership will be allowed."

a)  Does this apply to just legal ownership?

Applying a strict plain language reading of the resolution, it would
apply only to ownership and NOT control. Thus providing the biggest
loophole for the creative minds of ICANN contracting parties to fly an
Airbus A380 through.  

b)  What about vertical integration through other means direct or
indirect.  In other words, some have advocated that restrictions should
apply to those that exercise some form of control over the registry
(i.e., by contract or ownership), while others have argued that it
should just apply with respect to legal ownership?  Which position has
the Board decided to take?

See above. Only ownership, not control. Flight gTLD Gaming, this is
flight control, you are cleared for take-off on runway 7L/25R.

c)  Does the cross ownership requirements apply to affiliates or just
the entity under contract.  In other words, if you have Parent Company A
that owns Subsidiary B and Subsidiary C.  If Subsidiary B is a registrar
and Subsidiary C is a registry, would the cross ownership rule apply? 
Will this be allowed in that the Registrar here does not own any portion
of the registry, nor does the registry here own any portion of the
Registrar despite the fact that they share a common parent.   

Applying a strict plain language reading of the resolution all
cross-ownership would be prohibited, direct and indirect
(parent/subsidiary). 


4.  When the Board states, "no cross ownership":

A. Does that literally mean 0% ownership as opposed to the 15% used
today in the existing agreements?

Applying a strict plain language reading of the resolution no cross
ownership means ZERO.

B. If it literally means 0% ownership, what about those companies that
are public where shares are traded on the open market.  Could an entity
be prohibited from serving as a registry if a de minimus amount of
shares are purchased by a registrar? 

Yes. Any registrars looking to purchase some publicly traded shares of a
Registry Operator? Flight gTLD Gaming, this is flight control, please
proceed to a cruising altitude of 36,000 ft.


C. If it does mean no ownership, will ICANN afford entities a transition
period to divest registrar shareholders if a registry elects to do so? 
In other words, would the rule be that prior to launching there can be
no cross ownership, or is it prior to applying for a new gTLD.
If the terms of the DAG state no cross ownership, the applicant should
have to be in compliance with this contractual obligation at the time of
filing the application. 


Therefore in closing I appreciate and support what the Board was trying
to do (get the community to propose a solution as oppose to staff hired
experts). However, I think they went about it in the wrong way. I think
my answers to the questions demonstrate rather clearly that the failure
for ICANN to clarify the scope and context of the Nairobi resolution
will lead to uncertainty and gaming within the new gTLD process, and I
do not think anyone can argue that is in the public’s best interest.
Best regards,
Michael




-----Original Message-----
From: Stéphane Van Gelder [mailto:stephane.vangelder@xxxxxxxxx]
Sent: Thursday, May 13, 2010 10:10 AM
To: Michael D. Palage
Cc: 'Avri Doria'; Gnso-vi-feb10@xxxxxxxxx
Subject: Re: [gnso-vi-feb10] Regarding the Nairobi Board Resolution
Hi,
I am in strong agreement with Avri. I think Kurt (and the Board's)
message is helpful in providing clarity to this group.
Of particular use I think is the sentence reiterating the fact that
UNLESS a new policy supersedes it, the Nairobi Board resolution will be
in DAGv4. To some extent, I still think there is misunderstanding within
the WG about the fact that unless it produces results quickly, the first
round will be run under strict separation. I therefore consider this
sentence extremely useful to aid the WG in understanding the larger
context it is operating in.
It's now up to us to come up with a solution in time, or risk seeing the
first round run under strict separation, an outcome that many would not
be happy with.
I personally think the Board acted well to stop this issue from dragging
on another 2 years. The solution for the final AG is there. If we don't
like it, it's up to us to do something about it. But one option we no
longer have is to just delay things further and further. I think that's
a good thing.
Stéphane 
Le 13 mai 2010 à 08:23, Michael D. Palage a écrit :
> 
> Avri,
> 
> I have no interest in attacking the Board. I think all Jeff and I want is
> the Board to actually clarify what the resolution means, because there is
> some ambiguity in the current wording. I appreciate the Board allowing the
> community trying to resolve this issue, however, there is an obligation
> under the AoC for them to actual explain the basis of their decision.
> Taking unilateral action that changes the status quo with no explanation,
> and recognizing that their actions would have a clear economic impact on
> certain parties is wrong.
> 
> While I appreciate the good intention of the resolution, as the old saying
> goes the road to hell is paved with good intentions.
> 
> Should there be no consensus within this group, parties have a right to know
> how staff is going to interpret the Nairobi resolution, NOW, not after they
> spend a couple of hundred thousand dollars.
> 
> Best regards,
> 
> Michael
> 
> 
> 
> 
> 
> -----Original Message-----
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx]
> On Behalf Of Avri Doria
> Sent: Thursday, May 13, 2010 1:53 AM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: Re: [gnso-vi-feb10] Regarding the Nairobi Board Resolution
> 
> 
> Hi,
> 
> I tend to see this differently.
> 
> The GNSO  initiated a PDP and the Board has cleared the table of
> preconditions and has given us a free path to do what we said we were going
> to do.  We asked for it, they gave it to us.  Now that we are getting down
> to the nitty gritty of actually making compromise, we decide to turn our
> energies toward attacking the board.  This makes no sense to me.
> 
> I would hate to see us waste this opportunity by now beginning to spend our
> energy on deciding what the Board may or may not have intended.  I admit
> Kurt's message could have been written better, but the point is the GNSO
> asked for the chance to define what went into the DAG and we are not getting
> it done.
> 
> a.
> 
> 
> On 13 May 2010, at 02:41, Michael D. Palage wrote:
> 
>> Kurt,
>> 
>> While I personally have no problem with the Nairobi resolution appearing
> in DAG#4, I find ICANN's refusal (Board/Staff) to answer legitimate
> questions put forward in good faith from this group deeply troubling on many
> levels.
>> 
>> First, the ICANN Board in connection with its Nairobi resolution changed
> the status quo, by imposing zero cross ownership. Under Paragraph 4 of the
> Affirmation of Commitments (AoC) "ICANN commits to perform and publish
> analyses of the positive and negative effects of its decisions on the
> public, including any financial impact on the public, and the positive or
> negative impact (if any) on the systemic security, stability and resiliency
> of the DNS."  Additionally, Paragraph 7 imposed upon ICANN a commitment to
> "to provide a thorough and reasoned explanation of decisions taken, the
> rationale thereof and the sources of data and information on which ICANN
> relied."
>> 
>> Now as the ICANN Board is well aware there are a number of commercial
> interests that are potentially negatively impacted as a result of the
> Nairobi resolution.  To date I have seen no data or information upon which
> ICANN relied upon in passing this resolution. If it does exist can ICANN
> please provide me a copy of this data/information. If this data/information
> does  not exist, I would respectfully request that ICANN reconsider its
> refusal to answer the legitimate questions that this Working Group properly
> submitted to them.
>> 
>> I am not trying to be difficult, but I believe that ICANN has certain
> obligations set forth in the AoC and refusing to answer legitimate questions
> in response to a resolution in which they provided no rationale or
> information deeply troubling. Can you please reconfirm that ICANN
> (Board/staff) has no intention of answering the legitimate questions that
> this Working Group initially put forward.
>> 
>> Best regards,
>> 
>> Michael
>> 
>> 
>> 
>> 
>> 
>> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx]
> On Behalf Of Kurt Pritz
>> Sent: Wednesday, May 12, 2010 2:20 PM
>> To: Gnso-vi-feb10@xxxxxxxxx
>> Subject: [gnso-vi-feb10] Regarding the Nairobi Board Resolution
>> 
>> Members of the Vertical Integration Working Group:
>> This is the first contact I have had directly with you as a group - I want
> to start by thanking you for the interest and hard work put into the
> vertical integration issues. I have attended several of the calls and read
> the mail list. A tremendous amount of thought has been devoted to developing
> a vertical integration model for this new gTLD marketplace.
>> Some time ago, representatives of the group forwarded a set of questions
> to the ICANN Board regarding the Nairobi Board resolution on the vertical
> integration issue. The working group authored the set of specific questions
> to clarify the meaning of the resolution in order to inform the work of the
> group.
>> The Board discussed the questions posed by the group and considered a set
> of possible answers. In the end, the collective Board members' opinions
> indicated that the Board will not provide advice for your group in response
> to the questions.  The Board took note that the task set out for the GNSO -
> and through it, for the working group - was to develop a policy
> recommendation regarding the vertical structure of the name registration
> marketplace, starting with a "blank sheet of paper." The Board comments
> indicated that the resolution was crafted, in part, to give the GNSO the
> widest possible latitude in crafting a structure.
>> The Board also indicated that the next version of the proposed Guidebook
> and the gTLD implementation will be guided by the Nairobi Board resolution,
> unless superseded by a GNSO recommended, Board approved policy.
>> I realize some time has passed since the questions were originally posed
> and am gratified that the working group has continued to prosecute this task
> with all possible vigour. After considering this issue myself, I think the
> sense of the Board on this issue is correct. The policy advice on this issue
> should come from the consensus of the constituent groups, and should not be
> influenced by the input of the ICANN's directors.
>> Again, please accept my thanks for the hard work to date and also my
> willingness to respond to questions or issues on any of the vertical
> integration discussion points.
>> 
>> Sincerely,
>> 
>> 
>> Kurt
>> 
>> Kurt Pritz
>> ICANN
> 
> 
>