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Re: [gnso-vi-feb10] Molecule #2 Report

  • To: "Drazek, Keith" <kdrazek@xxxxxxxxxxxx>
  • Subject: Re: [gnso-vi-feb10] Molecule #2 Report
  • From: "Mike O'Connor" <mike@xxxxxxxxxx>
  • Date: Mon, 21 Jun 2010 14:55:22 +0200

Keith!  you are da man!

many thanks.  

mikey


On Jun 21, 2010, at 2:46 PM, Drazek, Keith wrote:

> 
> Hi Mikey, this is the report from our group, now known as Molecule 2. The 
> first part is a detailed summary and the second part includes the atoms 
> structured following Richard's outline (for ease of comparison). Group 
> members should review and comment. Our group was able to reach general 
> consensus on the following proposal for further consideration and discussion:
> 
> Molecule 2 - Overview
> 
> Our goal was to encourage competitive entry into the gTLD market. In 
> particular, it was noted that Registrars are the most likely source of 
> competitive entry; therefore any policy regarding CO and VI that unduly 
> restricts the ability of Registrars to own or operate Registries/RSPs is 
> anti-competitive. It was also agreed that Registries/RSPs should have 
> reciprocity in terms of their right to co-own registrars. 
> 
> In order to address the potential “harms” of cross ownership, the proposal 
> does not allow VI in general. It maintains and strictly enforces functional 
> separation of Rys and Rrs and equal access, and prevents cross-owned 
> registrars from selling registrations in their own TLD. Registries cannot own 
> or control more than a de minimus share of a registrar distributing its TLD 
> (de minimus was discussed as 5% in light of publicly traded company 
> visibility/knowledge of ownership). 
> 
> In exchange for the VI restriction, there would be no ownership level 
> restrictions; i.e., Registrars and Registries/RSPs could own up to 100% of 
> other Registrars and Registries/RSPs, respectively.
> 
> Exceptions
> 
> This proposal allows VI for Single-Registrant, Single-User (SRSU) TLDs. Names 
> in these TLDs must not be open to the general public, but only to corporate 
> users.  This requires defining a process for assessing SRSU to make 
> exceptions from the general policy. The process would take place prior to the 
> launch.
> 
> Compliance/Enforcement
> 
> 1. Disclosure. The proposal requires serious disclosure requirements. 
> Applicants must disclose to ICANN:
>  All shareholders above ___ %
>  Voting powers
>  Officers and directors
>  Material Ks for material registry services
>  Physical infrastructure
>  Key/material subcontracts
>  (public monitoring was discussed but not agreed)
> 
> 2. Audits
> 
> 3. Certifications
> 
> 4. A complaint process that allows 3rd parties to report abuses
> 
> 5. There would be tiered levels of enforcement: dependent on the scale of the 
> violation, the context, and the amount of harm
> 
> 6. Meaningful penalties/sanctions for violations
> 
> ---
> Below is a recap of this molecule following the same structure as Richard's 
> message, for ease of comparison.
> 
> 1. LIMITS DO NOT APPLY ACROSS TLDS
> A registry operator or registry services provider that does not distribute 
> its own TLD should not be restricted from acting as a registrar in other 
> TLDs. An existing registrar should not be prohibited from becoming a new TLD 
> registry just because it sells other TLDs. The potential harms of registry 
> sharing data with an affiliated reseller or friendly registrar can be 
> addressed via contract and ICANN compliance and enforcement mechanisms, 
> provided resources and commitment are present. The benefit of new entrants, 
> including existing registrars, outweighs the potential harms from 
> cross-ownership if no self-distribution is permitted.
> 
> 2. CONTROL/OWNERSHIP
> Cross-ownership up to 100% is permitted provided there is no distribution of 
> own TLD. An existing registrar should be permitted to become a new TLD 
> registry and own up to 100% provided they don't act a their own registrar. 
> Separation of functionality and no self-distribution make restrictions on 
> cross-ownership unnecessary provided ICANN enforces contracts.
> 
> 3. OWNERSHIP LIMITS
> No ownership limit if cross-owned entity doesn't distribute its own TLD. De 
> minimus limit (5%) if cross-owned entity distributes own TLD.
>     
> 4. EXCEPTIONS
> Exceptions should be allowed for single-registrant/single user, orphaned 
> TLDs, and possibly others TBD. A procedure should be established for 
> applicants to request exceptions based on business model and to ensure 
> ability to take TLD to market if no other registrars agree to offer and/or 
> market the TLD.
> 
> 5. REGISTRY SERVICE PROVIDERS
> Registry Service Providers should have the same restrictions as Registry 
> Operators.
> 
> 6. COMPLIANCE AND ENFORCEMENT
> We spent a significant portion of our time discussing compliance, audit, and 
> enforcement procedures. Our group felt that a "serious" structure would be 
> required, but would be capable of deterring bad actors with significant but 
> tiered penalties.
> 

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