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

["Mike O'Connor" <mike@xxxxxxxxxx>]

many thanks to you all.

mikey

On Jun 21, 2010, at 3:01 PM, Drazek, Keith wrote:

> 
> I can't take credit; it was a team effort! Milton wrote the first half, I 
> wrote the second, and Jeff and Antony reviewed/commented to make sure we 
> captured it accurately. 
> 
> ----- Original Message -----
> From: Mike O'Connor <mike@xxxxxxxxxx>
> To: Drazek, Keith
> Cc: Gnso-vi-feb10@xxxxxxxxx <Gnso-vi-feb10@xxxxxxxxx>
> Sent: Mon Jun 21 08:55:22 2010
> Subject: Re: [gnso-vi-feb10] Molecule #2 Report
> 
> 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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