[gnso-vi-feb10] CAM Answers to Standard Questions

["Michael D. Palage" <michael@xxxxxxxxxx>]

Competition Authority Model (CAM)

 

The Competition Authority Model (CAM) is one of the proposals in ICANN's
Vertical Integration Working Group to resolve the complex and contentious
issues surrounding vertical integration and co-ownership. The proposal draws
on provisions in existing gTLD registry contracts that allow referral to
national competition authorities to resolve questions about market power and
consumer protection. It is designed to allow new and innovative gTLD
business models while protecting the rights of registrants. The CAM proposal
begins with a rebuttable presumption in favor of maintaining the existing
bifurcation of registry and registrar functions within the domain name
market place. It prohibits cross ownership between registry and registrar as
originally set forth in the ICANN Board Nairobi resolution, but allows up to
100% cross ownership and even full vertical integration under the rules of a
waver/exemption process.

 

Further information on the CAM Proposal is available via the Vertical
Integration Working Group wiki:

 

Summary - https://st.icann.org/vert-integration-pdp/index.cgi?camv3_summary
Proposal - https://st.icann.org/vert-integration-pdp/index.cgi?camv3

 

 

 

1. LIMITS ACROSS TLDS

 

It depends on the particular details of the application. The CAM baseline
modeled after the ICANN Board resolution in Nairobi prohibits registrars
from owning registries. However, if granted a waiver/exemption through the
Competition/Consumer Evaluation Standing Panel (CESP), limits/restrictions
would not apply. 

 

 

2. CONTROL/OWNERSHIP

 

It depends on the particular details of the application. The CAM baseline
modeled after the ICANN Board resolution in Nairobi prohibits cross
ownership/control. However, if granted a waiver/exemption through the
Competition/Consumer Evaluation Standing Panel (CESP), control/ownership
would be permitted provided that appropriate compliance safeguards
specifically outlined in the proposal are incorporated.

 

 

3. OWNERSHIP LIMITS

 

It depends on the particular details of the application. The CAM baseline
modeled after the ICANN Board resolution in Nairobi prohibits cross
ownership. However, if granted a waiver/exemption through the
Competition/Consumer Evaluation Standing Panel (CESP), control/ownership
would be permitted provided that appropriate compliance safeguards
specifically outlined in the proposal are incorporated.

 

     

4. EXCEPTIONS

Those entities that wish to vertically integrate or obtain co-ownership may
do so by requesting an exemption/waiver. These requests would be forward to
a standing panel entitled the Competition/Consumer Evaluation Standing Panel
(CESP). This panel is modeled after the existing Registry Service Technical
Evaluation Panel (RSTEP) that is incorporated into existing registry
agreements as part of the Registry Services Evaluation Process (RSEP). This
panel would be given pre-defined set of guidelines evaluating the
applications for waver or exception. If the CESP "quick look" or initial
analysis raised no competition or consumer protection concerns, the
exemption/waiver would be granted.

If the CESP initial analysis raises competition or consumer protection
concerns or indicates a need for a more detailed or extended analysis to
properly evaluate the proposal, then ICANN shall refer the matter to the
appropriate national competition and/or consumer protection agencies. This
referral process is modeled after the same contractual provisions which are
currently incorporated into existing registry agreements.

 

5. REGISTRY SERVICE PROVIDERS

 

Following the baseline criteria established in Nairobi by the ICANN Board of
zero cross ownership, an exemption/waiver would be required.

 

6. COMPLIANCE AND ENFORCEMENT

 

The CAM proposal proposes a three tiered approach toward contractual
compliance. The first being ICANN's normal compliance efforts. The second
being an annual audit that any entity seeking a waiver/exemption would have
to pay a third party to undertake. The third being an expanded Post
Delegation Dispute Resolution Procedure (PDDRP) for third parties to
initiate their own administrative remedy against a registration authorities
non-compliance, coupled with a strict three strikes rule for repeat
offenders.

 

Questions:

 

What is the best way to prevent gaming in a cross-owned entity -- percentage
ownership caps, restrictions on control, both or something else?

 

.         .         The three tiered contractual compliance approach set
forth in the CAM proposal which empowers third parties to file an
administrative dispute.

 

Do the benefits of increased competition (registrars becoming registries or
back-end service providers) outweigh the potential risks of gaming from a
cross-owned entity, or vice-versa?

 

.         .         It depends on the particular details of the application.
However, recognizing that such a determination is outside the scope and
mandate of ICANN's narrow technical mandate, therefore such issues are
deferred to a properly constituted panel of experts to make that
determination.

 

 

Common ownership

 

Should a registry be able to own a registrar, and vice versa, provided it
doesn't distribute its own TLD?

 

.         .         It depends on the particular details of the application.
However, recognizing that such a determination is outside the narrow scope
and technical mandate of ICANN, such issues are deferred to a properly
constituted panel of experts to make that determination, and grant a
waiver/exemption if there are no consumer/competition harms.

 

What is an acceptable level of cross-ownership (0 - 100%) if
self-distribution is permitted?

 

.         .         It depends on the particular details of the application.
However, recognizing that such a determination is outside the narrow scope
and technical mandate of ICANN, such issues are deferred to a properly
constituted panel of experts to make that determination, and grant a
waiver/exemption if there are no consumer/competition harms.

 

What is an acceptable level of cross-ownership (0 - 100%) if
self-distribution is prohibited?

 

.         .         It depends on the particular details of the application.
However, recognizing that such a determination is outside the narrow scope
and technical mandate of ICANN, such issues are deferred to a properly
constituted panel of experts to make that determination, and grant a
waiver/exemption if there are no consumer/competition harms.

 

Should a registry be able to control a registrar, and vice versa, provided
it doesn't distribute its own TLD?

 

.         .         It depends on the particular details of the application.
However, recognizing that such a determination is outside the narrow scope
and technical mandate of ICANN, such issues are deferred to a properly
constituted panel of experts to make that determination, and grant a
waiver/exemption if there are no consumer/competition harms.

 

Absent an arbitrary restriction on percentage of cross-ownership, what
constitutes control?

 

.         .         The CAM baseline is modeled after the ICANN Board
resolution in Nairobi which prohibits cross ownership/control. However, if
granted a waiver/exemption through the Competition/Consumer Evaluation
Standing Panel (CESP), control/ownership would be permitted provided that
appropriate compliance safeguards specifically outlined in the proposal are
incorporated.

 

What restrictions should be put in place to prevent control?  Do these vary
if self-distribution is prohibited?

 

.         .         The CAM baseline is modeled after the ICANN Board
resolution in Nairobi which prohibits cross ownership/control. However, if
granted a waiver/exemption through the Competition/Consumer Evaluation
Standing Panel (CESP), control/ownership would be permitted provided that
appropriate compliance safeguards specifically outlined in the proposal are
incorporated.




 

Enforcement and Compliance

 

Is ICANN capable of enforcing contract compliance to prevent gaming in a
cross-owned entity?

 

.         .         It depends upon the number of gTLD, ICANN budgetary
concerns and the mandate to do so. However, the CAM proposes two additional
compliance enforcement mechanism that are independent of ICANN compliance
staff.

 

 

 Scope

 

Should the scope of ICANN contracts be increased?

.         .         Yes. ICANN should rename/restructure the existing
proposed Registry Agreement as currently found in the Draft Applicant
Guidebook (DAG) into more modular agreement. The title of the document
should also be renamed Registration Authority
<https://st.icann.org/vert-integration-pdp/index.cgi?camv3#master_agreement>
Master Agreement (RAMA) to reflect the continued blurring between resellers,
registrars, registry owners and registry service providers in the existing
marketplace. The chapeau of this agreement would broadly define the
relationship between the parties (ICANN and the Registration Authority) and
would be modeled in large part after the current accountability framework
that ccTLD administrators have entered into with ICANN. This base agreement
would then be supplemented through a series of standard addendums/annexes
that could reflect a number of business models, e.g. standard Registrar,
standard Registry Operator; Sponsor; Registry Operator seeking to provide
domain name registrations services to registrants; Intergovernmental and
Public Sector Applicants; and restrictions imposed on Registration
Authorities (Registries/Registrars) by national competition authorities.

 

.         .         The PDDRP should be expanded to empower third parties to
bring claims for contract/compliance breaches.  

 

Specifically, should Registry Service Providers be required to enter into
contracts with ICANN?

 

.         .         ICANN should rename/restructure the existing proposed
Registry Agreement as currently found in the Draft Applicant Guidebook (DAG)
into more modular agreement. The title of the document should also be
renamed Registration Authority
<https://st.icann.org/vert-integration-pdp/index.cgi?camv3#master_agreement>
Master Agreement (RAMA) to reflect the continued blurring between resellers,
registrars, registry owners and registry service providers in the existing
marketplace. The chapeau of this agreement would broadly define the
relationship between the parties (ICANN and the Registration Authority) and
would be modeled in large part after the current accountability framework
that ccTLD administrators have entered into with ICANN. This base agreement
would then be supplemented through a series of standard addendums/annexes
that could reflect a number of business models, e.g. standard Registrar,
standard Registry Operator; Sponsor; Registry Operator seeking to provide
domain name registrations services to registrants; Intergovernmental and
Public Sector Applicants; and restrictions imposed on Registration
Authorities (Registries/Registrars) by national competition authorities.

 

Should other entities (eg Resellers) also be required to enter into
contracts with ICANN?

 

.         .         (Not determined at this time)

 

 

 

Exceptions to cross-ownership and self-distribution restrictions

 

Permitted for Single-Registrant, Single-User (SRSU) TLDs?

 

.         .         Yes if a waiver/exemption granted by
Competition/Consumer Evaluation Standing Panel (CESP)

 

Permitted for "orphaned" TLDs that can't get registrar distribution?

 

.         .         Yes if a waiver/exemption granted by
Competition/Consumer Evaluation Standing Panel (CESP)

 

Permitted for "community" TLDs?

 

.         .         Yes if a waiver/exemption granted by
Competition/Consumer Evaluation Standing Panel (CESP)

 

Should there be numeric caps for any or all of these?

 

.         .         Not required if a waiver/exemption granted by
Competition/Consumer Evaluation Standing Panel (CESP)

 

 

Interim solution

 

Should the results of this first-phase VI-WG PDP be limited to the first
round of new TLDs only?

 

.         .        It depends on what the results of the first phase are.
there should be a review before the the second round of new gTLDs of all
aspects of the New gTLD program including any CO/VI provisions.