Re: [gnso-vi-feb10] Fwd: DAG4 Summary for report bullet #3

[Richard Tindal <richardtindal@xxxxxx>]

Bullet #3 of my DAG summary (below) is based on the principle that something 
not prohibited by the DAG is permissible.     2% to 100% non-Beneficial 
Ownership is not prohibited by the DAG,  therefore it is permitted.      Let me 
frame the question this way.   If the DAG completely omitted provisions 
limiting Beneficial Ownership (i.e.  there was no mention of it, or of 2%) 
would we not conclude that 100% Beneficial Ownership was allowed?    According 
to your approach we would not.    Your approach argues that if the DAG was 
silent on ownership levels we would not know what is allowed.  

I gave an example yesterday of how this could work in practice --  
http://forum.icann.org/lists/gnso-vi-feb10/msg02887.html.    Alternately, there 
are many instances of assets managed in trust where the asset owner does not 
have control -- e.g.  stock owned by a Senator who sits on an industry 
oversight committee.

In the interest of compromise I propose we reword bullet #3 this way:

3.    The DAG appears to allow a registrar entity or their Affiliate to own 
more than 2% of the shares in a registry company if those shares are not 
Beneficially Owned (i.e.  they must not have the power to decide disposal of 
the shares, and the shares must not have voting rights).  We have asked the 
staff for a clarification of this interpretation. 

RT

> Original bullet 3.   A registrar entity or their Affiliate may own 100% of 
> the shares in another company that can hold a registry contract.  However,  
> the registrar entity or Affiliate must not have the power to decide disposal 
> of those shares, and the shares must not have voting rights  (i.e.   the 
> shares must not be Beneficially Owned).   




On Jul 19, 2010, at 4:58 PM, Jeff Eckhaus wrote:

> Hi,
>  
> I still have an issue with Bullet point 3, as I believe this is an 
> interpretation of the DAG and is not a fact. I also believe that this is a 
> conceptual idea and makes it seem that the door is really open for ICANN 
> Registrars, but is not based in reality. The DAG states no ICANN accredited 
> Registrars.
> I would also ask for examples where this exists in business, either for 
> profit or non-profit. Is there any occasion where someone can own 100% of a 
> company, but can never vote, control or dispose of the shares. That you are 
> stuck with the investment in this entity forever. This makes no sense to me 
> and do not believe this was the intent of ICANN when they used the terms 
> beneficial ownership and the 2% level.
> Until ICANN staff or ICANN Board comes out and agrees to this belief , I ask 
> that this not be included in this report or any statement of fact surrounding 
> DAGv4.
>  
>  
>  
>  
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
> Behalf Of Richard Tindal
> Sent: Monday, July 19, 2010 12:28 PM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: [gnso-vi-feb10] Fwd: DAG4 Summary for report
>  
> Jeff N,
>  
> Per todays call, let's drill down on whether we think the 10 bullets below 
> are accurate statements of what's in the DAG4.   
>  
> As Mikey said,  let's agree on the ones we agree,  and identify those where 
> we interpret the DAG differently.  Those latter ones are presumably the 
> ambiguous issues.    I can only find one potentially ambiguous issue - and 
> that's in point 6. below.   It's not clear to me whether the DAG prohibition 
> on registrars providing back-end Registry Services applies to a registrar who 
> provides just one component of those Services (e.g.  Escrow only).     I note 
> this issue was raised with Kurt several times in Brussels and he undertook to 
> clarify.
>  
> Can we also agree that we're not going to comment on what the DAG4 'should 
> say' or 'meant to say'.    Let's just focus on summarizing the specific words 
> in the DAG.
>  
> Make sense?
>  
> Richard
>  
>  
>  
> Begin forwarded message:
> 
> 
> From: Richard Tindal <richardtindal@xxxxxx>
> Date: July 18, 2010 11:08:10 PM PDT
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: Re: [gnso-vi-feb10] DAG4
>  
>  
> I agree with Milton about the DAG4 language.  It's complex to read, but it's 
> also precise and unambiguous.    As Milton says, the underlying concept is 
> simple.   It's about control.
>  
> The key to understanding it is the definitions of 'Control' and 'Beneficial 
> Ownership'.  These terms are carefully defined in Section 2.9 (c) of the 
> draft Registry contract -- which should be read first.    Control is the 
> power to cause the direction of management or policies.  Beneficial Ownership 
> of shares means the ability of those shares to vote,  or the power to direct 
> the sale of those shares.
>  
> Here's a summary of some important, DAG4 rules:
>  
> 1.   A registrar entity or their Affiliate (another company with whom the 
> registrar has common Control) may not directly hold a registry contract.  
> This applies regardless of the TLD(s) in which the  registrar is accredited.  
>  
> 2.   A registrar entity or their Affiliate may Beneficially Own up to 2% of 
> shares in another company that can hold a registry contract
>  
> 3.   A registrar entity or their Affiliate may own 100% of the shares in 
> another company that can hold a registry contract.  However,  the registrar 
> entity or Affiliate must not have the power to decide disposal of those 
> shares, and the shares must not have voting rights  (i.e.   the shares must 
> not be Beneficially Owned).   
>  
> 4.   In no circumstance may a registry entity Control a registrar or its 
> Affiliates, or vice versa.    
>  
> 5.   Affiliates of the registry entity may not distribute names in any TLD -- 
> as either a registrar, reseller or other form of domain distributor
>  
> 6.   No registrar, reseller or other form of domain distributer (or their 
> Affiliates) may provide Registry Services to a registry entity.  Registry 
> Services are defined in Spec 6 to the contract. 
>  
> 7.   Names can only be registered through registrars
>  
> 8.   Registries can set accreditation criteria for registrars that are 
> reasonably related to the purpose of the TLD  (e.g.   a Polish language TLD 
> could require registrars to offer the domain via a Polish language 
> interface). 
>  
> 9.   Participating registrars must be treated on a non-discriminatory basis
>  
> 10. Registries can register names to themselves
>  
> I offer these bullets only as a data point for the group.  I'm happy for 
> someone else to draft the actual text for inclusion in the Report.
>  
> Regardless of who prepares this I think it's extremely important that report 
> readers have a summary of DAG4.    I feel there is a significant level of 
> misunderstanding in the community about the DAG4 rules.   As it's the  
> baseline position on this issue, including the basis for proposed exemptions, 
>  I think our report will be much less useful if we fail to factually 
> summarize the DAG. 
>  
> RT
>  
>  
> On Jul 16, 2010, at 7:05 PM, Milton L Mueller wrote:
> 
> 
> 
> Jeff,
> I don't agree. DAGv4 is pretty simple in concept, it's an attempt to 
> translate the Nairobi resolution into practice. I don't have any objection to 
> Richard summarizing it. 
> 
> 
> -----Original Message-----
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-
> feb10@xxxxxxxxx] On Behalf Of Jeff Eckhaus
> Sent: Friday, July 16, 2010 7:59 PM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: RE: [gnso-vi-feb10] Re: "Rules" for proposal-summaries and
> Principles-summaries
>  
>  
> I have been thinking about this and believe that a summary written by a
> WG member is not appropriate. (No offense to Tindal on this)
>  
> The other proposals such RACK, JN2, Free trade were authored by members
> of this group and asking the authors and collaborators of those
> proposals to summarize their work makes sense.  They understand the
> ideas, details and logic of their proposal and can express those in a
> summary.
>  
> The DAGv4 was written by Staff and to have a 3rd party summarize their
> work could be lead to interpretations and conclusions that the authors
> did not intend. If we want to include DAGv4 we should include the exact
> text in DAGv4, no editing of it, not just a few bullet points , but the
> whole section related to CO/VI. Alternatively we could just have it in
> the Annex
>  
>  
> Jeff Eckhaus
>  
>  
> -----Original Message-----
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-
> feb10@xxxxxxxxx] On Behalf Of Richard Tindal
> Sent: Friday, July 16, 2010 4:46 PM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: Re: [gnso-vi-feb10] Re: "Rules" for proposal-summaries and
> Principles-summaries
>  
>  
> I may be suffering from some of Mikey's sleep deprivation, and losing
> the plot on this,  but this is what I'm asking  ---  Given that the
> Nairobi resolution has already been turned into detailed DAG4 language
> (which we will summarize) what is the point of us trying to reinterpret
> the resolution?
>  
> R
>  
>  
>  
> On Jul 16, 2010, at 4:36 PM, Eric Brunner-Williams wrote:
>  
> wow. i feel like i wrote a vanishing note.
>  
> Only our common (mis)interpretation of the resolution can explain our
> acts in consequence.
>  
> Can you think of a currently contracted party not eliminated from re-
> obtaining contracted party status, as a registry, by the Nairobi
> resolution?
>  
> Do you think that is the self-evident reading of the Nairobi
> resolution?
>  
> I don't.
>  
> Only we can explain our reading of the text, and therefore our
> subsequent acts.
>  
> Eric
>  
> On 7/16/10 7:23 PM, Richard Tindal wrote:
>  
> Understand and agree
>  
> Given all you say about Nairobi though - how could you (or anyone
> except a board member) turn it into other words?
>  
> I don't think any of us are able to turn Nairobi into a summary -
> hence I think we just include the 70 word resolution itself.
>  
> RT
>  
>  
> On Jul 16, 2010, at 4:06 PM, Eric Brunner-Williams wrote:
>  
> Richard,
>  
> What the resolution states is not what the working group understood
> it to state, hence our original (and unanswered) questions to ... a
> void.
>  
> Further, the Board resolution is not couched in language intended to
> inform, and elicit, informed public comment.
>  
> The Board resolution language does not make plain that all 2001 and
> all 2004 registries have liabilities, either actual ownership interests
> by registrars, or use a registrar's technical facilities for the
> registry's service provider.
>  
> The uninformed reader of the Board resolution has no way to grasp
> from that one sentence that no registry contract will be concluded with
> any existing contracted party.
>  
> Since we know this, we should make it known to the reader, else the
> public comment we get will be unable to interpret those few words as we
> do, and therefore be unable to correctly associate our work with the
> Board's resolution.
>  
> Thanks for volunteering to do the 200 kind words on the sublime
> beauty of DAGv4, I suppose I'm a likely candidate for 200 kind words on
> the 2% less sublime beauty of Nairobi.
>  
> Eric
>  
>  
>  
>  
>  
>  
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>  
> 
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