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Internet Commerce Association Comments on the Draft Final Task Force Report
- To: <pdp-feb06-comments@xxxxxxxxx>
- Subject: Internet Commerce Association Comments on the Draft Final Task Force Report
- From: "Phil Corwin" <pcorwin@xxxxxxxxxxxxxxxxxx>
- Date: Thu, 29 Mar 2007 18:49:35 -0400
Note: This comment letter was filed yesterday in advance of the comment
deadline from Lisbon while attending the ICANN meeting. However, for some
reason no e-mail confirmation was received nor has it been posted at the ICANN
website. We are therefore re-submitting it. Thank you.
BUTERA & ANDREWS
Attorneys at Law
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-1701
202-347-6875
Philip S. Corwin, Partner
pcorwin@xxxxxxxxxxxxxxxxxx <mailto:pcorwin@xxxxxxxxxxxxxxxxxx>
By E-Mail
March 28, 2007
Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601
Re: ICANN Opens Public Comment Period on Policy Development Process on Policies
for Contractual Conditions: Existing Registries
<http://gnso.icann.org/announcements/announcement-08mar07.htm>
Dear Members of the ICANN Board:
This comment letter is submitted by the Internet Commerce Association (ICA) in
regard to the March 8, 2007 ICANN Notice, "ICANN Opens Public Comment Period on
Policy Development Process on Policies for Contractual Conditions: Existing
Registries <http://gnso.icann.org/announcements/announcement-08mar07.htm> ".
ICA is a not-for-profit trade association. Its membership is composed of
individuals and companies that invest in domain names and develop and monetize
the associated websites. ICA's mission is to promote the benefits of the
activities of professional domain name investors and developers to the press,
advertisers, and governmental authorities on a global basis. ICA stands for
Internet prosperity and entrepreneurship and for fairness among regulators and
in the dispute resolution process, taxation, and treatment under other relevant
laws, regulations, and agreements in the U.S. and other nations. ICA provides a
unified voice for a membership with common interests and a diverse collection
of experience in the professional domain name ownership community. This
community represented by ICA has risked large amounts of capital in order to
develop domain names as the first new form of property of the virtual age.
Professional domain name registrants are a major source of the fees that
support registrars, registries, and ICANN itself.
The ICA commends ICANN for soliciting public comment on this draft Final Task
Force Report ("Report") prepared for the Generic Names Supporting Organization
(GNSO) in furtherance of its PDPFeb06 project. It is unfortunate that the ICANN
Board ignored the many requests from a broad range of community members that it
defer final action on the proposed new registry contracts for .Biz, .Org and
.Info until this Report could be completed and considered. The premature
approval of those contracts at the December 2006 Sao Paulo meeting, far in
advance of their renewal dates, was a grave disservice to the many registrants
who had expressed outrage over their presumptive renewal and pricing increase
provisions. The Board's explanation that it would be unfair to these registries
to deny them the same unjustifiable concessions that were made to VeriSign in
the .Com settlement displayed a great insensitivity to what constitutes
fairness to millions of domain name (DN) registrants. Nonetheless, we presume
that your solicitation of comments on the Report is an indication that it may
have some beneficial impact on all registry contracts in the future.
The general views of the ICA as regards the key recommendations of the Report
are as follows:
* Registry Agreement Renewal - We concur that there should be a general
policy guiding renewals and that registry agreements should be a commercially
reasonable length; we do however have concerns hat the suggested standard term
of ten years may be too long a term, especially for dominant registries or
newly introduced registries, and that a shorter period would allow recouping of
investment in combination with market testing at intervals that prevent a drift
into monopolistic conduct. While we have no objections to a reasonable
presumption of renewal where a registry operator has not materially breached
its existing agreement we cannot support presumptive renewal as written into
the current .Com and similar registry agreements, as they permit the
presumption to stand despite multiple material breaches triggering corrective
arbitration or litigation by ICANN. Such presumptive renewal is an effective
grant of perpetual renewal and is blatantly anti-competitive. In any event, we
support mandatory re-bid, with a modest but not insurmountable advantage to the
incumbent operator who has not been in material breach, as the only practical
means to provide periodic market testing of service quality and pricing. Absent
such market testing the only viable alternative would be pervasive price and
service quality regulation, an approach that we do not favor.
* Relationship to Consensus Policies - We support the view that Consensus
Policies should apply to all generic top level domain (gTLD) registries. We
also support the recommendation that it is appropriate to delegate certain
policy making responsibilities to operators of sponsored top level domain
(sTLD) registries.
* Pricing Policies - As an association of free market entrepreneurs our
general preference is for marketplace determination of pricing. However, given
that each registry operator is an effective natural monopolist, that certain
gTLD operators have substantial market dominance (especially .Com), and that DN
registrants face high switching costs, some effective controls on registry
pricing must be in place. Periodic market testing can have a salutary effect in
this regard, as was demonstrated in the re-bid process for the .Net gTLD.
Registry agreements should contain reasonable limits on annual price increases
and in all cases should require that any proposed increase be justified by
verifiable cost data accompanied by a demonstration that the registry operator
would not reap an excessive return on investment from the proposed increase.
Differential pricing within any TLD should be prohibited, as the cost of
providing registry services to any particular DN is identical and differential
pricing therefore constitutes an unjustified tax on the value of a particular
DN or on the commerce taking place at the associated website. In determining
the relative dominance of particular TLDs we would suggest that ICANN utilize
the auction and other pricing data that is now readily available from the
robust and highly competitive marketplace for secondary DNs, as high valuations
for particular TLDs are indicative of such dominance.
* ICANN Fees - We support the view that ICANN should implement a system
of fees from registries that avoids individual negotiation and provides
consistency and predictability. Separate negotiations may tend to prolong
ICANN's reliance on particular TLDs for its own funding as well as leverage the
negotiation process to support new staff-driven projects.
* Use of Registry Data - We support the development of a general policy
on the permissible registry use of registry data, including traffic data, for
purposes other than that for which it was collected, as well as the development
of a policy to ensure non-discriminatory access to registry data by third
parties. Such basic statistical data on the operation of the DNS should be
available, subject to appropriate privacy protections, to all parties seeking
it. Further, the availability of such data is the only way to ensure that
competing bids submitted in a re-bid process are based on sound and accurate
TLD data. Finally, any policy addressing this area should ensure that
registries do not use such data to unfairly leverage their monopoly operator
position into one of competitive advantage for the offering of services against
registrants and registrars who must rely upon the TLD operators.
* Investment in Development and Infrastructure - We support the
development of baseline requirements for the security and stability of
registries by ICANN in consultation with the Security and Stability Advisory
Committee (SSAC). In fact, we are quite surprised that such requirements have
not yet been established given the critical and ever expanding role of the
Internet in facilitating global commerce and communications.
In all of the above areas, maximum utilization of open competition combined
with greater process transparency and ICANN accountability will yield results
that best assure the continued secure and stable operation of the DNS in a
manner that is beneficial and fair to all constituencies including registrants.
We appreciate the opportunity to comment upon this matter and look forward to
participating in ICANN's future internal processes devoted to implementing this
Report.
Sincerely,
Philip S. Corwin
Counsel, Internet Commerce Association
Philip S. Corwin
Partner
Butera & Andrews
1301 Pennsylvania Ave., NW
Suite 500
Washington, DC 20004
202-347-6875 (voice)/-6876 (fax) /202-255-6172 (mobile)
"Luck is the residue of design." -- Branch Rickey
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