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[pdp-pcceg-feb06] Re: Internet Commerce Association Comments on the Draft Final Task Force Report

  • To: Phil Corwin <pcorwin@xxxxxxxxxxxxxxxxxx>
  • Subject: [pdp-pcceg-feb06] Re: Internet Commerce Association Comments on the Draft Final Task Force Report
  • From: Liz Williams <liz.williams@xxxxxxxxx>
  • Date: Fri, 30 Mar 2007 10:16:41 +0200

Mr Corwin

Thank you for your comments. The public comment archive was closed on 28 March.

However, I have received these comments and have distributed them to the Task Force.

Kind regards and thank you for participating in our policy development process.


Liz Williams
Senior Policy Counselor
ICANN - Brussels
+32 2 234 7874 tel
+32 2 234 7848 fax
+32 497 07 4243 mob

On 30 Mar 2007, at 00:49, Phil Corwin wrote:

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

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

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 ”. 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.

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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