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

[Liz Williams <liz.williams@xxxxxxxxx>]

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
.....................................................

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.
>
> 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