<<<
Chronological Index
>>> <<<
Thread Index
>>>
Internet Commerce Association -- Initial Response Regarding Development of Transparency and Accountability Management Operating Principles
- To: <principles-comments@xxxxxxxxx>
- Subject: Internet Commerce Association -- Initial Response Regarding Development of Transparency and Accountability Management Operating Principles
- From: "Phil Corwin" <pcorwin@xxxxxxxxxxxxxxxxxx>
- Date: Tue, 31 Oct 2006 20:24:17 -0500
By E-Mail
October 31, 2006
Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601
Re: Initial Response Regarding Development of Transparency and Accountability
Management Operating Principles
Dear Members of the ICANN Board:
This comment letter is submitted by the Internet Commerce Association (ICA) in
regard to the notice, "ICANN Seeks Community Input on the Development of
Transparency and Accountability Management Operating Principles", posted for
public comment by ICANN on October 16, 2006. ICA is a new, not-for-profit trade
association. Its membership is composed of individuals and companies that own,
buy, sell, resell, host and manage Internet traffic emanating from search
engines, domain names and Internet links. ICA's mission is to promote the
values and benefits of Internet traffic, including the value of purchasing
direct navigation traffic, 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 has been
established to provide a unified voice for a membership with common interests
and a diverse collection of experience in the Internet traffic marketplace. The
website ownership 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. These professional registrants are the source of the fees that
support registrars, registries, and ICANN itself.
The ICA appreciates the "Clarification of Consultation Process" relating to
this matter that was posted on October 27, 2006. That clarification, responding
to Internet community feedback that a 15 day comment period was woefully
inadequate to thoughtfully and comprehensively address the questions posed by
ICANN, makes clear that this is but an initial inquiry. That clarification also
lays out a timetable that indicates that ICANN intends to issue a first draft
of principles in November; that the ICANN Board will discuss that first draft
and comments received thereon at the Sao Paulo meeting in December, and that
the public comment period will terminate on December 31st. This timetable also
proposes that a final draft of Management Operating Principles will be posted
in February 2007, and that the Board intends to adopt Management Operating
Principles at its Lisbon meeting at the end of March 2007. As ICA believes that
ICANN has not been operating in a satisfactorily transparent and accountable
manner, we welcome the Board's commitment to expeditious progress in this
critical area. However, we would urge the Board not to lock itself into an
inflexible timetable for adoption of guiding principles. It is far more
important that these principles, which will likely guide ICANN's operational
conduct for years to come, be done right than be done quickly. Therefore, if it
develops that Management Operating Principles reflecting the consensus view of
the broad Internet community can be finalized by the time of the Lisbon
meeting, so be it - but if there is still broad concern that the principles
being contemplated do not adequately address previous shortcomings and promise
real reform, then ICANN should reserve the flexibility to delay final adoption
until a later meeting.
The importance of getting this matter right is twofold:
1. First, there remains strong concern throughout the Internet community
that ICANN has been operating in an opaque and cavalier manner -- that it fails
to explain or even recognize the policy assumptions that underlie key
decisions; that it announces critical policy changes as fait accompli after
agreeing to them in private contract negotiations; that it makes primarily
cosmetic changes in response to strong and negative consensus feedback from the
affected Internet community; and that it lacks an adequate administrative
proposal and review process to permit meaningful community participation in
policy development.
2. Second, the new Joint Project Announcement ratified by ICANN and the
U.S. Department of Commerce (DOC) on September 29th identifies "greater
transparency, accountability, and openness in the consideration and adoption of
policies related to the technical coordination of the Internet DNS" as the
leading priority for which the DOC will assess progress in the continuing
transition of ICANN to the private sector. Similarly, the Affirmation of
Responsibilities approved by ICANN's Board on September 25th commits ICANN to
continuing improvements in transparency, accountability, and an improved policy
development process. While ICA commends these priorities and commitments, they
must move from the realm of mere rhetoric by being translated into genuine and
indisputable progress in the manner in which ICANN conducts its operations and
develops fundamental policy. We believe that substantial progress in these
areas must be the precondition for any future termination of the MOU between
ICANN and the DOC and completion of ICANN's transition to full privatization.
The ICA plans to provide extended commentary on guiding principles for
transparency and accountability when the first draft of principles is posted by
ICANN in November. At this time we will confine our comments to transparency
and accountability shortcomings in the ongoing process of considering
fundamental changes in the .Biz, .Org and .Info TLD agreements. We previously
posted comments on this matter (under our former name of Internet Traffic
Association, aka INTRAS) on August 28th (available at
http://forum.icann.org/lists/biz-tld-agreement/msg00523.html
<http://forum.icann.org/lists/biz-tld-agreement/msg00523.html> ). The executive
summary of that statement was as follows:
INTRAS believes that consideration of the proposed agreements is premature and
that the accelerated comment and decision process under which ICANN seeks to
make a final decision on this matter fails to allow the affected Internet
community sufficient time to consider the broad and fundamental changes to
Internet governance that will result from adoption of the proposed agreements.
In particular, INTRAS is strongly opposed to the provisions of the proposed
agreements that allow for their perpetual renewal under almost any
circumstance, and that not only remove price caps on domain name registrations
but allow registry operators to, for the first time, implement tiered pricing
on domain names. Registry operation is a natural monopoly and the only means by
which to curb potential abuses of that monopoly is for ICANN to exercise a
strong and continuing oversight role over registry operators and to allow for
appropriate marketplace testing at the time of an agreement's renewal.
Perpetual renewal as proposed in these agreements deprives ICANN of any
meaningful control over the service quality or conduct of registry operators
and makes a mockery of the potential discipline of arbitration or litigation
concerning fundamental and material breaches of the registry agreements.
Unrestrained pricing power, especially tiered domain name pricing, would effect
a fundamental alteration of the role of registry operators from technical
providers of ministerial services to unrestrained and unelected taxing
authorities with the potential to extract extortionate and parasitic rents from
entrepreneurs whose work and capital have built successful websites and
associated businesses. Tiered pricing also creates a dangerous potential
conflict between the power of registry operators and the intellectual property
rights of domain name owners in regard to websites whose names constitute
registered and valuable trademarks under the laws of the United States and
other jurisdictions. INTRAS believes that there is virtually no support in the
broad Internet community for such fundamental alteration in the powers and
roles of registry operators and that the substance and timing of these
proposals is directly contrary to the "bottom up" consensus Internet governance
process that ICANN is charged with implementing. These proposed agreements
threaten the free and unfettered flow of commerce and ideas on the Internet.
Adoption of these proposed agreements by ICANN's Board at its upcoming
September 13th meeting would further undermine support for ICANN's policies and
procedures among major segments of the Internet community and would therefore
be detrimental to efforts to assure that the long-term governance of the domain
name system (DNS) remains centered within ICANN rather than in some new
multinational entity subject to politicization.
INTRAS therefore strongly opposes finalization of the proposed registry
agreements at this time. INTRAS urges the ICANN Board to immediately withdraw
these agreements and to republish them for comment only at an appropriate time
after the Internet community has been afforded sufficient opportunity to fully
consider their ramifications. When these proposed agreements are republished
INTRAS urges that:
· Perpetual renewal be replaced by a renewal process that affords ICANN
sufficient power to discipline registry operators who have engaged in
fundamental and material breaches, and that allows for vigorous marketplace
testing of the service quality, conduct, and pricing regimes of existing
operators through a competitive re-bid process.
· Meaningful controls on registration price increases during the term of
the agreements be incorporated within the agreements.
· The revised agreements put out for public comment should specifically
forbid differential pricing for domain names based upon the revenues or traffic
of any domain site operator, the value of any trademarked term incorporated
within a domain name, or any other factor.
· The notice provided by ICANN should be accompanied by detailed
explanations of and policy justifications for any proposed material changes in
agreement terms, and the comment procedure should afford the broad Internet
community sufficient time to fully consider their implications and develop
responsive commentary for submission to ICANN.
As it turns out, we were hardly alone in these concerns. Comments received from
the Internet community ran 200 to 1 against the proposals. As ICANN's own
September 7th "Summary of Public Comments" memo notes, process concerns noted
by commentators included:
· Insufficient public information regarding ICANN's reasoning underlying
both the timing and substance of the proposals.
· A public comment period (30 days) that was entirely too short, given
the permanent and fundamental nature of the proposed changes.
· The premature nature of the proposals, given that the agreements in
question do not expire for another one to three years.
· The manner in which the proposals undermine the legitimacy of ICANN's
own Policy Development Process 06 (PDP 06), in which the Generic Names
Supporting Organization (GNSO) Council is addressing such core gTLD management
issues as permanent assignment of domain names to registry operators, consensus
policies, price constraints, and the use of traffic data.
In short, if ICANN was operating in a transparent and consensus-driven manner
it would not have negotiated these proposed agreements in secret with incumbent
registry operators, it would not have proposed them prematurely and without
adequate policy justification, and it would not have given the broad Internet
community insufficient time in which to fully digest their implications and
prepare comprehensive commentary.
ICANN's own "Summary of Public Comments" lists the serious deficiencies of
these gTLD registry agreement proposals that were readily apparent to the
affected public but either went unperceived or ignored by ICANN staff:
· Unrestricted, differential registration and renewal fees could be
applied in a manner to suppress political and economic views disfavored by the
registry operator, a power with chilling future potential should DNS governance
ever be transferred to a politicized organization.
· Unrestricted, differential registration and renewal fees could create
significant barriers to entry, especially for small businesses; result in
extortionate renewal fees, given the lock-in effect of the high cost and
potential detrimental business fallout for registrants switching to an
alternative gTLD; effectively constitute a "domain name tax" on successful
e-businesses; and create conflicts with trademark law if a registrant was
unable or unwilling to pay an extortionate initial registration or renewal fee
and the registry operator auctioned its trademarked domain name to the highest
bidder (including a direct competitor).
· The allowance of the use of traffic data for any commercial purpose
could undermine data privacy, and allow the registry operator to, in effect,
compete against its own registrants by engaging in "domain-tasting" in order to
determine how high a price the market would bear for a specific new domain name
registration.
· The presumptive renewal provision was tantamount to a grant of
perpetual monopoly; would permit registry operators to commit multiple,
fundamental and material breaches of their agreements and flaunt ICANN
authority for extended periods without risking loss of the contract; and made
inadequate utilization of market mechanisms, such as competitive re-bidding, to
provide discipline and assure high levels of service and reasonable pricing
policies.
It is apparent from these comments that adoption of the proposed agreements
would fundamentally change the mission and character of the gTLD registries and
of the Internet itself. Yet the only policy rationale provided so far by ICANN
was after the fact, contained in its September 7th Summary of Public Comments
document, in which it asserts that it "sought to strengthen the stable and
secure operation of the Internet's unique identifier systems, while reducing
any unnecessary entanglement in the economic regulation of the competitive
market for domain registration services". This explanation does not even begin
to suffice.
Unfortunately, ICANN's response to the concerted outcry from the Internet
community regarding these proposals is hardly encouraging to those who hope
that transparency and accountability will move from rhetoric to reality. On
October 24th ICANN published revised versions of these agreements in which,
according to your own summary,
"The key changes to the document include a new restriction on
the use of "traffic data" in the context of the operation of .BIZ, .INFO and
.ORG as "thick" registries (meaning they publish additional registrant-
supplied contact details in their public WHOIS services), and the acceptance of
a 10% cap on price increases along the lines of the .NET and proposed .COM
registry agreements. "
ICA intends to file additional comments on these proposed agreements by the
comment deadline of November 14th. However, ICANN continues to fail in regard
to both transparency and accountability by:
· Failing to provide any rationale why registries should be entitled to
any price increases absent cost justification, much less explain why price
increases should even be anticipated when the prices of most Internet services
continue to fall (including in the .Net agreement, by one-third, when its
renewal was subjected to competitive bidding).
· Failing to even address presumptive renewal - which is really nearly
assured perpetual renewal under the proposed agreement terms - despite the
broad consensus in opposition to this concept.
· Failing to explain while it is still apparently rushing to finalize
these agreements far in advance of their termination dates, and why it is
undermining its own PDP 06 process by failing to wait on the forthcoming GNSO
report on core gTLD management issues.
· Failing to provide any detailed policy response and rationale to the
concerns raised by more than one thousand commentators.
If ICANN wants to demonstrate a true commitment to the implementation of
transparency and accountability in its policymaking process it should begin by
withdrawing these agreements, waiting on the submission and consideration of
the GNSO report, and then soliciting input from the Internet community in
regard to the fundamental issue at the core of the dissent over these proposals
- the proper role and functioning of the TLD registries. ICANN has yet to
explain why the registries should not be regarded as natural monopolies over
which it needs to exercise some restraining supervision to prevent pricing
abuses and assure service quality; or, in the alternative, why periodic market
testing through a re-bid process is not required to assure that registries do
not abuse their position. ICANN has also failed to articulate whether it
believes that there is sufficient competition between registries, and that the
domains they administer are largely interchangeable, and there is consequently
no need for meaningful restrictions on their practices (while we fundamentally
disagree with that viewpoint, we can think of no other policy explanation for
ICANN's TLD proposals). Finally, ICANN should state whether it agrees or
disagrees with the views of some parties who support presumptive renewal on the
grounds that registries are entitled to quasi-property rights in the domains
they administer (again, we strongly disagree with that viewpoint, but it is
certainly deserving of vigorous and extended debate).
In sum, until ICANN begins to articulate and defend the policy assumptions that
underlie the timing and content of these agreements, its rhetorical commitment
to transparency and accountability must be viewed with utmost skepticism.
The ICA appreciates your consideration of our comments.
Sincerely,
Philip S. Corwin
Partner, Butera & Andrews, Washington, DC
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
<<<
Chronological Index
>>> <<<
Thread Index
>>>
|