Concerns about ICANN-VeriSign settlement

["Moi" <charles_bokor@xxxxxxxxxxx>]

Dear Dr. Cerf:

The Internet Corporation for Assigned Names and Numbers (ICANN) Board is poised 
to make a historic decision on a proposed agreement to settle pending 
litigation with VeriSign and to extend VeriSign's contract as the registry 
operator for the .com domain.  We are writing to voice our deep concern about 
this proposal.  Even if this is, indeed, VeriSign's "last and best offer," it 
must not be ICANN's.
  
ICANN's staff recently revised the proposed ICANN-VeriSign settlement and .com 
registry agreements.  Unfortunately, the changes do not go to the heart of the 
matter.  We focus here on the need to change the following, damaging provisions:

   1. Pricing:  The proposed revisions provide VeriSign with the unprecedented 
capability to increase prices by 7 percent annually in four of the next six 
years without cost-justification. 

   2. Perpetual management rights:  The proposed revisions would modify the 
renewal clauses so that the contract is essentially non-cancellable and ICANN's 
right to rebid is taken away. 

The proposed agreement still harms the Internet community by allowing 
unjustified price increases in most future years at a time when fees for com 
should be decreasing, not rising.  Even VeriSign last year agreed to drop fees 
by more than 40 percent for .net to win an extension of that registry 
agreement. 
  
The revised proposal changes the "presumptive renewal" provision to deny any 
competition when the contract ends in 2012, locking in VeriSign as the .com 
registry operator, without the counterbalance of a competitive bid process.  
This is particularly troubling because VeriSign, as the authorized registry 
operator for the .net and .com domain names, controls 85 percent of the U.S. 
market, as .com alone accounts for 75 percent of domain names registered by 
U.S. registrants.  The guarantee of an unregulated monopoly runs counter to the 
reasons behind why ICANN was created, the policies of the anti-trust laws of 
the United States, and the competition policies of many nations worldwide.

At the United Nations' World Summit on the Information Society (WSIS) last 
year, arguments were made that the hands-off, market-based approach to ICANN 
administration is working.  The current ICANN management structure upheld at 
WSIS must not be called into question in the future by ceding control of the 
.com registry operation to one U.S. operator essentially forever, and without 
competition or regulation. 

This letter highlights areas that deserve immediate attention.  Other key 
concerns on which you will be hearing from us include a need for public 
accountability and third party verification of the $200 million investments in 
the .com infrastructure required of VeriSign under the current contract, and a 
requirement that VeriSign follow ICANN's consensus policy for introducing new 
registry services, such as selling traffic data relating to .com domain names.
  
We urge you and your fellow Board members to sign a final agreement that 
preserves competition and promotes market-based pricing.  What is before you 
for consideration achieves neither result.  Thank you for your diligent efforts 
on these critical issues. 
  
Respectfully