Comments on the COI / COF

["Ron Andruff" <randruff@xxxxxxxxxxxxxxx>]

To Whom It May Concern:

 

The issues we are having difficulty with - in both the COI and the COF -
are:

 

*                    both require an inordinate amount of capital be
'parked'; money that could otherwise by more usefully deployed by new gTLD
managers in developing and marketing their string to their potential
registrants; 

*                    tying up financial resources for a period of 3 years is
an inordinate amount of time considering that a failing registry can be
switched over to failover system in less than 24-48 hours, if appropriate
technical provisions are in place (i.e. prior to the new registry being
'turned on' in the root);  

 

The key question, in our view, is the one ICANN notes in its request for
public comment post: Who should determine how much reserve must be set
aside? In my view, it should be the new registry applicant in conjunction
with whom they choose as their backend provider.  If an applicant selects an
incumbent backend provider, Verisign as an example, that applicant should be
able to choose the same failover system that Verisign has in place as its
failover.  In such case, the user protection that ICANN is looking for is
clearly already in place and operational instantaneously; and the marginal
cost, if any at all, would be determined between the applicant and its
provider. 

 

If an applicant selects a non-incumbent provider, ICANN need only mandate
that backend provider to meet the same failover standards as incumbent
registries have in place.  ICANN should NOT be looking to new registry
applicants - which are effectively 'marketing organizations' that within
ICANN nomenclature are called 'registry operators' - but rather to those
entities that will, in point of fact, be managing the technological part of
the registry business, i.e., said third part backend operators.

 

As for winding down a failed registry in a controlled manner - which the
real issue ICANN should be addressing here - applicants should be
responsible for establishing such a plan with their backend registry
operator under to-be-established ICANN policy guidelines.

 

Finally, in this discussion one must also consider the fact that not one of
the registries that 'run' the Internet today have ever failed in the history
of ICANN.  And should a failure have occurred, the incumbent registry
operator's own failover redundancy systems would have kicked in.  I
underscore that the word 'registry' should be understood as 'backend
registry provider'.

 

In our view, it appears that ICANN is looking:

 

*                    to raise the capital investment required for new TLD
operators to yet a higher threshold to exclude large numbers of new
potential registries that do not have deep- pocket, brand TLD financial
backing; or 

*                    to develop yet another pool of applicant money that
ICANN will have sole discretion over spending when, and if, a registry
operator fails in their mission to market their product.

 

Neither case is acceptable, particularly when viewed in light of the fact
that ICANN has already earmarked USD 25,000 from each application fee to
cover sunk costs on the new TLD program. (Note that ICANN is a
not-for-profit organization that by legal structure must spend its full
budget each year and start the next year with a fresh slate as opposed to a
for-profit corporation whose shareholders would expect such investment
recovery.)  In addition to that recovery cost, an additional USD 60,000 is
earmarked to a 'risk fund' to enable ICANN to fight battles such as the
current .XXX lawsuit.  Very few applicants will end up in ICANN related law
suits, but all pay to defend those few that do.  This is seriously flawed.  

 

So in summary, on top of USD 25,000 and USD 65,000, ICANN has created a COI
whereby each applicant will have to pony up USD1 million + (according to the
slides deck presented in Dakar), which ICANN will spend as it wishes in the
highly unlikely situation that a registry operator ('marketing
organization') 'fails' despite the fact that said registry's end-users'
domain names will continue to resolve without issue.

 

I am not a technical person, nor a lawyer, but I struggle to understand why
complicated instruments such as the COI or the COF are even being
contemplated when all backend service providers already have their own
redundancy systems in place and operational.  

 

For these reasons we propose that ICANN establish a base standard that every
backend service provider meet to ensure that there is no impact on end-users
irrespective of which domain name they register and whether or not the
front-end of those registries remains operational. 

 

In the interest of full disclosure, dotSport LLC, a company for which I am
president and CEO, is considering an application for a new TLD.

 

Kind regards,

 

Ronald N. Andruff

RNA Partners, Inc.