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Username: DNSGA
Date/Time: Fri, March 30, 2001 at 7:12 PM GMT
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Subject: DNSGA COMMENTS ON PROPOSED REVISIONS TO VERISIGN AGREEMENTS

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DOMAIN NAME SYSTEM GENERAL ASSEMBLY
http://www.dnsga.org

DNSGA COMMENTS ON PROPOSED REVISIONS TO VERISIGN AGREEMENTS

1.   The Domain Name System General Assembly (DNSGA) is a not-for-profit corporation formed to promote international opinion and alternative views that concern the stability, management and integrity of the Domain Name System (DNS), to promote international competition and new technology, and to develop and promote good policy and standards that concern the Internet through international representation.

2.   The DNSGA hereby submits these DNSGA comments on proposed revisions to VeriSign agreements (the VeriSign proposal) and the DNSGA's opinion in response to the Internet Corporation for Assigned Names and Numbers (ICANN) Board request for comments on the substantive merits of the VeriSign proposal.

3.   The DNSGA is concerned about the substantive and procedural matters related to the VeriSign proposal and the apparent predatory conduct on the part of ICANN-VeriSign in the domain name industry.

4.   The DNSGA and other interested parties did not receive proper notice from ICANN, nor any reasonable amount of time, to properly address or comment on the significant matters concerning the VeriSign proposal.

5.   ICANN is heading in the wrong direction.  ICANN is compromising the integrity of the DNS.  ICANN's integrity, credibility, motivation and processes are being seriously questioned and challenged by interested parties and stakeholders worldwide in the domain name industry, of which such challenges are a significant threat to the stability of the DNS.

6.   One cannot properly address the VeriSign proposal without first identifying a few significant problems associated with ICANN operations and policy making processes.  The DNSGA will first identify problems associated with ICANN operations and policy making processes with its comments regarding the VeriSign proposal.

I.  Clinton Administration
=================
7.   It is the Clinton Administration, or Clinton's Enterprise, that currently controls the Internet.  ICANN and VeriSign's current Registry/Registrar functions, authority, direction and policies in the domain name industry were all formed, developed and approved by, and under, the Clinton Administration.

8.   The Clinton Administration appears to have allowed certain significant and questionable policy changes to evolve through its approval of the various Agreements among ICANN, the U.S. Department of Commerce (DOC), and Network Solutions, Inc. (NSI), concerning the ICANN/NSI relationship.  These significant policy changes and Agreements are adverse to, and in conflict with, the U.S. Government's White Paper and statement of policy concerning the Internet Domain Name System, and the policy changes and Agreements appear to have been allowed to move forward unchecked by the Clinton Administration so to entrench Clinton's control over the Internet.

II.   U.S. Government's White Paper
=========================
9.   The U.S. Government's June 1998 White Paper (http://dnsga.org/usg/white_paper-jun0598), Management of Internet
Names and Addresses, 63 Fed. Reg. 31741(1998) (Statement of Policy), the policy statement concerning the Internet Domain Name System, requires ICANN to be governed on the basis of a sound and transparent decision-making process with protection against capture by a self-interested faction.  The White Paper requires ICANN operations processes to be fair, open and pro-competitive, protecting against capture by a narrow group of stakeholders.

10.   With written and oral public comments and strong consensus opposing the Tentative Agreements of September 1999, the Clinton Administration approved the Agreements in November 1999, which allowed ICANN to radically depart from the statement of policy prescribed in the U.S. Government's White Paper, and which also allowed NSI to radically depart from the U.S. Government's Cooperative Agreement.

11.   With ICANN and NSI allowed to coordinate the engagement of predatory conduct in the domain name industry, this provides a mechanism for the Clinton Enterprise to achieve irreversible control over the Internet.

12.   A few examples of Clinton compromising the U.S. Government's White Paper are described as follows:

(a.)   It is known that ICANN is not operating within the policy and spirit of the White Paper and this can be shown by ICANN's conduct in the domain name industry and by ICANN's operations and policy making processes.  The protections against capture by a self-interested faction and the protections against capture by a narrow group of stakeholders, as prescribed by the White Paper, have been allowed to be compromised and diluted by ICANN.

(b.)   It is known that ICANN has been allowed to not operate on the basis of a sound and transparent decision-making process and ICANN has not protected itself against capture by a self-interested faction.  This can be shown by ICANN's unfair policy making processes that appear to be built only upon consensus that agree with ICANN's preconceived plans and agendas.  All other consensus regarding ICANN matters are considered babble by ICANN.  ICANN has chosen on most occasions to ignore, or has refused to acknowledge, significant and majority consensus that oppose ICANN processes and policy making proposals.

(c.)   It is known that ICANN operations processes are not fair, open and pro-competitive, protecting against capture by a narrow group of stakeholders.  This can be shown by ICANN's unfair policy making processes and ICANN's coordinated predatory and anti-competitive conduct in the domain name industry.  ICANN has engaged in unfair licensing practices concerning ICANN Registrar Accreditation and licensing of new TLD Registries.

(d.)   It is known that ICANN has demonstrated its willingness to accept money or favors in consideration for special treatment and in consideration for matters that concerns ICANN's policy and licensing authority.

(e.)   It is known that VeriSign dominates the domain name industry and ICANN has not proposed any mechanism, whatsoever, to protect itself from capture by VeriSign.  In fact, it appears that ICANN is currently assessing what appears to be VeriSign's offer to acquire ICANN through the sophisticated VeriSign proposal.

(f.)  It is known that VeriSign currently receives 100% market share of .com, .net and .org domain names at $6 per domain name registration or renewal transaction.  In addition to this, VeriSign retains more than 50% of all registrations in the .com, .net, and .org Registries.  It is possible that ICANN is knowingly promoting false and misleading statements regarding VeriSign's market share and associated revenue.  VeriSign makes more than twice the amount of revenue on every .com, .net and .org domain name registration or renewal transactions than do most of the domain name Registrars in the industry.  Most domain name Registrars make less than $3 per domain name registration or renewal transaction.

III.   ICANN-VERISIGN PREDATORY CONDUCT
======================================
13.  It appears that ICANN and VeriSign, together, are both engaged in predatory conduct in the domain name industry.  The following are a few examples of predatory conduct:

(a.)   ICANN appears engaged in predatory behavior through its adverse actions and bias in licensing ICANN Accredited Registrar applicants and new TLD Registry applicants.  ICANN's Registrar Accreditation licensing processes and new TLD Registry licensing processes appear unfair, illegally selective and appear used as a mechanism to control competition in the domain name industry in favor of VeriSign and other ICANN special interests.

(b.)   ICANN has abused its authority by unduly inhibiting the progress, success and participation of ICANN Accredited Registrar applicants by not processing ICANN Registrar Accreditation Applications.

(c.)   VeriSign has apparently engaged in predatory conduct against competing Registrars by making certain demands upon those Registrars, demands that have a greater impact on VeriSign's competition, than on VeriSign itself.

(d.)   VeriSign has unrestricted access to the Registry Database and VeriSign's competing Registrarsí customer base information.  The information available to VeriSign is not readily available to VeriSign's competition. Furthermore, VeriSign has demonstrated its willingness to acquire domain name Registrars and domain name auction businesses.

(e.)   It appears that ICANN is operating and coordinating in secret with VeriSign and ICANN has apparently authorized VeriSign to police the domain name registration industry.

(f.)    ICANN has allowed VeriSign to continue charging Registrars $6 per domain name for all .com, .net and .org domain name registration and renewal transactions.  ICANN is not properly managing the DNS, nor is ICANN's conduct pro-competitive, when it allows VeriSign to continue to accept $6 for all .com, .net and .org domain name registrations and renewals.  ICANN is certainly aware that given the low costs now associated with the management of databases and network
system resources, that the cost to maintain a Registry is significantly less than $6 per domain name entry.

(g.)   VeriSign's proposals show ICANN-VeriSign's predatory coordination in the domain name industry.

IV.   REGISTRY/REGISTRAR SEPARATION
=================================
14.   There apparently is not the Registry/Registrar separation originally contemplated that should be in the domain name industry.  The Registry/Registrar separation or firewall represented by VeriSign appears phony and does not work to prevent anti-competitive efforts or predatory conduct on the part of VeriSign.

15.  There is no ethical duty or ethical obligation like that required by a lawyer's Bar, of which demands a certain level of integrity from a lawyer involved in matters that require separation or a firewall when conflicts arise within a law firm.  The VeriSign entity, and its representatives and associates, have no ethical duty or ethical obligation to maintain a firewall like that required by a lawyer's Bar.  VeriSign has no ethical duty or ethical obligation to maintain any firewall provision.  ICANN knows that VeriSign has no real firewall and any such language are only empty words.  It is impossible to enforce Registry/Registrar separation or a firewall provision in this case.

16.   ICANN apparently began a process of diluting the Registry/Registrar separation requirement in November 2000, with ICANN's approval and licensing of the 19 Registrar cooperative representing the new TLD Registry Affilias.

17.   VeriSign indicated with its agreement revisions proposal that the market has changed and that any Registry/Registrar separation requirement is not a significant matter now, as it once was.  This in part because of ICANN's approval of the 19 Registrar cooperative representing the new TLD Registry Affilias.

18.  It now appears that ICANN approved the new TLD Registry Affilias in November 2000 for the  purpose of diluting Registry/Registrar separation and for the purpose of assisting VeriSign with the VeriSign agreement revisions currently under consideration by ICANN.

19.  Furthermore, the new TLDs that ICANN approved pose little threat to VeriSign's .com and .net.  It could be that ICANN did not approve certain new TLD Registry applications last year because ICANN is preserving the popular and/or valuable new TLDs (.web or others that could pose serious competition against VeriSign's .com and .net) for some future VeriSign Registry or VeriSign associated Registry.  It appears that ICANN is preserving popular and/or valuable new TLDs for VeriSign.  This appears to be predicted by VeriSign and that which is being considered by ICANN with VeriSign's proposal.

20.  It appears that ICANN and VeriSign want everyone to believe that the market has changed and that any Registry/Registrar separation requirement is not a significant matter anymore.  However, departure from Registry/Registrar separation requirements only began to take place in November 2000, when ICANN initiated its process of diluting Registry/Registrar separation by licensing the Affilias Registry.

21.  It may be reasonable to conclude that had ICANN departed from Registry/Registrar separation before September, 2000, VeriSign would have submitted its proposal back then.  This appears to be what ICANN and the Clinton Enterprise anticipated and this is why only an extension was issued by the Clinton Administration in September 2000 regarding the DOC-NSI Cooperative Agreement.  Significant policy change amendments to the MOU were authorized by DOC before Clinton left office.

22.  Another matter of significance is that back in July 2000, approximately 8 months ago, apparently ICANN demanded  that Afternic.com not be permitted to operate as an ICANN Accredited Registrar because Afternic.com is a domain name auctioneer.  It is apparent that ICANN engaged Afternic.com because ICANN was enforcing Registry/Registrar separation and maintaining a high degree of integrity in the domain name industry.  Now, that has all changed.  For example, ICANN now allows VeriSign to acquire GreatDomains.com and ICANN allows Register.com to acquire Afternic.com.  This is a gross and significant conflict which allows Registries and Registrars to engage in unfair and anti-competitive activities which include domain-name reselling, domain-name warehousing, and other activities related to trading or facilitating trading in the secondary market for domain-name registrations.

V.   ICANN NOT CAPABLE OF MAKING FAIR DECISION
============================================
23.   ICANN does not appear capable right now of making any fair and/or unbiased decision regarding the VeriSign proposal.

24.   ICANN and VeriSign appear to have been operating and coordinating in secret while negotiating the VeriSign proposal. ICANN coordinating and participating in secret negotiations with VeriSign without any reasonable notice to the general public and interested parties regarding the VeriSign negotiation process and proposal was inappropriate.

25.  ICANN has demonstrated abuse of its authority by unduly inhibiting the progress, success and participation of ICANN accredited Registrar applicants, by not processing Registrar accreditation applications.

26.  ICANN appears to be engaged in predatory behavior through its adverse actions and bias in licensing ICANN Accredited Registrar applicants and new TLD Registry applicants.  ICANN's Registrar Accreditation licensing processes and new TLD Registry licensing processes appear unfair, illegally selective and used as a mechanism to control competition in the domain name industry in favor of VeriSign and other ICANN special interests.

VI.   OPTION C
============
27.  VeriSign and ICANN have both claimed that there is no option "C" in the VeriSign proposal.  However, there does appear to be an option "C", and it is that ICANN do nothing regarding the VeriSign proposal and that ICANN postpone the entire ICANN-NSI Agreement matter until ICANN and VeriSign's conduct in the domain name industry are fully investigated, assessed and addressed.

VII.   DNSGA RECOMMENDATIONS
============================
28.   The DNSGA recommends that ICANN launch a full investigation into ICANN itself and VeriSign's conduct and processes in the domain name industry.

29.   The DNSGA recommends that ICANN postpone its decision regarding the ICANN-NSI Agreement until ICANN and VeriSign's conduct in the domain name industry is fully investigated, assessed and addressed.

30.  The DNSGA recommends that VeriSign agree to postponing its decision regarding the ICANN-NSI Agreement until ICANN and VeriSign's activities in the domain name industry are investigated, assessed and addressed.

31.  The DNSGA recommends that the Bush Administration's DOC launch a full investigation into ICANN and VeriSign's conduct and processes in the domain name industry.

32.  The DNSGA recommends that the Bush Administration quickly get up to speed regarding these matters and reign in those DOC career representatives who are currently involved in the ICANN and VeriSign processes.

33.  The DNSGA recommends that the Bush Administration review the merits of the significant policy changes that concern ICANN and VeriSign and the domain name industry, and specifically those policy changes that were approved by the Clinton Administration before Clinton left office.

34.  The DNSGA recommends that the DOC not allow any significant policy changes concerning the DNS without first establishing the integrity of ICANN's operations and processes.

35.  The DNSGA recommends that Registry/Registrar separation be a requirement for VeriSign and a requirement in the domain name industry and that ICANN reverse certain of its decisions that have caused departure from policy requiring Registry/Registrar separation.

36.   The DNSGA recommends that ICANN require that VeriSign divest its Registrar business if it is to be awarded its Registry business.  Or, that ICANN require that VeriSign divest its Registry business if it continues to operate its Registrar business.

37.  The DNSGA recommends that ICANN require that VeriSign and ICANN Accredited Registrars be not permitted to engage in activities classified as domain-name reselling, domain-name warehousing, and other activities related to trading or facilitating trading in the secondary market for domain-name registrations.  Furthermore, it is recommended that ICANN enforce these limitations that concern VeriSign and ICANN Accredited Registrars engaged in such activities or businesses.

38.   The DNSGA recommends that ICANN require VeriSign to divest its GreatDomains.com business if it is to be awarded its Registry business and/or Registrar business.

39.  The DNSGA recommends that the $6 fee that Registrars must pay VeriSign for all .com, .net, .org domain names be reduced to a reasonable amount that is less than $6.

Dated this 30th day of March, 2001.

Derek A. Conant
President and Chairman

DNSGA
PO Box 53197
Washington, DC  20009  USA
E-mail:  dconant@dnsga.org
Telephone:  (202) 801-0158

CC:  ICANN Chairman Vinton Cerf
        ICANN General Counsel Louis Touton
        VeriSign CEO Stratton Sclavos
        DNSO Secretariat
        DOC Honorable Secretary Donald Evans
        U.S. Government Representatives   
     
     
     
     
     
     
     
     

 

Link: Domain Name System General Assembly (DNSGA)

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