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GoDaddy.com comments

  • To: biz-tld-agreement@xxxxxxxxx, info-tld-agreement@xxxxxxxxx, org-tld-agreement@xxxxxxxxx
  • Subject: GoDaddy.com comments
  • From: Tim Ruiz <tim@xxxxxxxxxxx>
  • Date: Fri, 25 Aug 2006 18:23:27 -0700

Below in text, and PDF attached.

GoDaddy.com comments regarding the proposed .BIZ, .INFO, and .ORG gTLD
Registry Agreements

I. The Timing of the Proposed New Agreements

A. PDP-Feb06
The most glaring problem with the timing of these proposed agreements is
that there is a Policy Development Process underway within the GNSO on
policies for contractual conditions regarding existing gTLDs

1. PDP-Feb06 is a direct result of the lack of process that the ICANN
Staff and Board undertook to revise the .net and .com agreements. There
has been substantial discussion and controversy within the GNSO
community around both agreements. It is clear that all interested
parties within the ICANN community, except perhaps the Registries
themselves, believe that changes executed in the .net agreement, and
the similar changes proposed in the .com, .org, .biz, and .info
agreements, represent significant policy changes that the ICANN Staff
and Board should not be making unilaterally.

2. The GNSO Council has wisely recognized that issues such as permanent
assignment of namespaces to specific registry operators, consensus
policies, price controls (which may or may not include caps), and use
of traffic data may in fact be policy issues. The GNSO recognizes that
it may be more appropriate to have policies that apply to all gTLDs on
some of these issues rather than treating them as matters to negotiate
behind closed doors on a contract by contract basis.

3. PDP-Feb06 was appropriately initiated in full accordance with ICANN?s
bylaws. The PDP-Feb06 Task Force has been pressing hard to complete its
work far enough in advance of the upcoming expiry of the 2001 gTLD
agreements to allow the ICANN Staff and Board to consider its
recommendations prior to finalizing the renewals for these registry
agreements. The .biz and .info agreements do not expire until the end
of June 2007, and the .org agreement does not expire until 2009.

4. Acting on these proposed agreements prior to the completion of
PDP-Feb06 would further demonstrate the Board?s disregard for the
bottom-up, consensus-building process it is bound to in the ICANN?s

B. Exiting Board Members
Another problem with the timing is that the term of three current ICANN
Board members expires at end of this year.

1. Given the likely timing of any vote by the Board on these proposed
agreements, these potentially exiting Board members will be voting on
these agreements as their parting act.

2. These three Board seats will be filled by the Nominating Committee
well in advance of the expiration of these registry agreements.

3. It appears as though there is a rush to allow the Board as presently
composed to make the decision on these proposed agreements. However,
given the significant policy changes represented in these proposed
agreements it would not be in the community?s best interest to have
exiting Board members make such monumental decisions.

II. Policy Changes Proposed in the Agreements

A. Presumptive Renewal
It is obvious to any reasonable person that these proposed agreements do
not simply provide a presumptive renewal; they virtually guarantee
renewal in perpetuity without any reasonable opportunity for ICANN to
ever consider re-bidding these agreements regardless of the conduct or
performance of the incumbent registry operator.

1. The Staff makes the statement, ?The proposed new .BIZ, .INFO and .ORG
registry agreements each provide for presumptive renewal, absent
material and repeated breach of the agreement by the registry operator.
This is consistent with each of the 2005 .NET registry agreement, and
the proposed new .COM registry agreement.? However, this statement is
only partly true.

2. It is true that the renewal conditions, or rather the lack thereof,
in these proposed agreements are indeed consistent with those in the
.net agreement and proposed .com agreement. It is also true that the
Staff has conveniently left out the fact that there was considerable
opposition to the lack of appropriate renewal conditions from within
the international Internet community, and that even several
representatives within the US Congress have voiced concerns over the
proposed .com agreement in part due to the lack of appropriate renewal
conditions. It is as though the Staff and Board hope that if they keep
proposing the same ideas often enough we?ll all get tired of pointing
out the flaws and let it go.

3. There are several conditions in the current agreements that allow
ICANN latitude to possibly re-bid them. These should be a part of all
gTLD registry agreements. For example, section 25.B. of the current
.com agreement states:

   ?(a) Registry Operator is in material breach of this Registry
Agreement, (b) Registry
    Operator has not provided and will not provide a substantial service
to the Internet
    community in its performance under this Registry Agreement, (c)
Registry Operator is
    not qualified to operate the Registry TLD during the renewal term,
or (d) the maximum
    price for initial and renewal registrations proposed in the Renewal
Proposal exceeds
    the price permitted??

4. Of particular importance in 25.B. as quoted above are items (b) and
(c). These concepts are completely absent in the proposed agreements,
as they are in the as yet unapproved new .com agreement. As a result,
if the agreements are approved as they stand the registry operator only
need not be in breach or bankruptcy and their registry agreement will be
renewed. They are not required to show that they continue to be
qualified or demonstrate that they have provided, and will continue to
provide, a substantial service to the Internet community. It is not in
the public?s best interest for ICANN to give up these concepts.

5. What is not true in the Staff?s statement is that each of the
proposed agreements ?provide for presumptive renewal, absent material
and repeated breach of the agreement by the registry operator.? In
fact, the registry operator is allowed to repeatedly breach the
agreement without limitation as long as they cure each breach within
the specified time periods. The consequences of such repeated breaches
regardless of their nature is not failure to renew, it is simply
monetary damages.

6. In addition, as has been pointed out by us and others in regards to
the proposed new .com agreement, there is no allowance for ICANN to
consider re-bid of these agreements should the registry operator engage
in or be convicted of serious offenses related to its financial
activities. For example, the current .com agreement section 16.C.
allows for termination by ICANN if:

   ?(i) Registry Operator:
       a) is convicted by a court of competent jurisdiction of a felony
or other serious 
       offense related to financial activities, or is the subject of a
determination by 
       a court of competent jurisdiction that ICANN reasonably deems as
the substantive 
       equivalent of those offenses ; or 
       (b) is disciplined by the government of its domicile for conduct
       dishonesty or misuse of funds of others.
   (ii) Any officer or director of Registry Operator is convicted of a
felony or of a 
   misdemeanor related to financial activities, or is judged by a court
to have committed 
   fraud or breach of fiduciary duty, or is the subject of a judicial
determination that 
   ICANN deems as the substantive equivalent of any of these, and such
officer or director 
   is not immediately removed in such circumstances.?

7. We urge the Board to not approve these agreements until these serious
and potentially embarrassing deficiencies have been corrected.

B. Lifting of Price Controls on Registry Services
The Staff makes the statement, ?Following extensive consideration and
discussion, each of the proposed new .BIZ, .INFO and .ORG registry
agreements provide for the lifting of price controls formerly imposed
on the pricing of registry services.?

1. Following extensive consideration and discussion with whom? If this
refers to the public comment and discussion that has taken place
regarding similar provisions in the .net and proposed .com agreements
the Staff should add that their decision is in total disregard for the
overwhelming opinion of the international community. Their recognition
of that opinion is apparent in that both .net and proposed .com
agreement contained the same lifting of price controls, but both, on
separate occasions, were modified to include limitations based on
overwhelming community outcry. The .net agreement price increases are
now limited to 10% per year, and the proposed .com agreement increases
are limited to 7% with cost justification required in some cases.

2. In addition, the referenced Staff statement is completely deceptive,
intended or not. The use of the word "imposed" implies that its some
terrible, onerous imposition wrongly placed upon the registries that
need to be rectified. While limited ability to increase prices under
certain conditions may be a valid expectation, limitless rights is
simply a recipe for disaster and results in an even greater imposition
on the rest of the Internet community.

3. The Staff further states, ?However, in order to protect incumbent
domain name registrants and allow time for planning by those in the
registry and registrar communities, the form of registry-registrar
agreement proposed with each of the new registry agreements requires
six months advance notice by the registry operator of any price
increase in registry services.?

4. A six month notice is not sufficient protection for incumbent
registrants when considering the totality of the pricing provisions in
these proposed agreements. There appears to be no requirement for the
registry operator to charge the same for renewals as they do for new
registrations. In fact it also appears that the registry operator has
the latitude to set different fees for each individual second level
string. This lack of notice, price controls, and clarity raise the
following potential impositions:

   a. Established incumbent registrants find it difficult and costly to
switch to another
   TLD. They need to consider issues related to trademarks, name
availability, marketing 
   investments, name recognition, and on and on, all of which takes
considerable time to 
   affect. Six months hardly gets them started. The impact may be
lessened for those who
   chose to register for longer periods, but even then only as it
relates to the time 
   they may have to make a switch.
   b. Incumbent registrants, as captive patrons, could be charged much
higher prices to 
   keep their domain names. That could happen even today by individual
registrars, but 
   registrants have a wide variety of choice in registrars and have the
ability to switch
   without sacrificing what they have invested. That is not true if the
registry operator
   should decide to charge considerably more for renewals than they do
for new registrations.
   c. Registry operators could use selective pricing to push certain
incumbent *elements* 
   out of their name space, or to simply capitalize on existing high
traffic names whether 
   the traffic is inherent to the string or has been built up by the

5. Clearly, the proposed pricing provisions lack clarity and sufficient
safeguards for incumbent registrants. The lack of price controls and
sufficient notice needs to be corrected. The ICANN Board and Staff
should consider what is in the best interest of the Internet community
as a whole, as required in Article 4 of its Articles of Incorporation.

C. Use of Traffic Data
The Staff states that ?each of the proposed .BIZ, .INFO and .ORG
registry agreements contains a Section 3.1(f) on the use for
statistical purposes only of "traffic data."?

1. Intended or not, that statement is completely misleading. No where in
3.1(f) is the phrase or concept of ?statistical purposes? used. To be
clear, that section states (emphasis mine):

   3.1 (f) Traffic Data. Nothing in this Agreement shall preclude
Registry Operator from 
   making commercial use of, or collecting, traffic data regarding
domain names or non-
   existent domain names for purposes such as, without limitation, the
determination of 
   the availability and health of the Internet, pinpointing specific
points of failure, 
   characterizing attacks and misconfigurations, identifying compromised
networks and 
   hosts and promoting the sale of domain names, provided however, that
such use does not
   disclose domain name registrant or end-user information or other
Personal Data as 
   defined in Section 3.1(c)(ii) for any purpose not otherwise
authorized by this 
   agreement. The process for the introduction of new Registry Services
shall not apply 
   to such traffic data. Nothing contained in this section 3.1(f) shall
be deemed to 
   constitute consent or acquiescence by ICANN to an introduction by
Registry Operator of 
   a service employing a universal wildcard function. To the extent that
traffic data 
   subject to this provision is made available, access shall be on terms
that are 

2. If the intent of the Staff members that negotiated this section is to
limit the use of Traffic Data to statistical purposes only, that intent
did not make it into the text. In fact, use of the data is without
limitation and any related service the registry operator may dream up
does not need to go through the registry services approval process. It
is not clear at all that the Staff, the registry operators, and the
community are in agreement with, or even understand, what this
provision intends.

3. In addition, it appears it could be construed to permit a registry to
use traffic data that includes Personal Data in any way it desires
without limitation. The clause reads, in essence, that the registry
operator may use traffic data in any way, limited only from uses that
do "not disclose domain name registrant or end-user information or
other Personal Data ... for any purpose not otherwise authorized by
this agreement." The issue is with the "not otherwise authorized by
this agreement" clause. The first part of Section 3.1(f) specifically
authorizes the Registry Operator to make commercial use of traffic
data. Would this not then permit the registry from using traffic data
in ways that would disclose domain name registrant or end-user
information or other Personal Data? We believe the intent was not to
create a potential loophole, but the drafting could certainly be better
to make the intent more clear.

4. This Traffic Data provision is poorly written and its intent is
unclear. It previously existed only in the as yet unapproved new .com
agreement. Further, it is a subject of review for PDP-Feb06. It is
premature to include it as a standard provision in all gTLD agreements
and should be removed.

D. Use of ICANN Accredited Registrars
Section 3.6 of the current unsponsored gTLD agreements for .info, .biz,
and .org clearly provides that registrations in the TLD will take place
only through ICANN Accredited Registrars except under very specific

1. In these proposed new agreements that requirement is neither implied
nor specifically stated. The agreements state that the registry
operator must allow all ICANN Accredited Registrars who enter into the
Registry-Registrar Agreement access to its registry services. But it
does not state that only ICANN Accredited Registrars are allowed such

2. The Board should direct the Staff to correct this ambiguity prior to
approving these agreements.

III. Summary of Recommendations

A. PDP-Feb06 and Exiting Board Members
The Board should not take action on these proposed agreements until (1)
the GNSO has completed its work with PDP-Feb06, (2) the Nominating
Committee has made its pending appointments to the Board, and (3) that
revised Board has reviewed and considered the recommendations of

B. Correcting Deficiencies
If the Board should decide to ignore PDP-Feb06 in violation of the ICANN
bylaws and push ahead with these early renewals, it should direct the
Staff to:

1. Correct the deficiencies in the renewal conditions as noted in II.A

2. Incorporate appropriate price controls. Incumbent registrants deserve
and expect some predictability in the cost of maintaining their
registrations. There should, at the least, be an annual limit on the
increases that can be imposed on renewal and transfer fees. There
should also be no fear that incumbent registrants will be targeted with
exorbitant fees based, for any reason, on the second level string they
have selected.

3. Remove the provision for the use of Traffic Data until its true
purpose is clearly understood and agreed upon by the Staff and Board,
the registry operator, and the community whose data is being targeted.

4. Add clear language that the registry operator may only offer
registration services through ICANN Accredited Registrars.

Tim Ruiz
Vice President
Corporate Development and Policy

Attachment: GoDaddyCommemtsBizInfoOrgRAs.pdf
Description: Adobe PDF document

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