Comment on .COM & RZMA Agreements
Dear ICANN Board, I respectfully submit this comment in connection with the proposed amendments to the .COM Registry Agreement and the new RZMA. Sadly, the majority of the comments submitted to date are misguided rants, seeking to have the contract cancelled or the fees reduced. These are options that are simply outside the scope of the current ICANN Board's purview based upon previous contractual negotiations. However, there are a couple of areas in which ICANN Board can and should act. Since the creation of ICANN, Verisign and its predecessor (NSI) have always had preferential terms when it comes to gTLD Registry Agreements beginning with the very first Registry Agreement that bundled the .COM, .ORG and .NET TLDs into a single contract. In order for ICANN to separate these TLDs into three separate contract, ICANN had to give Verisign a presumptive right of renewal in the .COM TLD. Since then, VeriSign has always had preferential contract terms when negotiating with ICANN, including during my term on the ICANN Board 2003-2006 when there was a fundamental shift in how ICANN received it funding from the contracting parties. Therefore, I was deeply concerned when ICANN announced the proposed terms of this "extension" to 2012 agreement Registry Agreement with over two years still left on this contract. Every other legacy gTLD operator has been forced to sign a new Registry Agreement that mirrors the template agreement (and associated enhanced safeguards) signed by over 1,000 new gTLD registry operators. ICANN is no longer a humble technical coordinating body, circa 1999. Whether it likes it or not, it has become the de facto regulator for a global billion dollar market. And when the regulator with monopoly control over the an essential facility (see CRA report 2009) provides favorable contractual terms to a the dominant provider in that market that raises serious competition concerns. In addition it potentially exposes ICANN to claims of contributory liability regarding harm to third parties when certain consumer safeguards are not imposed on that dominant market provider. The potential harm to consumers and businesses are clearly and articulately set forth in the INTA comments submitted to ICANN by Lori Schulman. Therefore, I recommend for the Board to decline extending the 2012 Registry Agreement until 2024 and to begin negotiations with VeriSign to enter into a new contract mirroring the baseline template that every new gTLD applicant has signed and which a growing number of other legacy gTLD operators have signed. As noted above, ICANN since its very creation has been working to get out of bundled contracts with VeriSign (and its predecessor NSI), therefore it makes no sense that ICANN would agree to sync the .COM and RZMA agreements together even in just their terms. The comments provided by ICANN's Akram Atallah on the "inextricably intertwined" nature of the .COM and RZM functions actually is support for why these functions should be separated as it represents a single point of failure. I respect the ICANN's Board decision in wanting to finalize this RMZA to remove any obstacle in connection with the IANA transition. However, the provisions regarding potential claims of intellectual property rights are deeply troubling for the reasons set forth below. The joint announcement by VRSN and ICANN, makes specific reference to "work product." This is a legal term of art usually referring to protection afforded under copyright law. See http://www.ntia.doc.gov/files/ntia/publications/root_zone_administrator_prop osal-relatedtoiana_functionsste-final.pdf Second, the DNSSEC Practice Statement for the Root Zone ZSK operator, see http://www.root-dnssec.org/wp-content/uploads/2010/06/vrsn-dps-00.txt contains the following Copyright Notice: Copyright 2010 by VeriSign, Inc., and by Internet Corporation for Assigned Names and Numbers. This work is based on the Certification Practice Statement, Copyright 1996-2004 by VeriSign, Inc. Used by Permission. All Rights Reserved. Historically, VRSN (and its predecessor NSI) had previously sought to leverage copyright law to extend its grip over certain domain name activities. By way of example when the US was seeking to synchronize US copyright law with European copyright law regarding the sui generis protection of database compilations in the late 90s, see http://www.techlawjournal.com/intelpro/19990523.htm The local congressman from Virginia was very active on this topic and even proposed his own bill. Congressman Bliley also submitted letters to ICANN and NTIA raising intellectual property claims regarding certain domain name functions. See this response from NTIA to the Congress (see https://www.ntia.doc.gov/other-publication/1999/department-commerce-response -letter-chairman-committee-commerce-united-states ) and this response from ICANN to the Congressman denying any potential copyright claims in the data (see https://www.icann.org/resources/unthemed-pages/bliley-response-1999-07-08-en ) See this relevant excerpt from the ICANN communication to the Congressman: Under current United States law, it is highly doubtful that collection by registrars of this factual information gives rise to any enforceable intellectual property rights. Under <http://caselaw.findlaw.com/scripts/getcase.pl?navby=case&court=US&vol=499&i nvol=340> Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991), copyright may not be claimed in factual information itself, but only in the selection, coordination, or arrangement of the information in a sufficiently original way. It therefore violates no copyright for others to use the registrar data for their own purposes according to their own selection, coordination, and arrangement. Similarly, because the registrar data has long been available to the public for the asking, both by Internet tradition and by U.S. Government requirements, it would not seem to be subject to legitimate claims of trade-secret rights. Although not giving rise to intellectual-property rights under current U.S. law, registrar data may be subject to claims of intellectual property rights under the laws of other countries, or under future laws that may be enacted in this country at the state or federal level. Claims under such laws, if not accommodated to the Internet's needs, could complicate the efforts of the technical community to ensure stable and reliable operation of the Internet and the legitimate needs of the Internet user community for information about domain names. Pending proposals for extending U.S. intellectual-property law to cover databases, fortunately, take into account these special operational needs of the Internet. For example, H.R. 1858 (the Consumer and Investor Access to Information Act of 1999) <http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_bills&do cid=f:h1858ih.txt.pdf> , which protects publishers from others who seek to compete unfairly by copying and selling the publishers' databases, specifically excludes coverage of databases "incorporating information collected or organized . . . to perform the function of addressing, routing, transmitting, or storing Internet communications . . . ." Now while the proposed RZMA does contain a provision disclaiming any Intellectual Property claims in the underlying data (a good thing), the remaining carve out regarding retention of rights is deeply troubling since any Intellectual Property claims are not bound by consultation/mediation/resolution. Instead, Section 7(g)(vi) provides that either party may commence a "civil action" to "prevent or enjoin the breach of any Intellectual Property Rights or confidentiality obligations of the other Party". This represents another example of how ICANN has provided preferential treatment to VeriSign. Almost every other agreement entered into by ICANN contains a provision preventing a party from seeking resolution before a court. In fact, ICANN has recently submitted an Appeal to the Ninth Circuit in connection with the .AFRICA dispute arguing this very point. Therefore, it makes no sense why ICANN would provide this concession to VeriSign. The RZM functionality is too important for any one party (neither VeriSign or ICANN) to claim any proprietary rights. This is a global resource and the global internet community should be able to rely upon any qualified third party undertaking this service if/when the global internet community lose trust in either VeriSign or ICANN. Therefore, there should be a provision in the RZMA that specifically prohibits either party ICANN or VRSN from making any intellectual property claims to the processes involved in the signing/publishing of the root zone. Notwithstanding VeriSign's competence to provide the RZM functions, if VeriSign fails to waive any and all Intellectual Property Rights in connection with the RZM functions, ICANN should serious consider allocating the necessary financial resources from strategic reserve or auction proceeds to ensure that there are NO proprietary rights associated with the RZM functions. Respectfully submitted, Michael D. Palage P.S. To all the VeriSign "commenters" demanding that the price of a .COM NOT increase or be lowered, please refer to section 7.3 (d)(ii) of the current agreement which states in relevant part: (ii) Registry Operator shall be entitled to increase the Maximum Price during the term of the Agreement due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS, not to exceed the smaller of the preceding year's Maximum Price or the highest price charged during the preceding year, multiplied by 1.07. Then look at when the proposed "implementation" of the Thick Whois "Consensus Policy" is scheduled for, see https://www.icann.org/resources/pages/thick-whois-2016-06-27-en Under the existing and proposed extended contract, VeriSign will be contractually permitted to ask for a price increase of $0.55 per domain name year. Now ask you self this question, how do you think VeriSign shareholders will reacted to them NOT asking for an increase that will bring in 69 million in additional revenue/profit per year? While everyone feared Google being the deep pocket bidder in ICANN's auction of last resort, VeriSign's sole source contract in connection with .COM and .NET shows why the 135 million for .WEB was just a defensive drop in the bucket.