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Username: EPo
Date/Time: Sat, March 31, 2001 at 2:45 PM GMT
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Subject: Input from the ccTLD members on the ICANN-VeriSign contract.


Input from the ccTLD members on the ICANN-VeriSign contract.

This document is in TWO parts:
Text included in the NC resolution posted to the ICANN Board

2. Part TWO
Personnal comments from the ccTLD Names Council Representatives,
Peter de Blanc, Oscar Robles Garay, Elisabeth Porteneuve

Kind regards,
Elisabeth Porteneuve


The ccTLD group needs much more time that other Constituencies
to consider ICANN issues, for two main reasons reasons:
first because a lot of people consider ICANN is not about ccTLD,
second because the group is international by nature,
and communicating very slowly.

However taking into account an extremely short time, the ccTLD
Council representatives decided to convey individual ccTLD members
comments in absence of Constituency consensus.

The summary of ccTLD members input is provided below. The ccTLD
NC representative's comments are attached.

Assumptions on ICANN - VeriSign agreement:
The ccTLD Constituency members have been taking into account the
following "border conditions":
1. The current ICANN -VeriSign agreement (option "A") originated
   between the US Department of Commerce and Network Solutions Inc.,
   and after several revisions has been adopted by the ICANN Board
   on 4 November 1999. This agreement follows a timeline, agreed
   upon by the DoC and the NSI, with several actions concerning
   .com, .org and . net registry/registrar activities.
   The next date is 10th May 2001 - under a 1999 agreement the
   VeriSign is obliged to divest the assets and operations of
   either the NSI Registrar or the Registry. VeriSign announced
   its intention to divest itself of the assets and operations
   of the NSI Registrar and to continue to operate the Registries
   for .com, .net, and .org through at least 2007.
2. This ICANN - VeriSign agreement as such is subject to the US law,
   and is between two private sector companies, which committed
   to accept it. All re-negotiations are possible, but subject
   to agreement of both parties.
   a. Since December 2000, the ICANN staff have been approached
      by VeriSign to revisit the current agreement.
   b. ICANN staff has been taking into account the fact that
      agreements for new gTLD, following selection in November 2000,
      differ from the one for . com, .org and .net.
   c. A revised contract, option "B, has been drafted and reviewed
      between ICANN staff and VeriSign, and published on 1st March
   d. ICANN staff presented a comparative study of advantages and
      drawbacks of both options, "A" and "B", in Melbourne,
      mid-March 2001.
   e. Both VeriSign and ICANN staff have been publicly stating
      that the proposed option "B" is not subject to negotiation
      prior to 10 May deadline.
3. Several international rules apply to private sector agreements,
   such as open competition and deregulation of monopolies.
   At this stage, various governmental agencies are concerned
   (such as the US Department of Commerce or the Directorate
   General 4 of European Commission).

Results of 5 days e-mail consultation within ccTLD Constituency
The ccTLD Constituency has been provided notes from its NC
representatives and was requested to comment and to choose
between option "A" and option "B".
The outcome of five days formal e-mail consultation, over which
an additional group of 15 ccTLD (besides 3 NC reps) provided input,
1. Four (4) members are in favour of "A", one explicitly supports
   "A" to have "B" renegotiated.
2. Five (5) members are in favour of "B".
3. Six (6) members commented on ballot, stating option "B" is
   less harmful than "A", but both keep VeriSign in the same
   monopoly position as usual. The ccTLD members request to warn
   ICANN Board that the community do not have enough time to comment.
   The ccTLD members are concerned by agreements signed between
   ICANN and VeriSign (or others), because it might influence,
   directly or indirectly, on ccTLD as well (for example ICANN
   budget impacts on ccTLDs).
4. Initially three (3) members stated they do not care,
   afterwards two of them echoed the warning message which
   ccTLD shall sent to the ICANN Board.


About ccTLD NC work on ICANN-Verisign contract
All the ccTLD NC reps had an opportunity to discuss over a telecon
held Friday 23th March, at 23:00 Paris time, with Joe Sims
and VeriSign staff, and are grateful for this opportunity.
We have been following as well various debates on the DNSO GA lists.
Subsequently we prepared our note, which at that stage is only
a personal note, and submitted it to ccTLD colleagues.
Whatever result we get, we will inform you.

Report and recommendations to the ccTLD from Peter de Blanc

On Friday, 23 March, 2001 VeriSign representatives Roger Cochetti
and Miriam Sapiro and Counselor Joe Sims provided a Question and
Answer opportunity to invited ccTLD leadership. Invitations were
sent to AdCom and ccTLD Names Council members.

Unfortunately, the limited advance notice of this opportunity meant
that many persons could not participate.

Since the 3 NC reps were available, we went on with the call.

The following notes are personal, not consensus-based, and certainly
do not suggest that any other member of the ccTLD constituency may
support or diminish any positions.

1. VSGN spent 10 minutes or so "selling" the "advantages" of option
   "B"; modified contract.

2. We got into the Q&A, and some statements expressed by me,

3. My premise here is that the entire issue of "Option A, status
   quo" or "Option B, revised agreement" is something that mostly
   concerns registrars and big business, mostly in the US mainland.

4. WRT competition and market share, either option could result in
   the same net effect. For example, if status quo is elected,
   and VSGN divests itself of one division, and that division goes
   to a new company, VSGN could simply buy the new company. They
   certainly have enough money to do so. That would have the same
   effect as the new contract.

5. WRT to the possibility of changing the terms of the deal in
   "option B", there will not be a re-opening of the negotiations
   prior to the April 1, 2001 deadline. So it really IS "A" or "B"
   the way the agreements are written.

6. WRT to the US $ 200 million "investment"; this is meaningless.
   VRSN will invest whatever is necessary to provide the service
   level required to handle the new business (and existing business)
   that it has. The number probably will be more than US $ 200
   million, regardless of which way the deal goes.

7. WRT direct impact on ccTLD, there is ONE SINGLE POINT that,
   from a strictly financial perspective is GOOD for ccTLD in
   the "option B"

   The CAPs (maximum contribution payment to ICANN budget) are
   removed. The current agreement has registry paying US $ 250,000
   and Registrar US $ 2 million maximum.

   As the ICANN budget increases, and the number of .COM names
   increases, under the present arrangement ccTLDs would pay more
   each year, and VRSN would pay less per domain name each year.

   Under "option B, the new deal" the CAPs are taken off, and
   VRSN pays a proportional share as the other registrars do,
   including the new gTLDs.

8. Therefore I recommend "option B, the new deal"

As far as maintaining or increasing competition, and discouraging
VRSN from taking over any more of the world of Domains, I would
lobby to institute, on an ICANN policy level, and outside of
the VRSN contract, some of the ideas Michael Schneider has
expressed in his (personal) postings. I copy them here...
> a) Registries themselves may not also be registrars, unless they
> split off the registrar business as an independent entity. The
> registry shall not be allowed to re-insource the registrar
> business de facto by performing essential technical and
> administrative functions for the registrar on a contractual basis.
> b) If the share of registrations for which a registry is
> responsible (because it is administering a very important TLD
> or a number of smaller ones) reaches or exceeds 20% of the
> registrations calculated for either all gTLDs or all ccTLDs,
> the registry may not hold an interest of 50% or more or
> otherwise exercise management control of any registrar.
> c) Registrars shall not be entitled to hold an interest of 50%
> or more in registry operators or otherwise exercise management
> control of these if
> aa) the registry operator administers more than 2,500,000 SLDs or
> bb) the registrar has a market share of more than 50% in one TLD,
> or more than 25% of all gTLDs, or more than 12.5% in all ccTLDs.

To summarize, this time around, I support "option B, the new deal"
as better for ccTLDs, for the reasons listed in # 7, above,
and I support adoption of new ICANN policy guidelines as per
Michael's a),b),c) above.

Peter de Blanc

Additionnal comments from Elisabeth Porteneuve
Personnal request for ICANN policy action:

   I am concerned about currently being established NSI/VeriSign
   market-dominating positions, which will have impact on the whole
   landscape of ccTLDs. The text from Michael Schneider quoted above
   is EXCELLENT, very well written.
   Schneider comments on the deregulation of monopolies as
   an issue at planetary political level.
   My language on the call (to Joe Sims) was very simple:
     Since several months he NSI/VeriSign (other registrars as well)
     are travelling all over the ccTLD, marketing them,
     selling/giving their softs and knowledge to operate cc
     On one side we have efforts to diminish their power in gTLDs,
     but on the second side many ccTLDs may move into NSI hands.
     NSI/VeriSign may give away Dot org, plan "B". No matter which
     option, plan "A" or plan "B", the NSI/VeriSign moves towards
     How to prevent NOW they may run hundred of ccTLD ? Is it ICANN
     policy concern ? Shall it be now ?

I support Peter's personnal conclusion:
  To summarize, this time around, I support "option B, the new deal"
  as better for ccTLDs, for the reasons listed in # 7, above,
  and I support adoption of new ICANN policy guidelines as per
  Michael's a),b),c) above.

Elisabeth Porteneuve

Additionnal comments from Oscar A. Robles Garay

I support most of the Peter's comments, although we should
express our concerns about the process.

Also, I am interested in being more general, in one aspect
that Peter mentioned, which is the CAPs issue. I would
propose that any TLD (it doesn't matter it is a gtld o cctld)
should NOT be allowed to set them (CAPs) because it means
the rich ones would pay less and the poor ones more.

Another, speaking about this sort of generalization,
I recommend that ICANN refrain to negotiate agreements
with single Registries. If we want a fair Internet,
and promote competition, the way should be same conditions
to every gTLD registry when it comes to policies.

So, if we just have two choices (A or B) I'd choose B,
but it doesn't means it is the best solution, neither
it means I fully support the way ICANN staff is
conducting this negotiations with a single Registry.


Annex: Current situation within ccTLD (notes from Melbourne)
1. The ICANN issues are extremely difficult, the contact with ccTLD
   managers means speaking and writing in various languages.
   The ccTLD WG on language diversity reports how essential it is.
   There is no open competition to which ICANN is committed without
   taking into account language diversity.
2. The summary of difficulties to communicate with 240+ ccTLD
    * only 98 answered ICANN call for funding
    * only 95 ever sent an email to ccTLD mailing lists
    * at most 70 were represented over a physical meeting in Geneva
    * only 88 run whois database (from Geneva presentation on uwhois)
    * 25% of IANA records are inaccurate (i.e. 60+ ccTLD)
   It means that the minimal active contact was established with
   only 40 percent of ccTLD Managers.
3. The USG extension to ICANN project for one year, specificaly
   targeted on ccTLD agreements may be summarized by
   "242 countries in 242 days", it is unrealistic
4. To sign an agreement it is necessary to ICANN to meet all
   ccTLD managers, to know who they are, how registry is working,
   to establish physical contract.





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