DRAFT

Please see the public comment announcement Proposal for Renewal of the .NET Registry Agreement.

The draft below is a result of the input process at the bottom of this page.  The final version of this ALAC Statement, sent to the Board on 17 May 2011, can be found here.

SECOND DRAFT

The ALAC wishes relate three specific matters of concern emanating from the documents relating to changes to the .Net Registry Agreement, relating to concerns regarding competition, the need to avoid monopoly power and the requirement for transparency in ICANN processes.

1. The statement of ICANN's position, "ICANN's gTLD registry agreements provide for presumptive renewal so long as certain requirements are met", fails to distinguish between legacy contracts, established before ICANN's existence, and contracts entered into subsequent to the 2001 and 2004 rounds of the new gTLD process, and prospective contracts from any continuation of ICANN's new gTLD process.

This is unfortunate as there are substantive differences of market power exercised by the holder of pre-ICANN registry agreements, and the holders of ICANN registry agreements, and one of ICANN's core public purposes arose from a competition policy goal, which necessitates distinguishing between actors in a market with market power and actors lacking market power.

2. The ALAC is also concerned with the fact that the proposed changes to the .NET agreement do not appear to address the core problem of monopoly power by the registry operator. This is a relic from the May 1999 decision to create a locus of competition in a separate registrar function, a decision reversed in November 2010.

The ALAC suggests including language which separates the formal Registry Operator (RO) functions (zone file signing, zone file production from one or more distinct data sources, pointer data to registrar held "thin registry" registrant data, registrar transfer processing, registrar invoicing, ICANN reporting and transactional fee processing and payment), from the Data Base Operator (DBO) (aka "registry technical services") set of functions, allowing registrants, through their registrars, to select the underlying competitive DBO for a given domain.

This would allow the .NET contract to be modified, allowing a second, and subsequent Data Base Operators to provide database service to the Registry Operator, in light of the removal of structural separation requirement for legacy contracts.

3. As recently recorded in our statement on Registrar Accreditation Agreement (RAA), Reference AL/ALAC/ST/0511/1 which has recently been transmitted to the Board and is available on the ALAC Wiki on https://community.icann.org/x/zYbT||\, the ALAC deplores that no community input was possible at an earlier stage of the negotiations on the new contract. Due to the fact that the Contractual Conditions are matters of policy, it seems inappropriate that these negotiations were held behind closed doors without community observers or input.

We maintain that "ICANN" has a multi-stakeholder model, as described in its organizational diagram and at no moment is "ICANN" restricted to ICANN Staff. 

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---- THIS DRAFT WAS WRITTEN FROM INPUT PROCESS BELOW:

Below are posted two e-mails from Eric Brunner-Williams which he submitted as comments. Support was received in NARALO to propose them to be the basis for an ALAC Statement.

Therefore, the goal is to combine them in order to create an ALAC statement on this topic.  Permission has been received for the ALAC to submit this statement to the Board by 18 May 2011, even though the public comment period is closed.

Please use the "Add Comment" function at the bottom of this wiki page to offer your comments.  The deadline for these comments is Sunday, 15 May, 2011 at 23:59 UTC.

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A Comment on the .NET auto-renew, against public interest on competition policy grounds

• To: net-agreement-renewal@xxxxxxxxx
• Subject: A Comment on the .NET auto-renew, against public interest on competition policy grounds
• From: Eric Brunner-Williams <ebw@xxxxxxxxxxxxxxxxxxxx>
• Date: Tue, 10 May 2011 10:08:37 -0400
  

The statement of ICANN's position, "ICANN's gTLD registry agreements provide for presumptive renewal so long as certain requirements are met", fails to distinguish between legacy contracts, established before ICANN's existence, and contracts entered into subsequent to the 2001 and 2004 rounds of the new gTLD process, and prospective contracts from any continuation of ICANN's new gTLD process.

This is unfortunate as there are substantive differences of market power exercised by the holder of pre-ICANN registry agreements, and the holders of ICANN registry agreements, and one of ICANN's core public purposes arose from a competition policy goal, which necessitates distinguishing between actors in a market with market power and actors lacking market power.

It is also unfortunate as it negates the public policy purpose in having conducted two open, objective competitions for re-delegations in 2002 and 2004, however problematic each of those were. It is worth noting that one act of redelegation accomplished more in one year than ten years of awarding new registry contracts has towards realization of those original competition policy goals.

The public interest in stability and predictability for new registry operators is self-evident. None of the 2001 round and subsequent operators, with the possible exceptions of the .INFO registry, and the certain exception of the .CAT registry, are clearly "viable" as is after almost 10, respectively 5, years of operation.

Where there is a clear pattern of mismanagement, as there has been for several years for the .TRAVEL registry, and currently for the .JOBS registry, and as there was in the initial years of the .BIZ registry operations, corrective action, including non-renewal and competitive re-delegation, or temporary "fail-over" operations, are appropriate.

Absent those circumstances, re-award of a limited term operating contract is commercially reasonable, perhaps even necessary.

However, where the contract has been held for more than three five year periods, the presumption of re-award absent adverse circumstances is incompatible with the original, and continuous, competition policy goal.

Eric Brunner-Williams
Unaffiliated Member Representative
North American Regional At Large Organization
At Large Advisory Group

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 A Comment on the .NET auto-renew, proposed contract extension for multiple technical providers

• To: net-agreement-renewal@xxxxxxxxx
• Subject: A Comment on the .NET auto-renew, proposed contract extension for multiple technical providers
• From: Eric Brunner-Williams ebw@xxxxxxxxxxxxxxxxxxxx
• Date: Tue, 10 May 2011 10:08:47 -0400

The proposed changes to the .NET agreement, while of some utility, do not address the core problem of monopoly power by the registry operator. This is a hold-over from the May 1999 decision to create a locus of competition in a separate registrar function, a decision reversed in November 2010.

The contract should be changed to include language which separates the formal Registry Operator (RO) functions (zone file signing, zone file production from one or more distinct data sources, pointer data to registrar held "thin registry" registrant data, registrar transfer processing, registrar invoicing, ICANN reporting and transactional fee processing and payment), from the Data Base Operator (DBO) (aka "registry technical services") set of functions, allowing registrants, through their registrars, to select the underlying competitive DBO for a given domain.

The means to allow the .NET contract to be modified, allowing a second, and subsequent Data Base Operators to provide database service to the Registry Operator, is now necessary, in light of the removal of structural separation requirement for legacy contracts.

No specific set-aside for ROOT-SERVERS.NET is necessary under a stability and security theory, as the root server operators are capable of designating whether they seek to use a DBO other than the current unique DBO.

An additional extension to EPP will be necessary, to allow registrants to select, through the registrar function, their choice of DBO to have custody of their data.

It is possible that the registrars with a large number of domains, or other mature database operators, including the operators of other registries, also currently contractually constrained as monopolies,
will seek to become Competitive Data Base Operators (CDBOs) for the .NET registry, transforming over 10% of the gTLD domain market from monopoly to competition.

The default choice of many users may remain Verisign, the legacy monopoly registry entity. However, where competition is possible, and competition among back-end registry service providers within a single name space is possible, it must be allowed if the competition policy goal is to be achieved in the current decade.

Eric Brunner-Williams
Unaffiliated Member Representative
North American Regional At Large Organization
At Large Advisory Group
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