16 January 2012

ICANN has received a number of questions from potential New gTLD applicants regarding provisions of the Registry Agreement for new gTLDs. The following answers are provided in order to provide general guidance to potential applicants, but these are informal and preliminary answers only and could be subject to change based on further review and discussion. 

1. New gTLD Registry Agreement – General Questions

Q1: Will ICANN release a revised or alternate Registry Agreement for Registry Operators operating closed registries?

A1: There is no commonly accepted definition of a "closed registry" and ICANN has not planned to release an alternate version of the Registry Agreement for use by such registries.

Q2: Module 5.1 states that material changes to the Registry Agreement may be requested but must be first approved by ICANN's Board of Directors. Please advise what would constitute a material change. For example, Paragraph 2.11 of the Registry Agreement concerns Contractual and Operational Compliance Audits and states that "ICANN will give reasonable advance notice of any such audit." Would requesting a specific time frame of notice, such as 30 or 15 days constitute a material alteration? Will ICANN be providing any additional guidance as to what would constitute a material alteration?

A2: Whether a requested change to the Registry Agreement constitutes a "material" change will be based on a facts and circumstances review of each requested change. However, each Registry Operator will be expected to enter into the Registry Agreement substantially in the form provided in the Applicant Guidebook, which has been developed over several years with the input of many Internet stakeholder groups, including substantial input from prospective registries and the ICANN gTLD Registries Stakeholder Group.

2. New gTLD Registry Agreement – Use of Registrars

Q1: If the Registry Operator is planning on running a closed registry, and is planning to function as its own Registrar, and therefore does not intend to use any other third party Registrars for domain name registrations associated with the new gTLD, is Section 2.9 of the Registry Agreement still applicable, or may it be removed or altered? Does ICANN plan to release an alternate version of paragraph 2.9 that is suitable for closed registries?

A1: There is no commonly accepted definition of a "closed registry," and ICANN has not planned to release an alternate version of the registry agreement for use by such registries. However, if Registry Operator is granted an exemption from the Code of Conduct set forth in Specification 9 to the Registry Agreement (pursuant to the requirements of Section 6 of Specification 9), and Registry Operator does not use the services of unaffiliated registrars for domain name registrations in the TLD, ICANN could consider also waiving any potentially inapplicable requirements in Section 2.9 of the Registry Agreement.

3. New gTLD Registry Agreement – Pricing

Q1: Please advise whether Section 2.10 of the Registry Agreement may be removed or amended in the instance where Registry Operators are (a) operating closed registries not offering domain names for sale, or (b) giving away domain names for free?

A1: ICANN does not plan to remove this provision from the agreement. A registry that does not offer domain name registrations to the public or does not charge for domain name registrations will by definition not have price increases, and therefore would have no trouble complying with the notice requirements in Section 2.10. If the registry later determines to offer or charge for registrations (initial or renewal registrations), then the registry operator must comply with the notice provisions of Section 2.10. In addition, Section 2.10 contains other obligations that must be complied with by registry operator even if such operator does not offer or charge for registrations.

4. New gTLD Registry Agreement – Registry Operator Change of Control

Q1: Section 7.5 of the Registry Agreement provides that any "direct or indirect change of control of Registry Operator ... shall be deemed an assignment" that is subject to ICANN's consent. Will a change of control of a parent entity of Registry Operator constitute a change of control that would be deemed an assignment and require ICANN notification or consent?

A1: Generally, a change of control of the ultimate parent entity of the Registry Operator will be considered a change of control of the Registry Operator for purposes of Section 7.5 of the Registry Agreement.

5. New gTLD Registry Agreement – Code of Conduct

Q1: Does Section 1(b) of the Code of Conduct allow TLDs with a single-registrant model register domain names for its own use without submitting requests for exemption to the Code of Conduct?

A1: The exception provided in the second part of Section 1(b) of Specification 9 of the Registry Agreement allows Registry Operator to register names in its own right so long as those names are registered through an ICANN accredited registrar and the names are reasonably necessary for the management, operations and purpose of the TLD. If Registry Operator is utilizing a single-registrant model, then the "purpose" of the TLD for purposes of this Section 1(b) can include Registry Operator's intended use of the TLD, which is broader than simply management and operations names such as nic, whois, etc. However, the exception in the second part of Section 1(b) only applies to Section 1(b) and not to the rest of the Code of Conduct. The Registry Operator would still be required to comply with the remainder of the Code of Conduct (or request an exemption if necessary and appropriate). The Registry Operator Code of Conduct was added to the registry agreement as a measure to protect registrants from possible abuses related to registry-registrar cross-ownership. The provision allowing single-registrant/single-user TLDs to request an exemption from the code of conduct was added in response to comments arguing that it doesn't make sense to force a registry operator to offer protections for registrants in a TLD where the registry operator itself is the only registrant. The exemption is only allowed however if all the names in the TLD are registered and used exclusively by the registry operator. Otherwise a registry operator might try to avoid the protections afforded by the code of conduct by registering all the names to itself and then licensing the use of those names to third parties (instead of allowing those parties to be registered name holders themselves as in the existing customary model for the operation of gTLDs).

Q2. What is the definition of "USE" per Specification 9 of the Registry Agreement?

A2: "Use" in this context is meant to refer to the power to alter content with respect to the domain name, to manage the domain name and to take other actions necessary for the maintenance of the domain name. Passive visiting of a domain name by a third party is not "use" for these purposes. If third-parties are permitted to use a website to post their own profiles or other content, then the domain name is not being used for the "exclusive use" of the Registry Operator. A Code of Conduct exemption will be based on a facts and circumstances review of the Registry Operator's TLD operating model, but generally the Registry Operator must have exclusive control over the content and management of any domain name within the TLD in order to qualify for an exemption.

Q3: Will an entity under control by contract be considered an AFFILIATE per the definition of the Registry Agreement?

A3: Generally, a third party that is under contract with respect to a specific matter (for example, a customary photocopier lease agreement) is not "controlled" by the other contracting party for purposes of determining "Affiliate" status. Whether a contract provides one party with "control" over the other party is a facts and circumstances analysis, and cannot be determined absent full knowledge of such facts and circumstances. Generally speaking, the contract must provide Party A with the power to direct the operations and policies of Party B in order to make Party B an "Affiliate" of Party A, and the degree and significance of such power is also a facts and circumstances analysis.

Q4: In cases where the technical operation of the TLD is handled by a contracted entity separate from the Registry Operator, would such a contracted registry service provider fall under the definition of a "Registry Related Party"?

A4: Yes, as provided in Section 1 of Specification 9, a subcontractor of Registry Operator, to the extent such subcontractor is engaged in the provision of Registry Services (as defined in the Registry Agreement), is a "Registry Related Party" for purposes of the Code of Conduct.

DISCLAIMER: This material is for information only and does not represent of all requirements and criteria that the applicant must satisfy. ICANN is not providing legal, financial, business or any other kind of advice. This material does not represent a modification to the Applicant Guidebook, or the terms and conditions to the new gTLD program. This material also does not represent a waiver of any ICANN policy, procedure or agreement. In the event that any information provided in this material appears to be inconsistent with any information published elsewhere by ICANN, please do not rely on this material without confirmation or clarification from ICANN.