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<DIV>
<DIV><FONT style="BACKGROUND-COLOR: transparent" face=Arial color=#000000
size=2>Mawaki:</FONT></DIV>
<DIV><FONT style="BACKGROUND-COLOR: transparent" face=Arial color=#000000
size=2>Thank you very much for going to Brussels for this meeting -- and thank
you for this and detailed comprehensive report! It was certainly something
that I (among others I am sure) needed in our work in other areas of
ICANN. Among Whois Task Force members, discussion often turns to new
gTLDs... </FONT></DIV>
<DIV> </DIV>
<DIV>I have some questions. Are you pleased with the way the meeting
went? From an NCUC perspective, are we pretty much on the same page with
Registrars and Registries? Are there areas of disagreement we should be
working on? Are there requests from the Intellectual Property/Business
crowd which you view as dangerous? </DIV>
<DIV> </DIV>
<DIV>What do you recommend NCUC do as a next step? </DIV>
<DIV> </DIV>
<DIV>Many thanks again for taking the lead on this,</DIV>
<DIV>Kathy</DIV>
<DIV> </DIV>
<DIV>Mawaki wrote:</DIV>
<DIV><<<FONT style="BACKGROUND-COLOR: transparent" face=Arial
color=#000000 size=2>Dear all,<BR><BR>We had mainly three activities during the
Brussels meeting:<BR>I) tutorial on the ICANN registry contracts and agreements
by Dan Holloran, ICANN<BR>Deputy General Councel;<BR>II) review of the
constituencies' comments on the registry contractual conditions;<BR>III)
development of guidelines for the registry terms of reference.<BR><BR>Enjoy the
reading,<BR><BR>Mawaki <BR><BR>***********************<BR><BR>II - Constituency
views<BR><BR><BR>Business constituency<BR><BR>- transparency plus
public comment processes for contractual negotiations<BR>-
consistency amongst contracts<BR><BR>- fair treatment amongst
registries, equal obligations, and proportional to the<BR>ICANN resource
requirements for that particular TLD<BR><BR>- not allowed to extend
their sole source provider position into areas where there<BR>is already a
competitive marketplace (e.g traffic data)<BR><BR>- don’t support a
presumptive right of renewal (except may be special considerations<BR>e.g for
sponsored), but agree that the existing licensee may be re-awarded the
TLD<BR>through a competitive process<BR><BR>Registries
constituency<BR><BR>- the base contract should be provided before
the start of the process, and may be<BR>customized at the time of
award.<BR>- Policies to guide contractual criteria should not
compromise<BR>o “Private sector” (ie non-Government entities)
participation<BR>o Investment with greater certainty<BR>o
Optimal opportunity for innovation and competition<BR>o E.g
presumptive right of renewal encourages the above<BR>- Policies to
guide contractual criteria should relate to Consensus Policy matters<BR>-
(1) issues for which uniform or coordinated resolution is reasonably
necessary to<BR>facilitate interoperability, Security and/or Stability of the
Internet or DNS; <BR><BR>- (2) functional and performance
specifications for the provision of Registry<BR>Services (as defined in Section
3.1(d)(iii) below); <BR><BR>- (3) Security and Stability of the
registry database for the TLD; <BR><BR>- (4) registry policies
reasonably necessary to implement Consensus Policies<BR>relating to registry
operations or registrars; <BR><BR>- or (5) resolution of disputes
regarding the registration of domain names (as<BR>opposed to the use of such
domain names). <BR><BR>- Believe the new consensus policy for the
introduction of new Registry Services<BR>provides the necessary protections for
security and stability<BR><BR>- Does not believe there needs to be
a Consensus Policy on contractual compliance<BR>programs for registry services,
although the staff could work with registries to<BR>develop a compliance program
that is equally applied to new gTLDs (both sponsored<BR>and
unsponsored)<BR><BR><BR>ISP constituency<BR><BR>- contract for
.jobs OK for new sponsored TLDs<BR>- still undecided over
presumptive right of renewal – might depend on type of TLD<BR>-
concerned over requirement to use ICANN accredited registrars
exclusively<BR>- may need additional contractual conditions for a
non-ASCII TLD<BR>- security and stability covered adequately in the
.jobs example<BR><BR><BR>Non-commercial<BR><BR>- need to have a
renewal expectancy<BR>- non-renewal only if breach of contract,
criminal activity etc<BR>- presumptive renewal provides long term
view, encourages investment, and value<BR>creation, stability<BR>-
support principle of competition but at the registrar level<BR>-
registry should policy making authority<BR>- registry comply with
ICANN consensus policies<BR>- ICANN should rely on relevant
national bodies that are responsible for<BR>competition/anti-trust in the market
– taking into account the difference between<BR>the end-user interest and the
intermediary interest<BR>- Not assume ICANN contract are the proper
mechanism for price control<BR>- ICANN registry fees should be a
uniform approach – taking into account differences<BR>in regional, economic and
business models<BR>- Removing price caps on existing TLDs may allow
new TLDs to be more competitive<BR>- Oppose access by third parties
to personally identifiable registry data<BR>- Should not dictate
the investment level but focus on the performance specification<BR><BR>WORLD
BANK<BR>Abstract <BR><BR>A major challenge facing regulators in developed and
developing countries alike is<BR>the need to strike the right balance between
ensuring certainty for market players<BR>and preserving flexibility of the
regulatory process to accommodate the rapidly<BR>changing market, technological
and policy conditions. <BR><BR>As much as possible, policy makers and regulators
should strive to promote<BR>investors’ confidence and give incentives for
long-term investment. <BR><BR>They can do this by favoring the principle of
‘renewal expectancy’, but also by<BR>promoting regulatory certainty and
predictability through a fair, transparent and<BR>participatory renewal
process.<BR><BR>For example, by providing details for license renewal or
reissue, clearly<BR>establishing what is the discretion offered to the licensing
body, or ensuring<BR>sufficient lead-times and transitional arrangements in the
event of non-renewal <BR>or changes in licensing conditions. <BR><BR>Public
consultation procedures and guaranteeing the right to appeal
regulatory<BR>decisions maximizes the prospects for a successful renewal
process. <BR><BR>As technological changes and convergence and technologically
neutral <BR>approaches gain importance, regulators and policy makers need to be
ready to adapt<BR>and evolve licensing procedures and practices to the new
environment. <BR><BR>Ensure regulatory certainty and ease investors’ concerns
<BR><BR>• Codify a clear regime of license renewal in the telecommunication
legislation,<BR>including renewal procedures, reasons for refusal to renew and
appeals to regulatory<BR>decisions <BR>• Provide further details in the license
itself where the legislative framework is<BR>not comprehensive <BR>• Adopt some
varying degree of the principle of renewal expectancy <BR>• Strike the right
balance between certainty in the renewal process and regulatory<BR>flexibility,
and engage in forward thinking and planning <BR>• Subject regulatory discretion
to clear parameters of license renewal with<BR>appropriate checks and balances
<BR><BR>Procedures for license renewal <BR>• Initiate renewal process well in
advance of expiry <BR>• Perform periodic forward review of market and needs
<BR>• Disclose and publish reasons for non renewal <BR>• Adopt public
consultation process <BR>• Guarantee a right to appeal <BR><BR>In the event of
non-renewal <BR>• Provide a minimum notice period <BR>• Delay vacancy of
spectrum to give enough time for operators to adapt strategies <BR>• Ensure exit
strategies for operators <BR>• Ensure continuity of service to consumers
<BR><BR>License renewal fees<BR><BR>• Beware that heavy license fee burdens
reduce possibilities of making further<BR>investment <BR>• Establish models for
licensing and spectrum pricing, ensure openness, transparency<BR>and the right
to appeal from the methods applied <BR><BR>Change in license conditions and
obligations <BR><BR>• Renewal process is a good occasion to review license
conditions (e.g. those<BR>related to the moving target of universal service.)
<BR>• Ineffective mandatory service obligations can have anti-competitive
impacts if the<BR>burden is not kept at a manageable level for the license
holders <BR><BR>Spectrum implications of license renewal <BR><BR>• Strike a
balance between protecting ongoing investment and optimal exploitation of<BR>the
spectrum resources <BR>• Leveling the playing field at license renewal between
operators entering the<BR>market under different regimes (e.g., auction vs.
beauty contest) to avoid windfall<BR>gains <BR><BR>Migration to technology
neutral licensing<BR><BR>• Continuity of the service for the consumers as a
leading principle for transition <BR>• Leveling the playing field at license
renewal between operators entering the<BR>market having followed different
technology migrating paths to avoid windfall gains<BR><BR><BR>Intellectual
Property Constituency<BR><BR>- framework needed for compliance
program and system of graduated sanctions be<BR>available<BR>- any
deviation from consensus policies should be explicitly stated and justified
in<BR>the agreement<BR>- flexibility will often be
needed<BR>- conditional (e.g based on appropriate performance) and
rebuttable (violation of<BR>terms of the registry agreement) presumption of
renewal<BR><BR>- not in favour of price caps – any exceptions would
need to be justified<BR><BR>- prevent discrimination amongst
registrars<BR><BR>- ensure transparency and access to information
about pricing treatments amongst<BR>registrars<BR><BR>- Access to
registry information<BR><BR>o Require a mechanism to identify what
data should be available to third parties and<BR>under what conditions (e.g
non-discriminatory, tiered access etc), and what data<BR>should not be
available. <BR><BR>o Use of registry data to create or support new
registry services by the registry<BR>should subject to consensus policy, and any
deviations should be specifically<BR>specified and justified<BR><BR>-
Commitments should be included to ensure the availability of a robust
database of<BR>the contact details of registrants<BR><BR><BR>Registrars
constituency<BR><BR>- registry renewal<BR>o initial
term of commercially reasonable length case-by-case<BR>o oppose
“presumptive” (e.g or virtually “automatic” renewals<BR>o support
limited “renewal expectancy” (e.g 5.2.1 in .info or RAA 5.4)<BR>proposed
.com (contract terms similar to top five, and some terms can’t be
changed)<BR>.tel (contract terms must be similar to top 5)<BR>.job
(allows negotiation of contract terms)<BR>.info (provides discretion to
ICANN)<BR>o should justify renewal by meeting qualifications and
standards<BR>o ICANN reserves its rights to seek a bid at its
discretion<BR><BR>Consensus policies<BR>- support some limitations
with respect to the new or changed policies that the<BR>registry must comply
with during the term of the agreement, otherwise must comply<BR>with consensus
policies<BR><BR>Complete delegation of some policy development responsibilities
to the registry<BR>operator is inappropriate (e.g clause 4.3.6 of the .aero
agreement), apart from work<BR>on the charter. The registry operator
should be required to comply with Consensus<BR>Policies (e.g in 3.1 (b)
(iv)).<BR><BR>Should not be price controls unless the registry has Market or
Pricing power (Market<BR>Power and Pricing power to be defined) – which may be
decided at the time of<BR>renewal.
<BR><BR>http://ec.europa.eu/comm/competition/general_info/m_en.html<BR><BR>[Market
Power definition from Strength of a firm on a particular market. In
basic<BR>economic terms, market power is the ability of firms to price
above marginal cost<BR>and for this to be profitable. <BR><BR>In
competition analysis, market power is determined with the help of a
structural<BR>analysis of the market, notably the calculation of market
shares, which<BR>necessitates an examination of the availability of other
producers of the same or of<BR>substitutable products (substitutability).
<BR><BR>An assessment of market power also needs to include an assessment of
barriers to<BR>entry or growth ( entry barriers) and of the rate of innovation.
<BR><BR>Furthermore, it may involve qualitative criteria, such as the financial
resources,<BR>the vertical integration or the product range of the
undertaking concerned.]<BR><BR>- Equitable pricing opportunities for all
registrars, and 6 month notice before any<BR>increase.<BR><BR>-
Registry must justify any increase if there is a price cap in the
agreements,<BR>which should be objectively evaluated by a third
party.<BR><BR>ICANN fees: <BR>- ICANN should not be able to collect
the registrar proportion of the ICANN budget<BR>via a pass-through via the
registries (e.g 7.2 (d) of the .jobs agreement), or
from<BR>registries<BR><BR>Use of Personal Data: limit it to the purpose for
which it is collected, and to the<BR>extent it is made available to third
parties – should be on a non-discriminatory<BR>basis.<BR><BR>[from .jobs escrow
provisions. <BR><BR>Registry Data, as used in this Agreement, shall mean
the following: <BR><BR>(1) data for domains sponsored by all registrars,
consisting of domain name, server<BR>name for each nameserver, registrar id,
updated date, creation date, expiration<BR>date, status information, and
DNSSEC-related key material; <BR><BR>(2) data for nameservers sponsored by all
registrars consisting of server name, each<BR>IP address, registrar id, updated
date, creation date, expiration date, and status<BR>information; <BR><BR>(3)
data for registrars sponsoring registered domains and nameservers, consisting
of<BR>registrar id, registrar address, registrar telephone number, registrar
e-mail<BR>address, whois server, referral URL, updated date and the name,
telephone number,<BR>and e-mail address of all the registrar's administrative,
billing, and technical<BR>contacts; <BR><BR>(4) domain name registrant data
collected by the Registry Operator from registrars<BR>as part of or following
registration of a domain name; <BR><BR>and (5) the DNSSEC-related material
necessary to sign the TLD zone (e.g., public and<BR>private portions of TLD zone
key-signing keys and zone-signing keys).]<BR><BR>Investment in development and
infrastructure: should not be a policy in this area –<BR>should consider such
investments in deciding whether registry should be renewed (e.g<BR>whether
registry is meeting performance standards)<BR><BR>ICANN needs contractual tools
to deal with a bad actor (e.g ICANN can terminate<BR>registrar agreement
for any material breach – clause 5.2 of registrar agreement is<BR>OK, but clause
6.1 of .jobs doesn’t give ICANN enough power – particularly for a<BR>party
without a track record) – taken from the registrar input to
PDP-Dec05.<BR><BR><BR>III - Guidelines for the registry terms of reference
<BR><BR>There should be a base contract to provide some level of
consistency. The contract<BR>may be customized, with changes to the
base contract subject to public comments<BR>before approval.<BR><BR>The contract
should strike the right balance between ensuring certainty for market<BR>players
and preserving flexibility of ICANN to accommodate the rapidly
changing<BR>market, technological and policy conditions.<BR><BR>The initial term
of commercially reasonable length (e.g default 10 years), although<BR>may be
changed on a case-by-case basis.<BR><BR>[Note: could use a similar approach to
domain name registration with different fee<BR>structure depending on the length
of the contract)<BR><BR>There should be a renewal expectancy. A contract would
be renewed provided that the<BR>registry operator is meeting the terms of the
present contract, and provided the<BR>license holder agrees to the any new base
contract conditions. <BR><BR>The contract should provide certainty and
predictability through a fair, transparent<BR>and participatory renewal
process.<BR><BR>The contract should clearly establish what is the discretion
offered to ICANN, and<BR>ensuring sufficient lead-times and transitional
arrangements in the event of<BR>non-renewal or changes in the base contract.
<BR><BR>During the term of the agreement, the registry must comply with new or
changed<BR>consensus policies in one of the following areas:<BR>-
(1) issues for which uniform or coordinated resolution is reasonably necessary
to<BR>facilitate interoperability, Security and/or Stability of the Internet or
DNS; <BR><BR>- (2) functional and performance specifications for
the provision of Registry<BR>Services (as defined in Section 3.1(d)(iii) below);
<BR><BR>- (3) Security and Stability of the registry database for
the TLD; <BR><BR>- (4) registry policies reasonably necessary to
implement Consensus Policies<BR>relating to registry operations or registrars;
<BR><BR>- or (5) resolution of disputes regarding the registration
of domain names (as<BR>opposed to the use of such domain names). <BR><BR>Any
deviation from consensus policies should be explicitly stated and justified
in<BR>the agreement<BR><BR>Where a registry provides IDNs, the contract should
require that the registry adhere<BR>to IDN standards, and ICANN guidelines for
IDNs.<BR><BR>Initially rely on external competition/anti-trust Government
authorities to ensure<BR>compliance with laws relating to market power or
pricing power. This can be<BR>reviewed after initial
term.<BR><BR>ICANN registry fees should be a uniform approach – taking into
account differences<BR>in regional, economic and business models<BR><BR>ICANN
should not be able to collect the registrar proportion of the ICANN budget
via<BR>a pass-through via the registries (e.g 7.2 (d) of the .jobs agreement),
or from<BR>registries<BR><BR>Use of Personal Data: limit it to the purpose for
which it is collected, and to the<BR>extent it is made available to third
parties – should be on a non-discriminatory<BR>basis.<BR><BR>ICANN needs
contractual tools to deal with a registry that consistently breaches<BR>material
contract provisions.<BR></DIV></FONT></DIV>
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