Amended statement on gTLD service changes

[Milton Mueller]

Please comment TODAY if you can

Proposed NCUC statement on 

"Procedure for use by ICANN in considering requests for consent and 
related contractual amendments to allow changes in the architecture 
or operation of a gTLD registry."

NCUC observes that by initiating this procedure, ICANN is assuming 
that its contracts alone are not sufficient to provide a predictable and 
stable basis for the industry. It is assuming that it needs an ongoing 
form of oversight to supplement its contracts and contractual 
modifications, because the contracts cannot deal with all possible 
developments in the future. Thus, ICANN is expanding into additional 
areas of industry regulation, although no one wants to admit that.

In formulating its response, NCUC begins by asking: How are
noncommercial domain name users specifically affected by this 
change? The answer, NCUC believes, is that there is no 
commercial/noncommercial angle to this issue. It is more a 
question of:

a) consumer protection; i.e., how users/consumers relate to 
suppliers and what kind of regulatory procedures are needed to 
protect consumers given the high switching costs associated with 
changing registry suppliers after a domain name is well-established.

b) technical coordination; i.e., what kind of technical regulation or 
specifications are needed to protect third parties using domain names 
on the Internet from harmful changes made in registry operation, while 
preserving as much as possible the freedom of suppliers to respond 
to the market and innovate.

NCUC notes that whether consumers or users are commercial 
or noncommercial has little bearing on these issues.

We also note that a) and b) are distinct policy issues. a) Involves
protection of the parties buying service from a gTLD registry, who 
may have options, while b) involves protection of third party users 
of a domain name, who probably do not have any options if they 
want to connect to the party using the affected registry. We also 
note that a) involves economic forms of regulation which also 
involves competition policy concerns, while b) is more a matter of 
technical coordination.

NCUC strongly recommends that the PDP distinguish clearly between
a) and b) in its consideration of the new process. Is the object
of the process economic regulation or technical coordination?

The document we are asked to comment on proposes no policies,
so our comments can only suggest questions or problems for the
PDP process to consider.

1. One question the PDP should consider is whether all issues
related to a) above should be handled by national regulatory
authorities instead of ICANN. We support ICANN's need for
technical coordination related to matters under b). We are less
confident of ICANN's ability and right to engage in a). We are also not 
convinced of ICANN's ability to engage in competition policy-related 
forms of regulation. 
We recognize, however, that it may be difficult for consumers to 
obtain adequate protection in a transnational business context. 
While there is a case for a global governance regime, we note that 
ICANN invested most of its effort in protecting trademarks and 
domain name supplier interests, and has shown very little interest 
in protecting consumers and users. For ICANN to become an effective 
consumer protection agency significant changes would have to be 
made in its representational structure and decision making processes. 

2. The PDP document refers to a "quick look" process followed by
a more involved process if a change fails the "quick look."
A question the PDP needs to face squarely is: What is a subject to
a "quick look" and what is not? What is a "new registry service"?
How is that defined? Who will make that determination initially?
What happens when the registry and ICANN disagree on that issue?
If a process is created, there should be guidelines as to when an issue 
is important enough to put it before ICANN bodies, invite public comment 
etc. Some issues will be too important to leave to ICANN staff.

3. The NCUC recognizes the danger that a registry can make
damaging changes, such as in the Sitefinder case. We support
clear, well-defined specifications for registry operation that make
DNS a neutral platform for Internet functions. We also recognize
a threat that innovative changes, such as multilingual domain
names, will be stifled by a central organization such as ICANN
which may have incentives to prevent useful changes in order to
maintain its control over the industry.

4. The PDP should consider whether there should be a distinction 
between policies applied to sponsored and unsponsored TLDs. NCUC 
believes the answer is no: if the justification for regulation is 
economic; i.e, that users are locked in to a supplier and cannot switch 
service providers without incurring damaging costs, then the same 
fundamental economic problem applies regardless of whether the 
registry is sponsored or not. In some respects, switching costs are
more serious with sponsored TLDs, since they are supposed to 
represent a community identity and not just an individual 
company/organization's identity. If the justification for the review
process is technical, the answer is the same: there is no relevant 
technical distinction between sponsored and un-sponsored registries. 
We do, however, believe that sponsored TLDs could be and should be 
required to consult their "community" before making changes in 
operation of the sort contemplated by the PDP.

5. The PDP should consider whether there should be a distinction
between the treatment of dominant and non-dominant TLDs? In this
case NCUC believes there is a stronger case for a distinction. A major
dominant registry may have the power to move the entire industry and
technology, whereas smaller ones would not. However, the lock-in
problem of consumers applies regardless of whether the registry is
dominant or not. As the Internet and DNS grow, larger numbers of 
users will be affected by TLD registries regardless of their overall 
share of the market. Thus, the policy must identify carefully what 
problem it is trying to solve.

6. We wish to emphasize that public consultation, and consultation 
of constituencies, must be a regular part of dealing with the most 
important issues. We do not want ICANN staff to handle substantive 
policy issues on their own.