Report, GNSO Committee Meeting, Brussels May 11-13

[KathrynKL at AOL.COM]

Mawaki:
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...  
 
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?  
 
What do you recommend NCUC do as a next step? 
 
Many thanks again for taking the lead on this,
Kathy
 
Mawaki wrote:
<<Dear all,

We had mainly three activities during the  Brussels meeting:
I) tutorial on the ICANN registry contracts and agreements  by Dan Holloran, 
ICANN
Deputy General Councel;
II) review of the  constituencies' comments on the registry contractual 
conditions;
III)  development of guidelines for the registry terms of reference.

Enjoy the  reading,

Mawaki 

***********************

II - Constituency  views


Business constituency

-    transparency plus  public comment processes for contractual negotiations
-     consistency amongst contracts

-    fair treatment amongst  registries, equal obligations, and proportional 
to the
ICANN resource  requirements for that particular TLD

-    not allowed to extend  their sole source provider position into areas 
where there
is already a  competitive marketplace (e.g traffic data)

-    don’t support a  presumptive right of renewal (except may be special 
considerations
e.g for  sponsored), but agree that the existing licensee may be re-awarded 
the  TLD
through a competitive process

Registries  constituency

-    the base contract should be provided before  the start of the process, 
and may be
customized at the time of  award.
-    Policies to guide contractual criteria should not  compromise
o    “Private sector” (ie non-Government entities)  participation
o    Investment with greater certainty
o   Optimal opportunity for innovation and competition
o    E.g  presumptive right of renewal encourages the above
-    Policies to  guide contractual criteria should relate to Consensus 
Policy matters
-   (1) issues for which uniform or coordinated resolution is reasonably  
necessary to
facilitate interoperability, Security and/or Stability of the  Internet or 
DNS; 

-    (2) functional and performance  specifications for the provision of 
Registry
Services (as defined in Section  3.1(d)(iii) below); 

-    (3) Security and Stability of the  registry database for the TLD; 

-    (4) registry policies  reasonably necessary to implement Consensus 
Policies
relating to registry  operations or registrars; 

-    or (5) resolution of disputes  regarding the registration of domain 
names (as
opposed to the use of such  domain names). 

-    Believe the new consensus policy for the  introduction of new Registry 
Services
provides the necessary protections for  security and stability

-    Does not believe there needs to be  a Consensus Policy on contractual 
compliance
programs for registry services,  although the staff could work with 
registries to
develop a compliance program  that is equally applied to new gTLDs (both 
sponsored
and  unsponsored)


ISP constituency

-    contract for  .jobs OK for new sponsored TLDs
-    still undecided over  presumptive right of renewal – might depend on 
type of TLD
-     concerned over requirement to use ICANN accredited registrars  
exclusively
-    may need additional contractual conditions for a  non-ASCII TLD
-    security and stability covered adequately in the  .jobs example


Non-commercial

-    need to have a  renewal expectancy
-    non-renewal only if breach of contract,  criminal activity etc
-    presumptive renewal provides long term  view, encourages investment, and 
value
creation, stability
-     support principle of competition but at the registrar level
-     registry should policy making authority
-    registry comply with  ICANN consensus policies
-    ICANN should rely on relevant  national bodies that are responsible for
competition/anti-trust in the market  – taking into account the difference 
between
the end-user interest and the  intermediary interest
-    Not assume ICANN contract are the proper  mechanism for price control
-    ICANN registry fees should be a  uniform approach – taking into account 
differences
in regional, economic and  business models
-    Removing price caps on existing TLDs may allow  new TLDs to be more 
competitive
-    Oppose access by third parties  to personally identifiable registry data
-    Should not dictate  the investment level but focus on the performance 
specification

WORLD  BANK
Abstract 

A major challenge facing regulators in developed and  developing countries 
alike is
the need to strike the right balance between  ensuring certainty for market 
players
and preserving flexibility of the  regulatory process to accommodate the 
rapidly
changing market, technological  and policy conditions. 

As much as possible, policy makers and regulators  should strive to promote
investors’ confidence and give incentives for  long-term investment. 

They can do this by favoring the principle of  ‘renewal expectancy’, but 
also by
promoting regulatory certainty and  predictability through a fair, 
transparent and
participatory renewal  process.

For example, by providing details for license renewal or  reissue, clearly
establishing what is the discretion offered to the licensing  body, or 
ensuring
sufficient lead-times and transitional arrangements in the  event of 
non-renewal 
or changes in licensing conditions. 

Public  consultation procedures and guaranteeing the right to appeal  
regulatory
decisions maximizes the prospects for a successful renewal  process. 

As technological changes and convergence and technologically  neutral 
approaches gain importance, regulators and policy makers need to be  ready to 
adapt
and evolve licensing procedures and practices to the new  environment. 

Ensure regulatory certainty and ease investors’ concerns  

• Codify a clear regime of license renewal in the telecommunication  
legislation,
including renewal procedures, reasons for refusal to renew and  appeals to 
regulatory
decisions 
• Provide further details in the license  itself where the legislative 
framework is
not comprehensive 
• Adopt some  varying degree of the principle of renewal expectancy 
• Strike the right  balance between certainty in the renewal process and 
regulatory
flexibility,  and engage in forward thinking and planning 
• Subject regulatory discretion  to clear parameters of license renewal with
appropriate checks and balances  

Procedures for license renewal 
• Initiate renewal process well in  advance of expiry 
• Perform periodic forward review of market and needs  
• Disclose and publish reasons for non renewal 
• Adopt public  consultation process 
• Guarantee a right to appeal 

In the event of  non-renewal 
• Provide a minimum notice period 
• Delay vacancy of  spectrum to give enough time for operators to adapt 
strategies 
• Ensure exit  strategies for operators 
• Ensure continuity of service to consumers  

License renewal fees

• Beware that heavy license fee burdens  reduce possibilities of making 
further
investment 
• Establish models for  licensing and spectrum pricing, ensure openness, 
transparency
and the right  to appeal from the methods applied 

Change in license conditions and  obligations 

• Renewal process is a good occasion to review license  conditions (e.g. those
related to the moving target of universal service.)  
• Ineffective mandatory service obligations can have anti-competitive  
impacts if the
burden is not kept at a manageable level for the license  holders 

Spectrum implications of license renewal 

• Strike a  balance between protecting ongoing investment and optimal 
exploitation of
the  spectrum resources 
• Leveling the playing field at license renewal between  operators entering 
the
market under different regimes (e.g., auction vs.  beauty contest) to avoid 
windfall
gains 

Migration to technology  neutral licensing

• Continuity of the service for the consumers as a  leading principle for 
transition 
• Leveling the playing field at license  renewal between operators entering 
the
market having followed different  technology migrating paths to avoid 
windfall gains


Intellectual  Property Constituency

-    framework needed for compliance  program and system of graduated 
sanctions be
available
-    any  deviation from consensus policies should be explicitly stated and 
justified  in
the agreement
-    flexibility will often be  needed
-    conditional (e.g based on appropriate performance) and  rebuttable 
(violation of
terms of the registry agreement) presumption of  renewal

-    not in favour of price caps – any exceptions would  need to be justified

-    prevent discrimination amongst  registrars

-    ensure transparency and access to information  about pricing treatments 
amongst
registrars

-    Access to  registry information

o    Require a mechanism to identify what  data should be available to third 
parties and
under what conditions (e.g  non-discriminatory, tiered access etc), and what 
data
should not be  available. 

o    Use of registry data to create or support new  registry services by the 
registry
should subject to consensus policy, and any  deviations should be specifically
specified and justified

-   Commitments should be included to ensure the availability of a robust  
database of
the contact details of registrants


Registrars  constituency

-    registry renewal
o    initial  term of commercially reasonable length case-by-case
o    oppose  “presumptive” (e.g or virtually “automatic” renewals
o    support  limited “renewal expectancy” (e.g 5.2.1 in .info or RAA 5.4)
proposed  .com  (contract terms similar to top five, and some terms can’t be  
changed)
.tel  (contract terms must be similar to top 5)
.job   (allows negotiation of contract terms)
.info  (provides discretion to  ICANN)
o    should justify renewal by meeting qualifications and  standards
o    ICANN reserves its rights to seek a bid at its  discretion

Consensus policies
-    support some limitations  with respect to the new or changed policies 
that the
registry must comply  with during the term of the agreement, otherwise must 
comply
with consensus  policies

Complete delegation of some policy development responsibilities  to the 
registry
operator is inappropriate (e.g clause 4.3.6 of the .aero  agreement), apart 
from work
on the charter.   The registry operator  should be required to comply with 
Consensus
Policies (e.g in 3.1 (b)  (iv)).

Should not be price controls unless the registry has Market or  Pricing power 
(Market
Power and Pricing power to be defined) – which may be  decided at the time of
renewal.  

http://ec.europa.eu/comm/competition/general_info/m_en.html

[Market  Power definition from Strength of a firm on a particular market.   
In  basic
economic terms, market power is the ability of firms to price  above  
marginal cost
and for this to be profitable. 

In   competition analysis, market power is determined with the help of a  
structural
analysis of the market, notably the calculation of  market  shares, which
necessitates an examination of the availability of other  producers of the 
same or of
substitutable products (substitutability).  

An assessment of market power also needs to include an assessment of  
barriers to
entry or growth ( entry barriers) and of the rate of innovation.  

Furthermore, it may involve qualitative criteria, such as the financial  
resources,
the vertical integration or the product range of the   undertaking concerned.]

- Equitable pricing opportunities for all  registrars, and 6 month notice 
before any
increase.

-     Registry must justify any increase if there is a price cap in the  
agreements,
which should be objectively evaluated by a third  party.

ICANN fees: 
-    ICANN should not be able to collect  the registrar proportion of the 
ICANN budget
via a pass-through via the  registries (e.g 7.2 (d) of the .jobs agreement), 
or  from
registries

Use of Personal Data: limit it to the purpose for  which it is collected, and 
to the
extent it is made available to third  parties – should be on a 
non-discriminatory
basis.

[from .jobs escrow  provisions.  

Registry Data, as used in this Agreement, shall mean  the following: 

(1) data for domains sponsored by all registrars,  consisting of domain name, 
server
name for each nameserver, registrar id,  updated date, creation date, 
expiration
date, status information, and  DNSSEC-related key material; 

(2) data for nameservers sponsored by all  registrars consisting of server 
name, each
IP address, registrar id, updated  date, creation date, expiration date, and 
status
information; 

(3)  data for registrars sponsoring registered domains and nameservers, 
consisting  of
registrar id, registrar address, registrar telephone number, registrar  e-mail
address, whois server, referral URL, updated date and the name,  telephone 
number,
and e-mail address of all the registrar's administrative,  billing, and 
technical
contacts; 

(4) domain name registrant data  collected by the Registry Operator from 
registrars
as part of or following  registration of a domain name; 

and (5) the DNSSEC-related material  necessary to sign the TLD zone (e.g., 
public and
private portions of TLD zone  key-signing keys and zone-signing keys).]

Investment in development and  infrastructure: should not be a policy in this 
area –
should consider such  investments in deciding whether registry should be 
renewed (e.g
whether  registry is meeting performance standards)

ICANN needs contractual tools  to deal with a bad actor  (e.g ICANN can 
terminate
registrar agreement  for any material breach – clause 5.2 of registrar 
agreement is
OK, but clause  6.1 of .jobs doesn’t give ICANN enough power – particularly 
for a
party  without a track record) – taken from the registrar input to  PDP-Dec05.


III - Guidelines for the registry terms of reference  

There should be a base contract to provide some level of  consistency.   The 
contract
may be customized, with changes to the  base contract subject to public 
comments
before approval.

The contract  should strike the right balance between ensuring certainty for 
market
players  and preserving flexibility of ICANN to accommodate the rapidly  
changing
market, technological and policy conditions.

The initial term  of commercially reasonable length (e.g default 10 years), 
although
may be  changed on a case-by-case basis.

[Note: could use a similar approach to  domain name registration with 
different fee
structure depending on the length  of the contract)

There should be a renewal expectancy. A contract would  be renewed provided 
that the
registry operator is meeting the terms of the  present contract, and provided 
the
license holder agrees to the any new base  contract conditions. 

The contract should provide certainty and  predictability through a fair, 
transparent
and participatory renewal  process.

The contract should clearly establish what is the discretion  offered to 
ICANN, and
ensuring sufficient lead-times and transitional  arrangements in the event of
non-renewal or changes in the base contract.  

During the term of the agreement, the registry must comply with new or  
changed
consensus policies in one of the following areas:
-     (1) issues for which uniform or coordinated resolution is reasonably 
necessary  to
facilitate interoperability, Security and/or Stability of the Internet or  
DNS; 

-    (2) functional and performance specifications for  the provision of 
Registry
Services (as defined in Section 3.1(d)(iii) below);  

-    (3) Security and Stability of the registry database for  the TLD; 

-    (4) registry policies reasonably necessary to  implement Consensus 
Policies
relating to registry operations or registrars;  

-    or (5) resolution of disputes regarding the registration  of domain 
names (as
opposed to the use of such domain names). 

Any  deviation from consensus policies should be explicitly stated and 
justified  in
the agreement

Where a registry provides IDNs, the contract should  require that the 
registry adhere
to IDN standards, and ICANN guidelines for  IDNs.

Initially rely on external competition/anti-trust Government  authorities to 
ensure
compliance with laws relating to market power or  pricing power.   This can be
reviewed after initial  term.

ICANN registry fees should be a uniform approach – taking into  account 
differences
in regional, economic and business models

ICANN  should not be able to collect the registrar proportion of the ICANN 
budget  via
a pass-through via the registries (e.g 7.2 (d) of the .jobs agreement),  or 
from
registries

Use of Personal Data: limit it to the purpose for  which it is collected, and 
to the
extent it is made available to third  parties – should be on a 
non-discriminatory
basis.

ICANN needs  contractual tools to deal with a registry that consistently 
breaches
material  contract provisions.




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