[council] Letter from ICANN chair to GAC chair regarding GAC's comments on DAGv3 (published n October 2009)

["Bruce Tonkin" <Bruce.Tonkin@xxxxxxxxxxxxxxxxxx>]

Hello All,

The chair of the ICANN Board has sent a letter to the GAC responding to the 
GAC's comments on version 3 of the draft Applicant Guidebook.  It is quite 
significant in that it sets out the rationale for some of the recent Board 
decisions that led to DAGv4.  Up until now ICANN usually explains the reason 
for including something in the guidebook - but this letter also identifies some 
reasons why certain suggestions have not been incorporated.

Topics covered in the letter include:

- Root scaling implications

- Malicious conduct and abuse of the DNS

- Intellectual Property Rights

- Economic studies

- Country and territory names prohibited in version 4 of the Draft Applicant

- Definition of geographical strings insufficient and not in line with 
paragraphs 2.2 and 2.7 of the GAC principles regarding new gTLDs

- Mechanisms for dealing with post-delegation deviation from conditions of 
government approval

- Objection mechanisms should be improved

- Resolution of competing string applications does not give rise to 
auction-derived surpluses, but is decided on the respective value of the 
applications for end users

- Potential benefits of categories (or track differentiation) should be fully 
explored.


Regards,
Bruce Tonkin

From: 
http://www.icann.org/correspondence/dengate-thrush-to-dryden-05aug10-en.pdf


5 August 2010


Heather Dryden

Chair of the Governmental Advisory Committee 

Senior Advisor to the Government of Canada


Dear Heather,

GAC Comments on new gTLDs and Draft Applicant Guidebook version 3

Thank you for the GAC’s letter of 10 March 2010, providing comments on new 
gTLDs and version 3 of the Draft Applicant Guidebook.  I believe the Board and 
GAC share a similar viewpoint that it would be in the global public interest 
that “... the opening up of the gTLD space is undertaken in a way that does not 
compromise the resilience and integrity of the DNS and serves the global public 
interest”.   The Board is pleased with the way in which the various iterations 
of the guidebooks are evolving, and is particularly pleased by the mechanism 
whereby the overarching issues are being resolved through working groups 
comprised of members of the ICANN community and independent experts. 

I respond below to each of the areas of concern raised by the GAC. 


Root scaling implications
=========================

ICANN supports the principle that the scale and rate of changes must not 
negatively impact the resilience, security and stability of the DNS.  In 
February 2009,
the ICANN Board requested the Root Server System Advisory Committee (RSSAC), the
Security and Stability Advisory Committee(SSAC), and the ICANN staff (including 
ICANN Staff members dealing with technical issues and the IANA functions) to 
study the potential issues regarding the addition of IDNs, IPv6 addresses, 
DNSSEC and substantial numbers of
new TLDs to the root zone.  This study was completed in August 200 and posted 
for comment at

http://www.icann.org/en/committees/dns-root/root-scaling-study-report-31aug09-en.pdf

A complementary report

http://www.icann.org/en/committees/dns-root/root-scaling-model-description-29sep09-en.pdf

describes the characteristics of the quantitative model developed by TNO for 
dynamic analysis of root scaling issues.

In addition, and as part of ongoing efforts to ensure the stability of the DNS,
ICANN contracted with the DNS Operations, Analysis and Research Center 
(https://www.dns-oarc.net ) as independent and well-respected experts to 
provide an analysis of the impact of adding
IPv6, DNSSEC, and additional top-level domains to the ICANN-operated L root 
server.  This
study, while independent of the Root Server System Root Scaling study and 
focused specifically on the impact to the ICANN-operated L root server, has 
been used as input in the more comprehensive study undertaken by the Root 
Scaling Study Group.  The final report of the DNS-OARC study
was published at

http://www.icann.org/en/topics/ssr/root-zone-augementation-analysis-17sep09-en.pdf

Regarding the number of strings in an application round, this was considered in 
the analysis and model for anticipated new gTLD delegation rates published by 
staff, and is available at 

http://www.icann.org/en/announcements/announcement-03mar10-en.htm

This analysis indicates that processing constraints will limit delegation rates 
to a steady state even in the event of extremely large numbers of applications, 
so that even in a scenario where there are very many applications for new 
gTLDs, the rate of growth of the root zone would remain linear.  

The SSAC and RSSAC are considering the data and analysis in each of these 
reports and are expected to prepare recommendations for the Board on concrete 
steps (such as any limitations or emergency removal procedures) to be 
implemented prior to the initial gTLD application round.


Malicious conduct and abuse of the DNS
======================================

Some have made the case that the introduction of new gTLDs will result in an 
increase in malicious conduct.  While this has not been quantitatively 
demonstrated, significant steps have been taken to ensure that malicious 
conduct is mitigated in the new environment of new gTLDs through the 
introduction of several protections. 

These protections, described below, were the result of a study undertaken of 
malicious conduct as it related to the new gTLD space.  During the study, ICANN 
staff solicited and received comments from multiple outside sources, including 
Intellectual Property Constituency (IPC), Registry Internet Safety Group 
(RISG), the Security and Stability Advisory Committee (SSAC), Computer 
Emergency Response Teams (CERTs) and members of the banking/financial, and 
Internet security communities.   As a result of this work, nine measures were 
recommended to increase the benefits to overall security and stability for 
registrants and trust by all users of these new gTLD zones, and each of these 
requirements will be implemented in the program: 

• Vetted registry operators (background checks) 

• Demonstrated plan for DNSSEC deployment 

• Prohibition of DNS redirection or “wildcarding” 

• Removal of orphan glue records to eliminate a tool of spammers and others 

• Maintenance of thick WHOIS records 

• Centralized method of zone-file access 

• Documented registry abuse contacts and procedures 

• Participation in an expedited registry security request process. 

These are the recommendations of the experts in this area when asked the same 
question that was posed by the GAC.  More detailed information about these 
recommendations is available in the Mitigating Malicious Conduct explanatory 
memorandum, available at: 

http://www.icann.org/en/topics/new-gtlds/mitigating-malicious-conduct-memo-update-28may10-en.pdf
 


Intellectual Property Rights
============================ 

The GAC comments, in concert with other comments, were taken in account in 
version 4 of the Applicant Guidebook that, for the first time, included the set 
of proposed intellectual property rights protection mechanisms.  In particular, 
ICANN has broadened the types of trademark registrations that must be honored 
in offering a “Sunrise” service and all new registries employing an IP Claims 
service must honor trademarks registered in all jurisdictions.   The types of 
registrations offered protections have also been broadened for the Uniform 
Rapid Suspension Service, one of the new post-delegation rights protection 
mechanisms.  The Post Delegation Dispute Resolution Policy has also been 
amended in response to specific recommendations from the ICANN community.  
Rather than recount all the changes here, please see the redlined proposals 
for: 

− The Clearinghouse Procedures 
http://www.icann.org/en/topics/new-gtlds/trademark-clearinghouse-redline-28may10-en.pdf

− URS Procedures
http://www.icann.org/en/topics/new-gtlds/draft-urs-redline-28may10-en.pdf

− Post Delegation Dispute Resolution Procedures 
http://www.icann.org/en/topics/new-gtlds/pddrp-redline-28may10-en.pdf


Economic studies
================

The issues of costs and benefits to the expansion of the namespace, the 
possible impacts on users, the relevance of market power, and the use of 
defensive registrations are discussed in “An Economic Framework for the 
Analysis of the Expansion of Generic Top-Level Domain Names,” an independent 
study completed by economists Michael Katz, Gregory Rosston, and Theresa 
Sullivan and published by ICANN for comment in June 2010.  See
http://icann.org/en/topics/new-gtlds/economic-analysis-of-new-gtlds-16jun10-en.pdf

The report examines the current status of the gTLD market and surveys existing 
work that has been done on this set of economic issues.  The report also 
outlines a number of potential case studies that would seek to quantify the net 
costs and benefits involved in the introduction of new gTLDs.
Selected studies recommended in the report are now being initiated.  It is 
possible that these second-phase studies will recommend particular measures for 
the gTLD evaluation process that would minimize external costs (including, for 
example, the cost of defensive registrations) while allowing socially 
beneficial innovation.  In this case, any such recommendations will be 
considered by ICANN and subject to public consultation before being 
implemented. 

ICANN has published additional economic studies: 

• Report Of Dennis Carlton Regarding ICANN’s Proposed Mechanism for Introducing 
New gTLDs 
(http://www.icann.org/en/topics/new-gtlds/carlton-re-proposed-mechanism-05jun09-en.pdf
 )

• Preliminary Report of Dennis Carlton Regarding Impact of New gTLDs on 
Consumer Welfare 
(http://www.icann.org/en/topics/new-gtlds/prelim-report-consumer-welfare-04mar09-en.pdf
 ) 

• Preliminary Analysis of Dennis Carlton Regarding Price Caps for New gTLD 
Internet Registries 
(http://www.icann.org/en/topics/new-gtlds/prelim-report-registry-price-caps-04mar09-en.pdf
 ) 

• Report from CRA International “Revisiting Vertical Separation of Registries 
and Registrars” 
(http://www.icann.org/en/topics/new-gtlds/crai-report-24oct08-en.pdf ) 

In addition, the GNSO considered whether new gTLDs should be introduced and the 
net benefits of new gTLDs in its final report on the introduction of new gTLDs 
(http://gnso.icann.org/issues/new-gtlds/pdp-dec05-fr-parta-08aug07.htm ).


Country and territory names prohibited in version 4 of the Draft Applicant 
Guidebook 
=====================================================================================

As you are aware, the treatment of country and territory names in the DAG4 
Guidebook was developed specifically to adhere to paragraph 2.2 of the GAC 
principles on new gTLDs, i.e., the GAC view that governments should not be 
denied the opportunity to apply for, or support an application for, their 
respective country or territory name.  However, the GAC’s clarification of 
their interpretation of GAC principle 2.2 ("The GAC interprets para 2.2 of the 
GAC gTLD principles that the strings that are meaningful representation or 
abbreviation of a country or territory name should be handled through the 
forthcoming ccTLD PDP, and other geographical strings could be allowed in the 
gTLD space if in agreement with the relevant government or public authority.”) 
has resulted in a reconsideration of the treatment of country and territory 
names in the new gTLD process.  This has resulted in a change of approach as 
reflected in the recently published draft version 4 of the Applicant Guidebook: 
namely, that country and territory names will not be available for delegation 
in the first round of the new gTLD application process. 

With regard to the definition of country names, the Board has sought to ensure 
both clarity for applicants, and appropriate safeguards for governments and the 
broad community.  A considerable amount of time has been invested in working 
through the treatment of country and territory names to ensure it meets these 
two objectives.  Following discussion at the Mexico City meeting, the Board 
recommended that the Applicant Guidebook be revised in two areas regarding this 
subject: 

(1) provide greater specificity as to what should be regarded as a 
representation of a country or territory name in the generic space, and 

(2) provide greater specificity in defining the qualifying support requirements 
for continent names, with a revised position to be posted for public comment. 

The resulting definition for country and territory names is based on ISO 3166-1 
and other published lists to provide clarity for potential applicants and the 
community.  It seeks to remove the ambiguity created by use of the term 
‘meaningful representation.’  Therefore, the definition of country and 
territory names has not been amended in the recent Guidebook draft and remains 
consistent with the Board goals and resolution on this issue. 

While the revised criteria may have resulted in some changes to what names are 
afforded protection, there is no change to the original intent to protect all 
names listed in ISO 3166-1 or a short or long form of those names (and, 
importantly, translations of them).  This level of increased clarity is 
important to provide process certainty for potential TLD applicants, 
governments and ccTLD operators – so that it is known which names are provided 
protections. 

The definition is objectively based on the ISO list, which is developed and 
maintained by a recognised international organisation. 

It is acknowledged that ICANN has used the concept of ‘meaningful 
representation’ of a country or territory in the context of the IDN ccTLD Fast 
Track.  This reflects the objective of rapid initial deployment of IDNs and the 
associated need to remove as many potential obstacles as possible.  There have 
always been particular sensitivities about geographic names where non-Latin 
scripts and a range of languages are involved.  It does not follow that these 
considerations should automatically apply to the broader ccTLD and gTLD spaces. 
 It is reasonable that the criteria for including names (the Fast Track) could 
be different than the criteria for excluding names (gTLDs).

The ccNSO will be undertaking policy discussions, which may result in a change 
in position on these two issues.  In particular, defining the distinction 
between country code and generic names may warrant a broader cross-SO/AC policy 
discussion.  Once policy is developed, it will be appropriate for the Board to 
reconsider these positions.  


Definition of geographical strings insufficient and not in line with paragraphs 
2.2 and 2.7 of the GAC principles regarding new gTLDs 
===================================================================================================

As mentioned above, the Board has sought to ensure, throughout the process of 
developing a framework for new gTLDs, that there is 1) clarity for applicants, 
and 2) appropriate safeguards for the benefit of the broad community.  The 
current criteria for defining geographic names as reflected in version 4 of the 
Draft Applicant Guidebook are considered to meet the Board’s objectives and are 
also considered to address to the extent possible the GAC principles.  The 
current definitions, combined with the secondary avenue of recourse available 
by way of objections are considered adequate to address the GAC’s concerns. 

It should be noted that much of the treatment of geographic names in the 
Applicant Guidebook was developed around the GAC Principles regarding new 
gTLDs, and conversations and correspondence with the GAC on this issue going 
back to 2008. 

On 2 October 2008, 
(http://www.icann.org/correspondence/twomey-to-karklins-02oct08.pdf ) following 
a teleconference with the GAC on 8 September 2008, the then CEO & President, 
Paul Twomey, wrote to the GAC explaining proposed principles to guide a 
procedure for implementing elements of paragraph 2.2.  Place names were split 
into two categories, as follows: 

1) sub-national geographical identifiers such as countries, states, provinces; 
and, 

2) city names. 

Regional language or people descriptions were considered difficult to develop 
an implementation plan for this element of paragraph 2.2, because it will be 
difficult to determine the relevant government or public authority for a string 
which represents a language or people description as there are generally no 
recognised established rights for such descriptions. 

As described in the 2008 letter, city names were considered challenging because 
a city name can also be a generic term, or a brand name, and in many cases city 
names are not unique.  Therefore, where it is clear that an applicant intends 
to use the gTLD for purposes associated with the city name evidence of support, 
or non-objection is necessary.  However, provision is made in the Guidebook to 
protect sovereign rights by requiring government approval for capital city 
names in any language, of any country or territory listed in the ISO 3166-1 
standard. 

During the teleconference of 8 September 2008, GAC members identified the ISO 
3166-2 List, as an option for defining sub-national names.  Accordingly, 
version 4 of the Applicant Guidebook provides protection for all the thousands 
of names on that list.  Also during this call the idea of the GAC creating a 
list of geographic and geopolitical names was discussed, however, it is 
understood that the GAC moved away from this suggestion because it would be a 
resource intensive effort for all governments to undertake. 

In relation to paragraph 2.7, at the Board’s request, Paul Twomey (who was 
ICANN’s CEO and President), wrote to the GAC on 17 March 2009 
(http://www.icann.org/correspondence/twomey-to-karklins-17mar09-en.pdf ), 
requesting the GAC’s input on possible options to resolve the outstanding 
implementation issues regarding the protection of geographic names at the 
second level. The end result of this request was a letter from the GAC to Paul 
Twomey, dated 26 May 2009 
(http://www.icann.org/correspondence/karklins-to-twomey-29may09-en.pdf ), which 
proposed a solution, that was accepted by the Board and ultimately reflected in 
the draft Registry Agreement developed for new gTLDs.  On this basis, the Board 
considers that this matter has been dealt with to the satisfaction of the Board 
and the GAC. 


Mechanisms for dealing with post-delegation deviation from conditions of 
government approval 
===========================================================================================

The GAC’s suggestion of including a clause in the registry agreement requiring 
that in the case of a dispute between a relevant Government and the registry 
operator, ICANN must comply with a legally binding decision in the relevant 
jurisdiction has been adopted.  The Registry Agreement has been amended 
accordingly. 

In addition, the processes and remedies of the Registry Restrictions Dispute 
Resolution Procedure are available to governments in cases where the geographic 
name is applied for as a community-based TLD.  The remedies that can be 
recommended to ICANN under this procedure include: 

• remedial measures for the registry to employ to ensure against allowing 
future registrations that do not comply with community-based restrictions; 

• suspension of accepting new domain name registrations in the gTLD until such 
time as violation(s) is cured; or, in extraordinary circumstances; 

• providing for the termination of a registry agreement. 

Other protections have been added to ensure ongoing government approval of the 
delegation.  Further information is available in explanatory memoranda.  The 
following 

“Withdrawal of Government Support – Post delegation procedures” 
(http://www.icann.org/en/topics/new-gtlds/withdrawal-government-support-28may10-en.pdf
  ) and 

“Registry Transition Procedures” 
(http://www.icann.org/en/topics/new-gtlds/registry-transition-processes-28may10-en.pdf
  ) 
were posted on 31 May 2010. 


Objection mechanisms should be improved 
========================================

I reiterate my response of 22 September 2009, to the GAC on this issue: 

“It is difficult to predict with accuracy whether the costs of the objection 
procedure will prove to be a barrier to legitimate objections; however, it is 
felt that the existence of a fee to lodge an objection is necessary as a 
deterrent to frivolous objections.  Interested parties may pool their resources 
to finance an objection that they consider to be legitimate and important.  The 
rule that the prevailing party will be fully reimbursed for the filing fee and 
advance payment of costs that it paid (Article 14(e)) is intended to lessen the 
financial burden upon parties that file a well-founded objection.  Finally, it 
should be recalled that the Independent Objector may also file an objection 
where, for various reasons (including cost), no other objection had been 
filed.” 

“Governments that are members of the GAC have a mechanism to provide advice to 
ICANN’s Board, in accordance with ICANN’s Bylaws; however, it is not clear that 
Bylaw was intended to provide an avenue for governments to provide advice on 
operational matters of this nature.  The ICANN Board wishes to have a neutral, 
expert determination, based upon certain published standards, when deciding 
whether to accept an application for a new gTLD or if an objection should be 
upheld.” 

Reviewing that response and the issues posed in your letter, I would add the 
following.  ICANN (and the community) devoted substantial resources to develop 
the policy and implementation models to protect important interests through an 
objection based dispute resolution benefit.  Still, specific suggestions for 
improvements are encouraged and I understand some Supporting Organizations and 
Advisory Committees are forming groups to study the issue.  ICANN staff will 
support that work.  The costs of that process are paid directly to the dispute 
resolution provider – no fees are added as a deterrent to potential objectors.  
In fact, one intended result of the process is to discourage applicants of 
controversial names that may infringe upon those important interests. 

We note that governments pay fees for other services, enter into agreements, 
and pursue conflict resolution.  We do not believe that governments should be 
afforded special consideration by exempting them from paying fees associated 
with filing an objection.  To do so would result in an inflation of costs for 
other objectors to cover the costs incurred by government requests.  This is 
different, however, from arrangements to assist impecunious governments.  If 
the GAC is able to provide the principle on which they base their request for 
exemption, it will be considered for inclusion into the procedure. 


Resolution of competing string applications does not give rise to 
auction-derived surpluses, but is decided on the respective value of the 
applications for end users 
====================================================================

The purpose of an auction is to resolve contention in a clear, objective manner 
as the avenue of last resort in resolving contending applications. 

Possible uses of funds from this source include formation of a foundation with 
a clear mission and a transparent way to allocate funds to projects that are of 
interest to the greater Internet community, such as grants to support new gTLD 
applications or registry operators from communities in subsequent gTLD rounds, 
the creation of an ICANN-administered/community-based fund for specific 
projects for the benefit of the Internet community, the creation of a registry 
continuity fund for the protection of registrants (ensuring that funds would be 
in place to support the operation of a gTLD registry until a successor could be 
found), or establishment of a security fund to expand use of secure protocols, 
conduct research, and support standards development organizations in accordance 
with ICANN’s security and stability mission.  That is, funds will be used in a 
manner that supports directly ICANN’s Mission and Core Values and also 
maintains its not for profit status. 


Potential benefits of categories (or track differentiation) should be fully 
explored. 
====================================================================================

ICANN is a strong proponent of innovative uses of new TLDs.  This is especially 
so in cases where TLDs can be delegated to address the needs of specific 
communities such as intergovernmental organizations, socio-cultural groups and 
registered brands.  Rather than having ICANN limit this type of innovation and 
identification with certain TLD models, more creativity might be spawned by 
allowing different groups to self-identify the type of TLD they purport to be 
and promote that model among their community.  If a self-declaration program is 
instituted and contractual accommodations are eliminated or minimized, fees can 
remain constant.  Socio-economic groups, brand owners and other groups all can 
be accommodated under the existing structure and self-identify as a particular 
type of TLD.  Over time, the market and community interests will sort TLD types 
– a model preferable to having ICANN make that determination a priori.  To 
reiterate, it is not for ICANN to develop these distinctions a priori. 

It may well be that as definitive categories of applicants emerge in practice, 
and as ICANN and the respective communities gain further experience of possible 
benefits of additional gTLD categorization over time, organizational structures 
might be developed with ICANN to reflect these categories.  That will be a 
consequence of bottom-up policy developments by affected participants, 
according to the ICANN model.  Nothing in the current implementation procedures 
forecloses those future developments. 

Significant consideration has been given to the issue of the introducing 
category-based TLDs in the new gTLD process. The policy recommendations of the 
GNSO and the GAC principles have resulted in the creation of three gTLD 
categories or types: 

Community-based TLDs 

Geographic Name TLDs 

Everything else (called standard or open TLDs) 

Community comment suggests the creation of several TLD categories: for example, 
single-owner,  country, intergovernmental organization, socio-cultural, 
community and open.  Depending on the category, various accommodations are 
suggested: for example, no requirements for an ICANN contract, or to use 
accredited registrars, or to follow consensus policy, or policy provisions 
outlined in the GAC’s ccTLD principles.  Some might be restricted to 
not-for-profit status, be eligible for reduced fees, require registration 
restrictions, and have names reserved in anticipation of registration by 
certain parties. 

Beyond the accommodations sought, many or all of the suggested categories seem 
to be variations of community-based TLDs.  The preference for community-based 
TLDs in the evaluation/contention process is based on policy advice from the 
GNSO and is intended to ensure that community-based applicants receive the TLD 
string to which their community is strongly related.  Perhaps the most 
important aspect of the suggested categories is that an applicant within these 
categories does, in fact, receive the string associated with its community, and 
that is what the existing process is designed to do. 

The introduction of a number of new gTLD categories with a number of different 
accommodations will lead to a complex and difficult application, administration 
and evaluation process, in addition to a very complicated contractual 
compliance environment.  Additionally, there will be considerable debate and 
discussion in the community as to whether certain accommodations should be 
made.  Should certain gTLDs not be required to have an agreement with ICANN or 
not be required to follow consensus policy?  Should certain TLDs be required to 
maintain not-for-profit status? 

These discussions and debates will take considerable time and resources and may 
ultimately not result in consensus. 

The structure of TLD categories, if granted different accommodations with 
differing contractual obligations, would result in significantly higher 
compliance costs and therefore, annual fees. 

I thank the GAC for their continued effort in considering the implementation of 
the new gTLD program. 

As the Board’s resolution 
(http://www.icann.org/en/minutes/resolutions-25jun10-en.htm#11 ) from the 
Brussels meeting sets out, there will be a Board Workshop focusing on new gTLDs 
on 24 and 25 September 2010.  The Board will use this time to consider all of 
the outstanding issues 
relating to the implementation of the new gTLD program.   We will likely follow 
the Board Workshop with a Special Board Meeting focusing on the new gTLD 
topics. 

I understand the GAC is preparing their comments on version 4 of the Draft 
Applicant Guidebook, and we very much look forward to the GAC’s input for use 
in that Board Workshop. 

Yours sincerely

Peter Dengate-Thrush

Chair, ICANN Board of Directors