[council] RE: ICANN Board resolution on Vertical Integration - dated 5 Nov 2010

["Rosette, Kristina" <krosette@xxxxxxx>]

Thanks, Bruce.  I don't see anything on the BoD page or in the resolution that 
identifies which directors abstained because of a conflict of interest.  Can 
you share any information on that point?  Thanks! 

-----Original Message-----
From: owner-council@xxxxxxxxxxxxxx [mailto:owner-council@xxxxxxxxxxxxxx] On 
Behalf Of Bruce Tonkin
Sent: Wednesday, November 10, 2010 4:07 AM
To: Council GNSO
Subject: [council] ICANN Board resolution on Vertical Integration - dated 5 Nov 
2010



From:  http://www.icann.org/en/minutes/resolutions-05nov10-en.htm

New gTLDs - Cross-Ownership Issues for Registries and Registrars 

Whereas, at the ICANN meeting in Nairobi in March 2010, the Board passed a 
resolution indicating that as a default position that no co-ownership would be 
allowed in new gTLDs, but that if the GNSO were to develop a policy on the 
subject prior to the launch of new TLDs that the Board would consider using the 
new policy for the new gTLD program 
<http://www.icann.org/en/minutes/resolutions-12mar10-en.htm#5>.

Whereas, in May 2010, ICANN published version 4 of the Draft Applicant 
Guidebook, which included a note that the Board encouraged the GNSO to 
recommend policy on this issue, and that the Board would review this issue 
again if the GNSO did not make recommendations in time for launch of the new 
gTLD program <http://www.icann.org/en/topics/new-gtlds/comments-4-en.htm>.

Whereas, the GNSO's Vertical Integration Working Group is divided on whether 
registrars should be allowed to operate registries (and consequentially whether 
registries should be allowed to operate registrars). The VI-WG's "Revised 
Initial Report on Vertical Integration Between Registrars and Registries" is 
posted at 
<http://gnso.icann.org/issues/vertical-integration/revised-vi-initial-re
port-18aug10-en.pdf> [PDF, 2.42 MB].

Whereas, the GNSO VI working group's report includes a number of proposals to 
address vertical integration for the new gTLD program, but the VI-WG has not 
reached consensus as to which one to recommend 
<http://gnso.icann.org/mailing-lists/archives/council/msg09754.html>.

Whereas, on 23 September 2010, ICANN's Governmental Advisory Committee 
submitted its comments on v4 of the Applicant Guidebook, including comments on 
the issue of registry-registrar separation 
<http://www.icann.org/en/correspondence/dryden-to-dengate-thrush-23sep10
-en.pdf> [PDF, 44 KB].

Whereas, the Board has had over six months since Nairobi to consider the issue, 
including consideration of the GNSO VI working group's deliberations, and 
community comment including at the ICANN meeting in Brussels in June 2010.

Whereas, the current set of agreements are not balanced in that while recent 
contracts prohibit registries from acquiring registrars, ICANN has never had a 
rule prohibiting registrars from applying for or operating TLDs.

Whereas, while ICANN has individually negotiated contracts that recently have 
included restrictions on registry ownership of registrars, cross-ownership 
provisions have varied over time and no formal "policy"
on this topic has ever been recommended by the GNSO or adopted by ICANN.

Whereas, historical contract prohibitions on registries acquiring registrars do 
not provide a compelling basis for principled decision-making.

Whereas, the Board is committed to making fact-based decisions, and has 
carefully considered available economic analysis, legal advice and advice from 
the community.

Resolved, (2010.11.05.02), the Board directs the CEO to include the following 
principles relating to registry-registrar cross-ownership in the forthcoming 
version of the Applicant Guidebook.

1. ICANN will not restrict cross-ownership between registries and registrars. 
Registry operators are defined as the registry operator and all other relevant 
parties relating to the registry services.


2. Registry agreements will include requirements and restrictions on any 
inappropriate or abusive conduct arising out of registry-registrar cross 
ownership, including without limitations provisions protecting against:

a. misuse of data; or

b. violations of a registry code of conduct;


3. These provisions may be enhanced by additional enforcement mechanisms such 
as the use of self-auditing requirements, and the use of graduated sanctions up 
to and including contractual termination and punitive damages.


4. ICANN will permit existing registry operators to transition to the new form 
of registry agreement, except that additional conditions may be necessary and 
appropriate to address particular circumstances of established registries.


5. ICANN will have the ability to refer issues to relevant competition 
authorities.


6. ICANN will have the ability to address possible abuses that may arise out of 
registry-registrar cross-ownership through the consensus policy process.