[ga] Summary Email

["Michael D. Palage" <Michael@xxxxxxxxxx>]

Hello All:

In the interest of efficiency I have tried to consolidate a number of
discussions into a single email. I would like to start off by saying
that things have been remarkably civil which is a positive thing. I
think when people engage in a constructive dialog without personal
insults and attacks much more gets accomplished.

So before continuing lets start with the perspective of the various
participants.

Myself - Michael Palage. As most of you should know based upon my
numerous abstentions during my tenure on the Board. I am consultant to
various registrations authorities (registrars and registries), including
Afilias which currently has its contract up for review. I have had no
discussion with Afilias in connection with these posts. In fact they
would probably disapprove of my comments to date as they have taken a
very low key approach since the posting of the contracts. The principle
reason I responded to these posts was George's initial strongly worded
email in response to Vint's email. Listen, Vint and I do not agree on
several issues, during the three years on the board there were a number
of issues in which we were in violent disagreement. Notwithstanding
these differences of opinion, I always respected him. As previously
stated I agree with Vint's statement, and I have just tried to
articulate the reason why.

George Kirikos, successful businessman because unlike myself he does not
qualify for the small business discount within the business
constituency. George has a portfolio of around 500 domain name which are
mostly registered in the .COM TLD. John Berryhill calls him brilliant so
that is a good enough endorsement for me to listen and respect what he
has to say. George is also an active participant within the business
constituency and is very knowledge of domain name matters.

Tim Ruiz. Vice President of Domain Services for GoDaddy, the largest
domain name registrar in the world. I also hold Tim in high regard based
upon the number of years we spent together in the registrars
constituency. 

Danny Younger. The closest representation to an at large stake holder
that I know of. Very knowledgeable on ICANN matters and its history.
Does not own any domain name portfolio that I am aware of, and is not
currently employed by any registration authority.

Chris McElroy. Do not know Chris, nor if he has any domain name
portfolio, but he seems to be involved in helping clients select domain
names. He also seems knowledgeable on DN related matters.

Karl Auerbach. Former ICANN Board member. I have known Karl for many
years, and having completed a three year term on the ICANN Board, he is
someone that I hold in much higher regard prior to my service on the
board. Karl provides an important reference point to when things were
much simpler in the domain name space. Although he can be noisy and loud
at times, he is a good person whom I also respect.


So with regard to the topic of the proposed (biz, .info and .org)
registry contracts which have no price control provisions here are the
various position as I understand them based upon the discussion to date.

George is a strong advocate of an air tight contract that would regulate
price, and would require a competitive rebid on a periodic basis. Based
upon some email exchange on the business constituency list. George has
also expressed concern for a registry operator to offer discount pricing
to different registrars. George is a strong advocate of Karl's statement
that you should not repeat the same mistake twice.

Just to the right of George is Tim which expresses concern about the
ability of a registry operator to raise the price of services. However,
unlike George, Tim and the other large registrars are not opposed to
registry operators from giving them volume discounts.

On the opposite end of the spectrum is the proposed .BIZ, .INFO and .ORG
contracts as well as the existing .MOBI, .JOBS, .TRAVEL, .CAT and .TEL
which have no price caps/controls, and include preferential renewal.

To the left of that is the .NET and proposed .COM registry contracts
which have price caps on the number and size of increases, but include
preferential renewal terms.

Where I find myself is somewhere in the middle between the .NET/.COM
contracts and the proposed .INFO, .BIZ and .ORG contracts, and let me
explain why.

Back in 2001 I vehemently opposed the VeriSign renegotiation contracts
which provided VeriSign with its current preferential renewal term, just
ask anyone in attendance at the Melbourne meeting. However, once that
provision was done, it set in process a logical progression where all
contracts would have that provision. Now although George and Karl argue
that you should not repeat the same mistake twice, it is kind of hard to
create competition within the registry space if only the dominate player
holding the crown jewel (.COM) has preferential renewal terms, and no
one else does. Things have only become further complicated with the
preferential renewal term being incorporated into the .TRAVEL, .JOBS,
.CAT, MOBI, .NET and .TEL contracts. I just can't see how to unring this
bell. Some people say it is easy, just do it, but I seriously question
how to do it and withstand the potential legal challenges. 

So to me the preferential renewal terms are a non-starter.

Now some people will point to the current contractual PDP process
underway. The problem with that is that General Counsel has stated that
it was outside of scope from the beginning, although his recommendation
was overridden by a supermajority vote of the council. The question the
community needs to ask itself, who do you think the board will listen to
ICANN's General Counsel or the community?

Turning to the removal of price controls. I had significant reservations
about how the decision to remove price caps arose, however, I lost that
argument as well. Given, that scenario I find myself in a situation
where the ICANN Board has taken certain steps which I believe limit the
scope of what they can do in connection with the current .INFO, .BIZ and
.ORG contracts as well as the VeriSign .COM agreement.

Now many people have argued that we need to undo the mistakes and
correct the contracts, as previously stated, I do not see this as a
viable legal option. Obviously some may call me a defeatist or paid
shill of the registries, hopefully the constructive dialog will prevent
that from happening.

Where I have tried to focus my energies is on how to tweak the
existing/proposed contracts to seek the common goal which I believe most
people have expressed. How to prevent a sole source provider from
abusing their power within the market. I believe the focus needs to be
on the referral to national competition authorities. As Tim properly
notes this is a chicken and an egg scenario because ICANN controls the
initial decision of referral. 

Unfortunately there is a general lack of trust among the community for
the ICANN staff to do the right thing. However, I have an idea which I
would like to circulate. ICANN could create a Competition Office, not
unlike the Ombudsman that would be independent from ICANN staff
oversight and report directly to the Board. This Competition Office
would be tasked with reviewing new registry service requests and making
referrals to the national competition authorities. This Competition
Office would in NO WAY impact any review by the standing technical
committee which has its own mandate. This independence competition
office would act as an important safeguard to prevent a registry
operator from trying to exert undue influence on the staff during its
consideration of a funnel request. The elegance of this approach is that
it would not need any tweak to the registry contracts just an amendment
to the bylaws to create this office.

The one area where I believe some addition change in the registry
contract should take place is in connection with the 45 day window. I
believe that is just too small of a window to serve as an important
safety net.

Turning to Danny's question about why metadata from the zone is outside
the current PDP, I do not have an answer that I can share. However, I do
believe the non-discriminatory access provision to this data which
Thomas pointed out is an important safeguard to prevent any abuse.

Karl, answering your email on new TLD would take a lot longer and I have
already exceeded my non-billable ICANN allotment for the past couple of
days. Perhaps a phone call to catch up on things after I release my new
TLD implementation framework white paper?

In closing, I understand the anger and frustration that the community
feels with regard to how we got here. It is the same anger and
frustration that I tried to articulate during the Luxemburg meetings.
Over the past year, I have tried to focus on making the best out of the
current situation. I respect that some people will go down with the ship
arguing that ICANN needs to correct its past mistakes and redo the
registry contracts and re-insert price caps and competitive rebids.
What I am trying to articulate is how can we enhance the current
contracts to provide the community with additional safeguards against a
sole source provider that may potentially abuse its position in the
marketplace. 

I need to get some billable work done as well as some work around the
house. This will probably be my last email until next week, so no cheap
shots in the mean time. Thanks again for the constructive dialog that
the community has engaged in with regard to this discussion.

Best regards,

Michael D. Palage