RE: [registrars] Registrars Statement on .com agreement

["Christopher Kruk" <chrisk@xxxxxxxxxxxxxxxx>]

DomainPeople, Inc. and AAAQ.com, Inc. support this statement.


Regards,
 -Chris

  -----Original Message-----
  From: owner-registrars@xxxxxxxxxxxxxx
[mailto:owner-registrars@xxxxxxxxxxxxxx]On Behalf Of Nevett, Jonathon
  Sent: Tuesday, November 22, 2005 6:00 AM
  To: registrars@xxxxxxxxxxxxxx
  Subject: [registrars] Registrars Statement on .com agreement


  Registrar Colleagues:



  The Registrar Constituency .com Working Group set up by Bhavin has drafted
the following statement.  Please feel free to sign on to the statement and
to post it to the ICANN website -- to post comments, please send an e-mail
to: settlement-comments@xxxxxxxxx.



  Thanks.



  Jon



  We, the undersigned registrars, recommend against ICANN signing the

  proposed .com Registry Agreement.   The following reflects those issues

  that are of foremost concern to registrars:





  1.    New Registry Services



  The proposed .com contract locks ICANN and VeriSign in for three years

  on a version of the consensus policy covering the standards and process

  for consideration of new registry services.  The new registry services

  consensus policy process that recently was approved by the ICANN board

  is untested, and it is likely that the ICANN community will need to

  refine and improve it after it is implemented.  A three year lock will

  unnecessarily handcuff ICANN and the ICANN community.



  We recommend the deletion of Sections 3.1(b)(v)(B) and 3.1(b)(v)(C), and

  allowing the existing ICANN policy development and refinement process to

  be used during the term of the agreement.





  2.    Registry Agreement Renewal



  According to its own Bylaws and the Memorandum of Understanding between

  ICANN and the United States Department of Commerce, one of ICANN's core

  missions is to promote competition.  We understand that the current .com

  contract contains a "presumptive renewal" provision, which by its nature

  hinders competition.  The proposed .com contract, however, goes much

  farther than the existing contract by strengthening the presumptive

  renewal and termination provisions on behalf of VeriSign, thereby making

  it virtually impossible for VeriSign to lose the .com registry and

  impossible to reap the benefits of competition.  VeriSign should be

  appointed as the administrator of the .com registry, not its owner.



  We recommend reverting from Section 4.2 of the proposed .com agreement

  to the renewal terms of Section 25 of the current .com agreement, which

  requires a six month review of a "Renewal Proposal" provided by VeriSign

  and only under terms that are in "substantial conformity with the terms

  of registry agreements between ICANN and operators of other open TLDs.

  . ."   ICANN also should strengthen the termination provisions currently

  contained in Section 6.1 of the proposed agreement by using the relevant

  text from Sections 16(B-E) of the current agreement.





  3.    Registry Fees



  The proposed .com contract would permit VeriSign to unilaterally raise

  registration fees by 7% per year.  The existing .com contract and all

  gTLD registry agreements (other than the .net agreement with VeriSign,

  which was entered into without community input in violation of ICANN's

  Bylaws) require the registries to cost-justify any price increases.  In

  an industry where the economics suggest that fees should be going down

  when there is competition, it is particularly troublesome and

  anti-competitive to grant a monopolist or a single source provider the

  unilateral right to increase costs without justification.

  Unfortunately, these fee increases would result in cost increases to

  individual registrants.  We note that in the recent competitive process

  for .net, VeriSign significantly lowered its registry fees.  There is no

  reason for unilateral cost increases for the larger .com registry.



  We recommend that the Board delete the current text of Section

  7.3(d)(ii) and replace it with Section 22(A) of the current .com

  agreement requiring VeriSign to justify and ICANN to approve any

  proposed fee increase.  If there is a dispute between ICANN and VeriSign

  over a cost increase, ICANN should have the right to seek competitive

  price proposals from other registry operators to ensure that the ICANN

  community receives the benefits of competition.





  4.    New ICANN Fees



  ICANN and VeriSign propose a new ICANN fee that would be assessed on

  VeriSign and passed on to the registrars.  This fee would result in

  excess of approximately $150 million dollars to ICANN, and would be an

  end run around the existing ICANN budget approval process.  As proposed,

  ICANN staff has removed an important check on the ICANN budget process.

  All ICANN fees that impact registrants should be subject to the ICANN

  budget approval process and should not only be the subject of

  negotiations between VeriSign and ICANN.



  In addition to the changes suggested in number 3 above, we recommend the

  removal of Sections 7.3(g-h) in the proposed contract.  Any transaction

  fees that ICANN needs to collect from registrars (and hence registrants)

  should be assessed through the current transaction fees charged by ICANN

  to registrars and be subject to the existing budget approval process.





  While we understand the desire to finalize the litigation, it should not

  be done so without a sufficient review process nor at the expense of

  major tenets of ICANN's mission.  In its current form, it is a bad

  settlement for ICANN, the ICANN community, and the public-at-large.  We,

  therefore, urge the ICANN Board to take advantage of the six month

  review of a "Renewal Proposal" contemplated in the existing .com

  agreement, which doesn't expire until November 2007.  The Board should

  use this time to review the complicated contracts in their entirety,

  have a public comment period commensurate with the importance of the

  issue, and make the changes necessary to improve the agreement.