[registrars] Statement on proposed .com settlement from ICANN ALAC

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

The ICANN At Large Advisory Committee at a meeting this morning adopted
this statement about the proposed ICANN / Verisign settlement.

Regards,
John Levine, ALAC member and document scribe

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Concerns on the proposed ICANN / Verisign settlement from the At-Large
Advisory Committee
1 December 2005

1. We believe that it would be more appropriate to separate the lawsuit
settlement from the contract renegotiation. If the settlement requires
changes to the contract, ICANN and Verisign can amend the current
contract to reflect settlement terms.

2.  We are concerned about the loss of accountability and oversight both
of the community over ICANN and of ICANN over Verisign.  The external
oversight of ICANN's budget currently provided by the registrars will no
longer exist. The settlement provides no meaningful checks on Verisign's
behavior, unless they misbehave so badly that ICANN  voids their
contract.  As the registrars have pointed out, the proposed "consensus
process" is new and untested.

3. We are concerned about the use and misuse of personal data.  Under
the agreement, Verisign is allowed to do whatever data mining they want
of COM zone usage and access.  For example, they could sell DNS traffic
data about pepsi.com to Coca Cola, or about greenpeace.com and other
political sites to governments whose policies they oppose. As a trustee
for the Internet community, ICANN should provide appropriate protections
for the community's data. We are also concerned that such data mining
would be illegal in countries with data privacy laws.

4.  We believe that the proposed price increases for the .COM registry
are inappropriate, since the registry is no longer required to offer any
justification for them.  We are also concerned about the tripling of
ICANN's per-domain fee.  Although the incremental cost to each
individual user will be low, the aggregate cost to users will be in the
tens of millions of dollars per year.

5. We are concerned by the lack of economic and legal analysis of the
effects of the proposed settlement. To the extent that the .COM registry
is a monopoly, it requires stricter regulation than if it is not.
Analysis by a qualified economist of the price sensitivity and
substitutability of .COM and other domains, based on the extensive
historic data, should help understand the situation. Similarly,
qualified legal analysis of the likelihood of success of ICANN's and
Verisign's suits would help quantify the legal risks and costs the
settlement would avoid.  Market forces can have an effect on .COM
registry prices in two ways: (a) periodic rebids, and (b) a substitute
service. The current proposal does away with the rebidding, and we doubt
that .BIZ or .INFO or ccTLDs are a substitute for current registrants
who already have branded their .COM address.

6. The proposed settlement makes Verisign the permanent source of the
majority of ICANN's revenue.  By making itself dependent on an entity
not accountable to the public, ICANN endangers its independence and
hence endangers ICANN's public trust.

7. We share ICANN's concerns with the current budget and planning
process, which depends in large part on registrar approval and quarterly
financial contributions from numerous sources. We endorse a budget and
funding mechanism that would provide ICANN greater certainty in the
budget planning process and reduce the administrative burden on ICANN of
billing and collections. 
Nevertheless, we believe very strongly that ICANN should consult with
the registrant and At Large community before it fundamentally reshapes
its funding mechanism through new contracts with the registries.
Ultimately, funds paid to ICANN from registrars or registries come from
us, the At Large community. We encourage ICANN to engage the community
in a larger conversation about how it should be funded and how its
budgets should be created and approved.

8.  We are deeply concerned by the lack of transparent process.  The
current
(2001) .COM contract had a specific renewal timeline that has been
ignored, since the settlement includes a new contract that would void
the current one. 
ICANN offered no timetable or process for consideration of the proposed
settlement until forced to by the CFIT lawsuit.  The community does not
know whether it has a  month or a year to collect its input and offer
its advice, nor whether it may be possible to modify the proposed
settlement or it simply has to be accepted or rejected.

9.  With these considerations in mind, the ALAC advises the board to
reject the proposed settlement, to seek qualified advice on the econmic
and legal aspects of any proposed settlement, and to seek a settlement
that addresses our concerns.