[registrars] Regarding Board discussions on proposed .post agreement, and renewal of .aero and .museum agreements

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

From: http://www.icann.org/minutes/prelim-report-11sep07.htm

Status Report on discussions with the UPU regarding .POST and renewal
agreements for .AERO and .MUSEUM 

Kurt Pritz advised that there are issues in common with all the ongoing
sTLD negotiations (.MUSEUM, .AERO, and .POST). In some cases
negotiations are close to conclusion and in other cases, additional
negotiation is required. These issues have come up in other recent
registry negotiations and these issues have been themes for discussion
across the gTLD community. 

First, registries are seeking limitations to the requirement to comply
with ICANN consensus policies and have to follow and comply with
consensus policies. The second issue is the requirement to use ICANN
accredited registrars to register names in gTLD registries. The third
issue is the request for a clause in the agreement requiring
indemnification by ICANN to registries for costs associated with
compliance to consensus policies. This last clause was included in old
gTLD agreements but was eliminated in all new gTLD (including sTLD)
agreements. Indemnification was seen as necessary in early days of gTLD
development but as the market and registries have matured, it has become
apparent that this form of indemnification is not necessary or desirable
in the future development of the DNS. 

Steve Goldstein asked what it means to comply with consensus policies?
Kurt Pritz advised that the ccNSO, GNSO or ASO are designated to
recommend consensus policy to Board. When the Board approves the
consensus policy, it is incorporated by reference into the gTLD
agreements. 

Steve Goldstein clarified that after a contract is signed these can be
amended because there are new consensus policies. Kurt Pritz responded
that registry agreements include a clause that requires compliance with
consensus policy even when the policy is approved after the contract is
executed. 

Sponsored TLDs, by their definition, have significant policy making
authority. So certain policy-making authority is reserved to the
sponsoring organization in sTLDs. Recent sTLD agreements include
requirement for compliance with consensus policy, including the process
for considering new registry services - a stability and security
threshold review. 

As these contractual issues were raised, ICANN facilitated public
discussion on each and requested public explanations of the sTLDs as to
why these contract changes are important to them. It is important for
the Board to understand that the public discussion will not necessarily
lead to agreement across constituency groups and the Board may be left
to decide whether certain agreement terms should be approved in the face
of criticism. 

Kurt then reviewed the negotiating status on each of the registries, as
follows: 

Negotiation status - .MUSEUM: This negotiation is complete, a second
version of the agreement is posted for public comment. The controversial
issue was that .MUSEUM asked to "self-register" 5000 names. The reason
was that .MUSEUM wished to replace the functionality of their "wildcard"
that .MUSEUM was giving up in this negotiation. After registrar
constituency criticism, Cary Karp met with the registrar constituency in
Lisbon. Through that discussion, the contract language evolved to what
is posted, including a reduction in the number of names to 4000. The
proposed new language was posted on 31 August 2007 and thus far, there
has been no comment from the registrar community, which has been primary
in its opposition. ICANN Staff anticipates asking the Board to approve
the agreement at the 16 October 2007 Board Meeting. 

Negotiation status - .AERO: Many contractual issues have been resolved,
however, some core issues remain uncompleted. The sponsor SITA states
that, in the proposed agreement, the language does not adequately
protect the sponsor's delegated policy making authority. They have
requested a significant exemption from consensus policy compliance. SITA
also requested that the old indemnification clause remain in their
contract even thought the clause in other agreements has been
eliminated. They claim they should not be responsible for costs arising
from ICANN actions. Finally, they wish to eliminate the clause present
in other agreements that prohibits registries from owning a 15% interest
in a gTLD registrar. Their reason is, that in their large organization,
a registrar may be acquired without notice to the sponsoring
organization. 

While negotiations are amicable, ICANN Staff and SITA disagree on the
approach to these three core issues. Staff continues to work for a
conclusion that SITA and ICANN Staff can mutually recommend. 

Negotiation status - .POST: UPU, the sponsor, has in recent months
invigorated the negotiation. The issues here are similar. The UPU seeks
exemption from consensus policy and to include indemnification by ICANN
for certain costs to the registry. Additionally, their scheme does not
plan to utilize ICANN registrars for their 300-400 primary registrations
of their member states (uk.POST, for example). These requests have been
based on the UPU's special status as a U.N. organization. ICANN has
posted a UPU position paper describing their business plan and model to
the gTLD constituency group, which has been offered to the community for
input. The UPU would like to complete negotiations before the Los
Angeles ICANN Meeting, but time is running short for appropriate comment
periods and the issues remain controversial. 

Susan Crawford considered that in relation to the consensus policy
structure, it will be important for ICANN to stick with the consensus
policy model as it gives ICANN legitimacy and consistency in dealing
with registries so long as the right process has been used to achieve
the policy. Susan acknowledged the difficulty but concluded that it is
essential that the consensus policy clause remain in the agreement. With
regard to business models, she hoped it would not always be the case
that ICANN-accredited registrars were to be used. 

Bruce Tonkin noted that in the context of the new gTLD process where the
aim is to get consistency in agreements, he is wary of considering
agreements on a case-by-case basis.  The requirements to adhere to
Consensus policy and use ICANN accredited registrars are covered in the
proposed new gTLDs policy.  His view is that given how hard it is to
develop consensus policies these should be adhered to by registries and
registrars noting for example that the new gTLD process has taken two
years of intensive negotiation and has been through rigorous process.
The use of registrars has been part of new gTLD discussion between
registries and registrars and the general principle is that the
registrar should be accredited by ICANN and should be treated equally.
There have been some discussions over whether there should continue to
be restrictions on the level of ownership by a registry of a registrar,
and whether a registry may also be accredited as a registrar for its
TLD.   With regard to .POST and the three to four hundred names, there
should be a separation between domain name allocation and domain name
records maintenance. The .POST application may pre-allocate names as
part of the TLD proposal; but maintenance of records could still be done
by registrars .   It is likely that registrars are already maintaining
other domain name records for potential .POST registrants.  

Kurt Pritz advised that the clean division between registrar and
registry is based upon policy and practice and it dates from the
beginning the gTLD model structure. The agreements state that a registry
cannot own 15% of registrar. The discussion between the roles of
registries and registrars is ongoing about how distinction can be kept
and business models accommodated. 

Raimundo Beca asked if the date of November 2 is definite or if it can
be moved. Raimundo reflected that we should be careful not to give the
UPU any favors, as they are an organization that has a history of
monopoly and now there is competition. They should have to comply with
the consensus policies. He noted that the UPU and the ITU have a similar
history and that the ITU does not have it's own TLD, but is registered
under ITU.INT 

Kurt Pritz advised regarding the November 2 date, the UPU requested
ICANN Board approvals by that date so the UPU Congress can consider
approving the agreement. We will make every effort to resolve all issues
in time for that but have indicated that the deadline might be
problematic because of the public debate around this agreement. Question
was raised regarding whether the UPU could possibly consider the
proposed agreement before Board approval. 

Steve Goldstein noted that he was against giving special consideration
on consensus, indemnity, and registrar with exception of .MUSEUM. If you
look ahead to 10,000 TLDs it will be difficult to go forward without
common agreement. Steve Goldstein does not want to alienate the registry
community, and he does not want ICANN to indemnify the TLD sponsors
against consensus policies, so if such clauses were included in these
agreements, he would vote "no". 

Steve Crocker noted that he had previously reviewed this issue and that
with regard to .MUSEUM and other special registries using registrars,
there is not enough business for those registrars to participate. He
noted that .MUSEUM has problems getting the attention of registrars. The
idea was to create competition but when registrations fall below a
threshold it makes the business model difficult. Its nice to have a one
size fits all but this does not fit the facts of the matter. Steve
indicated that if we're going to encourage or have a system in place
favorable to registries 100,000 minimum business model then we have to
have the ability to use a mechanism other than a competitive registrars
system. 

Bruce Tonkin advised that what Steve explained registrars understand,
but the concern about considering on a case by case is the use of a
series of precedents and trying to look at the issue as a whole and come
up with something workable and in recognition of the points made. 

Steve Crocker noted that he had no problem with the framework developed
to deal with those issues but considered that what we have now does not
work.