RE: [registrars] Balloting interrupted. - Next steps???

["Jeffrey Eckhaus" <jeckhaus@xxxxxxxxxxxx>]

All,

 

I want to issue a correction as there were two topics that were
discussed below by the Board,  not one.

 

The two topics should have been listed below as:

 

5) Proposals to Address Domain Tasting , and 

6) Compliance Report on Network Solutions' Domain Reservation Activities


 

 

 

________________________________

From: owner-registrars@xxxxxxxxxxxxxx
[mailto:owner-registrars@xxxxxxxxxxxxxx] On Behalf Of Jeffrey Eckhaus
Sent: Tuesday, January 29, 2008 9:41 AM
To: Registrars Constituency
Subject: [registrars] Balloting interrupted. - Next steps???

 

Based on reading the Preliminary Report for the Special Meeting of the
ICANN Board of Directors and the result below (in italics) , do we even
need to vote? What are out next steps here now that the following
resolution has been passed? 

 

THEREFORE, the Board resolves (2008.01.04) to encourage ICANN's
budgetary process to

include fees for all domains added, including domains added during the
AGP,

and encourages community discussion involved in developing the ICANN
budget,

subject to both Board approval and registrar approval of this fee.

 

 

 

 

6) Compliance Report on Network Solutions' Domain Reservation Activities

 

Bruce Tonkin recused himself from the discussion and dropped off the
call during the discussion of items 5 & 6 due to potential conflict of
interest. Kurt Pritz indicated that tasting is a practice that has grown
over the years and that many recent discussions and writings demonstrate
that the Board is already well versed on the related issues. Kurt
indicated that ICANN has collected some information that a few parties
have taken the practice to its logical conclusion, and operate
exclusively on this model - deleting as much as 95.5% of names
registered within the five-day grace period. Others exercise degrees of
restraint. There are a spread percentage of names deleted in the grace
period across all registrars that ranges from 0% to 99.5%. ICANN has had
many discussions and consultations on this issue. It was proposed that
ICANN charged a transaction fee on add-grace deletes in the 2004-2005
budget but there was substantial criticism that such a fee would be
de-facto policy making by ICANN staff. Recently the GNSO voted to
recommend that staff take action to change its transaction fee to change
in for tasting deletes. If ICANN changed transaction fee in this manner,
most think practice would cease. The vote represents Supporting
Organization policy support for alternative budget.

 

The staff paper discusses three options for addressing tasting, to
eliminate the practice. These are three options that have been discussed
recently in many recent writings describing the tasting practice and its
effects. As discussed in the GNSO report and elsewhere, there are
basically three options that could be used to attack domain tasting: (1)
ICANN could revise its registrar-level transaction fee (the current rate
is US$0.20, which is subject to raise as the contracted rate is US$0.25)
to cover all new registrations and discontinue the exemption for
"tasted" domains, (2) registries could impose a "restocking" fee for
disproportionate domain deletions, or (3) ICANN could establish a new
"policy" effectively deleting the add grace period policy in the
registry agreements.

 

Revising the registrar fees would be discussed with the community and
specifically with registrars whose approval would be sought in
accordance with the 2/3 requirements relating to approval of the ICANN
budget by the registrars. Imposing a registry level restocking fee such
as .org has implemented in its registry, is problematic because pricing
and imposition of fees for registry services is considered as outside
that "picket fence" that describes constraints on consensus policy. A
consensus or temporary policy to delete the registry agreement
contractual provision that specifies the add-grace period might not be
an effective means of eliminating the practice. Tasting could still be
offered as a short-term pricing or introductory price discounts even if
the five-day period did not exist.

 

Susan Crawford noted that she had been consulting with parties involved
with and concerned with tasting and watching the Board discussion and
the points of view discussed. In light of this, she circulated a
resolution for the Board to consider that suggested that the Board take
an emergency step to impose a fee on names deleted during the add grace
period (AGP). This could be accomplished in the regular budget cycle. In
order to expedite implementation, Susan proposed the Board adopt a
resolution today as an emergency policy focused on the impact on
security and stability and relating it to the recent service introduced
by Network Solutions.

 

With regard to the proposed resolution, Jean-Jacques Subrenat thought it
was not absolutely necessary to include the reference to 'security and
stability'. Citing his understanding of the urgency for the Board to
take such a motion, he considered however that these practices under
scrutiny do not in a significant way endanger security and stability, he
suggested ICANN drop the reference to security and stability.

 

Paul Twomey suggested that the resolution should encourage further
exploration of the issue rather than reach a conclusion because we need
to give at least 21 days public notice on such a proposition, and the
ICANN Board should not agree that the fee be imposed until after public
comment. Dennis Jennings and Steve Goldstein suggested additional
proposed changes to the language.

 

John Jeffrey advised that any attempt to invoke consensus policy would
need to comply with bylaws. Resolutions to address tasting by invoking
the consensus (or temporary) policy provisions of ICANN's registry or
registrar agreements would have to comply with both the terms of those
agreements, and with ICANN's Bylaws.  Bylaws Article III, Section 6, for
example, requires that "With respect to any policies that are being
considered by the Board for adoption that substantially affect the
operation of the Internet or third parties, including the imposition of
any fees or charges, ICANN shall [...] provide public notice on the
Website explaining what policies are being considered for adoption and
why, at least twenty-one days (and if practical, earlier) prior to any
action by the Board ..."
<http://www.icann.org/general/bylaws.htm#III-6>.

 

Susan Crawford agreed with changes to her proposed resolution by
Jean-Jacques, Dennis Jennings, Paul Twomey and John Jeffrey.

 

Janis Karklins advised that during the last GAC call there was a request
to engage with the Board on domain name tasting in New Delhi, and he
will be requesting a staff briefing for the GAC as well.

 

The Chair asked in the context of the problem the registry and registrar
agreements, and under the bylaws, if the Board is able to do this and
make such a resolution.

 

Susan Crawford considered that the Board adopts lots of resolutions like
this, the "whereas" clauses identify scope, issues and what ICANN is
encouraging through a budget process that we think will address tasting.
She indicated that ICANN is not adopting a policy, but are directing
staff to take actions in compliance with the existing budget process.

 

The Chair considered the next general issue is the reference to the
issue of the NSI practice, and asked whether it is clear that that
practice will be addressed by this approach?

 

Kurt Pritz advised that the NSI practice is enabled by the AGP: putting
the name on hold for 5 days. If NSI is required to pay a transaction fee
then it is general opinion that the practice would end. John Jeffrey
confirmed that in conversations with NSI, a representative had indicated
that the service had already been revised since it was initiated, and
also that if ICANN were to impose a fee for the AGP than they would
likely roll back the service.

 

The Chair asked for further developments on the NSI situation.

 

Kurt Pritz advised that ICANN wrote to NSI to investigate the practice
and determine if the practice is in violation of the RAA. NSI had
already amended the practice prior to that writing to bring it into
compliance with the RAA. These were essentially nuances to the initial
version of the practices - in essence, it has the same effect. There may
be one more change to the practice to bring it into RAA compliance.

 

Steve Crocker advised that SSAC had spent a lot of time thinking about
this and he made two observations. The AGP is the connective tissue
between NSI's goals in the new service and their ability to offer the
service, but it is not the right issue. Information supplied by the user
when checking name availability disadvantages the user in an unexpected
way and when exposed a registrant would not want the registrar to
operate in this way. Raising the price on five-day registrations is a
pragmatic approach but it does not get to the core value underlying
this. We may feel good about the fee but it does not get to the core of
what's going on. We should not casually drive by and address a serious
underlying issue with the fee. Regarding other ways to eliminate
tasting, removing the AGP as a registry contract requirement would not
necessarily be effective because a registry might choose to offer some
fee discount period for whatever reason that would effectively replicate
the AGP. Therefore, although ICANN might remove the AGP as a
requirement, it is not assured that this would remove this as an option.
If the transaction fee is imposed on add-grace deletes ICANN could
subsidize costs resulting from typos or fraud.

 

Steve continued that the dialogue we're having has been about imposing a
fee during the AGP, another option is we simply stop defining AGP:
taking away any recognition of it as a separate type of transaction.
Everything gets simpler if we remove the AGP as having any special
meaning or purpose. The NSI situation is distinct from other uses of the
AGP and depends on the AGP for efficiency but that is not the only
example of a registrar or entity taking advantage of information
supplied by customer. Steve's perspective on AGP is that we should stop
subsidizing the practice and the other issues will be resolved.

 

The Chair asked Steve his opinion of Susan's resolution. Steve Crocker
responded that he is sympathetic to adopting the resolution, and also
agreed with Bruce Tonkin that it would be very difficult to declare an
emergency policy since AGP has been actively practiced for three years.
He also pointed out that what NSI is doing is qualitatively different
from what others have been doing.

 

The Chair considered that it might be, that tasters are prepared to pay
the transaction fee, and, if that is the case, we may consider a
resolution that addresses the issue of front running.

 

Harald Alvestrand noted that there are two different bad results that
have been discussed here: front running or capturing names from
registrants, and free registration using AGP. Action taken to fix one of
them is a good thing, but we should not forget that both issues should
be addressed.

 

Roberto Gaetano reflected on Susan's motion and the 3 alternatives. He
is not enthusiastic about ICANN imposing a fee on a registration of
domain names even if deleted; however, it appears to be the best or only
possible option. For the reasons stated earlier, Roberto would not
support the other two options. ICANN may step outside its authority with
requiring registries to impose fees and eliminating the AGP in the
registry agreements may not be effective. Taking an ineffective action
may be perceived badly. I believe we need to put in place some actions
and messages to explain these actions to anticipate misperceptions. We
need make it clear that we take this financial measure not in a
relationship to a financial perspective of profit or loss but simply as
the best way in order to cure problem for certain large parts of the
Internet community. We need a strong statement of the negative aspects
that the current practice entails and consequences of letting this
continue without attempting to stop it. We will see more creative
solutions than NSI's which may have effects worse than what we are
trying to cure. I support the option that follows a proposal in the
budget and in favor of Susan's motion but we need to enrich our action
by communicating clearly to the community why we are doing this and to
anticipate the negative and positive reactions. This communication
should take place when we present the budget and make it obvious to the
community that we are not imposing additional fees on registrants, that
this would not result in an increase in revenue to ICANN.

 

The Chair requested clean wording of a reworked resolution.

 

Susan Crawford moved and Steve Goldstein seconded the adoption of the
following resolution:

 

Whereas, the current version of all gTLD registry contracts provides for
a

five-calendar-day Add Grace period (AGP) following the initial
registration

of a domain during which a domain may be deleted and the sponsoring

Registrar will be credited for the amount of the registration fee (see,

e.g.,

http://www.icann.org/tlds/agreements/verisign/appendix-07-01mar06.htm);

 

Whereas, the AGP was originally created to allow domain names that had
been

accidentally registered to be cancelled;

 

Whereas, the practice of "domain tasting," by which names are registered
and

then deleted during the AGP, has grown at a very great rate since 2005,
with

tens of millions of domains registered and deleted each month;

 

Whereas, it is apparent that the AGP is being used for purposes for
which it

was not intended;

 

Whereas, abuse of the AGP is, in the opinion of the majority of
respondents

whose statements were collected by the GNSO Ad Hoc Group on Domain Name

Tasting (4 October 2007 report), producing disadvantages in the form of

consumer confusion and potential fraud that outweigh the benefits of the

AGP;

 

Whereas, the GNSO Council on 31 October 2007 resolved to launch a PDP on

Domain Tasting and to encourage staff to apply ICANN's fee collections
to

names registered and subsequently de-registered during the AGP;

 

Whereas, it is the Board's view that abuses of the AGP should speedily
be

halted, while the positive benefits of the AGP to consumers should be

retained;

 

Whereas, the positive benefits of the AGP may include, among other
things,

avoiding fraud and monitoring, testing and development of registrars'

provisioning, production and/or merchant gateway systems;

 

Whereas, the Board believes that the withdrawal of ICANN's waiver of
ICANN's

non-refundable transaction fee to the deletion of names within the AGP
will

substantially end the practice of abusing the AGP;

 

THEREFORE, the Board resolves (2008.01.04) to encourage ICANN's
budgetary process to

include fees for all domains added, including domains added during the
AGP,

and encourages community discussion involved in developing the ICANN
budget,

subject to both Board approval and registrar approval of this fee.

 

A voice vote was taken of all Board Members present and the motion was
approved by a vote of 13-0. Bruce Tonkin abstained from voting on this
item.

 

-----Original Message-----
From: owner-registrars@xxxxxxxxxxxxxx
[mailto:owner-registrars@xxxxxxxxxxxxxx] On Behalf Of Robert F. Connelly
Sent: Tuesday, January 29, 2008 12:30 AM
To: Registrars Constituency
Subject: [registrars] Balloting interrupted. Please wait a time with
patience.

 

 

Dear Registrars:

 

The ballot posted at 16:00 Pacific Time, Sunday, 27 January has been
aborted.

 

Please disregard the ballot with the following Subject line:

 

[RC Voting] Re-Balloting on Domain Tasting, View 1 & View 2 (1st Call
for Votes)

 

The required 72 hours for discussion was inadvertently shortened to
60:01 hours.  

 

We have received one comment in less than 72 hours.  Excom is
determining whether that comment is persuasive, requiring an amendment
in the ballot.  

 

You shall be notified when the ballot is launched again.

 

Regards, BobC