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ICANN director slammed vertical integration

Kevin Murphy, December 15, 2010, Domain Registries

ICANN really shook up the domain name industry last month when it said it was dropping rules that prevent registrars and registries from owning each other.

But two of its directors voted against the decision and one, George Sadowsky, entered a lengthy dissenting opinion in which he said the benefits of so-called “vertical integration” are “largely illusory”.

Vertical integration would allow existing registrars to apply to run new top-level domains. It would enable companies to more easily apply for “.brand” or small niche TLDs.

This has been banned in previous registry contracts, due in part to the potential for abuse of registry data and anti-competitive behaviour by registrars.

Sadowsky delivered a four-point objection to the VI resolution, which was passed in early November, according to minutes published this week.

He said that introducing VI at the same time as the new TLD program would create unpredictable and irreversible consequences for the industry, and questioned ICANN’s ability to enforce compliance with data-sharing rules.

in spite of the measures to be taken to ensure “good conduct,” the resolution has the potential to commingle all of the data, public and private, regarding a registry in one place, providing the possibility of easy and invisible sharing of data within a merged or co-owned entity regardless of the scope of any agreement with ICANN.

Such sharing is likely to be undetectable given the close affiliations among the entities. Data now forbidden to be shared between registries and registrars will be shared. Both auditing and enforcement by ICANN are unlikely to be effective, all the more so as we move from 20+ to hundreds of new gTLDs.

Data sharing would give registrars greater insight into valuable domains, potentially facilitating registrant-unfriendly activities such as warehousing.

Those companies which opposed VI, including Afilias and Go Daddy, have previously said that the potential for registrar abuse, harming registrars, was too great.

Sadowsky said:

Assuming that each gTLD registry must continue to treat all registrars equally, the real benefits of vertical integration are largely illusory, but those that can be easily obtained by the officially forbidden sharing of data are real

The minutes also show that Mike Silber voted against the resolution, saying he “believes there will be very unpleasant, unintended consequences”.

Harald Alvestrand, Ram Mohan, Thomas Narten, Jonne Soininen and Bruce Tonkin had conflicts of interest and were not in the room for the debate. The two voting directors, Tonkin and Alvestrand, officially abstained from the vote.

The minutes also contain this mysterious entry:

Confidential Issue
Pursuant to Article V, Section 5.4 of the ICANN Bylaws, the Board of Directors, by unanimous vote, determimed that, to protect the interests of ICANN, the matter under discussion should not be included in the minutes until such time as the Board designated the item should be published.

Anybody with any ideas what this might be, please feel free to theorize in the comments.

What next for new TLDs? Part 3 – The .xxx Factor

Kevin Murphy, December 14, 2010, Domain Registries

Like or loathe the decision, ICANN’s new top-level domains program appears to have been delayed again.

But for how long? And what has to happen now before ICANN starts accepting applications?

In short, what the heck happened in Cartagena last week?

In this four-part post, I will attempt an analysis of the various things I think need to happen before the Applicant Guidebook (AGB) is approved.

In this third post, I will look at the state of play with the .xxx TLD application, and what that means for the new TLD process.

The .xxx Factor

At some time in February, the ICANN board and its Governmental Advisory Committee plan to meet (possibly in Geneva) to discuss both the AGB and the .xxx TLD proposal.

While these are two separate issues, how .xxx is being handled may have an impact on the timetable for the AGB’s approval.

Let’s first look at what’s happening with .xxx.

As you will have almost certainly already read, the ICANN board resolved on Friday that it “intends to approve” .xxx, despite GAC advice that may be to the contrary.

The ICANN-GAC power structure is governed by an 11-point charter in ICANN’s bylaws. The last two points, J and K, deal with what happens when the two parties disagree.

Under what, for the sake of brevity, I’m going to call “GAC-J” (instead of “ICANN Bylaws section Article XI, Section 2, Paragraph 1(j)”), ICANN has to call a meeting with the GAC when it plans to disregard GAC advice.

Specifically, if the ICANN board “determines to take an action” that is not consistent with GAC advice, it has to “inform” the GAC, stating why it decided to not follow the advice, then “try, in good faith and in a timely and efficient manner, to find a mutually acceptable solution”.

GAC-J has, to the best of my knowledge, never been invoked before. There isn’t even a procedure in place for handling this kind of official consultation.

But on Friday, the board stated that it intends to not follow the GAC’s advice on the .xxx application and “hereby invokes the consultation as provided for in ICANN Bylaws section Article XI, Section 2, Paragraph 1(j).”

Now that GAC-J has been invoked, the GAC and board will meet to find their “mutually acceptable solution”.

Should such a solution prove elusive, the ICANN board has to make a final decision, stating why it has disregarded the GAC’s advice. That’s handled by what I’ll call GAC-K.

What does all this have to do with new TLDs and the timetable for the publication and approval of the final Applicant Guidebook?

As ICM Registry president Stuart Lawley pointed out in a comment on CircleID, the procedures being created to resolve the .xxx dispute could very well soon be applied to the AGB.

As Lawley points out, ICANN has not yet put the GAC on notice that it plans to disagree with any of the 11 concerns outlined in the Cartagena GAC Communique.

While the Communique “assumes” ICANN has invoked GAC-J with regards new TLDs, the board has not explicitly done so.

This is uncharted territory, but I think it’s possible that this oversight (if it is an oversight) has the potential to add latency to the new AGB approval timetable.

ICANN might be well-advised to pass a resolution officially invoking GAC-J before the February bilateral meeting, in order to turn it into a bylaws-compatible consultation.

As long as it invokes the bylaws before March, the San Francisco meeting will be able to host a GAC-Board consultation under the terms of GAC-J, enabling the AGB to be approved that week.

If ICANN does not take either of these options, the GAC will be able (if it wants to be a pain) to further delay the process by demanding another inter-sessional consultation, like it just did in Cartagena.

I’ll discuss the GAC’s actual concerns in the fourth part of this post.

What next for new TLDs? Part 2 – The GAC Bottleneck

Kevin Murphy, December 14, 2010, Domain Registries

Like or loathe the decision, ICANN’s new top-level domains program appears to have been delayed again.

But for how long? And what has to happen now before ICANN starts accepting applications?

In short, what the heck happened in Cartagena last week?

In this four-part post, I will attempt an analysis of the various things I think need to happen before the Applicant Guidebook (AGB) is approved.

In this second post I will look at the process problems presented by ICANN’s Governmental Advisory Committee.

The GAC Bottleneck

The main meta-story of Cartagena was ICANN’s turbulent relationship with its Governmental Advisory Committee, which is either maturing or (less likely) heading to towards a shattering collision.

The two big proposals that were widely expected to get the ICANN board’s nod last Friday – the new TLD final Applicant Guidebook and the .xxx TLD – were both delayed in whole or part by the GAC.

It’s become abundantly clear that the overall ICANN decision-making process has become subject to what I’m going to call the GAC Bottleneck.

If ICANN is serious about getting things done to its desired timetable in future, it will need to start paying attention to the GAC much earlier and much more seriously.

There’s been a failure to communicate over the last several years, the inherently problematic results of which were clearly embodied in sessions last Monday in which the GAC and the ICANN board discussed the definition of “advice”.

If there’s an “advisory” committee, and neither the committee nor the body its “advises” knows what “advice” means, that’s a pretty big stumbling block to constructive dialogue, which helps nobody.

The GAC believes that this historic uncertainty is the main reason why the new TLD program has hit an impasse at this late stage in the process.

The official Cartagena GAC Communique said:

the GAC considers that these [unresolved GAC concerns with the AGB] result primarily from the fact that the Board adopted the GNSO recommendations on new gTLDs without taking due account of GAC advice at that time, thereby creating a flawed process.

That’s pretty strong stuff – the GAC is basically saying that all the thousands of discussions the community has endured since 2007 have been carried out under faulty assumptions, because ICANN failed to pay heed to GAC advice when it was writing the rules of engagement for developing new TLD policy.

It’s also the reason we’re looking at the need for a GAC-Board retreat next February, at which ICANN will attempt to address the GAC’s outstanding concerns, before the AGB can be approved.

More on that in part three of this post.

Want a premium .xxx domain? Now’s your chance

Kevin Murphy, December 14, 2010, Domain Registries

ICM Registry, despite suffering another setback at the Cartagena ICANN meeting last week, has set the wheels in motion for the launch of .xxx with the announcement of a Founders Program.

If you want to get your hands on a “premium” .xxx domain without having to pay a tonne at auction, this is your chance.

ICM said it will license premium domains to organizations willing to develop and market their sites for at least two years, raising awareness of the TLD.

.CO Internet did a similar thing with .co, issuing one-character names to the likes of Go Daddy and Twitter. Other registries have had founder programs for super-short domains.

The program will be open to newcomers, as well as those who own “matching” domains in other TLDs.

The .xxx application is currently on hold, pending ICANN’s consultation with its Governmental Advisory Committee in February, but ICANN has said that it “intends” to approve it.

It will be interesting to see how many members of the adult community currently opposed to .xxx, if any, will attempt to participate as a Founder.

(Hat tip: Michele Neylon)

ICANN new TLD launch delayed (again)

Kevin Murphy, December 10, 2010, Domain Registries

ICANN’s new top-level domains program has been delayed, likely for a few months at least, after governments submitted a laundry list of issues they believe are still unresolved.

The Governmental Advisory Committee is mainly bothered that the Applicant Guidebook fails to adequately protect trademark rights and that the cost of the program could outweigh the benefits.

The ICANN board resolved at its meeting here in Cartagena earlier today to meet with the GAC for an unprecedented consultation next February.

(The meeting will also discuss the .xxx application, which I’ve reported on for The Register).

The actual board resolution is hopelessly lengthy and confusing at first reading. Take this doublethink:

ICANN considers that the solutions developed to address the overarching issues of trademark protection, mitigating malicious conduct, and root-zone scaling substantially reflect the negotiated position of the ICANN community, but ICANN will take into account public comment including the advice of the GAC.

Some delegates here tell me they think this means the book has been closed on the portions of the guidebook dealing with IP protection mechanisms, for example.

(J Scott Evans, head of the IP constituency, stormed out of the room in a huff when this part of the resolution was read aloud.)

But the text of the resolution pretty clearly states that IP protections and the other overarching issues are still open for negotiation with the GAC and could be amended based on comments filed this week.

The resolution is open to interpretation with regards these three “overarching issues”.

It does, however, refer to other issues that are explicitly unresolved in ICANN’s view, namely the treatment of geographic names and the handling of “morality and public order” objections.

Both are singled out as needing more work before they can be finalized.

What does all this mean for the launch timetable? I think it means there isn’t one. Again.

[The ICANN board] Directs staff to synthesize the results of these consultations and comments, and to prepare revisions to the guidebook to enable the Board to make a decision on the launch of the new gTLD program as soon as possible.

“As soon as possible” is either meaningless or, taken literally, means the board’s next meeting. That’s likely to be late January, if previous years are any guide.