ICANN content policing power grab may be dead

A move by ICANN to grant itself more formal “content policing” powers may be dead, after the community was split on the issue and governments failed to back the move.

The Governmental Advisory Committee yesterday sent comments essentially opposing, for now at least, the idea of ICANN reforming its bylaws to give it more powers over internet content, making it very unlikely that ICANN would be able to get such amendments approved by its community overseers.

The comments came a few days after ICANN extended the deadline for responses to a December 2023 consultation on whether applicants in the next new gTLD round should be able to sign up to so-called Registry Voluntary Commitments that regulate content in their zones.

RVCs would be an appendix to ICANN Registry Agreements which would commit a registry to, for example, ban certain types of registrant or certain types of content from domains in their gTLDs.

They’re basically a rebadged version of the Public Interest Commitments found in RAs from the 2012 round, in which the likes of .sucks agreed to ban cyberbullying and .music agreed to ban piracy.

But they’ve got ICANN’s board and lawyers worried, because the Org’s bylaws specifically ban it from restricting or regulating internet content. They’re worried that the RVCs might not be enforceable and that ICANN may wind up in litigation as a result.

ICANN has therefore proposed a framework (pdf) in which RVCs would be enforced by ICANN only after an agreed-upon third-party auditor or monitor found that a registry was out of compliance.

The board sent out several pages of questions to all of its Supporting Organizations and Advisory Committees in December, asking among other things whether the bylaws needed to be amended to clarify ICANN’s role, but the responses were split along traditional lines.

Registries and registrars were aligned: there’s no need for a bylaws change, because ICANN should not allow RVCs that regulate content into its contracts at all.

“ICANN should maintain its existing bylaws which exclude content from its mission, and allowing any changes to this could be a slippery slope opening ICANN to becoming a broader ‘content police’,” the Registrars Stakeholder Group said in its response, giving this amusing example:

An example of a content restriction is provided in the proposed implementation framework for .backyardchickens (e.g. no rooster-related content). Restricting rooster-related content would require a significant amount of policing, and could even prohibit valuable content that would benefit such a TLD. For example, a backyard hen farmer might want to promote the pedigree lineage of the roosters that helped sire the hens, show pictures of the roosters that were the fathers, etc. All of this could in theory be prohibited,but would also require review and subjective analysis. This would be a very slippery slope for ICANN, and a substantial departure from its mission. Restricting rooster content would then put ICANN in the place of enforcing laws that prohibit backyard roosters, rather than relying upon the competent government authorities charged with overseeing residential animal husbandry.

The Non-Commercial Stakeholders Group was more strident in its tone, even raising the possibility of legal action if ICANN went down the content policing route, saying “the best way for the Board to address content-related PICs and RVCs is to make it clear that it will reject them categorically.” It added:

The prohibition on content regulation in ICANN’s mission is extremely important and very clear. Mission limitations were a critical part of the accountability reforms that were required before ICANN would be released from US government control in 2016… NCSG will mount a legal challenge to any attempt to dilute this part of the mission.

The opposing view was held by the Business Constituency, the Intellectual Property Constituency, and the At-Large Advisory Committee, which is tasked with representing the interests of ordinary internet users.

They all said that ICANN should be able to allow content-related RVCs in registry contracts, but the IPC and BC said that no bylaws amendment is needed because the bylaws already have a carve-out that enables the Org to enforce PICs in its agreements. The ALAC said a bylaws amendment is needed.

“There is a distinction between ICANN regulating, i.e imposing ‘rules and restrictions on’ services and content, versus the registry operator voluntarily proposing and submitting to such rules and restrictions,” the IPC wrote.

“There is also a distinction between ICANN directly enforcing such rules and restrictions on third parties, i.e. registrants, versus ICANN holding a registry operator to compliance with the specifics of a contractual commitment,” it added.

The last community group to submit a response, fashionably late, was the GAC, which filed its response yesterday having reviewed all the other responses submitted so far. The GAC arguably has the loudest voice at ICANN, but its comments were probably the least committed.

The GAC said that ICANN should only go ahead with a bylaws amendment if it has community backing, but that the community currently lacks consensus. It said, “at this stage there are not sufficient elements to justify commencing a fundamental bylaws amendment to explicitly enable the enforcement of content-related restrictions”.

However, the GAC still thinks that RVCs “will continue to serve as tools for addressing GAC concerns pertaining to new gTLD applications during the next round” and that it wants them to be enforceable by ICANN, with consequences for registries found in breach.

The GAC said that it “will continue to explore options to address this important question”.

This all means that ICANN is a long way from getting the community support it would need to push through a bylaws amendment related to content policing. That’s considered one of the “Fundamental Bylaws” and can only be changed with substantial community support.

Such amendments require the backing of the Empowered Community. That’s the entity created in 2016 to oversee ICANN after it severed ties with the US government. It comprises individuals from five groups — the GAC, the GNSO, the ccNSO, the ALAC and the Address Supporting Organization.

For a fundamental bylaws amendment to get over the line, at least three of these groups must approve it and no more than one must object.

With the GNSO, given its divisions, almost certainly unable to gather enough affirmative votes, the GAC seemingly on the fence, and the ASO and ccNSO recusing themselves so far, only the ALAC looks like a clear-cut yes vote on a possible future bylaws amendment.

Perhaps that’s why ICANN chair Tripti Sinha has written to the ASO and ccNSO in the last few days to ask them whether they’d like to think again about ducking out of the consultation, giving them an extra two weeks to submit comments after the original March 31 deadline.

The ccNSO handles policy for country-code domains and the ASO for IP addresses. Both have previously told ICANN that gTLD policy is none of their business, but Sinha has urged them both to chip in anyway, because “the ICANN Bylaws govern us all”.

Progress made on next new gTLD round rules

Pace towards finalizing the details of the next new gTLD application round is picking up, with a group of policy-makers close to overcoming some of the ICANN board’s concerns about the program.

A so-called “small team” of GNSO members, aided by a couple of ICANN directors, have drafted a set of recommendations aimed at helping the board approve the 38 community recommendations it has not yet adopted.

The board approved 98 new gTLD “Subsequent Procedures” policy recommendations in March, but was hesitant on issues such as the proposed registry back-end evaluation program, round-based applications, and content policing.

The board had raised the specter of a first-come, first-served model for new gTLD applications, something the community roundly rejected during the Policy Development Process for the next rounds.

Directors in the small group have since clarified that they’re really looking for a “steady state” application process, that may or may not involve FCFS, in order to make planning, hiring and software development more predictable.

There seems to be no question of the next application opportunity being anything other than a round-based process.

Nevertheless, it’s now possible that the GNSO may throw the board a bone by suggesting a PDP that would look into how the new gTLD program could operate in a “steady state” over the long term.

Content policing is another issue that has caused the board pause.

SubPro and the GNSO have recommended that registries be able to add Registry Voluntary Commitments — promises to ban certain types of content from their zone, for example — to their ICANN contracts.

But the board is worried that this may break its 2016 bylaws, which demand ICANN not get involved in content policing, even though the similar Public Interest Commitments from the 2012 round are enforceable.

The GNSO and board currently seem to be leaning towards a bylaws amendment to address RVCs, but it will be a bit of a tightrope, language-wise, to keep ICANN on its ostensibly technical mandate.

The small group has met nine times since late March to try and resolve these and other board concerns ahead of the mid-year ICANN 77 meeting in Washington DC, which starts June 12.

There’s a pretty aggressive schedule of meetings between now and then, with a bilateral between GNSO and board May 22. The board should have the GNSO’s response to its roadblocks by DC, which should allow it to start chipping away at some of the 38 unadopted recommendations.

Content police? ICANN mulls bylaws change

ICANN could change its bylaws to allow it to police internet content to an extent, it emerged this week with the publication of the Operational Design Assessment for the next stage of the new gTLD program.

Currently, ICANN’s bylaws state that the Org may not “regulate (i.e., impose rules and restrictions on) services that use the Internet’s unique identifiers or the content that such services carry or provide”, and it’s been adamant that it is not the “content police”.

But the community has recommended that future new gTLD applicants should be able to agree to so-called Registry Voluntary Commitments, statements of registry policy that ICANN would be able to enforce via contract.

RVCs would be much like the Public Interest Commitments many registries agree to in the 2012 application round, implemented before ICANN’s current bylaws were in effect.

As an example I’ve used before, Vox Populi Registry has PICs that ban cyberbullying and porn in its .sucks gTLD, and in theory could lose its contract if it breaks that rule by allowing .sucks sites to host porn (like this NSFW one, for example).

ICANN’s board of directors expressed concern two years ago that its bylaws may prevent it from approving the RVC recommendation.

But Org staff have now raised, in writing and on a webinar today, the prospect that the board could change the bylaws to permit RVCs to go ahead. The ODA published on Monday states:

The Board may wish to consider how and whether it can accept the recommendations related to PICs and RVCs. One option may be to amend the Bylaws with a narrowly tailored amendment to ensure that there are no ambiguities around ICANN’s ability to agree to and enforce PICs and RVCs as envisioned

How worrying this could be would depend on the wording, of course, but even the chance of ICANN meddling in content is usually enough to raise eyebrows at the likes of the Electronic Frontier Foundation, not to mention supporters of blockchain alt-roots, many of whom seem to think ICANN is already censoring the internet.

It’s not clear whether the change is something the board is actively considering, or just an idea being floated by staff.

XYZ bought most of Uniregistry’s TLDs

XYZ.com has emerged as the winning bidder for 10 of the 17 new gTLDs that UNR, formerly Uniregistry, auctioned off last year.

The company bought .audio, .christmas, .diet, .flowers, .game, .guitars, .hosting, .lol, .mom and .pics, according to ICANN, which approved the transfer of each registry agreement today.

As previously reported, a new company called Dot Hip Hop bought .hiphop, albeit not at auction.

The contract reassignments come almost a year after the auction took place, and were delayed after ICANN got nervous about the fact that UNR had apparently sold matching Ethereum Name Service blockchain domains at the same time.

“This raised concerns because ICANN org was being asked to approve transactions that included not only the transfer of gTLD operations set out in the relevant registry agreements, but also included references and/or implications of the transfer of ownership rights in the gTLDs,” ICANN veep Russ Weinstein wrote today.

“To be clear, the registry agreements do not grant any property ownership rights in the gTLD or the letters, words, symbols, or other characters making up the gTLD string,” he added.

Six more UNR gTLD contracts remain in the approval process, but ICANN blamed this on the timing of when the assignment requests were submitted.

The UNR auction last April raised over $40 million, according to UNR.

DotKids signs very weird new gTLD contract

New gTLD registry hopeful DotKids Foundation has become the latest to sign its ICANN Registry Agreement, and it’s a bit odd.

The signing means that DotKids only needs to have its registry back-end, managed by Donuts/Afilias, pass the formality of its pre-delegation testing before .kids finds its way into the DNS root.

It’s going to be a regulated TLD, with strict rules about what kind of content can be posted there. It’s designed for under-18s, so there’ll be no permitted violence, sex, drugs, gambling etc.

DotKids plans to enforce this with a complaint-response mechanism. There won’t be any pre-vetting of registrants or content.

There are a few notable things about .kids worth bringing up.

First, the contract was signed August 13 by DotKids director Edmon Chung, best known as CEO of DotAsia. A few days later, he was selected for the ICANN board of directors by the Nominating Committee.

Second, it’s the first and only new gTLD to have been acquired on the cheap — DotKids got over $130,000 of support from ICANN as the only outfit to successfully apply under the Applicant Support program.

Third, DotKids’ Public Interest Commitments are mental.

PICs are the voluntary, but binding, rules that new gTLD registries opt to abide by, but the DotKids PICs read more like the opening salvo in a future lawsuit than clauses in a registry contract.

Three PICs in particular caught my eye, such as this one that seems to suggest DotKids wants to restrict its channel to only a subset of accredited registrars, and then doesn’t:

Notwithstanding Section 1 above, the Registry Operator makes a commitment to support ICANN’s overarching goals of the new gTLD program to enhance competition and consumer choice, and enabling the benefits of innovation via the introduction of new gTLDs. The Registry Operator further acknowledges that at the time of this writing, it is uncertain whether or not the limiting of distribution of new gTLDs to only a subset of ICANN Accredited Registrars would undermine ICANN’s own public interest commitments to enhance competition and consumer choice. In the absence of the confirmation from ICANN and the ICANN community that such undertaking would not run counter to ICANN’s overarching goals of the new gTLD program, or in the case that ICANN and/or the ICANN community confirms that indeed such arrangement (as described in 1. above) runs counter to ICANN’s public interest commitments and overarching goals, the Registry Operator shall refrain from limiting to such subset as described in 1. above.

I’ve read this half a dozen times and I’m still not sure I know what DotKids is getting at. Does it want to have a restricted registrar base, or not?

This paragraph is immediately followed by the equally baffling commitment to establish the PICs Dispute Resolution Procedure as a formal Consensus Policy:

Notwithstanding Section 2 and 4 above, the Registry Operator makes a commitment to support, participate in and uphold, as a stakeholder, the multi-stakeholder, bottom-up policy development process at ICANN, including but not limited to the development of Consensus Policies. For the avoidance of doubt, the Registry Operator anticipates that the PICDRP be developed as a Consensus Policy, or through comparably open, transparent and accountable processes, and commits to participating in the development of the PICDRP as a Consensus Policy in accordance to Specification 1 of this Agreement for Consensus Policies and Temporary Policies. Furthermore, that any remedies ICANN imposes shall adhere to the remedies specified in the PICDRP as a Consensus Policy.

The problem with this is that PICDRP is not a Consensus Policy, it’s just something ICANN came up with in 2013 to address Governmental Advisory Committee concerns about “sensitive” TLDs.

It was subject to public comments, and new gTLD registries are contractually obliged to abide by it, but it didn’t go through the years-long process needed to create a Consensus Policy.

So what the heck is this PIC doing in a contract signed in 2021?

The next paragraph is even more of a head-scratcher, invoking a long-dead ICANN agreement and seemingly mounting a preemptive legal defense against future complaints.

Notwithstanding Section 2 above, the Registry Operator makes a commitment to support ICANN in its fulfillment of the Affirmation of Commitments, including to promote competition, consumer trust, and consumer choice in the DNS marketplace. The Registry Operator further makes an observation that the premise of this Specification 11 is predicated on addressing the GAC advice that “statements of commitment and objectives to be transformed into binding contractual commitments, subject to compliance oversight by ICANN”, which is focused on statements of commitment and objectives and not business plans. As such, and as reasonably understood that business plans for any prudent operation which preserves security, stability and resiliency of the DNS must evolve over time, the Registry Operator will operate the registry for the TLD in compliance with all commitments and statements of intent while specific business plans evolve. For the avoidance of doubt, where such business plan evolution involves changes that are consistent with the said commitments and objectives of Registry Operator’s application to ICANN for the TLD, such changes shall not be a breach by the Registry Operator in its obligations pursuant to 2. above.

If you’re struggling to recall what the Affirmation of Commitments is, that’s because it was scrapped four years ago following ICANN’s transition out from under US government oversight. It literally has no force or meaning any more.

So, again, why is it showing up in a 2021 Registry Agreement?

The answer seems to be that the PICs were written in March 2013, when references to the AoC and the PICDRP as a potential Consensus Policy made a whole lot more sense.

While a lot of this looks like the kind of labyrinthine legalese that could only have been written by an ICANN lawyer, nope — these PICs are all DotKids’ handiwork.

ICANN seems to have been quite happy to dump a bunch of irrelevant nonsense into DotKids’s legally binding contract, and sign off on it.

But given that ICANN doesn’t seem convinced it even has the power to enforce PICs in contracts signed after 2016, does it even matter?

Has ICANN cut off its regulatory hands?

ICANN may have voluntarily cut off its power to enforce bans on things like cyberbullying, pornography and copyright infringement in future new gTLDs.

Its board of directors yesterday informed the chairs of SubPro, the community group working on new gTLD policy for the next round, that its ability to enforce so-called Public Interest Commitments may be curtailed in future.

A PIC is a contractual promise to act in the public interest, enforceable by ICANN through a PIC Dispute Resolution Process. All 2012 new gTLDs have them, but some have additional PICs due to the gTLD’s sensitive nature.

They were created because ICANN’s Governmental Advisory Committee didn’t like the look of some applications for gTLD strings it considered potentially problematic.

.sucks is a good example — registry Vox Populi has specific commitments to ban cyberbullying, porn, and parking in its registry agreement.

Should ICANN receive complaints about bullying in .sucks, it would be able to invoke the PICDRP and, at least in theory, terminate Vox Pop’s registry contract.

But these are all restrictions on content, and ICANN is singularly focused on not being a content regulator.

It’s so focused on staying away from content that four years ago, during the IANA transition, it amended its bylaws to specifically handcuff itself. The bylaws now state, front and center:

ICANN shall not regulate (i.e., impose rules and restrictions on) services that use the Internet’s unique identifiers or the content that such services carry or provide… For the avoidance of doubt, ICANN does not hold any governmentally authorized regulatory authority.

There’s a specific carve-out grandfathering contracts inked before October 1, 2016, so PICs agreed to by 2012-round applicants are still enforceable.

But it’s doubtful that any PICs not related to the security and stability of the DNS will be enforceable in future, the board told SubPro.

The issue is being raised now because SubPro is proposing a continuation of the PICs program, baking it into policy in what it calls Registry Voluntary Commitments.

Its draft final report acknowledges that ICANN’s not in the content regulation business, but most of the group were in favor of maintaining the status quo.

But the board evidently is more concerned. It told SubPro’s chairs:

The language of the Bylaws, however, could preclude ICANN from entering into future registry agreements (that materially differ in form from the 2012 round version currently in force) that include PICs that reach outside of ICANN’s technical mission as stated in the Bylaws. The language of the Bylaws specifically limits ICANN’s negotiating and contracting power to PICs that are “in service of its Mission.” The Board is concerned, therefore, that the current Bylaws language would create issues for ICANN to enter and enforce any content-related issue regarding PICs or Registry Voluntary Commitments (RVCs)

There’s a possibility that it could now be more difficult for future applicants to get their applications past GAC concerns or other complaints, particularly if their chosen string addresses a “highly sensitive or regulated industry”.

There was a “chuck it in the PICs” attitude to many controversies in the 2012 round, but with that option perhaps not available in future, it may lead to an increase in withdrawn applications.

Could .sucks get approved in future, without a cast-iron, enforceable commitment to ban bullying?

Ethos clarifies .org price rises, promises to reveal number of censored domains

Public Interest Registry and would-be owner Ethos Capital have slightly revised the set of promises they hope to keep if ICANN approves the $1.13 billion acquisition.

Notably, in updating their proposed Public Interest Commitments (pdf), they’ve set out in plain dollar terms for the first time the maximum annual price PIR would charge for a .org domain over the coming seven years.

[table id=59 /]

Previous versions of the PICs just included a formula and invited the reader to do the math(s).

The two companies are proposing to scrap price caps altogether after June 2027.

If ICANN rejects the deal, under its current contract PIR would be free to raise its prices willy-nilly from day one, though some believe it would be less likely to do so under its current ownership by the non-profit Internet Society.

The new PICs also include a nod to those who believe that PIR would become less sensitive to issues like free speech and censorship — perhaps because China may lean on Ethos’ shadowy billionaire backers. The document now states:

Registry Operator will produce and publish annually a report… This report will also include a transparency report setting forth the number of .ORG domain name registrations that have been suspended or terminated by Registry Operator during the preceding year under Registry Operator’s Anti-Abuse Policy or pursuant to court order.

A few other tweaks clarify the launch date and composition of its proposed Stewardship Council, a body made up of expert outsiders that would offer policy guidance and have a veto on issues such as changes to .org censorship and privacy policy.

The PICs now ban family members of people working for PIR from sitting on the council, and clarify that it would have to be up and running six months after the acquisition closes.

Because .org is not a gTLD applied for in 2012, the PICs do not appear to be open for public comment, but post-acquisition changes to the document would be.

ICANN currently plans to approve or deny the acquisition request by April 20, just 11 days from now.

.org decision delayed another month

ICANN has been given another month to decided whether or not to approve Ethos Capital’s proposed $1.13 billion acquisition of Public Interest Registry from the Internet Society.
PIR said today that it has agreed to give ICANN until April 20 to give it the yay or nay on the controversial deal.
It seems the disruption and distraction caused by the coronavirus pandemic played at least a small role in the decision. PIR said:

To ensure ICANN and the California Attorney General’s office, with which we have been communicating, have the time they need to address any outstanding questions regarding the transaction, especially in light of current events, we have agreed to an ICANN deadline extension to April 20th. We look forward to ICANN’s decision by this date.

Yesterday, opponents of the deal suggested that the acquisition could interfere with the global pandemic response, but PIR has dismissed these claims today as “misleading and alarmist” and “deceiving the public”.
Meanwhile, PIR has updated the proposed contractual Public Interest Commitments that it believes will address some of its critics’ concerns.
Future changes to the PICs will be subject to ICANN’s public comment process, the company said. This is presumably designed to calm fears that the registry will simply dump the PICs next time its contract comes up for renegotiation.
Given the level of confidence in the efficacy of the public comment process — which I would argue is currently close to zero — I doubt this new promise will have its intended effect.
PIR has also taken on criticism that its proposed .ORG Stewardship Council, designed to make sure .org continues to be managed in the public interest, could easily be captured by Ethos yes-men.
Now, instead of appointing the first five members of the council itself, Ethos will instead recruit an “internationally-recognized executive search firm” to find five suitable candidates from stakeholder groups including ICANN’s Non-Commercial Stakeholder Group and At-Large Advisory Committee.
Those nominations will still be subject to final approval by the PIR board, however, so again I think the deal’s critics will still have complaints to cling to.
PIR expects to announce further details of the council selection process next Monday, March 23.

Ethos volunteers for .org pricing handcuffs

Ethos Capital has volunteered to have price caps written back into Public Interest Registry’s .org contract, should ICANN approve its $1.1 billion proposed acquisition.
The private equity firm said Friday that it has offered to agree to a new, enforceable Public Interest Commitment that bakes its right to increase prices into the contract under a strict formula that goes like this:

Applicable Maximum Fee = $9.93 x (1.10n)

The $9.93 is the current wholesale price of a annual .org registration. The “n” refers to the number of full years the current .org registry agreement has been in play, starting June 30, 2019.
In other words, it’s a 10%-per-year increase on average, but PIR could skip a year here and there and be eligible for a bigger price increase the following year.
For example, PIR could up the fee by 10% or $0.99 to $10.92 this coming June if it wanted, but if it decided to wait a year (perhaps for public relations reasons) if could increase the price to $12.13 in June 2021, an increase of $2.20 or roughly 22%.
It could wait five years before the first price increase, and up it from $9.93 to $16.53, a 66% increase, in year six.
While price increases are of course unpopular and will remain so, the formula does answer the criticism posed on DI and elsewhere that Ethos’ previous public statements on pricing would allow PIR to front-load its fee hikes, potentially almost doubling the price in year one.
But the caps have a built-in expiry date. They only run for eight years. So by the middle of 2027, when PIR could already be charging $18.73, the registry would be free to raise prices by however much it pleases.
It’s a better deal for registrants than what they’d been facing before, which was a vague commitment to stick to PIR’s old habit of not raising prices by more than 10% a year, but it’s not perfect and it won’t sate those who are opposed to increased fees in principle.
On the upside, a PIC is arguably an even more powerful way to keep PIR in line after the acquisition. Whereas other parts of the contract are only enforceable by ICANN, a Public Interest Commitment could theoretically be enforced via the PIC Dispute Resolution Procedure by any .org registrant with the resources to lawyer up. Losing a PICDRP triggers ICANN Compliance into action, which could mean PIR losing its contract.
The PIC also addresses the concern, which always struck me as a bit of a red herring, that .org could become a more censorial regime under for-profit ownership.
Ethos says it will create a new seven-person .ORG Stewardship Council, made up of field experts in human rights, non-profits and such, which will have the right to advise PIR on proposed changes to PIR policy related to censorship and the use of private user/registrant data.
The Council would be made up initially of five members hand-picked by PIR. Another two, and all subsequent appointments, would be jointly nominated and approved by PIR and the Council. They’d serve terms of three years.
The proposed PIC, the proposed Council charter and Ethos’ announcement can all be found here.
Correlation does not necessarily equal causation, but it’s worth noting that the proposal comes after ICANN had started playing hard-ball with PIR, Ethos and the Internet Society (PIR’s current owner).
In fact, I was just putting the finishing touches to an opinion piece entitled “I’m beginning to think ICANN might block the .org deal” when the Ethos statement dropped.
In that now-spiked piece, I referred to two letters ICANN recently sent to PIR/ISOC and their lawyers, which bluntly asserted ICANN’s right to reject the acquisition for basically any reason, and speculated that the deal may not be a fait accompli after all.
In the first (pdf), Jones Day lawyer Jeffrey LeVee tells his counterpart at PIR’s law firm in no uncertain terms that ICANN is free to reject the change of control on grounds such as the “public interest” and the interests of the “.org community”.
Proskauer lawyer Lauren Boglivi had told ICANN (pdf) that its powers under the .org contract were limited to approve or reject the acquisition based only on technical concerns such as security, stability and reliability. LeVee wrote:

This is wrong. The parties’ contracts authorize ICANN to evaluate the reasonableness of the proposed change of control under the totality of circumstances, including the impact on the public interest and the interest of the .ORG community.

Now, the cynic in me saw nothing but a couple of posturing lawyers trying to rack up billable hours, but part of me wondered why ICANN would go to the trouble of defending its powers to reject the deal if it did not think there was a possibility of actually doing so.
The second letter (pdf) was sent by ICANN’s new chair, Maarten Bottermann, to his ISOC counterpart Gonzalo Camarillo.
The letter demonstrates that the ICANN board of directors is actually taking ownership of this issue, rather than delegating it to ICANN’s executive and legal teams, in large part due to the pressure exerted on it by the ICANN community and governments. Botterman wrote:

It is not often that such a contractual issue raises up to a Board-level concern, but as you might appreciate, PIR’s request is one of the most unique that ICANN has received.

He noted that the controversy over the deal had even made ICANN the target of a “governmental inquiry”, which is either a reference to the California attorney general’s probe or to a letter (pdf) received from the French foreign office, demanding answers about the transaction.
It’s notable from Botterman’s letter that ICANN has started digging into the deep history of PIR’s ownership of .org, much as I did last December, to determine whether the commitments it made to the non-profit community back in 2002 still hold up under a return to for-profit ownership.
Given these turns of events, I was entertaining the possibility that ICANN was readying itself to reject the deal.
But, given Ethos’ newly proposed binding commitments, I think the pendulum has swung back in favor of the acquisition eventually getting the nod.
I reserve the right to change my mind yet again as matters unfold.

Verisign pays ICANN $20 million and gets to raise .com prices again

Verisign is to get the right to raise the price of .com domains by 7% per year, under a new contract with ICANN.
The deal, announced this hour, will also see Verisign pay ICANN $20 million over five years, starting in 2021, “to support ICANN’s initiatives to preserve and enhance the security, stability and resiliency of the DNS”.
According to ICANN, the pricing changes mean that the maximum price of a .com domain could go as high as $10.26 by October 2026.
Verisign getting the right to once more increase its fees — which is likely to be worth close to a billion dollars to the company’s top line over the life of the contract — was not unexpected.
Pricing has been stuck at $7.85 for years, due to a price freeze imposed by the Obama-era US National Telecommunications and Information Administration, but this policy was reversed by the Trump administration in late 2018.
The amendment to the .com registry agreement announced today essentially takes on the terms of the Trump appeasement, so Verisign gets to up .com prices by 7% in the last four years of the six-year duration of the contract.
ICANN said:

ICANN org is not a price regulator and will defer to the expertise of relevant competition authorities. As such, ICANN has long-deferred to the [US Department of Commerce] and the United States Department of Justice (DOJ) for the regulation of pricing for .COM registry services.

But ICANN will also financially benefit from the deal over and above what it receives from Verisign under the current .com contract.
First, the two parties have said they will sign a binding letter of intent (pdf) committing Verisign to give ICANN $4 million a year, starting one year from now, to help fund ICANN’s activities:

conducting, facilitating or supporting activities that preserve and enhance the security, stability and resiliency of the DNS, which may include, without limitation, active measures to promote and/or facilitate DNSSEC deployment, Security Threat mitigation, name collision mitigation, root server system governance and research into the operation of the DNS

That’s basically describing one of ICANN’s core missions, which is already funded to a great extent by .com fees, so quite why it’s being spun out into a separate agreement is a little bit of a mystery to me at this early stage.
Don’t be surprised if you hear the words “bung” or “quid pro quo” being slung around in the coming hours and days by ICANN critics.
The second financial benefit to ICANN comes from additional payments Verisign will have to make when it sells its ConsoliDate service.
This is the service that allows .com registrants, via their registrars, to synchronize the renewal dates of all of the domains in their portfolio, so they only have to worry about renewals on a single day of the year. It’s basically a partial-year renewal.
Under the amended .com contract, ICANN will get a piece of that action too. Verisign has agreed to pay ICANN a pro-rated fee, based on the $0.25 per-domain annual renewal fee, for the number of days any given registration is extended using ConsoliDate.
I’m afraid to say I don’t know how much money this could add to ICANN’s coffers, but another amendment to the contract means that Verisign will start to report ConsoliDate usage in its published monthly transaction reports, so we should get a pretty good idea of the $$$$ value in the second half of the year.
The amended contract — still in draft form (pdf) and open for public comment — also brings on a slew of new obligations for Verisign that bring .com more into line with other gTLDs.
There’s no Uniform Rapid Suspension policy, so domain investors and cybersquatters can breath a sigh of relief there.
But Verisign has also agreed to a new Registry-Registrar Agreement that contains substantial new provisions aimed at combating abuse, fraud and intellectual property infringement — including trademark infringement.
It has also agreed to a series of Public Interest Commitments, along the same lines as all the 2012-round new gTLDs, covering the same kinds of dodgy activities. The texts of the RRA addition and PICs are virtually identical, requiring:

a provision prohibiting the Registered Name Holder from distributing malware, abusively operating botnets, phishing, pharming, piracy, trademark or copyright infringement, fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law and providing (consistent with applicable law and any related procedures) consequences for such activities, including suspension of the registration of the Registered Name;

There are also many changes related to how Verisign handles data escrow, Whois/RDAP and zone file access. It looks rather like users of ICANN’s Centralized Zone Data Service, including yours truly, will soon have access to the humongous .com zone file on a daily basis. Yum.
The proposed amendments to the .com contract are now open for public comment here. You have until February 14. Off you go.