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New registrar deal to bring big changes to the domain name industry

Kevin Murphy, April 23, 2013, Domain Registrars

Big changes are coming to Whois, privacy services and resellers, among other things, under the terms of a newly agreed contract between domain name registrars and ICANN.

A proposed 2013 Registrar Accreditation Agreement that is acceptable to the majority of registrars, along with a plethora of supporting documentation, has been posted by ICANN this morning.

This “final” version, which is expected to be approved by ICANN in June, follows 18 months of often strained talks between ICANN and a negotiating team acting for all registrars.

It’s expected that only 2013 RAA signatories will be able to sell domain names in new gTLDs.

Overall, the compromise reflects ICANN’s desire to ensure that all registrars adhere to the same high standards of conduct, bringing contractual oversight to some currently gray, unregulated areas.

It also provides registrars with greater visibility into their future businesses while giving ICANN ways to update the contract in future according to the changing industry landscape.

For registrants, the biggest changes are those that came about due to a set of 12 recommendations made a few years ago by law enforcement agencies including the FBI and Interpol.

Notably, registrars under the 2013 RAA will be obliged to verify the phone number or email address of each registrant and suspend the domains of those it cannot verify.

That rule will apply to both new registrations, inter-registrar transfers and domains that have changes made to their Whois records. It will also apply to existing registrations when registrars have been alerted to the existence of possibly phony Whois information.

It’s pretty basic stuff. Along with provisions requiring registrars to disclose their business identities and provide abuse points of contact, it’s the kind of thing that all responsible online businesses should do anyway (and indeed all the big registrars already do).

Registrars have also agreed to help ICANN create an accreditation program for proxy and privacy services. Before that program is created, they’ve agreed to some temporary measures to regulate such services.

This temporary spec requires proxy services to investigate claims of abuse, and to properly inform registrants about the circumstances under which it will reveal their private data.

It also requires the proxy service to hold the registrant’s real contact data in escrow, to be accessed by ICANN if the registrar goes out of business or has its contract terminated.

This should help registrants keep hold of their names if their registrar goes belly-up, but of course it does mean that their private contact information will be also stored by the escrow provider.

But the biggest changes in this final RAA, compared to the previously posted draft versions, relate to methods of changing the contract in future.

Notably, registrars have won the right to perpetual renewal of their contracts, giving them a bit more long-term visibility into their businesses.

Under the current arrangement, registrars had to sign a new RAA every five years but ICANN was under no obligation to grant a renewal.

The 2013 contract, on the other hand, gives registrars automatic renewal in five-year increments after the initial term expires, as long as the registrar remains compliant.

The trade-off for this is that ICANN has codified the various ways in which the agreement can be modified in future.

The so-called “unilateral right to amend” clauses introduced a few months ago — designed to enable “Special Amendments” — have been watered down now to the extent that “unilateral” is no longer an accurate way to describe them.

If the ICANN board wants to introduce new terms to the RAA there’s a series of complex hoops to jump through and more than enough opportunities for registrars to kill off the proposals.

Indeed, there are so many caveats and a so many procedural kinks that would enable registrars to prevent ICANN taking action without their consent I’m struggling to imagine any scenario in which the Special Amendment process is successfully used by the board.

But the final 2013 RAA contains something entirely new, too: a way for ICANN’s CEO to force registrars back to the negotiating table in future.

This seems to have made an appearance at this late stage of negotiations precisely because the Special Amendment process has been castrated.

It would enable ICANN’s CEO or the chair of the Registrars Stakeholder Group to force the other party to start talking about RAA amendments with a “Negotiation Notice”. If the talks failed, all concerned would head to mediation, and then arbitration, to sort out their differences.

My guess is that this Negotiation Notice process is much more likely to be used than the Special Amendment process.

It seems likely that these terms will provide the template for similar provisions in the new gTLD Registry Agreement, which is currently under negotiation.

The 2013 RAA public comment period is open until June 4, but I don’t expect to see any major changes after that date. The documents can be downloaded, and comments filed, here.

Registries still angry despite ICANN concessions on new gTLD contract

Kevin Murphy, April 9, 2013, Domain Policy

Domain name companies are coming close to agreement with ICANN on two critical new contracts, but there was still substantial skepticism and anger on display in Beijing yesterday.

It was revealed during a session at ICANN 46 that the long-running negotiations on the 2013 Registrar Accreditation Agreement are now pretty much done, with apparent compromise from both sides.

In addition, the proposed Registry Agreement for new gTLDs has been toned down to make it more acceptable to applicants, with ICANN apparently confident that agreement can be reached soon.

But while registrars seemed relatively content with their outcome, registries appear to still be very upset indeed, largely due to the new “special amendments” process that continues to be on the table.

This unilateral-right-to-amend proposal, which ICANN sprung on the industry in February, has been watered down along the lines that we reported last week.

The scope of the amendment process has been narrowed to items outside the “picket fence” that surrounds ICANN’s regulatory jurisdiction, and there are a few more ways companies can head off ICANN intervention.

“It’s not quite a unilateral amendment process any more, we’ve built in a lot of safeguards,” ICANN senior counsel Samantha Eisner told the meeting.

What’s new in the RAA?

These are some of the other things that have been agreed since the last draft of the RAA was posted a month ago.

  • Privacy opt-out on Whois. Registrars based in places such as Europe, which has stronger data protection laws than the US, will be able to opt out of the Whois data retention and verification rules if they can show that they’d be breaking the law otherwise. They won’t have to wait to to get sued first, either.
  • Account holder verification. As well as validating the email address or phone number used in the public Whois, registrars will do the same checks on their private account-holder records.
  • Proxy and privacy services. If ICANN doesn’t come up with an accreditation program for proxy/privacy services by a certain deadline, the temporary specs in the 2013 RAA will expire.
  • Port 43 obligations scrapped. Registrars will no longer have to provide Whois service over port 43 for gTLDs with “thick” registries. They’ll still have to provide it on their web sites though.

The registrars have also agreed to measures that address all 12 of the recommendations proposed by law enforcement agencies a few years ago, which is what kicked off the RAA renegotiation in the first place.

However, as we reported yesterday, law enforcement in the US and Europe are not impressed with the RAA, saying it doesn’t go far enough to verify domain registrants’ identities.

The Governmental Advisory Committee is due to speak to the ICANN board later today, and this is a topic it is likely to bring up. The RAA story may not be over yet.

Generally, the mood from registrars seemed to be mixed but relatively upbeat.

Rob Hall of Pool.com said he’s going to sign the new RAA as soon as possible. He said that the fact that the 2013 RAA is needed in order to sell new gTLD domains is an impetus to sign it.

Elliot Noss of Tucows said he was less eager to sign. He said that the new gTLDs likely to launch in the short term (uncontested ones, in other words) are unlikely to be the most lucrative ones.

Registries and new gTLD applicants, on the other hand, were not so happy with their lot.

Anger over the Registry Agreement

Yesterday’s session in Beijing was notable for a jarring moment in which normally mild-mannered Verisign policy veep Chuck Gomes threw an uncharacteristic wobbler, politely but brutally attacking ICANN for acting in bad faith and treating registries like “second-class citizens”.

He took issue with the fact that the special amendments process in the Registry Agreement was first introduced by ICANN, and then rejected by the community, a few years back.

ICANN can’t describe its eleventh-hour return as an act of “good faith”, he said.

“You’re dealing with organizations on the registry and registrar side that fund 95%, through our registrants, of your budget, and yet we’re treated like second class citizens by throwing something at us that totally reverses a community, multi-stakeholder, bottom-up decision that was made three years ago,” he said.

“Convince me that that was in good faith. I don’t think you can,” he said, receiving a round of applause.

New gTLD applicants such as Verisign have had less time to assemble their collective thoughts and come to a unified negotiating position on the RA, which was thought to be settled until recently.

The amendment provisions were introduced by ICANN in February, and applicants don’t yet have a the same kind of negotiating team the registrars have had for the past 18 months.

What’s more, they’re worried that ICANN is trying to push the changes through without giving them enough time for talks.

Rumors have been circulating in Beijing that the ICANN board is preparing to approve the RAA and RA at a meeting April 20, in time for the first registries to sign up at its April 23 new gTLDs media event.

Under persistent questioning, ICANN vice president of industry engagement Cyrus Namazi said in various different ways that ICANN has no intention to rush-approve an RA to an arbitrarily chosen date.

ICANN says it needs its special amendment rights in order to address unknown future situations in which the voting dynamics of the ICANN policy-making bodies are dominated by special interests that want to block contract changes that would be in the public interest.

Noss from Tucows, an applicant as well as a registrar, said he’s been asking for specific examples of possible reasons the special amendment process would be invoked, but has had no response from ICANN.

He further suggested that if ICANN is so worried about future uncertainties that it feels it needs these rights, then registries and registrars should get the same rights to force amendments.

ICANN to water down contract powers with “Public Interest Amendments”

Kevin Murphy, March 27, 2013, Domain Registries

ICANN has made a few tweaks to its proposed unilateral-right-to-amend powers in order to fend off open hostility from registries, registrars and new gTLD applicants.

The organization is set to announce “Public Interest Amendments”, a rebadged version of its hugely unpopular proposals for the Registry Agreement and Registrar Accreditation Agreement.

As previously reported, ICANN wants to be able to change both contracts in future, if there’s a “substantial and compelling need”, even if it does not have the majority support of the affected companies.

CEO Fadi Chehade has reportedly indicated that he won’t be budged on the need for some method for ICANN to make emergency changes to the contracts.

And during last night’s new gTLD applicants webinar, he made it clear that the RA and RAA will delay the launch of new gTLDs if registries and registrars cannot agree to ICANN’s terms.

But according to documentation seen by DI today — actually a flowchart of how the amendment process would work — these terms are going to be watered down, giving more power to commercial stakeholders.

Apart from the new Pubic Interest Amendment name, there appear to be three big changes.

First, there would be a way for registrars and/or registries to make a late-stage counter-proposal to the ICANN board if they didn’t like the look of a proposed amendment.

Second, any issues that fell within the so-called “picket fence” — the list of pre-agreed topics for which ICANN is allowed to make binding policy — would have to go into a formal GNSO Policy Development Process first.

Only if the PDP failed to reach consensus would the ICANN board of directors be able to step in and attempt to legislate unilaterally.

A practical effect of that would be to give contracted parties ample opportunity to delay amendments — possibly by years — that they weren’t happy with.

Third, PIAs would only cover changes designed to “ensure competition & consumer choice and promote consumer access to fair business practices” and explicitly “not to change ICANN fees, Consensus Policy Spec., or mechanism to change PIA process”.

This would prevent ICANN unilaterally amending the contract to make its amendment powers even stronger in future, which had been one criticism of the proposed process.

“The board’s ability to introduce an amendment is very tightly defined and limited in scope, so it’s only used in extreme cases and under very strict conditions,” Chehade said last night.

It appears — though I can’t be certain — that ICANN has also decided that the full board of directors, including those with identified conflicts of interest, would be able to participate in votes on PIAs.

That would mean registry and registrar representatives to the board would get to vote on amendments affecting their stakeholder groups.

Chehade is currently explaining all of this to a cautiously optimistic Registry Stakeholder Group on a conference call, and I believe more information is due to be published later this week.

Chehade to play hard-ball over unilateral right to amend?

Kevin Murphy, March 25, 2013, Domain Policy

ICANN CEO Fadi Chehade has reportedly indicated that the unilateral right to amend powers ICANN wants to put in its registry and registrar contracts are non-negotiable.

Speaking at a meeting of the Association of National Advertisers last week, Chehade is reported to have said: “I’m not going to back off this one.”

He is understood to have been referring to the changes ICANN wants to impose on the base new gTLD Registry Agreement and the Registrar Accreditation Agreement.

Amy Bivins of Bloomberg BNA’s Electronic Commerce & Law Report caught the speech live and tweeted the following:

Bivins’ full report is available behind BNA’s paywall.

The unilateral right to amend is just about the most controversial thing ICANN has proposed in a while.

It would give ICANN’s board of directors the power to make changes to both agreements in situations where registrars or registries cannot agree among themselves to a “special amendment” but there’s agreement by other community members that the change is required.

Registries and registrars argue that a contract in which one party has the power to change the agreement without the consent of the other is not really a contract at all.

But ICANN says the powers are needed, partly to redress existing imbalances: the fact that the RAA and RA both last for 10 years and that the RA has a presumptive right of renewal.

Without the right to change the RA over the protests of the registries, it’s possible that in future proposed changes could be vetoed by registries whose interests are not aligned with the “public interest”, ICANN argues.

ICANN says that it’s impossible to know how consolidation, future new gTLD rounds and power shifts in the ICANN community will affect the balance of power, meaning it needs a way to resist a registry choke-hold should the situation arise.

I suspect the fact that it’s taken about three years to get close to adding the recommendations of law enforcement relating to registrar conduct to the RAA may also have something to do with it.

Tempted by the Caesar solution [Guest Post]

The ICANN leadership is in a hurry, so to get things done, it is cutting corners.

One such attempt at going straight around a bend, the proposed changes to the new gTLD registry contract giving the ICANN Board unilateral right of amendment, has raised the registries’ ire.

ICANN’s other group of contracted parties (i.e. entities that must contract directly with ICANN to operate), the registrars, are also up in arms following ICANN’s inclusion of the same proposal at the eleventh hour of ongoing negotiations on their contract.

ICANN’s new leadership team, headed by newly appointed CEO Fadi Chehadé, has been rightly praised since he took office in the second half of 2012. This team has a business background, and it is attempting to apply business logic and business solutions to a number of obvious problems with ICANN.

The main one is predictability. ICANN is just not good at setting timelines, or keeping to those timelines it does manage to set.

In the past, that used to be annoying to stakeholders. But since the Board approved the new gTLD program in 2008, this trait has become excruciating.

This program has spawned a new industry, bought new interests into the ICANN environment, generated large-scale investments on the premise of future TLDs, and shone the spotlight on ICANN’s weaknesses to such business ventures.

Having a constantly slipping timeline as the new gTLD program did through much of its implementation phase, from that 2008 Board green light to the June 2011 Board resolution finally turning it into an operational reality, is a nightmare for any business.

So trying to fix this is a worthy goal. But the ICANN model is not only about business. It is first and foremost about community-driven policy-development and oversight. The new gTLD program is the result of such a process. One that the new ICANN leadership is finding cumbersome enough to want to cut through.

There have been a few mistakes made in this area in the last few months, but they seemed like honest missteps from a motivated team of result-getters. A team that apologized for those mistakes when they became apparent. A welcome change at ICANN.

But now, almost six months into the new leadership’s reign the veil is starting to lift and the leadership’s real visage to appear.

Last week, ICANN’s policymaking body for gTLDs, the GNSO, was unanimous in its denunciation of the leadership’s attempts at making the ICANN train go faster than it was engineered to.

During the GNSO Council’s monthly teleconference, the various groups that make up the GNSO’s diverse community all seemed to speak with one voice.

In a blog post written after the call and entitled “Clearing Up the Logjam: Time for ICANN to Drop Request for a Unilateral Right to Amend the Agreements”, GNSO Councillor Jeff Neuman, a representative of the Registry Stakeholder Group and a past Vice Chair of the Council, said the following:

A very rare thing happened in the GNSO Council meeting this week—the ICANN community spoke with one voice. Registries, registrars, non-commercial interests, new TLD applicants, IP owners and businesses unanimously and unambiguously agreed that giving ICANN a “unilateral right to amend” the registry and registrar agreements is not compatible with ICANN’s bottom-up processes and poses a fundamental threat to the multi-stakeholder model. There is true consensus that this change should be rejected.

ICANN COO Akram Attalah participated in the GNSO Council meeting and explained that this was not a done deal and that the leadership was in listening mode.

Except it all seems to be going in one ear and out the other.

A couple of days later, on March 15, ICANN Staff gave the Council an unofficial response by publishing a paper in which it explains its rationale for the unilateral change suggestion. It says:

The Board-approved amendment process is drafted to address a key concern of ICANN in this changing marketplace. What if the gTLD registration market develops in a way that is anticonsumer, yet very favorable to the existing registries or registrars. In this situation, it would be against the business interests of the incumbent registries or registrars to adopt a change – even when the broader community supports the change. Particularly in light of the “perpetual” renewal terms that are already in place within the proposed agreements, this limited power of the Board is the only way to introduce this type of change over the life of the agreements.

The real message is clear. The current leadership does not trust the ICANN multi-stakeholder bottom-up policy development process. Period.

So in cases of extreme necessity, the Board must have absolute power to enact the changes it sees fit. Experienced ICANN community member and former GNSO Council Chair Avri Doria calls this leadership’s tenure ICANN 3.0, and charts ICANN’s progress thus: “ICANN 1.0 – Democracy, ICANN 2.0 – Oligarchy, ICANN 3.0 – Imperium.”

Is a term which describes the absolute power given to the rulers of ancient Rome suited to ICANN? Of course not. But if a little caricature can help turn the ICANN leadership away from this temptation to get things done at all costs, then maybe it is needed.

This is a guest post by domain name industry consultant Stephane Van Gelder of Stephane Van Gelder Consulting. He has served as chair of the GNSO Council and is currently a member of ICANN’s Nominating Committee.