ICANN-VeriSign Settlement

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The At Large Advisory Committee (ALAC), with input from ICANN and other of its constituent bodies, is planning an information session at the Vancouver meetings on the changes in the .COM registry agreement that might impact those who rely on registry services (end-users, domain name registrants, registrars, etc.). We'll start by making a factual presentation to the group about the changes between the current agreement (May 2001 Agreement) and the proposed new agreement (Proposed Agreement After Settlement). What will that presentation look like? I'm hoping that we can create the slide presentation here on this Wiki (Thanks, Ray!). Please feel free to edit the slides below or add additional slides. For this session, we're trying to focus on facts, not rhetoric or argument. We'll have a separate session on Thursday to discuss pros and cons. (Bret Fausett, page started 10 November 2005).

If there's a subject you'd like to see addressed in the presentation, please note it below, even if you don't have the data to fill in.

[edit] Price: Base

Current: Registry price capped at $6 per name per year.

Proposed: Registry price caps may rise up to 7% per year beginning on 1 January 2007 (Section 7.3(d)).

[edit] Price: Volume Discounts

Current: ICANN contends that Verisign's 2001 Volume Discount program (details in ICANN Advisory of 12 December 2001) was a breach of the .COM Registry Agreement. (See, Paragraph 99 of ICANN's Cross-Complaint Against Verisign).

Proposed: Verisign is allowed to implement Volume Discount and Incentive Programs, provided they are offered to all registrars on the same terms (Section 7.3(e))

[edit] Expiration

Current: .COM Registry Agreement expires on November 10, 2007 (Section I.4)

Proposed: .COM Registry Agreement expires on November 30, 2012 (Section 4.1)

[edit] Terms of Renewal

Current: "Procedure for Subsequent Agreement" provides that Verisign can seek a four year renewal of the .COM agreement by applying to ICANN no earlier than November 10, 2005 and no later than May 10, 2006. ICANN may consider the renewal proposal for up to six months. ICANN is obligated to grant the renewal to Verisign unless: (a) Verisign is in material breach of the contract; (b) Verisign declines to provide a substantial registry service to the Internet community; (c) Verisign is not qualified to run the .COM registry; or (d) Verisign proposes a price for the renewal term that exceeds the current price caps.

Proposed: The Agreement shall be renewed unless an arbitrator or court has issued a final ruling stating that Verisign "has been in fundamental and material breach of Registry Operator’s obligations set forth in Sections 3.1(a), (b), (d) or (e); Section 5.2 or Section 7.3" and has failed to cure the identified breach(es) within 10 days. (See, Section 4.2)

[edit] Registry-Level Services

Current: ICANN contends that Verisign's attempts to introduce Internationalized Domain Names, Consolidate, Waiting List Service, and Sitefinder were breaches of the current .COM Agreement. (See, ICANN's Cross-Complaint, dated 12 November 2004)

Proposed: ICANN pre-approves the following new Verisign services: Waiting List Service, Consolidate, Internationalized Domain Names, "Restore", and Transfer Dispute Resolution. (See, Appendix 9). Sitefinder cannot be implemented unless it is approved through ICANN procedures.

[edit] Consensus Policies

Current: Defined in Section I-1.

Proposed:

[edit] Fair Treatment of Registrars / Registry Code of Conduct

Current: Secion II-23 of the 2001 Agreement and its Appendix I obligate the registry to treat all registrars equally and provide equivalent access to the registry. Verisign may not use registry revenues and assets "to advantage registrars that are affiliated with Registry Operator to the detriment of other ICANN-accredited registrars." Verisign may not warehouse domain names or engage in certain other activities that might provide an unfair business advantage to the registry vis-a-vis registrars. The registry may not act as a registrar. ICANN may audit Verisign to ensure that it is providing equivalent access.

Proposed: Registry may not act as a registrar (Section 7.1(b)). Registry may not own more than 15% of any ICANN-accredited registrar (Section 7.1(c)). The other restrictions appear to have been deleted.

Question: Does the phrase "such nondiscriminatory access" in Section 7.1 or Section 7.1(a)(vii) prevent Verisign from favoring any particular registrar in an ADD transaction?

Question: What change is intended, if any, by removing the term "equivalent" access and replacing it with the term "non-discriminatory" access?

[edit] ICANN Oversight

Current: Variable level registry fee, which constitutes much of ICANN's income, is set in consultation with registrars and is approved by registrar vote.

Proposed: New fixed .COM registry fee ramps up to twice the existing fee, paid unconditially to ICANN with no external oversight on how it is spent.

[edit] Lawsuits

Current: ICANN and Verisign are suing each other for a variety of causes. Verisign contractor Snapnames is suing ICANN over delays in WLS.

Proposed: ICANN and Verisign suits are dismissed. Snapnames suit continues, and Verisign is allowed to assist.

Ross Rader's Working Notes:

Lazy Wiki Contribution Here are my notes. They need be filtered and reformatted, but they might be useful base material for your effort. I tried to make it as editorially free as possible, but there is some bias to it. Use/abuse/discard as you see fit...ross

1 Settlement Agreement
Section 1 - Verisign Support of ICANN
1.A - Verisign doesn't actually agree to advocate that ICANN is the appropriate coordination of names and addresses, but only that Versign will advocate ICANN's appropriate role in that process. This is a small point, but it leaves room for Verisign to advocate against ICANN in specific instances.
1.B - This should be a standard clause for any registry operator (i.e. won't undermine ICANN through deed, word or action).
1.C.2 - Result of arbitration can only be that Verisign will issue a public retraction or corrective communication. Verisign can not be forced to remedy any situation it causes through other means, nor can its actions be used as a basis for non-renewal.
Section 3 - No admission of liability.
The parties agree that the disputes and allegations shall not be considered in any context. This means that the information gathered during the Sitefinder debacle cannot be used as the basis for future considerations of the service. It also prevents important information regarding Verisign's conduct from being considered in future contract deliberations.
Section 6 - Releases.
This clause carves out the current Snapnames litigation as being an exception to the release. This provides Verisign with the opportunity to pursue arms-length litigation, or if they acquire Snapnames, to pursue it directly. ICANN would probably be defenseless in such an event because of the conditions imposed by this agreement.
2 Registry Agreement
3.1.b - Consensus Policies
There are limitations to the extent of consensus policy. These limitaitons may indeed be appropriate, but should not live in any registry agreement. This is a subject better left for the ICANN Bylaws or similar document.
3.1.b.v - Further limitations on the scope of Consensus policy which prevent the GNSO from considering policy that deals with most aspects of Registry Services.
3.1.d - Registry Operations
The definition of Registry Services includes those services that the Registry offers as the result of its status as the sole source operator as the registry.
These are not "Registry Services" Registry Services can only be viewed as those services for which ICANN has established a management contract with Verisign to undertake. Unless Verisign is taking the position that they own .com
3.1.F - Traffic Data
This clause gives Verisign unlimited commercial rights to all metadata associate with the operation of the registry.
4.2 - renewal
This clause sets up the automatic renewal terms.
Further, it also specifies that the terms of this agreement should substantially atorn to the terms of agreement with the other top five registries by volume except in the areas of price, standards for consideration of registry services, limitation on consensus policy, terms and conditions of renewal - in other words, the key terms of this agreement.
This clause also specifies that when the contract renews, the Transaction pricing may change so long as it doesn't exceed the average price increase for the other five operators.
4.3 - Failure to peform in good faith
In the event that Verisign repeatedly and willfully materially breaches the terms of section 3.1 (a), (b), (d) or (e); Section 5.2 or Section 7.3 and the arbitrators have found the same, in at least three separate awards, then the arbitrators shall awards punitive, exemplary or other damages as they may see appropriate.
7.2 - Fees paid to ICANN
7.2.a provides for an immediate lump sum payment to ICANN of $1.25m USD so that ICANN may
"implement the provisions of this agreement"
7.2.c see's Verisign paying ICANN $43,725 per quarter for the year ending June 2006. Such fee is subject to increase on July 1 of each year thereafter, but may not exceed 115% of the prior year. $1 of this component will be waived for each dollar that the Registry transaction fee exceeds $2m p.a.
7.2.d implements the $0.37/transaction fee effective January 1. This increases to $0.45 and $0.50 on July 1, 2006 and July 1, 2007 respectively.
Verisign will pre-pay $7.8m of this over the first six months of the agreement.
7.3 - Pricing for Domain Name Registrations
7.3.b - This claus prevents tying. Interestingly, one *must* use Verisign SSL Certificates in order to access the registry and purchase domain names.