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[council] Personal Considerations on ICANN-Verisign contract


I would like to inform you about the following personal statement
(i.e. not acting on behalf of the ccTLD) from Peter de Blanc, 
Oscar Robles and myself, concerning the contract ICANN-Verisign.

You will find in an annex the summary of current ccTLD situation.

Kind regards,
Elisabeth Porteneuve

The ccTLD group needs much more time that other Constituencies
to consider ICANN issues, for two main reasons reasons:
first because a lot of people consider ICANN is not about ccTLD,
second because the group is international by nature,
and communicating very slowly.

About work on ICANN-Verisign contract
All the ccTLD NC reps had an opportunity to discuss over a telecon
held Friday 23th March, at 23:00 Paris time, with Joe Sims 
and VeriSign staff, and are grateful for this opportunity.
We have been following as well various debates on the DNSO GA lists.
Subsequently we prepared our note, which at that stage is only 
a personnal note, and submitted it to ccTLD colleagues. 
Whatever result we get, we will inform you.

Report and recommendations to the ccTLD from Peter de Blanc

On Friday, 23 March, 2001 VeriSign representatives Roger Cochetti and 
Miriam Sapiro and Counselor Joe Sims provided a Question and Answer 
opportunity to invited ccTLD leadership. Invitations were sent to 
AdCom and ccTLD Names Council members.

Unfortunately, the limited advance notice of this opportunity meant that
many persons could not participate.

Since the 3 NC reps were available, we went on with the call.

The following notes are personal, not consensus-based, and certainly do not
suggest that any other member of the ccTLD constituency may support or
diminish any positions.

1. VSGN spent 10 minutes or so "selling" the "advantages" of option "B";
modified contract.

2. We got into the Q&A, and some statements expressed by me, personally.

3. My premise here is that the entire issue of "Option A, status quo" or
"Option B, revised agreement" is something that mostly concerns registrars
and big business, mostly in the US mainland.

4. WRT competition and market share, either option could result in the same
net effect. For example, if status quo is elected, and VSGN divests itself
of one division, and that division goes to a new company, VSGN could simply
buy the new company. They certainly have enough money to do so. That would
have the same effect as the new contract.

5. WRT to the possibility of changing the terms of the deal in "option B",
there will not be a re-opening of the negotiations prior to the April 1,
2001 deadline. So it really IS "A" or "B" the way the agreements are

6. WRT to the US $ 200 million "investment"; this is meaningless. VRSN will
invest whatever is necessary to provide the service level required to handle
the new business (and existing business) that it has. The number probably
will be more than US $ 200 million, regardless of which way the deal goes.

7. WRT direct impact on ccTLD, there is ONE SINGLE POINT that, from a
strictly financial perspective is GOOD for ccTLD in the "option B"

The CAPs (maximum contribution payment to ICANN budget) are removed. The
current agreement has registry paying US $ 250,000 and Registrar US $ 2
million maximum.

As the ICANN budget increases, and the number of .COM names increases, under
the present arrangement ccTLDs would pay more each year, and VRSN would pay
less per domain name each year.

Under "option B, the new deal" the CAPs are taken off, and VRSN pays a
proportional share as the other registrars do, including the new gTLDs.

8. Therefore I recommend "option B, the new deal"

As far as maintaining or increasing competition, and discouraging VRSN from
taking over any more of the world of Domains, I would lobby to institute, on
an ICANN policy level, and outside of the VRSN contract, some of the ideas
Michael Schneider has expressed in his (personal) postings. I copy them
>a) Registries themselves may not also be registrars, unless they split off
>the registrar business as an independent entity. The registry shall not be
>allowed to re-insource the registrar business de facto by performing
>essential technical and administrative functions for the registrar on a
>contractual basis.
>b) If the share of registrations for which a registry is responsible
>(because it is administering a very important TLD or a number of smaller
>ones) reaches or exceeds 20% of the registrations calculated for either
>all gTLDs or all ccTLDs, the registry may not hold an interest of 50% or
>more or otherwise exercise management control of any registrar.
>c) Registrars shall not be entitled to hold an interest of 50% or more in
>registry operators or otherwise exercise management control of these if
>aa) the registry operator administers more than 2,500,000 SLDs or
>bb) the registrar has a market share of more than 50% in one TLD, or more
>than 25% of all gTLDs, or more than 12.5% in all ccTLDs.

To summarize, this time around, I support "option B, the new deal" as better
for ccTLDs, for the reasons listed in # 7, above, and I support adoption of
new ICANN policy guidelines as per Michael's a),b),c) above.

Peter de Blanc

Additionnal comments by Elisabeth Porteneuve
Personnal request for ICANN policy action:

   I am concerned about currently being established NSI/VeriSign
   market-dominating positions, which will have impact on the whole
   landscape of ccTLDs. The text from Michael Schneider quoted above
   is EXCELLENT, very well written.
   Schneider comments on the deregulation of monopolies as 
   an issue at planetary political level.
   My language on the call (to Joe Sims) was very simple:
     Since several months he NSI/VeriSign (other registrars as well)
     are travelling all over the ccTLD, marketing them, 
     selling/giving their softs and knowledge to operate cc Registries.
     On one side we have efforts to diminish their power in gTLDs,
     but on the second side many ccTLDs may move into NSI hands.
     NSI/VeriSign may give away Dot org, plan "B". No matter which
     option, plan "A" or plan "B", the NSI/VeriSign moves towards ccTLD.
     How to prevent NOW they may run hundred of ccTLD ? Is it ICANN
     policy concern ? Shall it be now ?

I support Peter's personnal conclusion:
  To summarize, this time around, I support "option B, the new deal" as better
  for ccTLDs, for the reasons listed in # 7, above, and I support adoption of
  new ICANN policy guidelines as per Michael's a),b),c) above.

Elisabeth Porteneuve

Annex: Current situation within ccTLD (notes from Melbourne)
1. The ICANN issues are extremely difficult, the contact with ccTLD
   managers means speaking and writing in various languages.
   The ccTLD WG on language diversity reports how essential it is.
   There is no open competition to which ICANN is committed without
   taking into account language diversity.
2. The summary of difficulties to communicate with 240+ ccTLD managers:
      only 98 answered ICANN call for funding
      only 95 ever sent an email to ccTLD mailing lists
      at most 70 were represented over a physical meeting in Geneva
      only 88 run whois database (from Geneva presentation on uwhois)
      25% of IANA records are inaccurate (i.e. 60+ ccTLD)
   It means that the minimal active contact was established with
   only 40 percent of ccTLD Managers.
3. The USG extension to ICANN project for one year, specificaly
   targeted on ccTLD agreements may be summarized by
   "242 countries in 242 days", it is unrealistic
4. To sign an agreement it is necessary to ICANN to meet all
   ccTLD managers, to know who they are, how registry is working,
   to establish physical contract.

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