RE: [registrars] Comments on Verisign Wait List proposal

[Elana Broitman <ebroitman@register.com>]

Bruce - thank you for your thoughtful posting.  You correctly pointed out
the way that the agreements affect registry services.  My take away is
two-fold: a) icann's duty not to "unreasonably" deny a new service should be
affected by the level and substance of stakeholders' concerns, registrars
being among the key stakeholders, and b) "reasonable profit" should allow
for a discussion of the costs of the service, or at least a discussion (with
all due antitrust caveats) of concerns that the WLS price does is not
"reasonable."

Given that, the next registrars' position should be focused on our key
concerns, as we have already issued two long statements.  We may well also
reach out to other constituencies, particularly ones representing our end
customers (such as the IPC and BC) and understand their positions.  This
will inform the level and substance of our cocnerns.  I would recommend that
the WLS drafting task force undertake that.

As for voting and concensus, what is our current practice/precedent with
regard to recording votes and sharing that information outside the
constituency?  Perhaps Tim Denton can let us know.  

Thanks, Elana

-----Original Message-----
From: Bruce Tonkin [mailto:Bruce.Tonkin@melbourneit.com.au]
Sent: Friday, February 22, 2002 2:11 AM
To: 'registrars@dnso.org'
Subject: [registrars] Comments on Verisign Wait List proposal


Hello All,

This will be a long posting, but I think it is important to have framework
to move forward on the WLS issue.

Before attending the registrars meeting in Dulles, Virginia, USA last
weekend, I visited ICANN offices in Los Angeles and also visited Verisign
registry offices near Dulles.
One of the main areas of interest for me was the process for approving and
moving forward with new product and service offerings that come under the
definition of Registry Services
in the ICANN contracts (see
http://www.icann.org/tlds/agreements/verisign/registry-agmt-com-16apr01.htm)
.  As a general principle I believe that registry operators should be able
to innovate and produce new products and services, and that these should not
be unduly held up through a long and bureaucratic process.  On the other
hand new REGISTRY SERVICES should be consistent with providing value to
consumers, and not causing damage for consumers (e.g resulting in lower
stability or integrity of the DNS, which could result from widespread
accidental deletions and loss of names)

A Registry Service is defined as:
********************
"Registry Services" means services provided as an integral part of the
Registry TLD, including all subdomains. These services include: receipt of
data concerning registrations of domain names and nameservers from
registrars; provision to registrars of status information relating to the
Registry TLD zone servers, dissemination of TLD zone files, operation of the
Registry zone servers, dissemination of contact and other information
concerning domain name and nameserver registrations in the Registry TLD, and
such other services required by ICANN through the establishment of Consensus
Policies as set forth in Definition 1 of this Agreement. Registry Services
shall not include the provision of name service for a domain used by a
single entity under a Registered Name registered through an ICANN-accredited
registrar."
*******************

I understand from discussions with ICANN and Verisign, that the WLS proposal
falls into the category of a Registry Service.

In the ICANN contract with Verisign there is provision for approving price
of registry services as follows:

********************
22 Price for Registry Services.

A. The price(s) to ICANN-accredited registrars for entering initial and
renewal domain name registrations into the Registry Database and for
transferring a domain name registration from one ICANN-accredited registrar
to another will be as set forth in Section 5 of the Registry-Registrar
Agreement (attached as Appendix F). These prices shall be increased through
an amendment to this Agreement as approved by ICANN and Registry Operator,
SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD, to reflect reasonably
demonstrated increases in the net costs of providing Registry Services
arising from (i) new or revised ICANN specifications or policies adopted
after the Effective Date, or (ii) legislation specifically applicable to the
provision of Registry Services adopted after the Effective Date, to ensure
that Registry Operator RECOVERS SUCH COSTS AND A REASONABLE PROFIT THEREON;
provided that such increases exceed any reductions in costs arising from (i)
or (ii) above.

B. Registry Operator may, at its option and with thirty days written notice
to ICANN and to all ICANN-accredited registrars, revise the prices charged
to registrars under the Registry-Registrar Agreement, provided that (i) the
same price shall be charged for services charged to all ICANN-accredited
registrars (provided that volume adjustments may be made if the same
opportunities to qualify for those adjustments is available to all
ICANN-accredited registrars) and (ii) the prices shall not exceed those set
forth in Appendix G.
***************************

I have placed in caps two important phrases above, ie:
- such approval not to be unreasonably withheld
- recovers such costs and a reasonable profit thereon

My view is that Verisign should submit a formal proposal to ICANN staff that
describes their new product and service, and proposes a price for registrars
that is based on costs and a reasonable profit margin.  It would be sensible
if ICANN staff spoke to some members of the industry to get a feel for
reasonable costs, or compared the costs of a new service with a comparable
service.  For example the cost to set up WLS could be compared to the cost
to establish ".biz" or ".info" registries.  However ICANN may not
unreasonably withhold approval.

I do not believe it is the role of the registrars constituency to
collectively determine a price for the service - this would appear to be
against at least anti-trust legislation in the USA.  I will offer a personal
comment in that the price is higher than I would have expected for the
volumes of WLS that have been quoted in some responses from Verisign.  Now
there are obviously some intellectual property costs that I am not privy to,
and there is also some risk that the volumes may be far lower.  One approach
Verisign may consider is to follow the approaches of ".biz" and ".info" that
provided a sliding scale for their costs for registering a domain name based
on volumes.

I do believe that ICANN does have a role to ensure that a new REGISTRY
SERVICE offering is consistent with the overall stability and integrity of
the DNS, and that there are sufficient safeguards that the new product is
not anti-competitive or otherwise harmful to the consumer.

The Registrars Constituency has a role to advise the ICANN Board either
directly or through the namescouncil of any concerns that it may have with
regard to the point above.  I am now of the view that there are no
substantial issues that will affect stability or seriously affect the
consumer (provided there is some grace period around the deletes as have
been proposed by ICANN staff, or offered by Verisign if the ICANN staff
proposal is rejected).

I have previously raised concerns about the loading problems with the batch
pool for deletes.  I have spoken extensively to Verisign technical staff on
this issue, and accept their statement that the loading problem is solved
from their point of view, and I believe this solution will also avoid
problems with the inevitable loading problems with WLS.  The staff confirmed
to me that registrars will always find innovative approaches to registering
either domain names or WLS spots that will result in loading the registry!
It is unfortunate that we had to wait until the meeting in Dulles for
Verisign to supply technical staff to talk about this point.  To me WLS is
just a parallel registry, which will have similar competitive and technical
loading dynamics to the existing ".com" registry.

The registrars constituency also has a role as customers and users of
Verisign services to collectively work together with Verisign to improve the
QUALITY of the services provided.
I have previously stated areas where I think the quality of the new service
offering could be improved.  I will re-iterate some of these ideas here.  It
would be good if the drafting team could incorporate some of these ideas in
their document if they are generally agreed.

(1) Grace period:
I believe that this is absolutely critical.  From experience domain names
are often not renewed inadvertently (ie the registrant was out of contact
and did not receive a renewal notice).  With the use of automated systems to
immediately register deleted names, registrars are increasingly dealing with
the customer service problem of trying to get a domain name back that has
been deleted by mistake.
I strongly recommend that a hold grace period be used before the deleted
name is allocated to a the subscriber, during which the name is removed from
the zone file.  I recommend that the period be extended to 30 days.

(2) Transparency
To be able to evaluate the success of the "trial period", and also ensure
that the WLS service is not being used in an anti-competitive way, I would
like to be able to have either or both of the following:
(a) a public WHOIS style service at the registry which will display for a
domain name, whether a WLS exists on the name, the creation date of the WLS,
and the name of the registrar that is managing this WLS.
(b) via the EPP protocol, I would like the <info> command to return the
information as above
I would like to see information broken down by registrar on reports such as
those provided by Snapnames.  Point (a) above ensures that the system is
open to consumers, and point (b) allows registrars to innovate with
customised services.

SUMMARY
I do not believe that it is the role of the registrars constituency to
collectively approve or dis-approve of the service.
It is the role of registrars constituency to collect feedback and express
any concerns with the operation of the service, and request quality
improvements that address those concerns.

My position is that I am not against the proposal proceeding through to
approval by ICANN staff provided that a suitable grace period is provided.
I leave it up to ICANN staff to satisfy themselves that the price of the
registry service is reasonable.  I see no regulatory reasons not to proceed
at this stage.

In terms of Melbourne IT's approval of the service, it will be a business
decision based on the demand from our customers.  We do believe that there
is a demand for a simple "back-order" service, but we don't know how much
demand there is.  So from that point of view we will let the market decide.

We do support the right of a registry operator to be able to introduce a new
service, and we encourage registry operators to innovate.

COMMENTS ON VOTING

At the registrars constituency meeting in Dulles, I don't think the right
question was asked to make a formal vote meaningful on the WLS topic.
Moving forward, I would like to see the output from the drafting team, a
period for comment on that output, and then an ability to vote on accepting
the document or rejecting the document.  I think it would be fair in
forwarding the document to Verisign GRS and other groups in ICANN, to record
the names of those registrars that vote for, against or abstain.  I am quite
comfortable with a majority vote being used to indicate that the registrars
constituency "approved the document", with the vote being recorded.  I am
also comfortable with individual registrars expressing their own comments
through separate submissions to Verisign, ICANN staff, or other groups
within ICANN.  I don't think we need to waste time with endless minority
views being attached to the document, unless there is more than one party
that subscribes to a particular minority view.

As others have pointed out, unless we improve our procedures, the impact
this group has in the wider ICANN process will remain limited.

Regards,
Bruce Tonkin