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[registrars] DOC/ICANN/Registrar Teleconference - 6-10-99 Minutes

DNSO Registrar Constituency Teleconference - Version 1.0
Date: 6-10-99
Time: 17:00 EDT
Duration: approx. 1hr.
Prepared by: Michael D. Palage (interim secretariat) -
mpalage@ipwarehouse.com / mdp@infonetworks.com

NOTE: I have been contacted by several companies and their legal counsel
with regard to participating in future teleconferences.  I have contacted
Louie Touton (Jones Day) and Karen Rose (DOC) about scheduling future dates
and times and will pass this information along to the group as soon as
possible.  It is my intention to transcribe these future teleconferences so
that the entire constituency will be aware of what transpires, since it is
mandated in the by-laws that all communications be open and transparent.

1. Louie Touton - Jones Day/ICANN
2. Michael D. Palage (interim secretariat/moderator) InfoNetworks
3. Amadeu Abril - Nominalia
4. Len Bayles - AllWest
5. Rolf Larsen - Active ISP
6. Karen Rose - Department of Commerce
7. Ian Christiansen - Active ISP
8. Hal ??? - CORE
9. Paul Stahura - eNom

Topics Discussed:

* Ten Thousand dollar licensing fee to Network Solutions for SRS software.
The general consensus was that this $10,000 fee was not a per se barrier to
entry but that NSI should be required to provide some type of performance
guarantee with regard to servicing their product.

* $100,000 Bond.  This was almost unanimously agreed upon by the group as a
barrier to entry due to the vague wording of the performance guarantee and
the amount.  Specifically Hal from CORE stated that they were required to
set aside $100,000 in their bank account to meet the bonding requirements.
The reality of this bonding issue is that it precludes small to mid sized
companies from entering the registry business.

* There was some confusion over the $100,000 bond being a line of credit.
However, it later was clarified that separate from the letter of credit or
deposit account, NSI requires a separate line of credit to cover the
registrars anticipated monthly registrations.

* Louie Touton made clear that all ICANN accredited registrars are required
to accept payment, or credit card authorization, prior to registering a
domain name. Therefore, after NSI signs the ICANN registrar agreement they
will no longer be able to provide their customers a 60 grace period for
payment. However, it was not addressed what happens to a registrar that in
good faith registers a domain name but then is not paid, i.e. credit card
charge back.

* Amadeu stated that the DG4 had asked all European registrars not to sign
the ICANN agreement until certain anti-trust issues could be resolved.
Karen Rose asked who had made this request and Amadeu stated that he would
send her the names after the teleconference.

* Transfer Policy.  There was much debate among the participants about this
being a major sticking point.  Most people expressed that any SLD
sponsorship transfer should be free.  However, it was explained that NSI may
incur some costs in verifying that the transfer is properly authorized.
There were some counter offers that a $2 or $3 dollars should cover NSI's
administrative expenses.

It was stated that NSI's position is that any transfer of an SLD between
registrars would require a two year registration period and associated fees.
If an SLD registrant wanted to renew a registration at its anniversary date,
if they elected to stay with NSI they would only be required to pay one
year, i.e. $35.  However, if they elected to change registrars at the
anniversary date, the registrar would be required to pay NSI $18 in registry
fees for the transfer, giving NSI an unfair business competitive advantage.

* Access to the Whois Database.  I raised the concern that NSI's proprietary
claim to the underlying Whois data is without merit. I cited several
examples of how NSI has entered into very lucrative agreements with
information companies to resell this data which it now claims as its own.  I
also gave a specific example as to how InfoNetworks was prohibited from
offering certain value-added services in connection with domain name
registration.  Specifically, InfoNetwork provides certain intellectual
property monitoring and clearance services.  When querying the Whois
database, NSI limits our retrieval to 50 records. This is unacceptable when
in numerous instances it is required of us to have access to all records and
their underlying data.  In addition, these value-added services will be
further hindered if not prohibited by the new nsiregistry.com interface that

* Nine dollar registry fee. There was a general consensus among the group
that the $9 per year fee was high. The participants agreed that NSI should
offer some type of accounting to justify their $9 per year claim. It was
stated that NSI based its $9 fee on its ability to recoup its $20-25 million
dollar investment in the SRS prior to September 2000.  When asked
hypothetically about extending NSI control of the registry beyond September
2000 to lower the $9 per year fee most if not all participants reacted
negatively.   However, the group refused to pay an assumed inflated $9 fee
without some accounting justification.

* There was an issue raised about the legal distinction between NSI the
registrar and NSI the registry. As Amadeu stated, there is a concern among
the registrars about NSI shifting expenses to inflate their registry
accounting expenses.  Case in point: NSI and their legal counsel attended
the Berlin DNSO-Registrar Constituency Meeting.  Were the expenses
associated with this trip attributed to NSI the registrar or NSI the

* Domain dispute policy.  There was concern about the adoption of a uniform
dispute policy to prevent forum shopping among potential registrants seeking
favorable terms.

* To help clarify and prioritize the legal issues for the Department of
Commerce in their upcoming negotiations with NSI, a survey will be
circulated among the constituency member to gauge their feedback as to what
is most important and why. I will undertake this task in connection with my
duties as Interim Secretariat.  However, this is not intended to be a
substitute for future teleconferences between the Department of Commerce and
the other registrars not able to participate on this date.

For any clarifications please contact Michael D. Palage, interim secretariat
at mpalage@ipwarehouse.com / mdp@infonetworks.com or +1 (561) 630-8060.