ICANN’s Process For Strategic Plan, .Net Domain Renewal Questioned

Luxembourg City—The Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit corporation in charge of technical aspects of the Internet naming system, is being questioned this week for potentially unaccountable actions.

The questioning comes from the organisation’s constituents at an 11-17 July board meeting in Luxembourg.

ICANN has faced charges in the early part of the meeting for a lack of transparency in the process it followed in negotiating a renewal of VeriSign’s contract to manage the .net domain. VeriSign also manages .com, the biggest of the non-governmental domains, and .net has been recognised as valuable to the underlying operation of many .com and other addresses because of its origin as a network domain.

ICANN also is seen by a number of constituents as trying to move forward with a draft strategic plan that does not have consensus. The powerful cross-cutting Generic Names Support Organisation (GNSO) Council voted in favour of a statement that it does not currently believe that there is a consensus of the ICANN community in the support of the strategic plan. The council encouraged the development of a consensus strategic plan.

ICANN Chairman Vint Cerf told constituents that the organisation is vulnerable if it cannot show that it has some sort of plan, even if it is not final.

On .net, ICANN signed a contract with incumbent manager VeriSign that a range of business groups in Luxembourg argue contained substantive changes over the old contract without a public comment period required under ICANN rules. One of the changes was to reduce the price for selling a domain name to a registrar for resale to consumers. That figure has been $6 for years, but now would drop to $4.25 until 2007, when VeriSign can request that price controls be removed altogether.

In several meetings with industry groups, ICANN officials were told of the concerns. ICANN leadership and lawyers said time was too short to conduct the consultations because the previous contract, negotiated years ago when VeriSign had a monopoly on domains, was about to expire. ICANN conducted a bidding competition for .net last year and chose to renew VeriSign’s contract.

A concern raised by some ICANN stakeholders is that ICANN may have been influenced by existing heated legal battles with VeriSign over other issues, such as VeriSign’s attempt to introduce a new registry services. New registry services were part of the changes made in the contract without comment. ICANN General Counsel John Jeffrey told constituents he could not speculate on whether ICANN would have behaved differently in negotiations if the lawsuits were not there, but said they were not the reason for the outcome.

The GNSO Council voted to express its concern to the board that the final .net agreement was not posted for public comment prior to approval, given the significant changes made to the agreement from the previously posted draft.

The Intellectual Property Constituency did not adopt a resolution on the .net issue, but in discussions it was pointed out that “the entry into the agreement without having posted the final text for public comment was a departure from ICANN’s long-standing practice,” said constituency representative Steve Metalitz. “We think this practice is essential to transparency and urge that there be no further deviations and that the importance of the procedure be reaffirmed.”

Bhavin Turakhia, chair of the ICANN Registrars Constituency, said there was “extreme displeasure expressed by all registrars with regards to changes in the .net contract without following due process.”

He read out a statement to the ICANN board agreed to by all registrars that called the contract signing without public consultation “not only a breach of trust but a breach of the transparency provision (Article III – specifically Section 6) of the ICANN bylaws” which require openness and transparency procedures to ensure fairness.

“This is not the first time this has happened,” the registers continued. VeriSign also negotiated a change in the registry-registrar agreement with ICANN staff related to transfers of domain names. The changes were significant and no public consultation was held, they said.

“ICANN staff gave an undertaking to registrars that this would not happen again,” the statement said. “It is the registrars’ view that this verbal undertaking was also breached.”

Specifically, registrars are concerned about the pricing change. They want the maximum price fixed for the duration of the agreement. They also complained about VeriSign’s exclusion from new consensus policies related to the introduction of new registry services. Furthermore, they opposed a provision preventing ICANN from changing the contract terms in a renewal of the agreement, which would prevent registrars from negotiating a lower price at that time.

The registrars called for the contract to be reconsidered following the proper procedure, assurances the procedure will be followed in the future, and particularly assurances that nothing similar will happen when the .com domain renewal negotiation comes up next year.