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Wednesday, February 22, 2006


Business Constituency on ICANN-VeriSign Settlement

Dear Vint

It has come to our attention that there is discussion on the Board to consider voting soon on the proposed 2006 version of the litigation negotiation agreement with VeriSign, which includes a revised proposed .com Registry Agreement. The Business Constituency officers would like to remind you and other members of the Board of the GNSO resolution sent to the Board during the Vancouver ICANN meeting: "That the ICANN Board should postpone
adoption of the proposed settlement while the Council fully investigates the policy issues raised by the proposed changes."

The Board should be aware that the GNSO Council is advancing that investigation promptly:

* On January 17, 2006 the Council requested an Issues Report related to the policy concerns raised by all constituencies

* On January 29, 2006 a revised set of documents were posted by ICANN, including a revised proposed .com Registry Agreement

* On February 6, 2006 the GNSO Council voted, by a two thirds majority, to launch a PDP to address the broader policy issues inherent to all registry agreements

* On February 16, 2006 the Council began detailed discussion of the Terms of Reference; a second call on Friday, February 24, 2006 is expected to complete that discussion

The Business Constituency's officers have examined the present draft .com agreement in detail. Two of the officers and several BC members were able to participate in a call with the ICANN senior staff last week to gain further insights. We thank the ICANN staff for this opportunity. That discussion revealed that there was no material change in the core areas that concerned the BC membership which all impact on competition:

* Exclusion from ICANN consensus policy for new registry services;

* a presumption right of renewal;

* the ability of an upstream monopoly to leverage its monopoly downstream to such areas as uses of traffic data.

The ICANN Board has a mechanism to address these concerns. It is the GNSO Policy Development Process to provide policy related to gTLD registries, and such a process is underway. Lacking the guidance that the PDP will provide to the Board, the officers of the BC do not believe that the Board should approve the proposed agreement.

As noted in our response to the first call for comment on the proposed .com award and settlement agreement, the BC is supportive of the settlement of the litigation. We identified several areas that needed changing in the
proposed .com award at that time. As stated above, these areas of concern remain in the revised 2006 .com proposed agreement. It remains clear that tying the litigation settlement to an early renewal of the .com registry
agreement is problematic, given the proposed approach in the proposed .com agreement to some significant policy areas that are likely to affect all existing registry agreements. As noted above, that has led to the initiation
of a policy development process (PDP) by the gNSO Council.

The BC officers are firmly of the view that the litigation should be settled in its own right, or seen to its natural conclusion through the courts without any settlement being linked to the early renewal of the .com registry agreement. Once the two are not linked, the Board and the ICANN community can take the appropriate time to consider the important policy implications of the suggested changes to the registry agreements.


The Officers of the Commercial and Business Constituency (BC)

Marilyn Cade

Philip Sheppard
Grant Forsyth

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