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Comments from the Commercial Internet Exchange Association (CIX)



 
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COMMENTS OF THE COMMERCIAL INTERNET EXCHANGE ASSOCIATION (CIX) ON THE PROPOSED ICANN GUIDELINES FOR
\par ACCREDITATION OF INTERNET DOMAIN NAME REGISTRARS AND FOR THE SELECTION OF REGISTRARS FOR THE SHARED REGISTRY SYSTEM TESTBED FOR .com, .net and .org DOMAINS
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\f1
\par }{\b\f1\ul Summary
\par }{\f1
\par The proposed ICANN guidelines published on February 8, 1999, correctly identify many of the elements, goals, and principles that should be included in the transition of the DNS from a resource administered pursuant to US Government guidance to a
fully private and globally managed system.  The February 8, 1999 draft correctly identify (1) Internet stability and operational integrity and (2) competition in providing DNS registration services as the priorities of ICANN's draft proposal.
\par
\par Motivated by
 good intentions, the proposal risks burdening ICANN with a costly administrative bureaucracy as many new entities apply for accreditation to offer registration services, either separately or as part of an Internet service bundle.  ICANN should consider a
l
ternative business models to "direct accreditation". There is no need for accreditation for a business in which entry is competitive.  The alternatives to direct accreditation include phasing in business and operational requirements as needed.  In additio
n
 to mandatory fair, non-discriminatory behavior, other issues that have been widely discussed internationally include consumer protection and until experience justifies the need for direct accreditation.  Some issues, such as consumer protection and trade
mark rights, should be addressed now since there has been extensive discussion of these issues.  However, it will be possible to achieve ICANN's goals without the complex, and potentially costly, accreditation proposal.
\par
\par With regard to the selection of part
ies to test the Shared Registry System (SRS), they should anticipate higher-than-normal operational requirements during the beta period.  Therefore, we do not object to the selection and other guidelines described in Section V.  However, we propose a proc
edural change to ensure that  the test participants do not have a competitive advantage over non-participants.
\par
\par }{\b\f1\ul Overview.
\par }{\f1
\par The proposed guidelines are intended to facilitate the opening of three top level domains currently administered by Network Solutions,
 Inc. (NSI), to competitive registration commencing with a two-month test of a shared registry system developed by NSI beginning in April, 1999.  ICANN's staff designed to guidelines to promote robust competition in SLD registrations while preserving netw
ork stability and operational integrity.
\par
\par The February 8, 1999, proposed ICANN guidelines seek to promote five other principles: (1) user convenience and ease of use; (2) standard good business practices and fair dealings, including clear ob
ligations by the registrar to customers and the registry; (3) protection of legal rights, including intellectual property rights, and prompt resolution of disputes; (4) reasonable protection of holders' privacy rights; and (5) worldwide access to domain n
ame registration services and the development of alternative business models for registration services.
\par
\par To achieve these goals, the guidelines prescribe a system under which registrars would be directly accredited by ICANN after application, payment of necessary pro
cessing fees, and demonstrating that they meet qualifying criteria.  The barriers to entry are intended to be set low enough to attract competitors but high enough to weed out unqualified businesses.  Successful applicants would become registrars after en
tering into a binding accreditation agreement with ICANN.  Am accreditation agreement is designed to prescribe mandatory business and operational conduct as long as a registrar is accredited.  An application and separate accredita
tion fee would defer the costs of processing the application and sustaining the accreditation program.  Registrars must also pay a variable annual fee to ICANN based on the number of their SLD registrations.
\par
\par Under extraordinary circumstances, ICANN may terminate an accreditation agreement before it expires.  Disputes arising from an agreement, including termination, will be subject to mandatory arbitration by an international arbitral body.
\par
\par Finally, the proposal invites applications to participat
e in the testbed of the SRS developed by NSI that will support non-discriminatory registration of SLDs.  The guidelines would allow testers to demonstrate greater technical competency and expertise than normal.
\par
\par {\pntext\pard\plain\b\f1\cgrid \hich\af1\dbch\af0\loch\f1 I.\tab}}\pard \fi-720\li720\nowidctlpar\widctlpar\jclisttab\tx720{\*\pn \pnlvlbody\ilvl0\ls1\pnrnot0\pnucrm\pnstart1\pnindent720\pnhang{\pntxta .}}\ls1\adjustright {\b\f1
Guidelines for Accreditation of internet Domain Name Registrars
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1
\par A)\tab }{\f1\ul Direct Accreditation by ICANN}{\f1 .  The proposal would establish application and accreditation processes managed by ICANN, qualifying accreditation criteria, and mandatory business and operational practices with which each registrar
 must comply.  There are several reasons why this complex process may be unwise and counter-productive.
\par
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 1.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1
ICANN should be commended for its commitment to protecting customers' interests and third-party rights.  Many, though not all, of the problems the
proposed guidelines attempt to solve are still prospective.  Thus it is possible and desirable initially to take more limited steps short of accreditation until the market matures and problems justify additional guidelines.  Wherever current problems and
solutions have been widely discussed - such as trademark rights - ICANN should proceed with modified guidelines.  In short, the guidelines }{\i\f1 in toto }{\f1 may be premature whereas individual parts thereof may be thoroughly justified.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 2.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1 Comprehensive accreditation
 as envisioned in the proposal could impose a heavy supervisory burden on ICANN, divert management attention from policy to ministerial matters, retard the commencement of competitive registration, and be far more demanding and expensive than its proponen
ts anticipate.  The financial resources required to sustain its creation will be high even it is outsourced since a trained staff must be assembled.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 3.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1
Processing applications and accreditation requests will be very demanding of ICANN.  Moreover, deliberate violations or inadvertent lapses by a registrar can be hard to detect and difficult to enforce.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 4.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1
The demand for accreditation authority will expand sharply to meet the demand for SLD names and as firms seek to meet this need.  Competitive registration services
 will be available from a wide array of firms and organizations, either working with accredited registrars or, more likely, by registering names themselves.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 5.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1
There are, as ICANN itself admits, other business models that might succeed without consuming o
r diverting ICANN's limited resources.  These include working more closely with registries and other major stakeholders to set the criteria and rules for new registrars.  ICANN's
 concern that NSI might slow competition or engage in anti-competitive behavior can be mitigated by vigorous antitrust law enforcement.   Other options that have not been fully explored could avoid the baleful effects of a bureaucracy.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 6.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1
High on a list of alternatives would be to compel registrars to comply with the terms of their a
greements with the registries.  Since registrars must sign a contract with NSI and other future registries to use their gTLDs, the latter will have the power and opportunity to compel registrars to adopt good business practices and consumer protection ste
ps.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 7.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls11\adjustright {\f1
If commentators, other Internet stakeholders, and ICANN's Board of Directors should decide that uniformity of business practices and conduct is imperative, ICANN should consider adopting and issuing an abridged set of guidelines consisting of goals,
 principles, and general operational standards.  Enforcement of general guidelines could then be left to registry administrators, national laws and courts, private contracts, Internet community, and the market.
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1
\par {\pntext\pard\plain\f1\ul\cgrid \hich\af1\dbch\af0\loch\f1 B)\tab}}\pard \fi-720\li720\nowidctlpar\widctlpar\jclisttab\tx720{\*\pn \pnlvlbody\ilvl0\ls6\pnrnot0\pnucltr\pnstart2\pnindent720\pnhang{\pntxta )}}\ls6\adjustright {\f1\ul
Protecting Customers' and Third Party Rights}{\f1
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 1.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls17\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls17\adjustright {\f1
Central to the case for direct accreditation are assertions that detailed accreditation guidelines would promote fair dealing and good business practices, reduce fraud, ensure connectivity for a name holder in the event of a business failure, per
mit name portability, increase protection of trademarks, and promote timely and fair dispute resolution.  Without doubt, the proposal would contribute to the protection of many parties' legal rights if adopted }{\i\f1\ul and}{\f1
 enforced.  The real question is whether these benefits could be obtained under a different institutional arrangements that are more efficient, cheaper, and unobtrusive.  We believe that other regulatory models would be preferable.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 2.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls17\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls17\adjustright {\f1
There have been instances of country TLD registrars that failed
 to retain vital customer records or unexpectedly ceasing operations and failing to perform a service.  Draft Sections IV.4, IV.5, and IV.6 would deal with this problem by requiring registrars to retain electronic copies of communications and transactions

between a registry administrator and the registrar and to make this information available to ICANN after reasonable notice.  ICANN need and should not be in the business of escrowing data or specifying who should be performing this function.  Instead it s
hould require registries to escrow it and prove that it has it to have access to the ICANN root.
\par }\pard \fi720\nowidctlpar\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\adjustright {\f1
\par }\pard \li360\nowidctlpar\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\adjustright {\f1 The registry administrators are the appropriate party to impose the data escrow via contract in their contracts with the new registrars.  Any guidelines must b
e reinforced by effective enforcement efforts and adequate tools and resources. Therefore, we recommend an expedited and simplified selection process unless experience later shows that closer vetting of applicants and slower moving procedures would outwei
gh the costs of delay.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 3.\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls17\pnrnot0\pndec\pnstart1\pnindent360\pnhang{\pntxta .}}\ls17\adjustright {\f1
Privacy rights are addressed in Sections IV.8 and IV.9.  We agree on the need to protect personal data collected pursuant to the registration process and support the proposed guidelines.
\par }\pard \fi-270\li270\nowidctlpar\widctlpar\adjustright {\f1
4.  Another issue that should be addressed now during the initial stage is the conflict between DNS and trademarks.  Trademark holders' problems have received close scrutiny and sympathetic attention during the last two years.  These can and should be add
r
essed where possible during the debate on guidelines.  The commentary notes correctly that the draft reflects some of that community's concerns and that the issue would be addressed again after a related WIPO report is published.  The bulk of the IPR-rela
ted provisions are contained in Section IV.9 and appear to be reasonable and realistic.
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1
\par C)\tab }{\f1\ul Expedited and Simplified Approval of New Registrars
\par }{\f1
\par The ICANN accreditation program described in Section III would require detailed vetting of an applicant, includi
ng its minimum financial qualifications, business plan and technical capabilities.  The process vests considerable power in ICANN as the parties negotiate about the type of data ICANN applications require to satisfy the eligibility criteria.  Some of the
c
riteria are very general and could confuse applicants.  For example, Section III.A.1 requires applicants to "demonstrate current business capabilities . . .or submit a comprehensive business plan to develop capabilities by commencement of operation".  Sub
jective judgements based on generalities could retard the processing of applications and approval of new registrars.
\par }\pard \fi720\nowidctlpar\widctlpar\adjustright {\f1
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1 As registrars must enter into binding agreements with the registry administrators, many of the proposed operational guidelines can be incor
porated into those contracts, including a commitment to fair trading practices.
\par }\pard \fi720\nowidctlpar\widctlpar\adjustright {\f1
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1 D)\tab }{\f1\ul Miscellaneous Comments}{\f1
\par
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 1\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls22\pnrnot0\pndec\pnstart1\pnindent360\pnhang}\ls22\adjustright {\f1
Whois service.  Section II.G invited comment on the evolution of the Whois database service.  We shall comment at greater length on Whois but woul
d like to note hear that a more limited database service would have an adverse effect on legitimate users like ISPs and law enforcement officials.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 2\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls22\pnrnot0\pndec\pnstart1\pnindent360\pnhang}\ls22\adjustright {\f1
Criteria for Registry Administrators.  The proposal's commentary stated in passing that ICANN may have to
develop criteria for registry administrators but did not intend to do so now.  Such criteria are necessary to have competition to manage a gTLD registry and to authorize new gTLD registries and gTLD names.  Should ICANN consider adopting registry administ
rative criteria, we strongly recommend that it simultaneously study how and when to authorize new gTLD registries and TLD names.
\par {\pntext\pard\plain\f1\cgrid \hich\af1\dbch\af0\loch\f1 3\tab}}\pard \fi-360\li360\nowidctlpar\widctlpar\jclisttab\tx360{\*\pn \pnlvlbody\ilvl0\ls22\pnrnot0\pndec\pnstart1\pnindent360\pnhang}\ls22\adjustright {\f1
Relationship of ccTLDs to ICANN.  Although the ccTLDs have no institutional; relationship to ICANN, in fact they use the root
 and IP addresses.  It might be desirable in the future to develop similar dispute resolution procedures and data escrow protection to prevent forum shopping among the ccTLDs and gTLDs.
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1
\par {\pntext\pard\plain\b\f1\cgrid \hich\af1\dbch\af0\loch\f1 II.\tab}}\pard \fi-720\li720\nowidctlpar\widctlpar\jclisttab\tx720{\*\pn \pnlvlbody\ilvl0\ls1\pnrnot0\pnucrm\pnstart1\pnindent720\pnhang{\pntxta .}}\ls1\adjustright {\b\f1
Selection of Registrars for the SRS Testbed
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1
\par }\pard \nowidctlpar\widctlpar\tx90\adjustright {\f1 Section V proposes
criteria for selecting five entities to test the SRS developed by NSI.  Beta tests usually are more demanding of participants than ordinary operating conditions and test managers often establish higher than normal criteria for beta testers.  Therefore ICA
NN should have wide latitude in setting the criteria as well as selecting qualified participants.
\par }\pard \fi720\nowidctlpar\widctlpar\adjustright {\f1
\par }\pard \nowidctlpar\widctlpar\adjustright {\f1 To ensure that the five participants do not enjoy a competitive advantage, ICANN should schedule a meeting after the beta test concludes and before competitiv
e operations begin to discuss the test at length.  Other parties should have reasonable access to the data from testbed managers.  Such a meeting and extensive information sharing should help alleviate competitors' concerns and political sensitivities.

\par }\pard \fi720\nowidctlpar\widctlpar\adjustright {\f1
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\f1 III.\tab }{\b\f1\ul Conclusion
\par }{\f1
\par A competitive market for registration services will most efficiently allocate resources, stimulate investment, and promote investment.  Regulatory oversight should be minimal but may be necessary sometimes
to ensure that market mechanisms work, such as promoting competition through vigorous anti-trust enforcement.  Similarly, consumers' and intellectual property rights must be protected against unfair practices.
\par
\par As the market develops, ICANN must regularly revise its guidelines and rely on the market to determine which companies may offer registration services and how they conduct themselves and retain only those that are necessary.
\par }}