Reconsideration Request 02-6
On 16 October 2002, Philip L. Sbarbaro, the Deputy General Counsel of VeriSign, Inc., sent a letter to Joe Sims, ICANN's outside legal counsel, objecting to the Board's decision in resolution 02.100 authorizing negotiations toward appropriate revisions to the VeriSign's .com and .net registry agreements to provide for the offering of a wait-listing service (WLS) as proposed by VeriSign, but placing six conditions on the terms of that authorization. At its meeting on 31 October 2002, the Board adopted resolution 02.124, referring Mr. Sbarbaro's letter to Reconsideration Committee, with instructions to treat it as if it had been submitted on the letter's date to the e-mail address as required by the Reconsideration Policy. The Reconsideration Committee then designated the letter as reconsideration request RC 02-6.
VeriSign's request was submitted during the evolution and reform process commenced by the ICANN Board in March 2002. Seven weeks before VeriSign's request, the community-based Accountability Framework Assistance Project issued its final "Recommendations Regarding Accountability" on 23 August 2002. That document detailed recommended revisions to ICANN's review mechanisms (including the reconsideration process) to conform to and implement the Blueprint for Reform adopted by the ICANN Board at its June 2002 meeting in Bucharest and particularly ICANN's reformulated Mission and Core Values. Both the Mission and Core Values and the substance of the "Recommendations Regarding Accountability" were incorporated in ICANN's New Bylaws approved by the Board on 31 October 2002, which became effective on 15 December 2003.
This recommendation and the Committee's recommendation concerning Dotster's request RC 02-5 are the first recommendations made by the Committee since the New Bylaws became effective and thereby superseded the former Reconsideration Policy. The current reconsideration mechanism, as embodied in the New Bylaws, contains additional provisions that improve upon the former policy. It is understandable that the two pending requests, which were written with the now-superseded Reconsideration Policy in mind, do not contain all the elements that would be required by the current reconsideration mechanism. After reviewing VeriSign's request, however, the Committee is satisfied that it contains sufficient information, when considered in conjunction with other publicly documented information, to allow proceeding to a recommendation without requesting VeriSign to provide a supplemental submission.
VeriSign's request is deemed submitted on 16 October 2002, over seven weeks after the challenged action (adoption of resolution 02.100) occurred on 23 August 2002. The former reconsideration policy, like the provisions of the New Bylaws concerning reconsideration, required the submission of a request for reconsideration within thirty days after notice of the action being challenged. VeriSign's letter was presented after that deadline. By way of explanation of its delay, VeriSign notes in its request that the practical effect of the challenged action did not become apparent until after it undertook a design effort intended to comply with the challenged conditions, which took longer than thirty days:
In recommendations under the former Reconsideration Policy, the Committee has at times treated the thirty-day deadline flexibly and performed an analysis of the merits of the request. See recommendations on RC 02-1 (Interim Secretariat for the Stockholm Convention on Persistent Organic Pollutants; submitted 31 days after challenged action) and RC 01-4 (Verio, Inc.; submitted 38 days after challenged Board action). While recognizing the importance the thirty-day deadline under the New Bylaws, the Committee believes that further discussion of VeriSign's request is warranted in the circumstances present here, where the delay was occasioned by the time required for the effects of the challenged action to be fully appreciated and where consideration of the issues is necessary in any event because of the submission by another party of a timely request for reconsideration challenging the same Board action.
In its request, VeriSign first disputes "that ICANN (1) has the authority to so regulate the business affairs of any registry, and (2) has any legitimate basis for appending 'conditions' on to the service which substantially impair its viability and economic success." VeriSign's request then focuses on three of the six conditions, stating that as a practical matter they make the WLS offering commercially impracticable. The request states:
Under Article IV, Section 2(2)(b) of the New Bylaws, an adversely affected party may seek reconsideration of a decision of the ICANN Board where the decision was "taken without consideration of material information, except where the party submitting the request could have submitted, but did not submit, the information for the Board's consideration at the time of action or refusal to act."1
VeriSign's general objection to the establishment of conditions for ICANN's agreement to revise the registry agreements simply repeats information comprehensively considered, and found unpersuasive, by the Board in adopting resolution 02.100. VeriSign's objections to establishment of conditions were extensively discussed in the process leading up to the adoption of the challenged Board resolution. As noted in the General Counsel's Second Analysis of VeriSign Global Registry Services' Request for Amendment to Registry Agreement (22 August 2002), VeriSign's proposal entails revision to existing services as well as establishment of a new service. Based on this fact, and the extensive community discussions of problems that the WLS could cause to others, the Board concluded in resolution 02.100 "that various conditions are necessary to ensure that the proposed WLS is implemented in a manner that promotes, rather than harms, the interests of consumers and others with legitimate interests". VeriSign's general objection to the conditions therefore does not warrant reconsideration.
The three conditions in resolution 02.100 specifically challenged by VeriSign are as follows:
With regard to Condition a (the six-month delay), VeriSign's present objections were fully considered by the Board in adopting resolution 02.100. As reported in the minutes of the 23 August 2002 Board meeting, this condition was the subject of significant Board consideration leading to an amendment to increase the delay from three to six months:
The above explanation also shows the inadequacy of the "interim RGP" VeriSign proposed to implement with WLS, since that interim procedure would not have applied to registrations for which no WLS subscription was in effect. In short, VeriSign has presented no arguments concerning Condition a that were not fully considered by the Board.
VeriSign's arguments concerning Condition c (registrar blackout) do present some new information. Under this condition as stated in the resolution, the registrar sponsoring a domain-name registration may not obtain, for itself or for a customer, a WLS subscription on that domain name at any time less than sixty days before the name is deleted. As noted in the 22 August 2002 General Counsel's Second Analysis of VeriSign Global Registry Services' Request for Amendment to Registry Agreement, the purpose of this condition is to avoid an incumbent registrar acquiring a preference through advance knowledge of the deletion of a domain-name registration. While VeriSign is sympathetic with this objective, it explains that the manner in which the restriction is stated presents an "extremely poor customer experience" because the deletion date of a registration cannot always be predicted. Thus, customers who place WLS subscriptions with the registrar sponsoring the name current registration even well before the expiration date could be surprised when the current registrant deletes the name within sixty days and the WLS subscription is not honored. The Committee believes that VeriSign's observations concerning the particular way the condition is stated do present information not fully considered by the Board, and which VeriSign could not reasonably have presented at the time of the Board's adoption of resolution 02.100.2 The Committee recommends that the staff be given flexibility to negotiate with VeriSign to tailor this condition to result in a better customer experience, while still substantially achieving the goal.3
Finally, VeriSign asserts that Condition d (registrant notification) will "work[ ] to the disadvantage of trademark owners and consumers and plays into the hand of speculators." As noted in the minutes of the 23 August 2002 meeting, however, these issues were fully considered by the Board; indeed the current language of Condition d resulted from an amendment after the Board's discussion of the various transparency issues involved. Thus, no new information regarding this condition has been provided and modification through reconsideration is not warranted.
For the above reasons, the reconsideration committee recommends that the Board give the staff flexibility to negotiate with VeriSign to tailor Condition c to result in a better customer experience, while still substantially achieving the goal of that condition. This should be accomplished by the Board's adoption of a new resolution restating resolution 02.100, with an appropriate revision of Condition c. Otherwise, the Reconsideration Committee recommends that the Board take no action on reconsideration request RC 02-6.
1. The requirement that the party was unable to submit the information at the time of the Board's original decision was not stated in the former Reconsideration Policy. That requirement is not determinative of VeriSign's reconsideration request, so that it is not necessary to decide whether the requirement should be applied to requests pending at the time the New Bylaws came into effect. It will be applied to all requests submitted after 15 December 2002.
2. The exact formulation of the proposed condition was first posted on 22 August 2002, the day before the Board meeting.
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