The Policy Oversight Committee submits the following comments. The text is set
forth below in ASCII and a Word file is attached.
POLICY OVERSIGHT COMMITTEE
RESPONSES TO THE QUESTIONS CONCERNING
GUIDLINES FOR ACCREDITATION
The Policy Oversight Committee respectfully submits its responses
to the
questions raised by the Internet Corporation for Assigned Names and Numbers in
its draft of Guidelines for Accreditation of Internet Domain Name Registrars
and for the Selection of Registrars for the Shared Registry System Testbed for
.com, .net and .org domains, dated February 8, 1999
Q1. Is the segmented model for the provision of domain name registration
services described above appropriate? How could or should it evolve over time?
The Policy Oversight Committee (POC), and its predecessor, the International Ad
Hoc Committee (IAHC) have consistently taken the position that the segmented
model is the preferable approach to maintaining the stability and reliability
of operations of the Internet, and overall best serves the public interest.
Q2. Are there any reasons why resellers should be accredited?
The POC does not see any reason for accrediting resellers. At the reseller
level, the interest in maximizing competition would favor minimizing
regulation.
Q3. In the context of accrediting registrars for the DNS system, is
preservation of universal and durable resolution of domain names an important
requirement for preservation of the Internet's stability? Are there other
stability issues that are particularly relevant in that context?
Preservation of universal and durable resolution of domain names is clearly the
most important requirement for preservation of the Internet's stability, and
all other stability issues are subsumed within this goal.
Q4. What conditions, other than the availability worldwide of a reasonable
number of alternative registrars and easy portability of domain names, are
important to the introduction and maintenance of robust competition in the
provision of registrar services?
There are no other conditions that are as significant as those mentioned.
However, POC believes that all registrars using a registry service should in
the future jointly contract for the provision of technical registry services
linked to specific gTLDs to avoid becoming economically captive to a registry
operator who could raise wholesale registry prices.
Q5. Are there significant principles in addition to those stated above that
domain name registrar accreditation should seek to promote?
No.
Q6. At what stage should requirements for accreditation of registry
administrators be introduced?
Within the generic TLD system, ICANN should undertake the accreditation of
registry administrators, including the authorization of new generic TLDs, as
soon as possible. Such accreditation process should be conducted in accordance
with the principles stated in the Statement of the Policy Oversight Committee,
dated 21 July 1998, "The Economic Structure of Internet Domain Name Registries:
For-Profit or Not-For-Profit?" ( the "POC Economic Structure Statement"), which
recommends that ICANN choose a not-for-profit, cost-recovery structure for all
gTLD names registries.
Q7. Should the requirement (Section III.A.1) that applicants demonstrate
general present or future business capabilities be revised to incorporate more
specifically stated thresholds or characteristics (e.g., levels of employment
or backup procedures)? For which aspects of Section III.A.1? What should the
more specific requirements be? If more specific thresholds or characteristics
should be incorporated for some aspects, should those thresholds or
characteristics be absolute minimum requirements, or should they be
"safe-harbors" that would automatically satisfy certain aspects of Section
III.A.1? (As an example of a "safe harbor," a showing that the applicant has
the equivalent of five full-time employees could be deemed to satisfy the
employee requirement stated in Section III.A.1.j.)
These requirements appear to be appropriate for the commencement of the
accreditation process. The POC faced the same issues in connection with the
creation of the Council of Registrars (CORE) and adopted similar requirements,
taking into account differing economic conditions throughout the world while at
the same time ensuring reasonable stability in operational aspects of registrar
functions.
Q8. Is it appropriate to have a specified threshold of required commercial
general liability insurance coverage? A requirement of US$500,000 is being
considered. Is that level about right, too high, or too low? Should the
required level vary by the location of the registrar to account for different
liability risks in different parts of the world?
POC and CORE adopted the requirement of such insurance, in an amount
equivalent to US$500,000, and found that it was reasonable for registrar
applicants throughout the world.
Q9. Is it appropriate to require that a specified level of liquid capital be
available to the applicant, or is it sufficient to have a more general
requirement such as that in Section III.A.1.i? A specified level of US$100,000
in liquid capital is being considered. Is that level about right, too high, or
too low? What effect would a requirement at that level have on the degree of
competition? Should the required level vary based on the country in which the
applicant is located? By the type of business model the applicant follows or
proposes?
POC and CORE adopted the requirement of capital in an amount equivalent to
US$300,000, and found that it was reasonable for registrar applicants
throughout the world.
Q10. Are the grounds for ineligibility set forth in Section III.B adequate to
protect consumers and the registry administrator from unscrupulous registrars?
Within practical limits of oversight, in widely differing legal jurisdictions
world-wide, these grounds are adequate. Ultimately, local law must be the
basis for protection of consumers, and registry administrators must be
delegated sufficient power, by ICANN, to protect themselves.
Q11. Are any of the grounds for ineligibility set forth in Section III.B
likely
to significantly diminish the number of applicants eligible for accreditation?
Given the experience of CORE, it seems unlikely.
Q12. ICANN presently has not concluded whether its accreditation
responsibilities will be performed by its own staff or by a qualified outside
agency. Does a decision on this issue have a potentially significant impact on
the proposed accreditation process?
CORE was fortunately able to secure the services of Arthur Andersen and Co, on
a pro-bono cost recovery basis. The process of qualifying CORE registrars went
smoothly in large part because of their generous cooperation and professional
skills. The use of a qualified outside agency should be seriously considered.
Q13. Where the registry administrator is also a registrar, is direct
accreditation of registrars an appropriate role for ICANN, or should
accreditation flow through the registry administrator?
ICANN must exercise accreditation power over all registrars for generic TLDs in
order to assure robust competition among the registrars. If registry
administrators were allowed to accredit registrars, there would be no way to
prevent more favorable treatment being afforded to those accredited registrars,
with accompanying anti-competitive results. The function of the registry
administrators must be separated from the functions of the registrars and
should be dealt with separately.
Q14. If direct accreditation is necessary to address competitive concerns
raised
by the registry administrator also acting as a registrar, do the draft
guidelines provide adequate protection?
POC believes that it is not in the public interest to have the same company
acting as both a registry operator and a registrar. As noted above in our
response to Question 4, POC believes that the most appropriate and stable
competitive model is where no single entity has absolute control over the
registry operation of a generic TLD. The most obvious solution is for
registrars to jointly contract for registry services where they have a direct
and joint economic interest in driving down the wholesale registry price for
registrations and can be more responsive to customer requirements. In this
scenario, the additional advantage is that a registry operator cannot make an
claims of ownership of intellectual property rights in a top level domain,
since it would be simply a contractor to a group of registrars.
Q15. If the draft guidelines do not provide adequate protection, what
additional measures could be taken to implement the equal access provisions of
Amendment 11?
The answer largely depends on the U.S. government fulfilling its
responsibilities.
Q16. What special measures, if any, should be taken to monitor the registry
administrator's activities to ensure that all registrars get equal access to
the registry?
There should be continuing oversight by ICANN, and appropriate measures,
including, if necessary, withdrawal of registry functions from a registry that
abuses its powers.
Q17. Are the data elements to be submitted by registrars to the registry
administrator appropriately specified?
They are appropriate. The applicable national laws relating to privacy issues
will, of course, have to be taken into account as the process is developed
further.
Q18. Is monthly an appropriate period for data escrow by accredited
registrars? Should more frequent or incremental escrows be required?
The POC recommends a per-volume related period instead of time periods (for
example, every 500 registrations), and further recommends making use of
third-party escrow services such as are used for escrowing computer source
code.
Q19. Should all registrar electronic records concerning dealings with
customers
be subject to a data escrow requirement?
This appears to be an appropriate requirement to protect the public and to
provide adequate assurances of stability of the DNS.
Q20. Should registrars be prohibited from claiming rights in the registration
data they generate?
To the extent necessary to assure portability of registrations and a
competitive system, registrars should not have any proprietary rights in the
registration data. The proposed Section IV.5 deals with this appropriately.
Q21. Should registrars' claims to rights in registration data be subject to a
Whois license for ICANN-designated Whois servers only, or should registration
data be freely available to all operators of Whois servers? What other
restrictions, if any, should be placed on the data?
Subject to applicable law relating to privacy, registration data should be
freely available to all operators of Whois servers.
Q22. Are the proposed requirements in Section IV.7 appropriate to promote fair
access to the registry? Should other similar implementing requirements be set
forth?
The proposed requirements of Section IV.7 are appropriate, but should also
include economic provisions to insure that all registrars are able to compete
on a level playing field. Section IV.7 should prevent a registry from giving or
receiving any financial advantage stemming from a relationship with a
particular registrar (or registrars). See the POC Economic Structure
Statement.
Q23. Does the uniform application of the fair information practices concerning
personal data impose undue burdens or restrictions on registrars or the
registry administrator? Should greater protections be required for personal
data provided by domain name holders?
The answer to this question depends largely on applicable laws relating to
privacy, but the uniform application of the fair information practices does not
itself impose undue burdens.
Q24. Does the proposed mechanism for anonymous holding of SLDs adequately
ensure that accurate contact information is available as required for proper
operation of the Internet?
This appears to be an adequate mechanism.
Q25. Does the proposed mechanism for anonymous holding of SLDs adequately
accommodate the legitimate interests of law enforcement authorities and those
seeking to enforce trademark and other rights?
This appears to be an adequate mechanism.
Q26. Is it advisable to have a Code of Conduct that establishes basic
standards
of fair business practices to which accredited registrars must adhere?
While a Code of Conduct is an appealing concept, the administration of such a
Code is likely to impose an enormous administrative burden that ICANN is not
equipped to handle. Local law is the preferable source of regulation of
registrars' business practices, other than practices that directly impinge on
operation or security of the Internet.
Q27. Should a registrar/registry administrator organization have the principal
responsibility for formulation of the Code of Conduct? Should that
responsibility instead be assigned to ICANN or some other body?
See the answer to Q27.
Q28. What standards of conduct should be in the Code of Conduct? A proposed
Interim Code of Conduct for DNS Registrars, to be used until the organization
of registrars and registry administrators becomes operational, is currently
being prepared and will be posted before the Singapore meeting. Early written
comment on this issue would be especially appreciated.
See the answer to Q27.
Q29. How, and by what entity, should the Code of Conduct be enforced? Should
enforcement decisions be subject to review and, if so, by what mechanism?
See the answer to Q27.
Q30. Should the guidelines limit the duration (e.g., two years) for which SLDs
can be registered?
In order to avoid problems stemming from unused SLDs, a two year registration
duration appears to be appropriate at this time. Experience may dictate a
change later.
Q31. Would the prepayment requirement hinder any otherwise realistic and
desirable registrar business models?
The prepayment requirement is highly desirable to avoid problems that have
arisen in registries that do not require prepayment, in particular, the
"cybersquatter" problem.
Q32. Should the durable connectivity assurance (against insolvency of
registrars) be limited to a specified length of registration?
The assurance should be limited to the specified length of registration plus a
reasonable grace period, e.g. 30 days.
Q33. Should other WIPO recommendations be implemented in these proposed
guidelines?
At this time, pending finalization of the WIPO recommendations, no other
recommendations should be implemented.
Q34. Because there has not yet been any experience in processing applications,
the proposed application fee levels are necessarily rough estimates. Comments
on the appropriate fee level to defray processing costs are invited.
Since there is no experience, the proposed fee levels for SLDs in the generic
TLDs appear to be appropriate. ICANN should closely monitor this situation and
make necessary changes when required.
Q35. Are there any practical problems presented by collection of
per-registration fees at the registrar level?
The collection of per-registration fees at the generic TLD registrar level
appears to be the best means of assuring adequate financial support for the
administration of the generic TLD system.
Q36. Is it appropriate to have both fixed and variable components of the
accreditation fee?
The answer to this question will depend on experience. The question should be
reviewed periodically.
Q37. At what level should the fixed component be set? Should the level vary
based on the country in which the registrar is located?
Initially the proposed fixed component appears to be an appropriate amount. As
stated above, the amount should be reviewed periodically based on experience.
Variation of the level dependent on location is probably a bad idea, because it
would simply lead to "flag of convenience" tactics that would defeat the
purpose, which presumably is to allow registrars in less-developed countries to
develop.
Q38. Is there some measure other than registration-years on which the variable
component should be based?
This is also a matter in which only time and experience can provide an answer.
Q39. Is it beneficial to state a cap on the rate at which the variable
component is computed, to allow registrars to better assess their prospects in
the business?
Initially, a cap is a good idea to allow the preparation of business plans by
registrars.
Q40. Are the stated grounds of termination appropriate? Can they be made more
specific while still preserving their utility?
Initially, the stated grounds appear appropriate.
Q41. Should additional grounds of termination be added?
Not at this time. The question should be revisited after experience with
operations.
Q42. Is fifteen days notice sufficient to allow a registrar to initiate
arbitration?
This appears to be an appropriate period at this time.
Q43. Is there any type of dispute arising from a registrar's accreditation
agreement that should not be subject to arbitration?
Disputes arising from the registrar accreditation agreement should all be
subject to arbitration.
Q44. What arbitral body should be selected, and what rules of arbitration
should be used?
The following provision is part of the CORE Memorandum of Understanding.
Although it has never been invoked, it was selected on the basis that it
maximized the neutrality of the proceeding.
"Each Registrar agrees that any claim arising out of or relating to this CORE-
MoU, or the breach, termination or invalidity hereof, shall be settled by
arbitration in accordance with the UNCITRAL Arbitration Rules as are at present
in force. The appointing authority shall be the Secretary General of the
Permanent Court of Arbitration. There shall be a sole arbitrator. The place
of arbitration shall be Geneva. The language used in the arbitral process
shall be English. The claim shall be decided in accordance with Swiss law."
Q45. Should registrars seeking renewal of their accreditation be specially
protected from the effects of raised accreditation standards or changes to the
terms of the accreditation agreement?
In order to assure the level playing field and to maximize the benefits of a
competitive business environment, it is not appropriate to offer such
protection. The ICANN proposal is intended to provide experience, based on the
Shared Registry System test, which will enable final accreditation guidelines
to be prepared. The final guidelines should be applied to all registrars across
the board.
Q46. Should disputes arising from actions on initial or renewal applications
for accreditation be subject to arbitration? If so, on what grounds should
such actions be reviewable?
In view of the global nature of the system, and the problems inherent with
parties in different jurisdictions, arbitration in a neutral forum is clearly
the desirable way to handle such disputes.
Q47. Should the guidelines prohibit accredited registrars from charging
different prices to different categories of customers?
No. This appears to be an area where the benefits of open competition among
registrars will be realized, and a minimum of price regulation is called for.
This answer is predicated on the assumption that no registrar will have a
financial advantage relative to other registrars based on a relationship with a
registry.
Q48. Should the guidelines require accredited registrars to offer unbundled
domain name registration services?
As stated in answer to Q47, assuming the level playing field for registrars,
there is no apparent economic basis for such a requirement, and competitive
market place forces should prevail.
Q49. Are the additional requirements for participation in phase 1 too
burdensome?
At this time, there appear to be good reasons for the requirements to assure
the success of the Shared Registry System test.
Q50. Is the primary selection criterion appropriate?
The primary selection criterion is appropriate.
Q51. In the event that more that five registrars meet the criteria equally,
what mechanism should be used to select among them?
As an absolute last resort, assuming that there is true "equality" among
candidates, which seems unlikely, a selection by lot could be used. The
criteria appear to be adequately detailed to preclude the absolute equality of
candidates.
POC responses to ICANN Questions re Guidelines for Accreditation.doc