2012-10-18 - Approval of Revised Process for Handling Requests for Removal of Cross-Ownership Restrictions on Operators of Existing gTLDs

On 20 June 2011, the Board adopted resolution 2011.06.20.01, that included approval of a process that ICANN developed "for handling requests for removal of cross-ownership restrictions on operators of existing gTLDs who want to participate in the new gTLD program . . . ." The resolution did note however, that "consideration of modification of existing agreements to allow cross-ownership with respect to the operation of existing gTLDs is deferred pending further discussions including with competition authorities."

Delaying the ability for registry operators to request removal of restrictions on cross-ownership for their own registries was to provide time for discussions with the competition authorities that had expressed interest in this issue. On 14 June 2011, the United States Department of Justice Antitrust Division sent a letter to the U.S. Department of Commerce on the subject of cross-ownership. Thereafter, in October 2011, ICANN's counsel spoke to the supervising lawyer at the Antitrust Division, who confirmed that there is no active Antitrust Division investigation with respect to the cross-ownership issues at this time. In light of this representation, there have been no other communications with the Antitrust Division, and none are planned.

The other competition authority that expressed interest is the European Commission (EC). Immediately before the Singapore meeting, on 17 June 2011, the EC sent ICANN a "non-paper" expressing some concerns regarding the removal of cross-ownership restrictions. Following the Board's approval of the New gTLD Program, ICANN's counsel sent a note to the EC offering to meet to discuss the "non-paper," and the issues identified in the Board's 20 June 2011 resolution. In response, the EC requested that ICANN respond to the "non-paper" in writing. On 25 October 2011, ICANN provided the EC with a comprehensive response to the "non-paper" and again requested a meeting to discuss these matters.

On 19 January 2012, the EC responded to ICANN's 25 October 2011 letter. The EC's letter stated, "we do not oppose the removal of vertical separation as a matter of principle." The letter continues, however, that the EC is "currently not convinced that the full removal of vertical separation for generic Top-Level Domains, particularly for existing ones such as .COM, is the most appropriate solution from a competition point of view." The EC then requested that ICANN furnish the EC with responses to questions seeking additional information.

A comprehensive response to the EC's 19 January 2012 letter was delivered to the EC on 9 March 2012, responding in detail to each of the questions posed by the EC. In the letter ICANN again offered to meet with the EC. In Costa Rica, an ICANN representative discussed the matter with the EU GAC Representative who asked for two things: (i) a bullet-point description of the Process; and (ii) assurance that the time limits placed on ICANN to act are in no way meant to limit the EC's authority to act at any time. ICANN provided the requested information and has heard no further comments from the EC, either as part of the Public Comment Forum or otherwise.

Accordingly, it appears that there is no longer any reason against extending the approved process to existing registry operators for their own TLDs.

This action will be an advantage for the ICANN community, as it will provide the opportunity for treating all registry operators equally with respect to cross-ownership restrictions. This action will not have any fiscal impact on ICANN and will have no impact on the security, stability and resiliency of the domain name system.

This decision is a Board-level Organizational Administrative Function – public comment sought.