Constituency addresses pricing and censorship issues.
The Non-Commercial Stakeholders Group (NCSG) has sent a letter to ICANN, asking it to make three changes to the .org registry contract if it is to be sold to Ethos Capital.
The group points out that the contract to be the steward of .org was awarded to Internet Society (ISOC) based, in part, on ISOC’s reputation and goals. It was a competitive process.
Now, ISOC wants to sell it to a strictly for-profit private equity group.
(I find it perplexing that ICANN has shoehorned provisions of new top level domain contracts into legacy extensions without considering the history of these legacy extensions and how they were awarded to their current operators.)
NCSG wants to see three changes to the contract before it is transferred to Ethos:
- A revised notification procedure in which wholesale price increases of any amount give ORG registrants 6 months to renew their domains for periods of up to 20 years at the pre-existing annual rate. Implementation of this revised notification procedure must be obligatory to both PIR as well as any registrar through which .org domain names are registered and/or renewed.
- A strong commitment that the administration of the ORG domain will remain content-neutral; that is, the registry will not suspend or take away domains based on their publication of political, cultural, social, ethnic, religious, and personal content, even untrue, offensive, indecent, or unethical material, like that protected under the U.S. First Amendment.
- An elimination of the URS procedure within the ORG domain, as the rights protection mechanisms specific to the URS were appropriate only for new domains.
While the price cap change requested in item #1 is helpful, it ignores two issues.
First, most .org registrants are unlikely to know the price is increasing until it comes time to renew. Therefore, they can’t lock in the original price for 20 years.
ISOC CEO Andrew Sullivan has noted that only a minority of .org users are speaking out against selling .org. That’s not because they don’t care, but because they don’t know about it. Likewise, they won’t know about price increases until it’s too late.
Second, it just kicks the can down the road another ten years.
Mark Thorpe says
“I find it perplexing that ICANN has shoehorned provisions of new top level domain contracts into legacy extensions without considering the history of these legacy extensions and how they were awarded to their current operators.”
Exactly! New TLD’s are not the same as Legacy TLD’s (.COM .NET .ORG) and they should never be grouped together. Apples and oranges.
These requests are like a private equity firms dream. Who wrote this Abry ?
Ability to pre-pay for 20 years?? So the PE company gets 20 years worth of cash upfront and since they are not public , not really care about reporting and deferred revenue.
No suspension of domains for content – so anything goes on .ORG and oh wait , no URS . So , registrants get to trade on the idea that ORG is for non-profits and trusted groups , when in reality they are free to do what they want.
I also find it perplexing ICANN has ignored United States Department of Justice, Antitrust Division advice.
ICANN is doing exactly OPPOSITE what DOJ recommended. ICANN is directly facilitating harm on a captive base of users.
Anyone concerned about ICANN’s actions should read this letter very carefully:
Quite extraordinary how much DOJ got right back in 2008.
— The creation of additional gTLDs is unlikely to constrain the exercise of market power by existing TLDs
— Competition from new gTLD created is not likely to prevent the exercise of market power by new or existing TLD registries.
— The Division makes two specific recommendations. First, ICANN’s general approach to new gTLDs should be revised to give greater consideration to consumer interest. ICANN should move carefully weigh potential consumers harms against potential consumer benefits before adding new gTLDs and renewing new gTLD registry agreements. Second, the RFP process and proposed registry agreement should include provisions that would enable ICANN to constrain new registry operators from exercising market power. In particular, ICANN should establish competitive mechanism for authorizing new gTLDs and renewal of gTLD registry agreements whereby prospective gTLD operators would compete for gTLDs by proposing registry terms – including MAXIMUM FEE SCHEDULES – that would provide consumer benefits. (emphasis added)
— Many registrants do not perceive .com and other gTLD’s and country code TLD’s to be substitutes.
— The proposed registry agreement does not include any price caps that would limit the ability of new gTLD registry operators to charge the highest possible prices for domain in the new gTLDs. Similarly, the proposed agreement does not include any restrictions against price discrimination, building and tying.
— The proposed registry agreement also allows for the perpetual renewal of every new gTLD registry without regard to competitive effects or consumer-based objections.
— ICANN’s request for bids should expressly call for bids to specify an internal maximum price that would be charged by the operator for domain registrations, as well as limitations on price increases over time.
— ICANN should require competitive bidding for renewal of a gTLD registry agreement, rather than granting the incumbent operator a perpetual right to renew without competition.
— Experience with the .net TLD and other gTLDs have showed that competitive bidding in the award of gTLD registry agreements, and periodic rebidding, has served as an effective tool for managing the interest of registrants in gTLDs.
— Indeed, competitive bidding has resulted in lower domain prices and higher operating specifications than what ICANN has achieved through non-competitive negotiations.
— In particular, competitive bidding prompts bidders to propose and accept registry improvements, higher operating standards, and lower registration fees to win the contract.
The following two lines sum it up quite well:
— ICANN’s approach to TLD management demonstrates that it has adopted an ineffective approach with respect to its obligation to promote competition at the registry level.
— To date, we believe that ICANN has not come close to fulfilling its obligations to employ competitive principles in its management of TLD registry operations.