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This letter to ICANN’s board is powerful

It’s time for ICANN to stop the charades and rediscover its bottom-up mandate.

Picture of five young adults playing charades, with one person standing on one foot with hands above her head.

ICANN granted price increases to Verisign for .com domain names last month. It announced the decision on a Friday during the pandemic news flurry, just one day after publishing an analysis of public comments received about the proposed price hikes.

It was an astonishing lack of regard for the bottom-up, community-driven process that is supposed to guide ICANN.

At this point, no one was surprised that ICANN rolled over for Verisign, which gave ICANN $20 million as part of the deal. No one was surprised that ICANN didn’t put any weight on community feedback. But it was shocking how ICANN decided to disregard giving even a pretense of caring about the process.

Zak Muscovitch, General Counsel of Internet Commerce Association, sent a letter to ICANN’s board calling out this charade.

I found the closing particularly powerful. If ICANN’s staff is going to make decisions, negotiate contracts, and then ignore the public feedback–why have the public comment periods at all?

Read the full letter here (pdf). The closing is below.

As you are people of good will who are ostensibly trying to do the right thing on behalf of the global public interest, we would suggest that it is time to take a step back and reevaluate your entire approach with a view to establishing sound, fair processes and rational decision making.

Before embarking on a decision affecting 140 million registrations and imposing a burden on consumers in the hundreds of millions of dollars, you could have easily consulted with stakeholders. By “before”, we mean before negotiating a revised Registry Agreement, rather than seeking comment afterwards.

You could have undertaken an economic study to fulfill your mandate to act in the public interest and to ensure that increasing prices is helpful to the public, rather than solely for your registry operator.

You could have studied and identified if there were any reasonable views to be considered that were contrary to your adopted view that “ICANN is not a price regulator”, and you may even have adopted such different views.

You could have taken stock of the nearly unanimous opposition to price increases from registrants, and determined that based upon public feedback, you should change course in order to serve the public interest.

Instead, you negotiated a controversial price increase, inter alia in exchange for a $20 million payment, prior to seeking any public feedback. When you received It’s feedback, you did not reconsider or change course whatsoever. You empowered Staff to make decisions rather than take responsibility yourself.

It need not be this way. ICANN can reclaim its place as a multistakeholder, transparent, responsive, and credible institution of integrity.

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  1. John says

    ICANN had Verisign contractually bound to maintain wholesale prices at $7.85 through 2024 for consumer protection under the 2016 .Com Registry Agreement. The agreement did not expire until November 30, 2024 – with capped wholesale prices a monopolist is able to charge at $7.85 per year.

    But ICANN is throwing out its 2016 agreement – and $7.85 price freeze through 2024 – and has decided to amend its agreement MORE THAN 4 YEARS EARLY – to allow Verisign to charge higher (aka supracompetitive) prices on its captive base of 144 million registrants.

    ICANN ignored almost 100% unanimous opposition during the public comment process. What is the point of public comments if ICANN will never listen?

    What is really going on here? The special arrangements between ICANN and Verisign must be exposed.
    What about the 2006 confidential settlement agreement between Verisign and ICANN (which was obtained by Verisign as a result of harassing litigation?)

  2. Jack says

    With the economic situation, these price increases will be fully reversed.
    Mark my words !
    No way Verisign increases prices 7% four years in a row with the unemployment and the economic crisis that is going to come.

    There will not be a single cent increase on .COM price for years to come.

  3. M. Menius says

    This problem with ICANN has been in plain sight for more than a decade. It will not come under control until a higher regulatory body steps in.

  4. joeG says

    I can’t wait for ICANN to be regulated! Because:

    ICANN is a joke
    ICANN is a mess
    ICANN is corrupt
    ICANN is inept
    ICANN is wrong
    ICANN is foolish
    ICANN is captured
    ICANN is dishonest
    ICANN is crooked
    ICANN is backwards
    The ICANN model is broken
    ICANN is greedy
    ICANN does not care
    ICANN is an insult to the Internet community
    ICANN is rotten
    ICANN is inadequate
    ICANN needs reform
    ICANN is evil

    Well, the list could go on for a mile. But you get the point. ICANN is in dire need of outside regulation because it has proven in the last few years how bad it is and how messed up it is at its very core!

  5. John says

    One of ICANN’s mandates is to promote competition.

    Two recent actions:

    —- removal of all pricing caps in the .Org domain extension in June of 2019
    —- amending the .Com Registry Agreement more than 4 years early in March 2020 – to allow the monopoly operator (Verisign) to increase prices without justification.

    ICANN already decided what it was going to do before it put both contracts out for public comment. ICANN negotiated terms with the monopoly operators – behind closed doors – without community input and without following the bottom-up, multi-stakeholder model. Once it reached its agreement – it opened up the public comment process. But as we all witnessed – regarding the two most significant legacy TLD’s – ICANN gave zero consideration to other stakeholders – and in both cases, it ignored almost 100% unanimous opposition.

    ICANN’s decision was already made up prior to the public comment process. I agree with ICA’s analysis – that the public comment process is a total sham.

    The multi-stakeholder model is dead.
    The only way to describe the current situation at hand – ICANN is a cartel – it has handed out monopoly contracts, and continues to extract out monopoly rents from those contracts.

    It is clear ICANN has been captured by the registries and only makes decisions that benefit its contracted parties. Why does ICANN put the interest of the registries ahead of all other stakeholders – and most importantly consumers?

    ICANN falsely claims there is more competition in the DNS with the introduction of the new gTLD’s. But practically everyone else will tell you that .com and .org do not compete with other extensions. They are their own market – and there is only one monopoly operator.

    Indeed, if the market was more competitive – you would expect prices to go down. Falling prices is a sign of a healthy and competitive market and it means services are substitutes for one another.

    But within the past 10 months – ICANN has enabled the two largest monopoly operators – running the legacy .com and .org domain extensions – to increase prices even further.

    ICANN also falsely claims they are no longer a regulator – and more specifically a price regulator, despite the fact that ICANN is a regulator and is currently engaged in price regulation today.

    Price increases will harm consumers – especially considering there is zero justification for any price increases.

    • Jonsie says

      They say they are not a regulator, and defer to competition authorities, yet they negotiated both items behind closed doors with the monopolies. Why did they not hand this to relevant competition authorities and ask them to conduct the negotiations? Why did they have authority to negotiate up-front on things they are not able to be a regulator to?

      Who approved the $20 million quid-pro-quo kickback payment? Was that handed to them from a regulator? Whomever came up with that specific $20 million dollar amount IS THE REGULATOR!

  6. Joun says

    It’s time we bring them into the public spot light and shame them. Can we get a submission to Change.org and create a petition?

  7. joesaba2014 says

    After a deal of favors for Verisign and the millions of dollars collected by ICANN as a non-profit organization?

    How to proceed against ICANN?

    I hope and wish that all of you are well from the pandemic in your country.

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