My comments to ICANN opposing proposed .org, .info, .biz and .asia contract renewals

Below is a (slightly reformatted) version of the comments I submitted to ICANN today regarding the proposed .org, info, .biz and .asia contract renewals. The deadline for comments on the .org and .info contracts is just a few hours away (longer deadline for .biz and .asia), so hopefully they inspire others to submit comments, if they’ve not already done so.

Submitted by: George Kirikos
Company: Leap of Faith Financial Services Inc.
Date: April 29, 2019

We write to oppose the proposed contract renewals posted by ICANN for the .org, .info, .biz and .asia contracts, as posted for public comments at:

While our arguments are focused on the .org TLD, to the extent that
the contractual terms are similar for the other TLDs, we repeat the
same comments for .info, .biz and .org. Indeed, while the majority of
the thousands of public comments to date have focused on .org, ICANN
should read those comments as also applying to .info, .biz and .org,
even if the submitters did not explicitly submit their comments to all
4 email addresses.

1. We support and endorse the great groundswell of opposition as expressed in the thousands of thoughtful public comments opposed to these proposed agreements. It is shocking that ICANN did not learn its lesson from 2006, when similar massive opposition existed for comparable contracts which would have allowed for unlimited fee increases.

The proposed contracts are simply unconscionable, and ICANN should instead simply extend the existing contracts by another 6 or 10 years,
rather than make any other changes.

2. Within the At-Large, we had a video discussion/debate, archived here:

where many of the points below are discussed, and I include them here
by reference.

3. We particularly agree with the comments and/or blogs submitted/posted by:

a) Nat Cohen / Telepathy (and also here)
b) NameCheap
c) Zak Muscovitch / Internet Commerce Association
d) Jay Chapman / Digimedia
e) Andrew Allemann

4. It should be noted that in the past ICANN trumpeted lower fees as
one of its main achievements. For example, the testimony of ICANN
General Counsel and Secretary John Jeffrey:


Among ICANN’s main achievements are the following:

Market competition. Market competition for generic top-level
domain registrations established by ICANN has lowered
domain name cost in some instances as much as 80 percent with savings for both consumers and businesses. (emphasis added)

It is not consistent with those past statements for ICANN to abrogate its responsibilities, and permit unlimited fee increases by registry operators. Unlimited fee increases are not in the public interest, and do not even attempt to balance the needs of registrants against those of registry operators. ICANN was handed a responsibility to balance the interest of affected stakeholders when it achieved (against our wishes) independence from US government oversight, and it’s now clear that it is not living up to those commitments given such one-sided contracts that have been presented here for public comment. Unlimited fee increases are not balanced, and do not promote stability of the internet or competition. ICANN is engaging in corporate welfare and/or crony capitalism through such anti-competitive proposals as are here before us.

5. As has been pointed out by others, under competition the cost of
providing registry services (really just the management of a central
database plus the operation of various nameservers) would be under USD
$1.00 per domain name per year. This is evidenced by the .IN (India)
tender, where Neustar beat Afilias with a winning bid of USD $0.70 per
domain name per year (70 cents/domain/yr).

A similar competitive tender process happened in France, where AFNIC had to lower the wholesale fees for .FR domain names, and the contract was for 5 years.

Similar competitions are held for the .US ccTLD.

You’ll note that registry operators do not have presumptive renewal in those ccTLD contracts, yet are more than willing and able to compete effectively and make investments. It was a major policy blunder of ICANN to have agreed in the past to presumptive renewal, a decision that has had a multi-billion dollar negative impact upon registrants, compared to a situation where there are regular competitive tenders. Even the US government has argued for those competitive tenders for both initial agreements and for renewals of agreements (Ms. Garza’s analysis begins on the 3rd page of the PDF, after the covering letter by Ms. Baker of the NTIA).

The absence of such competitive tenders can only be rectified through the protective fee caps which have been long established, and which the registry operators themselves have agreed to since the times they entered into their respective agreements. If current registry operators are not prepared to renew the existing contracts (which have fee caps in place), then there would be no shortage of other prospective registry operators who would be prepared to step in and replace them (and at a much lower cost, with fee caps in place).

Indeed, ICANN themselves have argued (in court) that such caps are

“….in a single supplier market, price caps are, if anything,
procompetitive (Mot. at 13-14);” (line 13, page 6 of 15)

6. We would like to openly make ICANN the following offer: We will run
the .org registry for USD $5 per domain name per year, and keep all other existing terms the same. [We would then simply subcontract it to one of the many registry operators who would bid for the job at USD $1 per domain per year or less, and pocket the difference!] This is lower than the $9.93 per domain name per year that PIR currently charges. ICANN cannot of course accept this improved deal, even if it wanted to, because its hands are tied by the foolish decision to agree to presumptive renewal in the past.

Looking forward, an agreement to permit unlimited fee increases in the future (far beyond the already generous 10% per year permitted increases) would similarly hamper ICANN’s ability to negotiate future “win-win” deals, giving it no negotiating leverage in the future, as it would have already given away the farm if it entered into this proposed agreement.

Agreeing to permit unlimited fee increases is like letting the genie out of the bottle, as there’s no way that registry operators will ever agree to voluntarily undo such a change in the future. Presumptive renewal means that registry operators can safely ignore any future attempts by ICANN to renegotiate. This is why these contractual changes are so important,  because they’ll be impossible to fix in the future (without giving up even more to registry operators, e.g. via a buyout or something). This alone should be reason for caution. Given there’s no urgency to making a change (i.e. registry operators have falling costs, not increasing costs), then the status quo should prevail.

6. Some have suggested that the Internet Society and/or PIR would
never raise fees by a large amount. However, “hope is not a strategy.”
Past performance is no guarantee of the future. Leadership can change,
as can priorities/missions. It’s clear from section 7.5 of the the draft contract itself that ISOC/PIR could simply sell or assign the registry contract to another entity (e.g. Private Equity, just as registry operator Donuts was sold by its founders), and that new owner/entity could take the
heat for future egregious fee increases. ICANN would not be able to stop such a deal. Such a sale would allow ISOC to create a huge endowment for itself worth billions of dollars, given that .org is arguably the second most desirable gTLD, after only .com.

7. The ability to renew a domain name for 10 years is not sufficient protection for registrants. Eventually the bill will come due, and nothing can offset the enormous switching costs. Any goodwill/links/etc. built up will be reduced to zero, totally destroying one’s investment in one’s web identity that may have been built up over 20+ years (even longer than ICANN has existed, in many cases). URLs that have been printed in offline media such as books, DVDs, etc. can’t be updated, thus it’s impossible for many to simply stop renewing after 10 years and switch, as some people will still see the old URL. E-mails aren’t forwarded by the new registrants to those of past registrants, meaning that all existing email addresses can’t
easily transition to a new domain name without risk. Business cards would need to be reprinted (and can’t be “recalled” from past recipients). Registrants expect URLs to be permanent, not transitory. Registrants of legacy gTLDs like com/net/org own their domain names, and are not temporary tenants (like those in the failed new gTLDs).

8. One of the reasons prospective registrants rationally avoid new gTLDs is the lack of certainty over potential future fee increases. As one submission pointed out, they are “leery” of such one-sided contracts, and for good reason. Those failures of the new gTLDs experiment should not be allowed to contaminate the successful and proven legacy gTLDs like .com/net/org. Indeed, if there is to be any harmonization of contracts, the “base agreement” should be that of the successful .com/net/org TLDs which included fee caps, rather than have the future be modeled on the the failed new gTLDs program. Registrants of new gTLDs knew the problems with the lack of price caps, and foolishly agreed to them before registration. Changing the rules for existing registrants of legacy gTLDs is unacceptable, as this amounts to changing the rules in the middle of the game, rules which would never have been acceptable to most prior to registration.

One submission suggested that as each new gTLD matures, or reaches a critical mass, it should then transition to the legacy contracts. That was a wise suggestion, to bridge the failed new gTLD program with the successful legacy gTLDs.

9. Even ISOC/PIR doesn’t enter into such one-sided agreements, given that its own supplier/subcontractor (Afilias) had to win a competitive tender to retain the contract for managing the back-end of the registry (presumably at an even lower fee than it agreed to years ago — fees would be able to be estimated once the relevant IRS Form 990 forms become public).

It’s entirely inconsistent that Internet Society doesn’t give presumptive renewal and/or permits unlimited fee increases for its own suppliers, yet wants such things for themselves.

10. We oppose the ability for the registry operators to unilaterally
create and impose their own mandatory RPMs upon registrants. See, for

Specification 7, § 1 The terms of Section 1 of Specification 7 are
hereby amended and restated in their entirety as follows: “Rights Protection Mechanisms. Registry Operator shall implement and adhere to the rights protection mechanisms (“RPMs”) specified in this Specification. In addition to such RPMs, Registry Operator may develop and implement RPMs that discourage or prevent registration of domain names that violate or abuse another party’s legal rights. Registry Operator will include all RPMs required by this Specification 7 and any additional RPMs developed and implemented by Registry Operator in the Registry-Registrar Agreement entered into by ICANN-accredited registrars authorized to register names in the TLD. (page 6, emphasis added)

This should be left to the GNSO, to develop only policies that have consensus, and which balance the needs of both rights holders and registrants. For example, suppose PIR (or another registry operator) was allowed to unilaterally create a RPM on their own which allowed for complaints to be filed for a fee of $100, but which required registrants post a $1 million bond if they wish to file any response to the complaint. Such a one-sided policy could be created by a registry operator under the proposed terms, and would ignore the requirement that ICANN policies need to balance the concerns of all affected stakeholders (including registrants).

11. We also oppose the searchable WHOIS, which ignores the ongoing EPDP on WHOIS:

“Notwithstanding anything else in this Agreement, Registry Operator must offer a searchable Whois service compliant with the requirements described in Section 1.10 of Specification 4 of this Agreement.” (page 37)

as it doesn’t properly balance the privacy rights of registrants against those who would go on fishing expeditions. A searchable WHOIS system should only ever be adopted, if and only if the Trademark Clearinghouse (TMCH) equally becomes public and searchable, in return. If the TMCH is kept secret and non-searchable, then the WHOIS should not be searchable either.

12. Additional RPMs that were developed for new gTLDs were the result
of bad predictions that were made of massive cybersquatting prior to
the adoption of the program. For example, in testimony before the US

“First, the immediate costs imposed on business is likely to be in the multi billions of dollars.”

“This Program in aggregate has multi-billion dollar implications for all marketers, both in the commercial and the nonprofit sectors, and their brands. It would cause irreparable harm and damage to the entire online business community. It would throw the domain name universe into substantial confusion for both marketers and consumers.”

“So there are billions of dollars that are going to be spent and it’s not going to be providing a use for the economy.”

“And when we’re talking about billions of dollars here, when we’re talking about companies with 3,000 or more brands, even big companies will be facing really large expenses. So this is a very, very significant economic issue for this country and for the world.”

“An unlimited expansion of the TLDs will cost the business community billions of dollars.”

“The unlimited expansion of TLDs would dramatically increase the cost and complexity for trademark holders to protect their rights. The immediate cost imposed on businesses is likely to be in the billions of dollars.”

“We believe ICANN’s gTLD program would impose billions of dollars in unnecessary costs on the restaurant industry at a time when restaurant operators are looking forward to investing in their businesses and hiring employees after the worst recession in decades.”

These predictions exaggerated and overestimated the actual risk that was realized by the launch of new gTLDs. Thus, the justification for the adoption of the URS and other RPMs turned out to be false predictions, and should now be undone. They were never intended for, nor should be imposed upon, registrants of legacy gTLDs.

Prospective registry operators at the time were willing to accept such terms, as the trademark lobby threatened to thwart and delay the release of new gTLDs unless their demands were met. Registry operators were blinded by dollar signs in their eyes, for example, predictions by Name.Space:

“Name.Space, whose business has a potential value of over 1 billion dollars, has been deprived the opportunity to fully launch and operate its portfolio of gTLD properties under what we believe is the most responsible, fair, and ethical practices yet to be employed in the commercial domain name industry.” (same link as above for testimony)

13. Given that the RPM PDP of the GNSO is actively reviewing the URS,
including determining whether or not it should be a consensus policy,
no steps should be taken by ICANN staff and/or the registry operators
to unilaterally impose it upon registrants. Indeed, there are numerous
proposals to actively change the URS (including a proposal to explicitly eliminate it; click the “Individual URS Proposal” tab to see the 33 individual proposals, 14 of them from us)

The current URS is deeply flawed. For example of just one of the defects, currently complaints are required to be in English (unlike the language rules for the UDRP, where complaints must be in the language of the registration agreement, which varies by registrar). Thus, many registrants defending a URS dispute have no idea what the actual URS complaint is about, if they do not understand English. This is particularly egregious, given that new gTLDs are most popular in China.

Such flawed RPMs whose creation was rushed before the launch of new gTLDs, and which are tilted in favour of large multinational companies, need to be reviewed and corrected before they are ever adopted for legacy gTLDs like .com/net/org.

14. In conclusion, ICANN’s proposed contracts represent a failure of the multi-stakeholder model, and are instead evidence that ICANN has been captured by registry operators. ICANN claims these contracts are the result of a negotiation, yet what did registrants receive in return for these contractual changes? We received absolutely nothing in return, except for higher fees and higher regulatory burdens (via the imposition of the URS), with all the gains being received by the registry operators at the expense of registrants. That’s not a negotiation — that’s a giveaway.

We expect and demand that ICANN and the registry will simply extend the current contracts, rather than enter into these one-sided arrangements.