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Verio's Response to Register.com Submission Concerning Petition for Termination
(7 March 2001)


 


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March 7, 2001

 

Writer's Direct Contact
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MJacobs@mofo.com

By Overnight Delivery and Electronic Mail

Internet Corporation for Assigned Names and Numbers
ATTN: Louis Touton
            Vice-President, Secretary, and General Counsel
4676 Admiralty Way, Suite 330
Marina Del Rey, CA 90292

  Re: Verio's Reply to Register.com's Response in Opposition to Petition for Termination of Its Registrar Accreditation Agreement and Response to Questions From ICANN Related to the Petition.  

Dear Mr. Touton:

Verio, Inc. replies to Register.com's January 26, 2001 response opposing Verio's Petition for Termination of its Registrar Accreditation Agreement (the "Accreditation Agreement").1

Register.com accuses Verio of filing its Petition to "spin" this dispute in Verio's favor. In fact, Verio filed this Petition because ICANN, in effect, told it to do so. In its Amicus Brief to the United States District Court, ICANN maintained that it, and not the Court, was the appropriate forum for the resolution of Verio's dispute with Register.com.2

Verio therefore seeks ICANN's intervention to remedy Register.com's flat refusal to comply with its obligations under the Accreditation Agreement. As discussed below, Register.com is blatantly and intentionally flouting its obligations under the Accreditation Agreement.

Register.com is casual not only with its obligations to ICANN; it is equally casual with the truth about Verio's conduct. Contrary to the mischaracterization propagated by Register.com, Verio has never used Whois data to spam anyone. Verio sales representatives may have followed up on some sales calls with individually directed email, but Verio never used Whois data to send "mass unsolicited commercial advertisements or solicitations via email" and has no intention of doing so.3

The issue Verio presents to ICANN is clear: will ICANN discipline a registrar that has repeatedly violated the letter and the spirit of the Accreditation Agreement? The integrity of the registrar governance system depends on an affirmative answer to that question.

I. RESPONSE TO QUESTIONS FROM ICANN.

Through its General Counsel, ICANN recently requested that Verio respond to a series of questions in any responses that Verio may have to Register.com's or NSI's recent submissions. See February 17, 2001 Louis Touton Letter to Michael Jacobs (Ex. M). The first six questions refer to Verio's Petition. The next nine questions refer to NSI's January 30, 2001 Investigative Report regarding Verio's TLD Zone File Access Agreement.4 As the questions themselves reflect, the proper focus of ICANN's inquiry here is not whether Verio's marketing practices are susceptible to challenge on trademark grounds, as Register.com spends much ink addressing; nor is the history of Verio's marketing program at issue here.

Moreover, the issues addressed in Verio's Petition and NSI's Investigative Report have little connection with each other. Verio's Petition focuses on Register.com's conduct, for which ICANN has indicated it is the sole regulatory authority. Thus, Verio came to ICANN because ICANN indicated that no other forum exists to address Register.com's conduct. The subject of NSI's Investigative Report, Verio's TLD Zone File Access Agreement, however, has no legitimate bearing on whether Register.com may continue to violate the Accreditation Agreement.

Thus, in this reply to Register.com's Response, Verio will address ICANN's questions that relate to Register.com's conduct. Upon completion of its own investigation into the matters raised by NSI's Investigative Report, Verio will separately address ICANN's other questions.

II. DESPITE A CLEAR STATEMENT FROM ICANN THAT ITS TERMS OF SERVICE VIOLATE THE ACCREDITATION AGREEMENT, REGISTER.COM REFUSES TO MODIFY ITS TERMS OF SERVICE.

As early as June 2000, ICANN informed Register.com that it imposes restrictions on the use of Whois data that exceed those allowed by the public access provisions of the Accreditation Agreement.5 Later, in its September 22, 2000, Amicus Brief, ICANN unambiguously declared that Register.com is in breach of the Accreditation Agreement:

In prohibiting use, for advertising or solicitations by direct mail and telephone, of Whois information it provides in response to queries made through proper means, Register.com has breached a promise it made in section II.F.5 of its Registrar Accreditation Agreement with ICANN.

Amicus Brief at 2 (emphasis added). Thus, on two separate occasions, in two distinct factual contexts, ICANN told Register.com in no uncertain terms: "You are violating your agreement with us." Although at least nine months have passed since the first occasion, Register.com has not budged. Register.com still refuses to conform its practices to the Accreditation Agreement.

Register.com attempts to masks its defiance by claiming that since being notified of ICANN's interpretation of the Accreditation Agreement, it "has been carefully reviewing its WHOIS terms of use, and looks forward to receiving guidance from ICANN." Register.com Response at 17. How much more guidance does Register.com need? ICANN clearly told Register.com long ago that it is in breach. Register.com simply refuses to cure.

In its Response to Verio's Petition, Register.com also claims that the Accreditation Agreement is ambiguous.6 The Accreditation Agreement's provisions regarding the limitations on a registrar's ability to control use of Whois data for marketing purposes, however, are perfectly clear. Interpreting the Accreditation Agreement's permitted terms of use is a simple two-step process.

First, the Accreditation Agreement specifically provides that a "[r]egistrar shall not impose terms and conditions on use of the data provided except as permitted by an ICANN-adopted policy." Accreditation Agreement § II.F.5 (emphasis added). Thus, Register.com cannot impose terms other than those permitted by ICANN.

Second, the Accreditation Agreement specifies the terms and conditions that are permitted. ICANN's current policy is that a "[r]egistrar shall permit use of data it provides in response to queries for any lawful purposes except to: (a) allow, enable, or otherwise support the transmission of mass unsolicited, commercial advertising or solicitations via e-mail (spam); or (b) enable high volume, automated, electronic processes that apply to Registrar (or its systems). Id. (emphasis added).

Although ICANN has already told Register.com that its interpretation is incorrect, Register.com again argues that the disjunctive "or" in Section II.F.5 should be read to prohibit both "(i) the transmission of mass unsolicited commercial advertising, and (ii) solicitations via email." Register.com Response at 18. Register.com's interpretation would prohibit a host of conduct that the Accreditation Agreement clearly intended to allow.

Register.com's interpretation, for example, would prohibit the following: John Doe owns a small baseball memorabilia shop in Spokane, Washington called "Cardtraders." Mr. Doe goes to register "www.cardtraders.com" but finds that it is unavailable. Mr. Doe performs a Whois query and finds that John Smith in Wilmington, Delaware owns the domain name. Mr. Doe emails Mr. Smith to inquire whether he would be willing to sell the rights to the name. Under Register.com's interpretation, Mr. Doe's single email solicitation would be prohibited. Obviously, the United States Department of Commerce ("DOC") and ICANN did not seek to prohibit such conduct.7 DOC and ICANN sought to prohibit "spam."8

In essence, Register.com requests ICANN to adopt a new policy limiting the use of Whois data for all marketing purposes. Verio strongly disagrees that such a policy would further ICANN's stated purpose of promoting competition, but Verio does not dispute that Register.com has the right to voice opposition to ICANN's current policy. What Verio disputes is that Register.com has a right to act on its opinion before it has persuaded ICANN of the merits of its position.

Critically, Register.com advances no technical basis for restricting use of Whois data. It does not claim that its restrictions are necessary to protect its servers; it does not claim that its restrictions are necessary to protect the Internet. To the extent Register.com advances a policy argument at all, it is directed to purported privacy concerns. But ICANN addressed privacy concerns in embracing an "opt-out" mechanism, and Register.com nowhere claims that such a mechanism is inadequate to address privacy concerns.9

More importantly, Register.com is taking the "law" here into its own hands. It is acting as the judge of ICANN's policies and enforcing its view without prevailing in the ICANN consensus process. Although Register.com pays lip service to that process, claiming that "it stands ready to work within the consensus process," Register.com Response at 19, Register.com has decidedly set itself outside of the process by selectively disregarding existing ICANN policies with which it does not agree. The time has come for ICANN to force Register.com to comply with the Accreditation Agreement unless and until Register.com is able to persuade the Internet community that its view is correct.

III. REGISTER.COM SEEKS TO SUBVERT THE "OPT-OUT" BULK ACCESS POLICY INSTITUTED BY DOC AND ICANN.

A. Register.com's Refusal To Institute An "Opt-Out" Policy Undermines Useful Bulk Access.

The Accreditation Agreement contemplates an "opt-out" policy that allows individuals to make an affirmative decision to exclude their Whois data from bulk access. Register.com says that ICANN did not mean "opt-out" when it said "opt-out," and claims that its "opt-in" policy therefore complies with the Agreement. To the contrary, the terms of the Agreement are clear, and Register.com has simply disregarded its obligations.10

DOC and ICANN's mandate could not be clearer. The Accreditation Agreement specifically refers to the policy as an "Opt-Out" policy. See Accreditation Agreement § II.F.6.f.. As Register.com knows, there is a significant distinction between an "opt-in" policy and an "opt-out" policy. Thus, although Register.com may try to call its policy an "opt-out" policy, it is clearly an "opt-in" policy.

Even Register.com's recently posted "Privacy Notice" acknowledges that its bulk access policy is an "opt-in" policy:

If you have opted-into having your WHOIS Information available for bulk access, ICANN also requires register.com to make that information available to third parties who enter into a bulk WHOIS data access agreement with register.com.

Register.com Privacy Notice (Ex. N) (emphasis added).11 But later bollixing up the distinction between opt-in and opt-out, Register.com goes even as far as interpreting silence from the individual as an opt-out:

If you do not contact register.com to request otherwise, you will be automatically opted out of having your WHOIS information included in the licensed data file. In the event that you wish to include your WHOIS information, you may do so at any time by contacting Customer Support. Keep in mind, however, that all businesses are required to include their WHOIS information in the data file, and therefore cannot opt out.

Frequently Asked Questions About Register.com's Privacy Notice (Ex. O) (emphasis Added).12

Affirmatively choosing to "opt-out" and affirmatively choosing to "opt-in" are distinct activities.13 Register.com has flipped the "opt-out" policy on its head. The Accreditation Agreement explicitly provides that registrars "may enable SLD holders who are individuals to elect not to have Personal Data concerning their registrations available for bulk access for marketing purposes." Accreditation Agreement § II.F.6.f. (emphasis added). If ICANN and DOC intended to allow registrars to implement an "opt-in" policy rather than an "opt-out" policy, they could easily have said that registrars "may enable SLD holders who are individuals to elect [. . .] to have Personal Data concerning their registrations available for bulk access for marketing purposes." But that is not what the language says, and Register.com knows it.

ICANN and DOC apparently chose an "opt-out" policy to encourage individuals to participate in the bulk access program unless they strongly wanted to be excluded. Under the ICANN system, individuals who are ambivalent about whether to take part in the bulk access program will most likely not express an affirmative choice. Thus, by default, they will take part in the bulk access program.

The policy to promote participation in the bulk access program is further evidenced by two other provisions of the Accreditation Agreement. First, ICANN and DOC deny institutional registrants the right to "opt-out" of the bulk access program. Only "SLD holders who are individuals" may "opt-out." See Accreditation Agreement § II.F.6.f. In addition, the Accreditation Agreement does not mandate that registrars institute an opt-out policy. If DOC and ICANN sought to encourage individuals to opt-out of the bulk access program, they would have mandated that all registrars employ such an opt-out program.14

By encouraging individuals to take part in the bulk access program, DOC and ICANN evidently sought to promote competition in the domain name registration system and market for value-added services and products. DOC and ICANN understood that by taking part in the bulk access program, individuals would obtain more information about value-added products and services and domain name renewal services than they otherwise would have obtained, thereby promoting competition and lowering the cost of such services to the public. Register.com's disregard of its obligations is motivated by its contrary policy objectives: it wants to limit competition and control access to what it regards as its exclusive domain.

B. In Violation Of The Accreditation Agreement, Register.com Continues To Market Value-Added Products And Services To Individuals Who Are Not Included In Its Bulk Access Program.

Even if Register.com's policy were an acceptable "opt-out" policy, Register.com would still be in violation of the Accreditation Agreement. Register.com ignores the requirement that registrars and bulk data licensees enjoy equal access to Whois data. The Accreditation Agreement provides that if an individual opts-out, registrars "may not use such data subject to opt-out for marketing purposes in [their] own value-added product or service." Accreditation Agreement § II.F.6.f. (emphasis added). Hence, under the Accreditation Agreement, if an individual chooses to "opt-out" of the bulk access program, all parties, registrars and bulk data licensees alike, are precluded from marketing value-added services to such individuals.

With this policy, DOC and ICANN intended to create a "level playing field" for marketing value-added products and services and domain name renewals. Register.com, however, has twisted the Accreditation Agreement's "opt-out" provision to favor exclusive marketing access for Register.com and its business affiliates. Register.com continues to market to individuals who do not "opt-in" to its bulk access program. Although bulk data licensees would be prevented from marketing to these individuals, such individuals still receive solicitations from Register.com and its affiliates.

In its questions to Verio, ICANN asked Verio to address Register.com's statement that "Verio's assertion that [R]egister.com's opt-in policy leads to a scenario whereby customers may 'elect not to be included in [Register.com's] bulk Whois database but still must agree to receive solicitations from Register.com and its Affiliates' is a mischaracterization." In particular, ICANN asked Verio to address whether communications Register.com sends to its customers from time to time, including customers excluded from its bulk Whois submissions, constitute "use [of Personal Data] subject to opt-out for marketing purposes in its own value-added product or service." See Registrar Accreditation Agreement II.f.6.f.

The evidence for Verio's assertion is not hard to find. Register.com clearly states in its Privacy Notice that it intends to continue marketing its own value-added products and services to its customers whether or not they "opt-in" to inclusion in the bulk Whois database. In its Privacy Notice, Register.com provides:

From time to time, register.com may use your personal information to contact you by electronic mail concerning your use of our services. These communications are intended to inform you of important information regarding your account, or about general services provided by register.com. If you do not want to receive email from us regarding service updates, please click the "unsubscribe link" at the bottom of any email you receive from register.com. We will, however, continue to send you email regarding your account administration and necessary information, such as renewal information.

Register.com Privacy Notice (Ex. N) (emphasis added).

What the following documents make clear is that Register.com's reference in its policy to "general services" is not a narrow exception; it is a door through which one could drive a truck. Register.com sends email solicitations for value-added products and services provided by it and its business affiliates to individuals that Register.com has removed from its bulk access database.

On November 19, 1999, Eric Eden, Verio's Director of Sales and Channel Operations, registered the domain name "eric-is-elite.com" with Register.com. As his contact information, Mr. Eden gave the email address "eric@eden.net."15 Since then, Mr. Eden has been inundated with email solicitations from Register.com seeking to provide him with value-added products and services.

On December 7, 2000, Mr. Eden received an email from Register.com with the heading "Register.com News."16 In that email, Register.com gave Mr. Eden the option to opt-in to the bulk access program. Register.com stated that "[i]f Register.com does not receive a response from you in regard to this issue, we will automatically exclude your contact information from the WHOIS data file it makes available to third parties." (emphasis added). Mr. Eden purposefully did not respond to the email to test whether Register.com, after excluding him from the bulk access program, would continue to market value-added products and services to him.

Notwithstanding his refusal to opt-in to bulk access, Mr. Eden received approximately one email every two weeks offering value-added products and services from Register.com and its business affiliates. On January 18, 2001, Mr. Eden received an email offering numerous services such as Register.com's "FirstStepStarter Kit" providing web site and email services; business cards through VistaPrint.com; access to the NextCard Affiliate Program; and access to the Afternic Virtual Broker Service. See Register.com January 18, 2001 Email Solicitation (Ex. P). On January 24, 2001, Mr. Eden received a similar email offering services such as CommerceLock services for secure web communications and toll free telephone services through TeleDomains.com. See Register.com January 24, 2001 Email Solicitation (Ex. Q). On February 27, 2001, Mr. Eden received an email from Register.com soliciting Mr. Eden to register additional domain names. See Register.com February 27, 2001 Email Solicitation (Ex. R).

Pursuant to Register.com's policy, Mr. Eden's information would not be provided to bulk data licensees seeking to provide similar services. Only Register.com has access to his contact information to barrage him with these emails.

Thus, the documentary evidence clearly establishes that Register.com ignores its obligation under the Accreditation Agreement, which provides that if individuals are not included in the bulk access database, Register.com is precluded from marketing to them. ICANN must force Register.com to cease this inequitable conduct. Register.com must stop marketing to these customers through email or otherwise.17

C. Register.com Has Embarked Upon A Mass Email Campaign To Undermine The Bulk Access Program.

As it turns out, Register.com's has not limited its efforts to undermine the bulk access program to new domain name registrants. In fact, Register.com has undertaken a systematic course of action to undermine the bulk access program with respect to all current customers regardless of when they first registered their domain name.

Register.com has launched an email blitz of its current customers actually recommending that they opt-out of bulk access even if theoretically they had earlier been included in the bulk access program.18 If these individuals do not affirmatively reply to the email, Register.com will simply remove them from the bulk access program. The email message provides:

We are sending you this message in an effort to protect the privacy of your personal data. Register.com recommends that you choose not to include your WHOIS information in the bulk WHOIS data file. If register.com does not receive a response from you in regard to this issue, we will automatically exclude your contact information from the WHOIS data file it makes available to third parties. To provide a response different from what is selected in the check box below, please click the following link

http://chtah.com/a/tA6Xd1uAEIpfsAEJ7FuADvrPD7o/wh10119

Please choose only one (1) of the following:

[x] I choose not to include my personal data in the bulk WHOIS data file that will be licensed by register.com to third parties.

[ ] I choose to include my personal data in the bulk WHOIS data file that will be licensed to third parties. [Please note that, in accordance with ICANN regulations, you must select this option if your domain name is registered to an organization or any other business entity.]

NameBargain.com Mass Email (January 11, 2001) (Ex. S) (emphasis added).20

Furthermore, this email makes clear that, as discussed above, Register.com itself will market to these individuals unless they affirmatively request that Register.com cease such activity. The email message states:

As you know, from time to time NameBargain.com communicates with you regarding your account with us. These communications are intended to inform you of important information regarding your account, or about general services provided by NameBargain.com. If at any time you decide that you are not interested in receiving future communications from NameBargain.com, you may opt-out of these communications by following the instructions that accompany such communications.

NameBargain.com Mass Email (January 11, 2001) (Ex. S) (emphasis added). Register.com understands that the vast majority of individuals will not take the time to affirmatively request that it cease marketing to them. Thus, Register.com and its business affiliates will retain access to these individuals while denying access to bulk data licensees.

Through this email blitz, it would appear that Register.com has substantially reduced the number of individuals who will be included in the bulk access program. Register.com conceivably removed from the bulk access program the thousands of those individuals who most likely did not bother to click on the link and reply to the email.

D. Register.com Must Repair The Damage It Has Done To The Bulk Access Program.

With respect its prior efforts to prevent competitors from obtaining bulk access, Register.com recently saw the writing on the wall. Realizing that ICANN would soon force it to begin providing bulk access to its competitors, Register.com instead turned its attention to making bulk access worthless.

Going forward, ICANN must stop Register.com from, among other things:

  • Employing an opt-in policy;
  • Removing its domain name registrants from the bulk access program without any affirmative indication that they wish to be removed; and
  • Marketing by email or otherwise to individuals who it does not include in the bulk access program.

ICANN must also cause Register.com, however, to repair the damage it has already done.

As discussed above, Register.com has apparently already removed thousands of domain name registrants from the bulk access program without any affirmative indication that they wanted to be excluded. ICANN should require Register.com to put everyone back into the bulk access program that has not affirmatively opted-out of the program. ICANN's failure to do so will reward Register.com for its past practice of disregarding its obligations under the Accreditation Agreement.

IV. THE THREAT TO COMPETITION FROM REGISTER.COM'S ACTIVITIES IS REAL.

In its response to ICANN, Register.com sidesteps Verio's warnings about the anti-competitive effects of its conduct. Instead of making a reasoned counter-argument, Register.com simply dismisses the threat its activities pose to competition in the market for domain name registration and value-added products and services by pointing to the fact that there are currently seventy-five competing ICANN-accredited registrars.

The number of accredited registrars, however, has nothing to do with competition in the market for domain name renewals and value-added products and services. Regardless of how many registrars may be competing with each other, ICANN surely did not intend for a registrar to be the only voice marketing domain name renewals and value-added products and services to its customers. With the single exception of prohibiting spam marketing, ICANN and DOC apparently took the position that Whois data should be available to all for marketing purposes. That is fundamentally inconsistent with Register.com's point of view that Whois data should be the exclusive marketing tool of the originating registrar alone.

Furthermore, Register.com will surely admit that not all registrars are created equally. A handful of registrars dominate the industry, registering all but the smallest portion of domain names.21 Although there may be a number of companies in the market today, the viability of many of these companies is in serious jeopardy.

ICANN has been given the duty of insuring that competition exists for Internet-related products and services. Register.com's activities and agenda are contrary to that effort.

V. TO PREVENT REGISTRARS FROM IMPOSING UNREASONABLE TERMS, ICANN SHOULD INSTITUTE A FORM BULK ACCESS AGREEMENT FOR ALL ACCREDITED REGISTRARS TO USE.

Verio has experienced significant difficulty obtaining bulk access from Register.com on reasonable terms.22 Register.com disputes that Verio first requested bulk access more than a year ago.23 Register.com cannot dispute, however, that Verio has been seeking bulk access since September 2000 and has yet to obtain it.24

To appear more reasonable before ICANN, Register.com has recently backed off many of the non-compliant terms that it sought to impose in the past. Nevertheless, Register.com continues to impose unreasonable conditions in "take-it-or-leave-it" bulk access agreements. See Register.com Response Ex. 15.

In its "Third Advisory Concerning Register.com v. Verio Litigation," ICANN appears to take comfort in Register.com's assertion that it "has recently licensed its bulk access WHOIS data to one licensee . . ., and has made bulk WHOIS data available to seven other potential licensees on identical terms."25 Although Register.com may have begrudgingly licensed its Whois data to one licensee and provided Whois data on an interim basis to seven other potential licensees, Register.com continues to abuse the bulk license process. Moreover, because Register.com binds licensees to keep the fact of the license a secret, Verio cannot independently verify Register.com's claims that it has licensed bulk access on the terms described in Register.com's response to ICANN. Finally, if such licensees have obtained bulk access to WHOIS data populated by Register.com's non-compliant "opt-in" policy and/or corrupted by Register.com's efforts to remove from such data the information of its customers that pre-dated such policy, it is a classic "sleeves off the vest" maneuver: the licensees have received nothing of value.

In its questions to Verio, ICANN asks whether Verio believes that the bulk Whois license form attached to Register.com's Response meets the Accreditation Agreement's requirements. If not, ICANN asks Verio to describe the aspects of the Bulk Access Agreement that Verio believes are deficient.26 In response, Verio brings to ICANN's attention several unreasonable provisions in Register.com's Bulk Access Agreement:

  • In Section 2.3, Register.com continues to deviate from the limitations that ICANN allows registrars to impose on use of Whois data pursuant to Section II.F.6;
  • In Section 2.4, Register.com refers to its "opt-out" policy when actually Register.com employs an "opt-in" policy;
  • In Section 5.1, Register.com seeks to impose a "gag order" preventing any disclosure of the terms of the agreement thereby preventing a bulk data licensee from determining whether it has obtained bulk access on less favorable terms;
  • In Section 7.2, Register.com retains the right to terminate bulk access without notice and without any showing of cause;
  • In Section 8.1, Register.com provides that it may obtain injunctive relief without giving bulk data licensees the same right;
  • In Section 9.2.2, Register.com provides no indemnification to licensees for its failures under the agreement, including any failure to properly exclude from the bulk data the information of customers who elected to opt-out;
  • In Section 9.3, Register.com (i) excludes liability for its failure to perform under the agreement (i.e., no liability for, among other things, failure to deliver the data or delivering bad data) and (ii) limits its own liability under the agreement to $10,000 while leaving bulk data licensees open to unlimited liability; and
  • In Section 9.10, Register.com gives itself the right to modify the agreement at any time upon thirty days notice.

Obviously, Register.com has no desire to provide bulk access to anyone. Preventing competitors from obtaining bulk access through obstructionist and unreasonable behavior furthers Register.com's ultimate goal of making the contents of its Whois database its own personal property.

Register.com effectively has a monopoly on its Whois database. The information cannot be obtained from any other source. By not mandating the use of a form bulk access agreement, ICANN leaves registrars such as Register.com with virtually unlimited bargaining power in negotiating the terms for obtaining bulk access. In reality, the power to impose unreasonable one-sided terms creates a de facto right to exclude competitors from obtaining meaningful bulk access.

To remedy this situation, ICANN should limit a registrar's power to impose unreasonable terms upon those seeking bulk access. The simplest means of achieving this end would be to introduce a form bulk access agreement, such as the form Registrar Accreditation Agreement that all accredited registrars must sign.27 By comparing proposed bulk access agreements with the form posted on ICANN's web site, bulk data licensees would feel confident that they had received bulk access under reasonable terms.

VI. AS A MATTER OF PUBLIC POLICY, ICANN SHOULD ENFORCE THE TERMS OF ITS ACCREDITATION AGREEMENTS.

In its Response to Verio's Petition, Register.com refers to a statement in ICANN's Amicus Brief for the proposition that ICANN should overlook Register.com's breaches of its Accreditation Agreement. ICANN has an obligation to the Internet community at large, however, to vigorously enforce the terms of its Accreditation Agreements with registrars.

In its Amicus Brief, ICANN indicated that "sometimes the language of contractual provisions do[] not perfectly match the underlying policies . . . [and for] this and other reasons, hard-and-fast enforcement of the letter of every term of every agreement is not always appropriate." Amicus Brief at 8. Enforcement of Register.com's Accreditation Agreement furthers the policy considerations underlying the Accreditation Agreement, namely, ensuring competition in the market for domain name registrations and value-added products and services. ICANN should not act arbitrarily in enforcing its agreements.

Because the Accreditation Agreement is not merely a private agreement between ICANN and Register.com the provisions of which the parties can choose to ignore, ICANN has a higher duty to strictly enforce its terms. The history of the Accreditation Agreement indicates that the enforcement of its terms is a matter of public policy.

On November 25 1998, ICANN and DOC entered into a Memorandum of Understanding ("MOU") agreeing to work together to manage the transition of the domain name management system from government control to private sector control.28 Pursuant to Article V, § (C)(3)(B) of the MOU, DOC and ICANN agreed to "[c]ollaborate on the design, development, and testing of a plan for introduction of competition in domain name registration services, including: . . . [d]evelopment of an accreditation procedure for registrars and procedures that subject registrars to consistent requirements designed to promote a stable and robustly competitive DNS, as set forth in the Statement of Policy." (emphasis added).29

Pursuant to the MOU, ICANN further had to obtain DOC approval before it could implement the Accreditation Agreement. See ICANN Notice Announcing Accreditation Agreement (Nov. 9, 1999) (noting DOC's approval of the Accreditation Agreement);30 ICANN Second Status Report to DOC (June 30, 2000) (stating that "in consultation with DOC . . . , ICANN developed and adopted a registrar accreditation policy for the .com, .net, and .org top-level domains.").31 Because, the Accreditation Agreement has been formulated in connection with, and approved by DOC, it is clearly much more than a private agreement between ICANN and Register.com.32

Furthermore, to change these policies, ICANN must proceed with detailed consensus procedures. See Accreditation Agreement § I.B. By simply declining to enforce certain policies set forth in the Accreditation Agreement, ICANN in essence adopts new policies without engaging in the consensus procedures it promised to employ.

ICANN's only means of enforcing the consensus policies is through enforcement of its agreements with registrars. When ICANN refuses to enforce its agreements, it allows registrars to ignore the consensus policies and adopt their own course. Through passive inaction, ICANN invites chaos and lawlessness into the domain name system, which DOC gave ICANN the mandate to protect.

VII. CONCLUSION

In response to ICANN's questions, Verio has established beyond a reasonable doubt that Register.com is flouting its obligations under the Accreditation Agreement. The time has come for ICANN to send Register.com a clear message: "You must play by the same rules as everyone else."

Verio respectfully requests ICANN to take immediate action to remedy this situation. ICANN should insist that Register.com comply with its obligations under the Accreditation Agreement. Among other things, Register.com should immediately tender a fair and even-handed bulk access agreement. If Register.com fails to do so, ICANN should terminate Register.com's accreditation.

 

Sincerely,

Michael A. Jacobs

Enclosures

cc: Scott Brown, Esq.


1  A copy of the Accreditation Agreement is available on ICANN's web site. (<http://www.icann.org//nsi/icann-raa-04nov99.htm>)

2  A copy of the Amicus Brief is available on ICANN's web site. (<http://www.icann.org/announcements/advisory-24sep00.htm>)

3 In its Order, the District Court declined to hold that Verio's use of email constitutes "spam." See December 8, 2000 Order at 11 n.4. (Ex. A). Verio incorporates by reference the exhibits to its initial Petition.

4 A copy of NSI's Investigative Report is available on ICANN's web site. (<http://www.icann.org/registrars/register.com-verio/registry-report-30jan01.htm>)

5 On June 7, 2000, Register.com recognized that "ICANN is not in agreement with register.com's position that register.com has the discretion to refuse to license its proprietary Whois data solely on the basis of a good faith belief that such data will be used for the purpose of making unsolicited commercial telephone calls or sending unsolicited commercial direct mail." See June 7, 2000 Letter from Scott D. Brown to Derek Newman (Ex. L) (emphasis added).

6  Register.com made this same argument in its Memorandum of Law in Support of Plaintiff's Motion for a Preliminary Injunction of September 8, 2000. In its September 22, 2000 Amicus Brief, however, ICANN disagreed with Register.com's interpretation.

7  As discussed herein, ICANN and DOC jointly developed the Accreditation Agreement's terms.

8  It seems clear that ICANN used the disjunctive "or" to distinguish between "advertising" and "solicitations." These are distinct types of communication. Webster's Dictionary defines an "advertisement" as "a public notice." It defines a "solicitation" as "the practice or act or an instance of soliciting," in turn defining "solicit" as "to approach with a request or plea." While advertising simply entails raising public awareness, a solicitation involves a specific proposition to an individual. Thus, ICANN apparently sought to prohibit mass unsolicited emails for both advertising and soliciting. It would appear that ICANN simply did not want Whois data to be used to flood domain name registrants with emails, which could overload servers and severely impact the flow of information over the Internet.

9  As Verio represented in the course of its litigation with Register.com, were Register.com to post an opt-out flag on the port 43 query responses, Verio would respect it; Verio has no interest in marketing to persons who do not wish to receive its communications.

10  Curious as to whether any other registrars employ an "opt-in" policy, Verio reviewed the web sites of the seventy-four accredited and operational registrars. Of those registrars, the vast majority apparently have decided against implementing an "opt-out" or "opt-in" policy. It appears that only Register.com and BB Online UK, Ltd. have instituted "opt-in" policies. Thirteen accredited registrars have apparently instituted standard "opt-out" programs, including Melbourne IT, Network Solutions, A Technology Company, AWRegistry.net, Computer Data Networks, DomainZoo.com, Inc., Dotster, Inc., Easyspace, Ltd., EnetRegistry.com Corporation, Parava Networks, Inc., The Registry at InfoAvenue, Signature Domains, Inc., and TierraNet Inc.

11  A copy of Register.com's Privacy Notice is also available on its web site. (<http://www.register.com/faq/privacy-notice.cgi?1|2269867324|>)

12  A copy of Frequently Asked Questions About Register.com's Privacy Notice is also available on its web site. (<http://www.register.com/faq/privacy-notice-faq.cgi?1|2269867324|>)

13  The Federal Trade Commission has indicated that "[t]here are traditionally two models for choice -- 'opt-in' and 'opt-out.' Opt-in regimes require affirmative steps by the consumer to allow the collection and/or use of information. Opt-out models require affirmative steps to prevent the collection and/or use of information." Online Profiling: A Report to Congress, at 6 n. 16 (July 2000) (emphasis in original). A copy of the report is available on the FTC's web site. (<http://www.ftc.gov/opa/2000/07/onlineprofiling.htm>).

14  From Verio's review of the policies posted on the web sites of all accredited and operational registrars, it appears that the vast majority of accredited registrars have decided against employing any program allowing individuals to opt-out of bulk access. Presumably, this is because ICANN prohibits registrars from marketing to individuals that have elected to opt-out as further discussed in this letter.

15  See "eric-is-elite.com" Whois Result (Ex. U). A copy of the Whois Result for "eric-is-elite.com" is also available on Register.com's web site. (<http://www.register.com/whois-results.cgi?dc14f06674aec794d6776fbb4eceb663113fc275c6914c63e087c659efb06e8b21864da7db773c2b>).

16  See December 7, 2000 Register.com Mass Email (Ex. C).

17  Verio also finds it peculiar that the Accreditation Agreement prohibits a third party from using bulk Whois data to spam individuals but does not prohibit registrars from using Whois data to spam the same individual. In light of Register.com's public posture against spam emails, Register.com should also agree not to use Whois data to send "mass unsolicited, commercial advertising or solicitations via email."

18  Verio uses the term "theoretically" because until recently Register.com had never provided bulk access to anyone.

19  Clicking on this link, Register.com includes two options with the first option for opting-out automatically checked. Screen shot (Ex. T).

20  The email states, "As you may know, NameBargain.com is a division of register.com."

21  From the calculation of gTLD contributions to ICANN for the quarter ending September 30, 2000, it appears that several registrars dominate the domain name registration market. Of the sixty-two registrars that made gTLD contributions during that period, only seven domain name registrars made contributions over $10,000. These seven domain name registrars comprise over ninety percent of the gTLD contributions made to ICANN for the period. In order of largest to smallest contributor, the seven are: Network Solutions, Inc., Register.com, BulkRegister.com, Tucows.com, Inc., CORE Internet Council of Registrars, Melbourne IT, Ltd., and Internet Domain Name Registrars. From June 30, 1999 to September 30, 2000, ICANN has received over $200,000 in gTLD contributions from Register.com. Since the introduction of competition into the domain name registration system, Register.com has been the second largest gTLD contributor to ICANN, behind only NSI, from which ICANN received over $2,000,000 in gTLD contributions over the same period. A copy of the ICANN Financial and Related Documents are available on ICANN's web site. (<http://www.icann.org/financials>).

22  In its questions to Verio, ICANN asks whether Verio has obtained bulk Whois licenses from other ICANN-accredited registrars. ICANN further asks whether Verio has been refused bulk Whois licenses by ICANN-accredited registrars other than Register.com. Verio is currently seeking bulk access from a number of other registrars. Verio has experienced some difficulty in negotiating reasonable, even-handed and fair bulk access provisions with a number of these registrars, but Verio would prefer not to make specific comments about ongoing negotiations with such parties. Furthermore, in some instances, Verio would be restrained by contractual provisions imposed by the registrars from discussing its bulk access agreements.

23  In its questions to Verio, ICANN requests Verio to state the circumstances and provide written documentation of all requests made before September 28, 2000 by or on behalf of Verio to Register.com for a bulk Whois license. The circumstances regarding Verio's prior requests for bulk access from Register.com are set forth in the Declaration of Eric Eden in Opposition to Plaintiff's Application for a Preliminary Injunction at 63. In his declaration, Mr. Eden states that "[a]round January 2000, I spoke with Ms. Gaviser who called to complain about Verio accessing Register.com's WHOIS database. . . . During this conversation with Ms. Gaviser, I offered to enter a bulk access agreement for the WHOIS database information. Ms. Gaviser replied that Verio could not have this information at any price." (emphasis added). In Ms. Gaviser's Declaration responding to Mr. Eden's declaration, she states that "she has no recollection of Mr. Eden ever making any verbal request that Verio be provided with a bulk license to register.com's WHOIS data." She then states that "if Mr. Eden had made such a request, I would certainly not have responded in the way in which Mr. Eden claims that I responded." Gaviser Decl. at 19-20.

24  See September 28, 2000 Letter from Kyle M. Hall to Jack S. Levy (Ex. F).

25  A copy of the advisory is available on ICANN's web site. (<http://www.icann.org/announcements/advisory-02feb01.htm>)

26  In its questions to Verio, ICANN also asks whether Register.com's attached bulk Whois license would meet the requirements for Verio's marketing program. Specifically, ICANN asks whether bulk Whois access on a weekly basis would meet Verio's needs for marketing its services. As to the first question, the answer is "no," for all of the reasons enumerated in this letter. As to the second, however, the answer is a qualified "yes;" bulk access on a weekly basis could meet Verio's requirements. Whether it is satisfactory or not depends on how ICANN permits registrars to market their services using Whois data. If registrars can use Whois data immediately for marketing purposes, but competitors must be satisfied with weekly bulk access, registrars will have a distinct "leg up." Moreover, if registrars can use "mass unsolicited commercial advertising or solicitations via email (spam)" to market their services, while bulk access recipients are barred from so doing, registrars would enjoy a major cost advantage over competitors. Hence, the prohibition on spam should be extended to registrars themselves.

27  In drafting a form Bulk Access Agreement, Verio proposes that ICANN mandate that registrars first remove the personal data of individuals who have opted-out of the Whois bulk access program prior to providing that data to bulk data licensees. Since the Accreditation Agreement also prohibits registrars from marketing to these individuals, the registrar should already have procedures in place to cull such identifying information from the database available for bulk access.

28  A copy of the MOU is available on ICANN's web site. (<http://www.icann.org/general/icann-mou-25nov98.htm>)

29  With DOC's "Statement of Policy, Management of Internet Names and Addresses," 63 Fed. Reg. 31741 (June 5, 1998) (commonly known as the "White Paper"), DOC did not abdicate its Internet governance role. Rather, DOC stated "the U.S. Government believes that it would be irresponsible to withdraw from its existing management role without taking steps to ensure the stability of the Internet during its transition to private sector management." A copy of the White Paper is available on ICANN's web site. (<http://www.icann.org/general/white-paper-05jun98.htm>)

30  A copy of this notice is available on ICANN's web site. (<http://www.icann.org/nsi/icann-raa-04nov99.htm>).

31  A copy of the Second Status Report to DOC is available on ICANN's web site. (<http://www.icann.org/general/statusreport-30jun00.htm>).

32  Incidentally, the term of the MOU -- and thus DOC's continued supervision of ICANN -- has not expired. Pursuant to Article VII of the MOU, the term of the agreement and the collaborative efforts between the parties was set to terminate on September 30, 2000. Nevertheless, Amendment 2 to the MOU extends the term of the agreement until September 30, 2001. Thus, DOC maintains an active role in supervising ICANN's governance responsibilities. A copy of Amendment 2 to the MOU is available on ICANN's web site. (<http://www.icann.org/general/amend2-jpamou-07sep00.htm>)


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