We have observed community discussions and received comments and questions about ICANN's top-level domain (TLD) Registry Agreement assignment approval process and a recent Urgent Reconsideration Request considered by the ICANN Board Accountability Mechanisms Committee (BAMC). We believe it is important to provide context to some of these discussions.
Proposed Assignments of TLD Registry Agreements
In May 2021, ICANN began receiving formal assignment notifications and requests for approval relating to the proposed assignments of top-level domain (TLD) Registry Agreements by UNR Corp. (UNR). With the exception of one TLD, the assignments are the result of private, non-ICANN affiliated auctions held by UNR for several of its TLDs in April 2021.
The UNR auctions offered these TLDs in an unconventional manner. The marketing materials and other communications associated with the UNR auctions indicated that the potential assignees would receive ownership rights, possibly denoting some form of property right or interest. The marketing materials also asserted that the potential assignees would have the power to control the entire name spaces of the TLDs in both the Domain Name System (DNS) and the Ethereum Name Service (ENS). This has led us to ask specific questions during our diligence to understand whether UNR was asserting authority in this regard. Additionally, the UNR offering included "newly minted NFTs" (non-fungible tokens) in the ENS for suffixes identical to the TLDs UNR operates under registry agreements with ICANN.
These assertions raised questions and concerns during our review, particularly with regard to ownership, as TLDs are not considered property. The statements also raise potential issues and consequences related to the Consensus Policies created by the ICANN community, name collisions, contractual compliance, predictability for users, consumer interests, and rights protection as it relates to receiving rights to a TLD in both the DNS and the ENS. Additionally, we are aware that some of the TLDs put out for auction by UNR are meant to support certain public interests, and therefore those Registry Agreements contain specific Public Interest Commitments or Community Registration Policies with unique and specific binding obligations on the registry operator.
Since May 2021, we have been conducting diligence of the proposed assignment requests to inform the decision of whether to approve the assignments. This diligence includes asking questions to ensure the proposed assignees meet the community-established criteria for a registry operator, as well as to ensure a clear understanding of the transactions and any impact such an approval could have on ICANN's remit and responsibilities. This is work ICANN does regularly, as we receive and process numerous transactions each year, some of which are simple and some more complex. This proposed assignment falls into the category of more complex and in this instance, it has been difficult to get clear answers to our questions resulting from the diligence process.
Since May, ICANN has repeatedly requested information and asked clarifying questions of UNR and the potential assignees. UNR and the potential assignees have provided, and continue to provide, additional information throughout this process, including new answers as recently as 30 December 2021. ICANN is evaluating this new information.
Despite assertions made publicly, ICANN has not indicated that the issuance of NFTs was the primary concern relating to the transactions. ICANN questioned what purpose they serve. ICANN org has since been informed that the NFTs have been destroyed. This only serves to make the issue more confusing since the NFTs were marketed as enhancing the value of the offering, but now are set out as unimportant and of no value. There is no indication that the rights intended to be conferred did or did not exist, or where the authority to issue them or destroy them came from, or how that related to auctioning TLD's conferred via contracts with ICANN.
Urgent Reconsideration Request Submission
On 14 December 2021, ICANN received an Urgent Reconsideration Request submitted by one of the potential assignees challenging alleged staff inaction on the requested assignment of one specific TLD, .HIPHOP. The BAMC concluded that the request did not meet the requirements for urgent reconsideration as mandated in ICANN's Bylaws.
While the BAMC considered the request for urgent treatment of the Reconsideration Request, it did not evaluate the merits of the request and determined that the Reconsideration Request will proceed under the regular time frame of the Reconsideration process set forth in the Bylaws. This process requires several steps, all of which are to be completed no later than 135 days from ICANN's receipt of the request, or 28 April 2022. More specifically, the BAMC must first decide if the request is sufficiently stated (see ICANN Bylaws, Article 4, section 4.2(k)). If so, then the ICANN Ombudsman must determine within 15 days of receipt (see Id., section 4.2(l)(ii)) if it is appropriate to evaluate the matter and make a recommendation to the BAMC, or to pass the matter directly to the BAMC. Following the Ombudsman step, the BAMC must then make a recommendation to the Board 30 days after receiving the Ombudsman's response, unless impractical (see Id., section 4.2 (q)). The Board must then make a final decision within 45 days of receipt of the BAMC recommendation, or as soon after as feasible, but in no event later than 135 days following ICANN org's receipt of the request (see Id., section 4.2(r)).
Representatives of .HIPHOP have made assertions that ICANN is retaliating against them by pausing the review of the request by UNR to assign that specific TLD while the matter is being considered under the Reconsideration Request process. Pausing review while an accountability mechanism is processed is a long-standing practice for ICANN, but we are considering the potential impact on the requestor as we have been requested to do. ICANN has often treated similarly situated requests evoking the ICANN Accountability Mechanisms by placing consideration by ICANN on hold, during the review phases, so that the information regarding the request can be reviewed without the information relating to such request shifting or changing during the review period, and to avoid Accountability Mechanisms from being used to pressure ICANN to make a decision on any basis other than the public interest. We have received correspondence from UNR and are reviewing many pieces of correspondence, blogs, and community outreach from representatives of .HIPHOP since the original Reconsideration Request was filed and are concerned that the information and record is still evolving. That said, we are still seeking to continue to evaluate and review the totality of the UNR requests and thereby .HIPHOP, as the answers relate to them, as soon as possible.
ICANN's Responsibility and Remit
ICANN enters into contractual agreements with registry operators by following Board-adopted, community-developed policies and processes, with the objective of establishing the rights, duties, and obligations required to operate TLDs. The intention of these agreements and the community-developed Consensus Policies are to protect domain name holders, rights holders, and end users by helping to maintain a stable, secure, and resilient DNS. Registry Operators adherence to these requirements are critical, and ICANN's means to enforce such obligations is through the Registry Agreements for TLDs in the DNS.
ICANN's responsibility is to consider and thoroughly evaluate all requests that impact the landscape of the Internet ecosystem or users' access to critical global resources. ICANN must conduct the necessary diligence to ensure that the potential gaining registry will abide by the commitments in the Registry Agreement. It would be irresponsible not to consider the implications before such a precedent is set.
We are providing this information to continue to enhance ICANN's performance of its responsibilities with accountability and transparency, following the processes decided by the global community and integrated into ICANN's Bylaws. As a nonprofit, public-benefit corporation with participants from all over the world, ICANN is conducting its work, within its mission, according to policies, processes, and accountability mechanisms as established by the community to ensure that the Internet continues to evolve in a safe, secure, and reliable manner.
Technology will always change and evolve, and the Internet will change and evolve, making way for new innovation, competition, and choice. The ICANN community is open to all participants, and open discussions about the Internet's unique identifiers. We all must consider how we together perform our areas of responsibility while also ensuring a stable, secure, predictable addressing system for users and economies globally.