Board Activities and Meetings
- Main Agenda:
Consideration of Reconsideration Request 19-2: .ORG and .INFO renewal
Whereas, Namecheap Inc. (Requestor) filed a reconsideration request (Request 19-2) challenging ICANN organization's 2019 renewal of the Registry Agreements (RAs) with Public Interest Registry (PIR) and Afilias Limited (Afilias) for the .ORG and .INFO generic top-level domains (gTLDs), respectively (collectively, .ORG/.INFO Renewed RAs), insofar as the renewals eliminated "the historic price caps" on domain name registration fees for .ORG and .INFO.1
Whereas, the Requestor claims that ICANN org's "decision to ignore public comments to keep price caps in legacy gTLDs is contrary to ICANN's Commitments and Core Values, and ICANN should reverse this decision for the public good."2 The Requestor also asserts that ICANN Staff failed to consider material information concerning the nature of .ORG and security issues with new gTLDs when it executed the .ORG/.INFO Renewed RAs.3
Whereas, the Board Accountability Mechanisms Committee (BAMC) previously determined that Request 19-2 is sufficiently stated and sent Request 19-2 to the Ombudsman for consideration in accordance with Article 4, Section 4.2(j) and (k) of the ICANN Bylaws.
Whereas, pursuant to Article 4, Section 4.2(l), the Ombudsman accepted Request 19-2 for consideration, and, after investigating, concluded that "the CEO and Staff acted within the scope of the powers given them by the Board," and that "no rules or duties of corporate governance were violated (including the ICANN Bylaws)."4
Whereas, the Board previously issued a Proposed Determination denying reconsideration because ICANN org's execution of the .ORG/.INFO Renewed RAs did not contradict ICANN's Bylaws, policies, or procedures, and ICANN Staff did not fail to consider material information in executing the Agreements. (See https://www.icann.org/resources/board-material/resolutions-2019-11-03-en#1.a.) The Board's action was taken in lieu of the BAMC's substantive evaluation on Request 19-2 pursuant to Article 4, Section 4.2(e) of the Bylaws because the BAMC did not have a quorum to consider Request 19-2.
Whereas, the Board has carefully considered the merits of Request 19-2 and all relevant materials, including the Requestor's rebuttal, and the Board reaffirms its conclusions in the Proposed Determination that ICANN org's execution of the .ORG/.INFO Renewed RAs did not contradict ICANN's Bylaws, policies, or procedures, and that ICANN Staff did not fail to consider material information in executing the Agreements. The Board further concludes that the rebuttal provides no additional argument or evidence to support reconsideration.
Resolved (2019.11.21.01), the Board adopts the Final Determination on Reconsideration Request 19-2.
Rationale for Resolution 2019.11.21.01
Brief Summary and Recommendation
The full factual background is set forth in the Proposed Determination on Request 19-2 (Proposed Determination), which is incorporated here.
On 3 November 2019, the Board evaluated Request 19-2 and all relevant materials, and issued a Proposed Determination denying reconsideration because ICANN org's execution of the .ORG/.INFO Renewed RAs did not contradict ICANN's Bylaws, policies, or procedures, and ICANN Staff did not fail to consider material information in executing the Agreements. (See https://www.icann.org/resources/board-material/resolutions-2019-11-03-en#1.a.) The Board's action was taken in lieu of the BAMC's substantive evaluation on Request 19-2 pursuant to Article 4, Section 4.2(e) of the Bylaws because the BAMC did not have a quorum to consider Request 19-2.
On 18 November 2019, the Requestor submitted a rebuttal to the Proposed Determination (Rebuttal), pursuant to Article 4, Section 4.2(q) of ICANN's Bylaws. The Requestor claims that (1) the Board should not have relied on an expert economist's prior assessment of the need for price caps in new gTLD Registry Agreements; (2) the Base RA's development process does not support migration of .ORG and .INFO to the Base RA; (3) ICANN Staff disregarded "essentially unanimous public comments in support of price caps"; (4) that it has sufficiently alleged harm, and (5) that a for-profit entity purchased .ORG after the .ORG Renewed RA was executed "requires that ICANN [org] review this purchase in detail and take the necessary steps to ensure that .org domains are not used [as] a source of revenue" for certain purposes.5
The Board has carefully considered Request 19-2 and all relevant materials, including the Requestor's rebuttal, and, for the reasons set forth in detail in the Final Determination, the Board reaffirms its conclusions in the Proposed Determination and concludes that the Rebuttal provides no additional argument or evidence to support reconsideration.
Analysis and Rationale
The .ORG/.INFO Renewed RAs Are Consistent With ICANN Org's Commitments.
There is no evidence to support the Requestor's conclusory assertion that ICANN org did not act for the public benefit when it omitted the price caps from the .ORG/.INFO Renewed RAs. As discussed in further detail in the Final Determination, which is incorporated herein, on the contrary, the evidence demonstrates that ICANN org sought community consultation regarding the proposed changes to the .ORG and .INFO RAs through a public comment process. ICANN org reviewed and considered all 3,700 comments received.6 ICANN Staff presented and discussed the key issues raised in the public comment process and correspondence, including removal of price caps, with the Board before executing the .ORG/.INFO Renewed RAs.7
That ICANN org ultimately decided to proceed without price caps despite public comments opposing this approach does not render the public comment process a "sham" or otherwise demonstrate that ICANN org failed to act for the public benefit. ICANN Staff's careful consideration of the public comments—as reflected in its Report of Public Comments and discussion with the Board,8 demonstrate the exact opposite, namely that the inclusion of price caps was carefully considered.
Further, the Report of Public Comments demonstrates ICANN Staff's belief that it was acting for the public benefit by "promot[ing] competition in the registration of domain names," providing the same "protections to existing registrants" afforded to registrants of other TLDs, and treating "the Registry Operator equitably with registry operators of new gTLDs and other legacy gTLDs utilizing the Base [RA]."9 There is no support for the Requestor's assertion that ICANN Staff's belief in this regard was based upon "conclusory statements not supported by evidence."10 ICANN org considered Professor Carlton's 2009 expert analysis of the Base RA, and specifically his conclusion that limiting price increases was not necessary, and that the increasingly competitive field of registry operators in itself would serve as a safeguard against anticompetitive increases in domain name registration fees.11
The .ORG/.INFO Renewed RAs Are Consistent With ICANN Org's Core Values.
The Board finds that there is no evidence to support the Requestor's assertion that omitting the price caps from the .ORG/.INFO Renewed RAs contradicts ICANN org's Core Value of
[s]eeking and supporting broad, informed participation reflecting the functional, geographic, and cultural diversity of the Internet at all levels of policy development and decision-making to ensure that the bottom-up, multistakeholder policy development process is used to ascertain the global public interest and that those processes are accountable and transparent.12
As discussed in further detail in the Final Determination, which is incorporated herein, contrary to the Requestor's argument, ICANN org did seek broad, informed participation through the public comment process for the .ORG/.INFO Renewed RAs. Moreover, ICANN org's Core Values do not require it to accede to each request or demand made in public comments or otherwise asserted through ICANN's various communication channels. ICANN org ultimately determined that ICANN's Mission was best served by replacing price caps in the .ORG/.INFO Renewed RAs with other pricing protections to promote competition in the registration of domain names, afford the same "protections to existing registrants" that are afforded to registrants of other TLDs, and treat registry operators equitably.13 Further, the Base RA, which is incorporated in the .ORG/.INFO Renewed RA, "was developed through the bottom-up multi-stakeholder process including multiple rounds of public comment."14
The Requestor has not demonstrated that ICANN org failed to seek or support broad participation or ascertain the global public interest. To the contrary, ICANN org's transparent processes reflect its continuous efforts to ascertain and pursue the global public interest by migrating the legacy gTLDs to the Base RA. Accordingly, this argument does not support reconsideration.
ICANN Org's Statements Concerning The Purpose Of Public Comments Do Not Support Reconsideration.
The Board finds that there is not support for the Requestor's assertion that omitting the price caps from the .ORG/.INFO Renewed RAs is contrary to ICANN org's statement on the public comment proceeding that the "purpose of this public comment proceeding is to obtain community input on the proposed .ORG renewal agreement."15 As discussed in further detail in the Final Determination, which is incorporated herein, ICANN org's decision not to include price caps in the .ORG/.INFO Renewed RAs does not mean that ICANN org failed to "obtain community input" or "use" the public comment "to guide implementation work" of ICANN org.16 To the contrary, it is clear that ICANN org actively solicited community input, and carefully analyzed it as part of its efforts—in consultation with the Board—to ascertain, and then with the Board's support, to pursue, the global public interest. Additionally, the Board notes that reconsideration is available for ICANN Staff actions that contradict ICANN's Mission, Commitments, Core Values and/or established ICANN policy(ies).17 ICANN org's general description of the purpose of the public comment process is not a Commitment, Core Value, established policy, nor part of ICANN org's Mission. Accordingly, reconsideration is not supported.
The Requestor Has Not Demonstrated That ICANN Org Acted Without Consideration Of Material Information.
As discussed in further detail in the Final Determination, which is incorporated herein, there is no evidence to support the Requestor's claim that ICANN org's analysis of the proposed removal of price caps was taken without material information.
The Requestor Has Not Demonstrated That It Has Been Adversely Affected By The .ORG/.INFO Renewed RAs.
The Requestor has not shown that it has been harmed by the .ORG/.INFO Renewed RAs. The Requestor asserts that it has been adversely affected by the challenged conduct because, "[a]s a domain name registrar, removal of price caps for legacy TLDs will negatively impact [the Requestor's] domain name registration business," insofar as the .ORG/.INFO Renewed RAs create an "uncertainty of price increases."18 The Requestor has not shown that it has, in fact, been harmed by the financial uncertainty it identified in Request 19-2, nor that it has been harmed by any price increases under the .ORG/.INFO Renewed RAs. Instead, the Requestor asserts that "additional analysis is needed to determine whether" the removal of price caps in the .ORG RA "can result in uncompetitive practices."19 This suggestion of further study is insufficient, at this stage, to warrant Reconsideration. The Requestor has not identified any evidence that it has been harmed or will be harmed by removal of the price caps, and the evidence that is available—Professor Carlton's expert report—indicates that such harm is not expected. As noted in the Final Determination, in 2009, Professor Carlton concluded that price caps were unnecessary to protect against unreasonable increases in domain name registration fees.20 Professor Carlton explained that "a supplier that imposes unexpected or unreasonable price increases will quickly harm its reputation[,] making it more difficult for it to continue to attract new customers. Therefore, even in the absence of price caps, competition can reduce or eliminate the incentives for suppliers to act opportunistically."21 For these reasons, reconsideration is not warranted.
The Rebuttal Does Not Raise Arguments or Facts that Support Reconsideration.
The Requestor makes five arguments in its Rebuttal.22 None support reconsideration. As discussed in further detail in the Final Determination, the Requestor's Rebuttal reiterates arguments that the Board addressed in the Proposed Determination. Essentially, the Rebuttal makes clear that the Requester relies on the assumption that legacy gTLDs should be treated differently than new gTLDs and should not migrate to the Base RA; Requestor still offers no evidence supporting this argument, and is incorrect, as demonstrated by the legacy gTLDs that have migrated to the Base RA over the past several years.
Each of the points raised in the Requestor's Rebuttal is addressed in the Final Determination, which is incorporated herein. But the Board wanted specifically to discuss here whether there was a past understanding that legacy gTLD registry agreements would be renewed in the new form of agreement used by new gTLDs. All registry agreements include a presumptive right of renewal clause. This clause provides a registry operator the right to renew the agreement at its expiration provided the registry operator is in good standing (e.g., the registry operator does not have any uncured breaches), and subject to the terms of their presumptive renewal clauses.
In the course of engaging with a legacy registry operator on renewing its agreement, ICANN org prefers to and proposes that the registry operator adopts the new form of registry agreement that is used by new gTLDs as the starting point for the negotiations. This new form includes several enhancements that benefit the domain name ecosystem such as better safeguards in dealing with domain name infrastructure abuse, emergency backend support, as well as adoption of new bilaterally negotiated provisions that ICANN org and the gTLD Registries Stakeholder Group conduct from time to time for updates to the form agreement, and adoption of new services (e.g., RDAP) and procedures.
Although ICANN org proposes the new form of registry agreement as a starting place for the renewal, because of the registry operator's presumptive right of renewal ICANN org is not in a position to mandate the new form as a condition of renewal. If a registry operator states a strong preference for maintaining its existing legacy agreement form, ICANN org would accommodate such a position, and has done so in at least one such instance.
While the prevailing policy is that all new gTLD registry operators must adopt the new form of registry agreement, there is no consensus policy that prohibits a legacy registry operator from adopting the new form of the agreement.
Notwithstanding that we are denying Request 19-2, the Board acknowledges (and the Requestor points out in its Rebuttal) the recently announced acquisition of PIR, the current .ORG registry operator, and the results of that transaction is something that ICANN organization will be evaluating as part of its normal process in such circumstances.
This action is within ICANN's Mission and is in the public interest as it is important to ensure that, in carrying out its Mission, ICANN is accountable to the community for operating within the Articles of Incorporation, Bylaws, and other established procedures. This accountability includes having a process in place by which a person or entity materially affected by an action of the ICANN Board or Staff may request reconsideration of that action or inaction by the Board. This action should have no financial impact on ICANN and will not negatively impact the security, stability and resiliency of the domain name system.
This decision is an Organizational Administrative Function that does not require public comment.
Published on 25 November 2019
1 Request 19-2, § 3, at Pg. 2.
2 Id. at § 3.
5 Rebuttal in Support of Request 19-2, https://www.icann.org/resources/pages/reconsideration-19-2-namecheap-request-2019-07-22-en.
6 Report of Public Comments, .ORG, at Pg. 3; Report of Public Comments, .INFO, at Pg. 3.
7 26 July 2019 Letter, at Pg. 2.
8 26 July 2019 Letter, at Pg. 2.
9 Report of Public Comments, .ORG, at Pg. 8.
10 Request 19-2, § 8, at Pg. 12.
11 Preliminary Analysis of Dennis Carlton Regarding Price Caps for New gTLD Internet Registries, March 2009, at ¶ 12, https://archive.icann.org/en/topics/new-gtlds/prelim-report-registry-price-caps-04mar09-en.pdf.
12 Request 19-2, § 8, at Pg. 4.
13 Report of Public Comments, .ORG, at Pg. 8; Report of Public Comments, .INFO, at Pg. 7.
14 26 July 2019 Letter, at Pg. 1.
16 See id.
17 Bylaws, Art. 4 § 4.2(c). The challenged action must adversely affect the Requestor as well. Id.
18 Request 19-2, § 6, at Pg. 2; see also id. § 10, at Pg. 13.
19 Request 19-2, § 8, at Pg. 10.
20 Preliminary Analysis of Dennis Carlton Regarding Price Caps for New gTLD Internet Registries, March 2009, at ¶ 12, https://archive.icann.org/en/topics/new-gtlds/prelim-report-registry-price-caps-04mar09-en.pdf.
22 Rebuttal in Support of Request 19-2, https://www.icann.org/en/system/files/files/reconsideration-19-2-namecheap-requestor-rebuttal-board-proposed-determination-18nov19-en.pdf.