Minutes of Board Meeting
A Special Meeting of the ICANN Board of Directors was held on 5 November 2010 in Silicon Valley, California.
Chairman Peter Dengate Thrush promptly called the meeting to order.
In addition to Chairman Peter Dengate Thrush, the following Directors participated in all or part of the meeting: Rod Beckstrom (President and CEO), Dennis Jennings (Vice Chairman), Harald Tveit Alvestrand, Steve Crocker, Gonzalo Navarro, Rita Rodin Johnston, Raymond A. Plzak, Rajasekhar Ramaraj, George Sadowsky, Mike Silber, Jean-Jacques Subrenat, Bruce Tonkin, Katim Touray, and Kuo-Wei Wu.
The following Board Liaisons participated in all or part of the meeting: Heather Dryden, GAC Liaison; Ram Mohan, SSAC Liaison; Thomas Narten, IETF Liaison; Jonne Soininen, TLG Liaison; and Vanda Scartezini, ALAC Liaison.
Suzanne Woolf, RSSAC Liaison, sent apologies.
John Jeffrey, ICANN General Counsel and Secretary, was also in attendance.
- Waiver of Meeting Notice
- New gTLDs – Cross-Ownership Issues for Registries and Registrars
ICANN will not restrict cross-ownership between registries and registrars. Registry operators are defined as the registry operator and all other relevant parties relating to the registry services.
Registry agreements will include requirements and restrictions on any inappropriate or abusive conduct arising out of registry-registrar cross ownership, including without limitations provisions protecting against:
misuse of data; or
violations of a registry code of conduct;
These provisions may be enhanced by additional enforcement mechanisms such as the use of self-auditing requirements, and the use of graduated sanctions up to and including contractual termination and punitive damages.
ICANN will permit existing registry operators to transition to the new form of registry agreement, except that additional conditions may be necessary and appropriate to address particular circumstances of established registries.
ICANN will have the ability to refer issues to relevant competition authorities.
ICANN will have the ability to address possible abuses that may arise out of registry-registrar cross-ownership through the consensus policy process.
- Confidential Issue
The Chair called for a waiver of formal notice of the meeting prior to calling the meeting to order.
The Chair moved, and Mike Silber seconded the following Resolution:
RESOLVED, (2010.11.05.01) the Board hereby confirms that it waives the notice for the meeting.
Resolution 2010.11.05.01 was approved unanimously, 15-0.
Prior to conversation on this item, in comformity with practices relating to conflicts of interest, Harald Alvestrand, Ram Mohan, Thomas Narten, Jonne Soininen and Bruce Tonkin stepped out of the room and were not present for discussion, deliberation or voting.
Prior to calling the meeting to order, the Board engaged in a discussion regarding risk assessment as well as a discussion of the issues raised within a legal memorandum provided by Afilias. Joe Sims of Jones Day was present for the Board's earlier conversation.
The Board reviewed text of a resolution drafted to address Board comments, following on from its Board Workshop discussions.
The Chair then invited Board members to provide comments relating to the wording of the Resolution. The Board identified specific line edits incorporated into the Resolution posted below.
After the text of the Resolution was finalized, the Chair noted that there will be members of the community that will not like the recitals of the Resolution as drafted, and the community will be expecting a full discussion of how the Board reached this action. The Chair noted his expectation that the Applicant Guidebook will be accompanied by explanatory appendices addressing this and other decisions of the Board.
Rajasekhar Ramaraj then moved and Rita Rodin Johnston seconded the following Resolution:
Whereas, at the ICANN meeting in Nairobi in March 2010, the Board passed a resolution indicating that as a default position that no co-ownership would be allowed in new gTLDs, but that if the GNSO were to develop a policy on the subject prior to the launch of new TLDs that the Board would consider using the new policy for the new gTLD program <http://www.icann.org/en/minutes/resolutions-12mar10-en.htm#5>.
Whereas, in May 2010, ICANN published version 4 of the Draft Applicant Guidebook, which included a note that the Board encouraged the GNSO to recommend policy on this issue, and that the Board would review this issue again if the GNSO did not make recommendations in time for launch of the new gTLD program <http://www.icann.org/en/topics/new-gtlds/comments-4-en.htm>.
Whereas, the GNSO's Vertical Integration Working Group is divided on whether registrars should be allowed to operate registries (and consequentially whether registries should be allowed to operate registrars). The VI-WG's "Revised Initial Report on Vertical Integration Between Registrars and Registries" is posted at <http://gnso.icann.org/issues/vertical-integration/revised-vi-initial-report-18aug10-en.pdf> [PDF, 2.42 MB].
Whereas, the GNSO VI working group's report includes a number of proposals to address vertical integration for the new gTLD program, but the VI-WG has not reached consensus as to which one to recommend <http://gnso.icann.org/mailing-lists/archives/council/msg09754.html>.
Whereas, on 23 September 2010, ICANN's Governmental Advisory Committee submitted its comments on v4 of the Applicant Guidebook, including comments on the issue of registry-registrar separation <http://www.icann.org/en/correspondence/dryden-to-dengate-thrush-23sep10-en.pdf> [PDF, 44 KB].
Whereas, the Board has had over six months since Nairobi to consider the issue, including consideration of the GNSO VI working group's deliberations, and community comment including at the ICANN meeting in Brussels in June 2010.
Whereas, the current set of agreements are not balanced in that while recent contracts prohibit registries from acquiring registrars, ICANN has never had a rule prohibiting registrars from applying for or operating TLDs.
Whereas, while ICANN has individually negotiated contracts that recently have included restrictions on registry ownership of registrars, cross-ownership provisions have varied over time and no formal "policy" on this topic has ever been recommended by the GNSO or adopted by ICANN.
Whereas, historical contract prohibitions on registries acquiring registrars do not provide a compelling basis for principled decision-making.
Whereas, the Board is committed to making fact-based decisions, and has carefully considered available economic analysis, legal advice and advice from the community.
Resolved, (2010.11.05.02), the Board directs the CEO to include the following principles relating to registry-registrar cross-ownership in the forthcoming version of the Applicant Guidebook.
Eleven Board members (Rod Beckstrom, Steve Crocker, Peter Dengate Thrush, Dennis Jennings, Rita Rodin Johnston, Gonzalo Navarro, Ray Plzak, Rajasekhar Ramaraj, Jean-Jacques Subranat, Katim Touray, and Kuo-Wei Wu) voted in favor of the Resolution. George Sadowsky and Mike Silber were opposed to the Resolution. Harald Alvestrand and Bruce Tonkin did not participate in the discussion or the vote on the Resolution due to conflicts of interest. The Resolution carried.
George Sadowsky noted the reason for his opposition was that he thinks this is the wrong way to go and he believes there will be very unpleasant, unintended consequences. However, George noted that he participated in the discussion and drafting of the Resolution to make the Resolution as good as it could be. George noted further:
"I oppose this motion on several grounds. First, the resolution makes a very significant change in relationships between registrars, registries, and registry service providers. It will drastically change both the current dynamics of the domain industry and the way in which it will evolve. This change will be introduced concurrently with a major expansion of the gTLD space, and we cannot predict with any certainty the effects of either change, much less the combination.
"Second, the significant extent of this change makes it irreversible for all practical purposes. If unintended consequences appear that make it advisable to re-introduce some separation between parties, it will be impossible to do so without major disruption of the players in this industry.
"Third, in spite of the measures to be taken to ensure "good conduct," the resolution has the potential to commingle all of the data, public and private, regarding a registry in one place, providing the possibility of easy and invisible sharing of data within a merged or co-owned entity regardless of the scope of any agreement with ICANN.
"Such sharing is likely to be undetectable given the close affiliations among the entities. Data now forbidden to be shared between registries and registrars will be shared. Both auditing and enforcement by ICANN are unlikely to be effective, all the more so as we move from 20+ to hundreds of new gTLDs.
"Finally, a combined registry-registrar having the possibility of data sharing will have more market power than otherwise. Assuming that each gTLD registry must continue to treat all registrars equally, the real benefits of vertical integration are largely illusory, but those that can be easily obtained by the officially forbidden sharing of data are real.
"The removal of restrictions to vertical integration embodied in this resolution is unnecessary, and goes counter to both the interests of registrants and the global public interest."
Mike Silber noted that his opposition was on similar grounds to George's. Though Mike stated his opinion that this was the wrong route to go on, he noted his congratulations to the Board on the ability to reach a decision on this issue.
Pursuant to Article V, Section 5.4 of the ICANN Bylaws, the Board of Directors, by unanimous vote, determimed that, to protect the interests of ICANN, the matter under discussion should not be included in the minutes until such time as the Board designated the item should be published.