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Mishandling the Registrar Contract Negotiations

Stéphane Van Gelder

By publishing a draft Registrar Accreditation Agreement (RAA) for public comment before it has been agreed on by both parties, has ICANN dealt the bottom-up multi-stakeholder model a blow?

ICANN Staff and the registrars have been negotiating a new version of the RAA for the past 18 months following requests by Law Enforcement Agencies (LEA) such as Interpol for greater consumer protection.

With both ICANN and registrars working hard, by early this year agreement had been reached on 11.5 of the 12 LEA "asks"

A deal looked close.

Then at the last minute, ICANN threw extras at the proposed RAA, including an extraordinary provision for the ICANN Board to be able to force unilateral changes into the RAA at any time.

Imagine signing a contract with someone where that person can change the contract at any time, without your input, and you are bound by those changes. Crazy, right? Even crazier in the ICANN world, built as it is on the premise of bottom-up consensus, not top-down "we'll change your contract when we damn well feel like it" tactics.

Here's one we prepared earlier

Still, disagreement in negotiations is no big deal. Surely all both sides have to do is simply continue talking and try to iron them out, right?

Wrong when one side tries to push its way forward by publishing a draft agreement and portraying it as the result of these negotiations, even though that's clearly not the case and the other side has asked this not to be done.

This is what's happened today, with ICANN putting the current draft RAA out for public comment. "Given the agreement in principle over so many areas, there were two paths forward: continue negotiations to address points that have been raised multiple times by each side, or put the agreement out to the community now for public input on the finalization of the agreement," says ICANN in a statement issued with the draft RAA. "After the long period of negotiations, as well as the import of the 2013 RAA to the New gTLD Program, ICANN feels that it is very important to take the RAA proposal to the community."

At least no-one can accuse ICANN of not saying it like it is!

The registrars have put out their own statement decrying the way ICANN has handled this. "All of the items that have been agreed to over the past 18 months would, by themselves, produce an RAA that is vastly improved over the current 2009 version. Nearly all of the Law Enforcement requests that were endorsed by the GAC have been included, as well as the major items that were requested by the GNSO. That RAA would bring registrant verification. That RAA would bring enhanced compliance tools. Registrars must emphasize that the key differences between that RAA and the one currently proposed by ICANN are not issues raised by Law Enforcement, GAC or the GNSO but by ICANN staff (underlined in the original statement)."

Cart, horse, in that order

It appears staff have been driven to put the cart before the horse by Fadi Chehadé's desire to wrap the RAA issue up.

Chehadé named the RAA as one of his key deliverables when he formally took office late last year. Since then, he has surprised the community by introducing new requirements in the contract new gTLD registries will have to sign. Among them, the obligation to only use registrars that have signed the 2013 RAA. In other words, under Chehadé's instructions, ICANN is attempting to tie down new gTLD operators to a registrar contract that is still being negotiated.

No wonder Chehadé wants these negotiations done sooner rather than later. Registrars feel this "surprise announcement that all new gTLD registries must only use registrars that have signed the 2013 RAA" is nothing more than "a transparent effort by ICANN to arbitrarily link the new gTLD program to the outcome of RAA negotiations." If enacted, they fear the requirement would create separate classes of registrars. "This is unprecedented in the DNS industry," they say. "There can and must be only one meaning of 'ICANN-Accredited'".

Worse than this, registrars feel the attempt by ICANN to give its Board power to unilaterally amend the RAA could affect the multi-stakeholder model as a whole.

"ICANN insisted on including a proposed Revocation (or "blow up") Clause that would have given them the ability to unilaterally terminate all registrar accreditations," registrars explain in their statement. "After major pushback, ICANN staff relented and in its place proposed giving the ICANN Board the ability to unilaterally amend the RAA. This is identical to what ICANN inserted into the proposed new gTLD registry agreement — a clause met with strong opposition not only from the Registry Stakeholder Group but from the broader ICANN community."

So this is the real blow-up clause. "The effect of such a clause in the primary agreements between ICANN and its commercial stakeholders would be devastating to the bottom-up, multi-stakeholder model," the registrars argue. "First, it will effectively mean the end of the GNSO's PDP, as the Board will become the central arena for all controversial issues, not the community. Second, it creates an imbalance of authority in the ICANN model, with no limits on the scope or frequency of unilateral amendments, and no protections for registrars and more important registrants."

Red alert

I founded and ran a registrar for more than a decade. Today, as a consultant to the domain industry, I represent a registrar (NetNames) in the Registrar Stakeholder Group. Clearly, I am biased towards the registrar point of view in this debate, and this is probably the way some will read this article.

But others know I am first and foremost a passionate defender of the multi-stakeholder model.

Through 2 years of chairing the GNSO (up until last October) I always sought to defend that ideal when it was put under pressure.

And since stepping down as Chair and getting my voice back, when the model is attacked I have spoken out to defend it. When Chehadé launched headfirst into the Trademark Clearinghouse discussions, I warned of the dangers of this approach and was impressed when he later recognised he may have been a little too hasty.

With what is happening now on the RAA, isn't it time to sound the alarm bells once again? Chehadé seems to be adopting a "Janus approach" to solving ICANN issues. Publicly, he is engaging, energetic and I have gone on the record saying how much good I think the new CEO is doing ICANN's image worldwide.

But in his more direct dealings with ICANN's constituencies, Chehadé seems to think that the end justifies trampling the model.

Sure ICANN has its problems and sure everyone can only welcome a determined leadership approach to solving them, but for the unique governance experiment that is ICANN, this bidirectional approach risks making the cure look worse than the disease.

By Stéphane Van Gelder, Chairman, MILATHAN

Related topics: Domain Names, ICANN, Internet Governance

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Comments

How I learned to stop worrying and love unilateral rights to amend Kevin Murphy  –  Mar 08, 2013 1:04 PM PDT

I tried to imagine signing a "crazy" contract like that, a contract in which the other party has the unilateral right to amend.

Then I realized I already have, several times. It's called the Go Daddy Domain Registration Agreement.

"You acknowledge and agree that (i) Go Daddy, in its sole and absolute discretion, may change or modify this Agreement, and any policies or agreements which are incorporated herein, at any time, and such changes or modifications shall be effective immediately"

And then there's the Network Solutions service agreement:

"you agree during the term of this Agreement, that we may: (1) revise the terms and conditions of this Agreement; and/or (2) change part of the Services provided under this Agreement at any time."

And Tucows's Hover TOS.

"Tucows will update this Agreement from time to time, usually to reflect new obligations and policies arising from the introduction of new services. It might also be updated to modify or clarify existing obligations and policies."

I've never used FastDomain, but if I had:

"Fastdomain reserves the right, in its sole discretion, to change, modify, add or remove all or any part of these Terms at any time with or without notice."

1&1;Domain:

Company may revise these Terms and Conditions at any time by amending them and posting an up to date copy on the Company Website. Customer should check the Terms and Conditions regularly as Customer's use of the Company Website and Services will be deemed an acceptance of the Terms and Conditions existing at that time.

Doesn't seem that crazy to me any more. Seems more like standard domain name industry practice.

Power to transfer Registrars Jeffrey Eckhaus  –  Mar 08, 2013 1:11 PM PDT

If you do not like the terms or the changes your registrar makes you are allowed to transfer your domain to another registrar.  That is the beauty of choice and competition
If you do not like the unilateral changes to a commercial contract that ICANN makes, you have no choice, there is nowhere to go.

Sure there is. You have 300-odd ccTLDs Kevin Murphy  –  Mar 08, 2013 1:17 PM PDT

Sure there is. You have 300-odd ccTLDs to choose from.

eNom, to its credit, at least promises to notify its customers when it unilaterally amends its registration agreement.

There are countries where local ccTLD has Rubens Kuhl  –  Mar 09, 2013 3:34 PM PDT

There are countries where local ccTLD has 4:1 registrations compared to all gTLDs combined, but when the biggest market doesn't (compare gTLDs to .us in the USA), getting ICANN accreditation is the only option to them.

KevinJust to reiterate what my fellow registrars Michele Neylon  –  Mar 08, 2013 1:26 PM PDT

Kevin

Just to reiterate what my fellow registrars have said.

If you don't like registrar X there's plenty of others to choose from.

But the real problem here isn't simply a matter of the unilateral amendment by itself. It's the usurping of the multi-stakeholder model. Though I think you know this already anyway!

And don't even get me started on some of the other additions that ICANN brought in at the 11th hour.

Happy to talk you through them Kevin

Regards

Michele

One of the reasons for that... John Berryhill  –  Mar 09, 2013 3:05 PM PDT

...is precisely because the registrant-registrar contract may have to change in order to accommodate changes to the RAA, or to accommodate new GNSO consensus policies. 

Most of those changes and obligations are passed through to the registrant, since the RAA is being used as a tool to control registrant behavior, more so than registrar behavior.

Take a look at the draft Registrant Rights and Responsibilities document.

It lists three "rights" and five "responsibilities".  However, the first "right" is a mandatory provision which, on close inspection, is grammatically flawed and seems to require that any proxy or privacy service be operated by a registrar. 

The other two "rights" are - access to information about how you will be billed, and the right to have those terms tucked away in an anodyne "terms of service" somewhere; and the "right" not to be subject to things which are already illegal.

So, really, there are two "rights" and six "responsibilities" in the "rights and responsibilities" document, and the two "rights" really don't amount to a whole lot.

apples and oranges Thomas Barrett  –  Mar 08, 2013 1:17 PM PDT

Kevin,

Not a good example.  If you don't like the changes made by your Registrar, you can simply move your business to another Registrar with a few key-strokes.

Registrars and Registries do not have that option with ICANN. 

This is why accountability for what they do is critical for their existence.

Multi-stakeholder how? Andy Steingruebl  –  Mar 08, 2013 2:16 PM PDT

Were the contract negotiations done via the multi-stakeholder model?  Not to the best of my knowledge.  They were exclusively a 2-party affair with some input from other parties, but fundamentally with only 2 parties at the table, ICANN and the Registrars.

That is precisely the opposite of multi-stakeholder, right?

The other stakeholders are always there John Berryhill  –  Mar 09, 2013 2:52 PM PDT

The RAA incorporates consensus policies passed or yet to be passed by the GNSO.  The underlying contract, of course, is between the two contracting parties, but there is nothing at all which prevents the GNSO from adopting consensus policies which become effective through the RAA.

Apart from... Kevin Murphy  –  Mar 09, 2013 4:34 PM PDT

... the fact that the Contracted Parties House has to agree to all GNSO consensus policies.

Which could be interesting to address within Rubens Kuhl  –  Mar 09, 2013 4:43 PM PDT

Which could be interesting to address within GNSO voting standards, perhaps ?
The unilateral right to amend is equivalent to a declaration of GNSO inability to address community concerns.

Do you mean... John Berryhill  –  Mar 10, 2013 8:46 AM PDT

...that one party to a contract might actually have a say in what the terms of that contract require?

The objection was that the ICANN-registrar negotiation did not include other the stakeholder groups. Yes, the GNSO does include all of the stakeholder groups.  So, is your follow up intended to suggest that the RAA negotiation supposed to exclude the registrars?

Yes, I agree, whether the contract terms are imposed by the ICANN board or by the GNSO, the process would be simpler if registrars were not a part of it.  For example, the earlier proposed requirement that all registrants provide a copy of a government issued ID to the registrar, as a pre-requisite to domain resolution, would have been put in place months ago.

It was up to ICANN staff to Rubens Kuhl  –  Mar 09, 2013 3:31 PM PDT

It was up to ICANN staff to get input from other stakeholders *before* negotiating with the registrars, so a public comment period should have been done month or years ago to know which concerns they have. Once again ICANN blew it.

The new gTLD registry agreement received extended years-long multi-stakeholder development, and even so ICANN now wants to unilaterally amend it… this dangerous trend doesn't seem related to the source of the contract text, but rather about what happens after it's signed.

I was thinking to write a post on this... Rubens Kuhl  –  Mar 09, 2013 1:12 PM PDT

... but I forgot Stephane would have already made it by then!

To those that think this it'is about registrars, it's not. ICANN is trying the same trick with the registries, using new business opportunities as a stick-dressed-as-carrot to force registrars within the registrar contracts.

We won't sign any agreements with ICANN with this unilateral right of change, even if it means not getting our new gTLDs, and we are advising clients not to sign them as well. We also won't think badly of any registrars refusing to sign this, even if it means delaying business launches.

If ICANN wants to be a champion of multistakeholderism in the world, it needs to start at its house first. If ICANN wants to be a unilateral regulator, I prefer ITU to be it. At least we know what it gets in ITU.

Rubens and Stéphane nailing it. Theo Geurts  –  Mar 09, 2013 2:55 PM PDT

This is not about regisrars or registries or gtld applicants.
It's about the multi stakeholder model.

We got the blow-up clause. That is what is about. So far the multi stakeholder model has proven itself to deal with complex situations and frankly it is complex. And yes it is teeth grinding slow at times but it is transparent and there is alot at stake. And now we are going throw it out ? It feels like taking a short cut and personally i do not like to take short cuts . They usually backfire bigtime.

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