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The Road Less Traveled: Time Is Running Out for NTIA-Verisign Cooperative Agreement

Greg Thomas

It is remarkable  —  for all the wrong reasons  —  that only two months remain before the National Telecommunications and Information Administration (NTIA) must make a fateful decision on how it will address its' long-standing Cooperative Agreement with Verisign  —  the private-sector corporation that edits the authoritative address book of the Internet's Domain Name System (DNS), maintains two of the DNS root servers, and operates the .com and .net registries of the Internet, undoubtedly one of the most lucrative concessions ever granted.

Yet, despite representing a unique and singular opportunity to finish the critical task of improving accountability at the root zone of the Internet  —  and in stark contrast to the herculean effort to develop accountability mechanisms for the Internet Corporation for Assigned Names and Numbers (ICANN) prior to the transition of the Internet Assigned Names Authority (IANA) in 2016  —  the much-vaunted global community of stakeholders is deafeningly silent. Whether from fatigue, attention-deficit disorder, or a failure of imagination, the absence of meaningful engagement and public dialogue by AWOL stakeholders is nothing less than dereliction of duty.

To be fair, I've spent nearly a decade thinking about this inflection point  —  perhaps longer and in greater detail than most. By way of introduction, I got my first real taste of the strange world through the looking-glass  —  that is, Internet governance  —  when I was recruited by Verisign in 2009 to help design the company's strategy for renewal of the .net and .com registry agreements in 2011 and 2012, respectively, and with an eye on the horizon for the 2017 — 18 renewal cycle.

Early in 2010, I delivered a multi-year strategic plan that heavily focused on a long-term effort to build trust with the Internet's global community of stakeholders and the U.S. Government  —  an approach that was sorely lacking after years of boorish, heavy-handed and appallingly tone-deaf missteps by the company and its predecessor, Network Solutions. My proposals, which anticipated the possibility that the .com concession was renewed but with constrained pricing, were all but dismissed and I was asked to leave the company not long after, in May 2010.

I was rehired in late 2013, to build a cross-company strategic perspective for the 2017 — 18 renewal cycle, this time including disposition of the Cooperative Agreement. The hallmark of my second stint at the company was the IANA transition and efforts to ensure that appropriate accountability safeguards were in place prior to removal of ICANN's "training wheels": the soft power represented by Uncle Sam's ability to yank the lucrative, yet zero-dollar IANA procurement contract. In April of 2016, I departed Verisign, this time under my own steam, to focus my energy on other business ventures and my family, which was devastated by the sudden, unexpected loss of my father due to cancer the year before.

While pursuing other ventures, I have continued to observe developments in Internet governance from afar with the expectation that, at some point, there would be some indication of activity by some of the many interests vested in the details of any potential disposition of the Cooperative Agreement.

Yet, crickets.

Over the summer, in an effort to help spur discussion on the topic, I submitted comments for a notice of inquiry by NTIA on "International Internet Policy Priorities." To my knowledge, the only other comments on the Cooperative Agreement were submitted by the Internet Commerce Association, an industry group representing domain investors. Additionally, GoDaddy offered some thoughts in testimony provided during a Senate hearing around the same time. The lack of focus on this issue quickly turned into a personal sense of alarm, as Summer is turning into Fall, and the calendar continues to march towards November 30th.

During the IANA transition, NTIA and ICANN were adamant that the Cooperative Agreement with Verisign was outside the scope of work required for completion before the procurement contract with ICANN expired. In hindsight, that was probably a wise decision  —  especially considering that, even without the thorny details of the Cooperative Agreement, the stakeholder community required a temporary extension of the procurement contract in order to complete its work.

To be clear, while a temporary extension may be similarly required here, I do not believe that the same intensity of purpose is necessary to address the disposition of the Cooperative Agreement. Although it is impossible to be certain, due to the mysterious unavailability of the original NSF-Network Solutions Cooperative Agreement, a review of the amendments available on the NTIA website suggests that only this remains relevant: NTIA's unilateral right to review and amend the .com registry agreement between ICANN and Verisign for the stated purposes of promoting consumer choice and competition in the domain name market.

NTIA has gone to great lengths to assert that its authority is very narrow, but let's cut to the chase: the ability to effectively set the wholesale price from which a billion-dollar public company derives more than 90% of its' annual revenue is the very large stick which permits NTIA to speak so modestly. As I stated in my submitted comments, I do not believe it is feasible nor desirable to extend the Cooperative Agreement beyond the time necessary to ensure that a successor mechanism is in place that offers the same or better accountability safeguards for the corporation controlling a vast proportion of the DNS.

In the United States, the regulation of competition is vested in the Antitrust Division of the Department of Justice and the Federal Trade Commission. Both of these agencies are equipped with professionals possessing the experience and expertise to help foster the dynamic competition that best regulates healthy markets. Additionally, both agencies are experienced at negotiating and enforcing consent decrees with private-sector corporations, which is the solution I have previously suggested should be considered as an effective successor to the Cooperative Agreement.

Consider that, in the absence of any meaningful leverage, Verisign need only comply with a small number of technical key performance indicators (KPIs) in order to benefit, in perpetuity, from its' presumptive right of renewal to this lucrative concession. This will only serve to allow the company to retreat further into a fortress shielded by legal provisions with which it can deflect anyone seeking redress or even basic cooperation beyond what is required for contractual compliance. One need only look at the history that includes the Cooperative Agreement to begin imagining a future without it. Or, consider the justification for the current accountability mechanism, as recounted to me in 2017 by a Clinton Administration official who helped insert this provision into the Agreement, "...time was running out and we weren't worried about ICANN. We had to do something to keep them (the registry operator) from running away with the Internet!"

I don't claim to have any monopoly on answers, or even good ideas. However, it is unacceptable to sit idly while one of a very small number of effective accountability safeguards expires. Take issue with me or my views, but I challenge anyone to defend the wisdom of permitting a corporation that controls so much of the core of the Internet to collect their share of Mammon while sitting comfortably behind impenetrable walls constructed from a presumptive right of renewal and a wide moat filled with basic technical KPIs; to argue with a straight face that competition is sufficiently present to regulate the domain name market and its hegemon.

Further complicating matters is the pragmatic reality that, although some have called for it, the .com registry agreement is not likely to ever be put out for open bid. The possibility that a non-US company could win a truly impartial and proper bid process overseen by ICANN is a national security non-starter. And anyone concerned about the global effects that could result from regulating an American company that is subject to U.S. jurisdiction  —  that is, indeed, a proverbial stone's throw from the White House  —  can find ample and recent precedent for regulating entities domestically without being overly concerned about effects in other jurisdictions. Simply look at the EU's implementation of its' General Data Protection Regulation, which has largely had the effect of creating global privacy regulation by local fiat. What's good for the Old World's goose is just as good for the New World's gander.

In the end, if so many economically and otherwise vested interests, including domain investors, copyright and trademark owners, law enforcement, new generic Top-Level Domain operators, and others, allow the path to be chosen for them at this crossroads  —  in effect, to fail to finish the job of ensuring effective accountability safeguards for the last of the two remaining pillars of the original IANA triad  —  then perhaps we really are through the looking-glass and, as the Cheshire Cat would observe, we're all mad here.

By Greg Thomas, Managing Director of The Viking Group LLC
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>the ability to effectively set the wholesale Charles Christopher  –  Oct 04, 2018 5:32 PM PDT

>the ability to effectively set the wholesale price from which a billion-dollar
>public company derives more than 90% of its' annual revenue is the very
>large stick which permits NTIA to speak so modestly.

I have been through the COM/NET zone file by eyeball, yes using a text editor. The vast majority of COM domain could expire and nobody would notice. Those that remain would most likely be willing to pay more. We get way too fixated on reg counts, which in the end only matter to registries and registrars not the internet or its users.

There is a critical issue here, with a very low cost the barrier to having your own location on the internet is very small. If you can afford a computer you can likely afford a domain name and setup a free website. This in turn gives you a voice to all others connected to the internet. FaceBook, Apple, Twitter's TOS mean nothing to you, its your site and your content, your voice.

Freedom will be affected by a significant increase in COM pricing. There are many today that would be pleased with a dramatic increase in pricing to reduce access to that freedom.

Taking a step even further, governments love the banner "it most be fair to all". So let me put my evil hat on for a moment and run with that viewpoint. Is it "fair" for Google to pay ~$10 yearly for Google.com while clearly utilizing far more than $10 for its domain name to be resolved? Is it fair for the rest of us to pay for Google.com to resolve? So we should be paying for the service we use right? The more we use the more we pay. Its only fair to everybody else right?

So lets implement a domain resolving tax. For every X times your domain resolves you get a bill for $1. That's fair right? It also keeps the domain registration fee low for those that don't use so much "Verisign" root infrastructure overhead. If you have a mom and pop website to share with your family, you'll never get hit with the tax as you get "Y" domain name queries resolved for free. So this is a perfectly fair and reasonable "tax" structure, like gas tax when you fill up your car. The more gas you use, the more tax your pay, and thus fairly contribute to the upkeep of the roads you are using.

Now let me take my evil hat off.

Now we have someone with something to say, and a lot of people want to hear what that person has to say. The person gets a domain name and sets up a webpage, and the traffic to it is enormous .... Then the tax bill for all those queires that Verisign resolved for the user comes in. The more the person says, and the more who want to hear it, the higher the bill is. The domain registrant now has to expend time and effort to pay the tax bill instead of presenting the content others are interested in consuming.

That "idea" is what I have thought about for many years, with much concern. Sometimes I don't think we really appreciate the effect of current domain pricing and structure.

There is no better way to reduce internet free speech than to manipulate pricing based on "usage", and drive people to be even further dependent on single domain social media sites who can pay the tax with relative ease.

Even just tiering reg fees based on usage can easily "shape" the voices that have access, or do not. What Verisign does, others registries will do to. Before ICANN expanded the TLD space, alt roots were much easier:

http://www.circleid.com/posts/splitting_the_root_its_too_late/

Any successful alt root implementation (a solution to a Verisign traffic tax) these days will result in an ICANN application and eventual instantiation under the canonical root.

The benefits humanity gains from the single low priced domain name should not be ignored or taken for granted. Much as I despise government regulations, this one I have a real problem arguing against. If the internet was setup to support true competition at the root (alt roots) then I'd say let Verisign go free, but we don't have that. New TLDs get forced through ICANN, who thought nothing of killing off the alt root .BIZ on their first nTLD deployment ..... Checkmate .....

The power of three, each pointing a figure at each other so I can't hold any of them accountable.

>we're all mad here

"In politics, nothing happens by accident. If it happens, you can bet it was planned that way."
- Franklin D. Roosevelt

NTIA and Verisign John Poole  –  Oct 09, 2018 11:58 AM PDT

"To my knowledge, the only other comments on the Cooperative Agreement were submitted by the Internet Commerce Association, an industry group representing domain investors."--REALLY? Did you bother to read ANY of the other comments submitted? They are ALL here: https://www.ntia.doc.gov/federal-register-notice/2018/comments-international-internet-policy-priorities — For example read p. 12 of this one:  https://www.ntia.doc.gov/files/ntia/publications/poolelettertoredlntia20180717.pdf

Illustrating the Benefits of Peer-Review Greg Thomas  –  Oct 10, 2018 5:42 PM PDT

John:

Thank you so much for reminding me of the comments you submitted.  I had read your comments, and recalled them immediately with a slap to the forehead as soon as I saw your byline on the comment. 

Happily, my oversight does not detract from the point I was making, which is that there is a severe deficit of attention and engagement from stakeholders on this critical and rapidly onrushing inflection point.

However, I apologize sincerely for my oversight and for any discourtesy or disrespect that was conveyed. 

Very best regards,
Greg Thomas

So What Should Be Done? Christopher Parente  –  Oct 09, 2018 12:14 PM PDT

Interesting article, but I'm not clear on what you're proposing. With your experience you must have a viewpoint. Can you summarize the comments you say you made to the NTIA in understandable terms?

I realize this is CircleID, but your article also could use a little background. In 2012, the NTIA/Commerce Dept. stepped in and modified an agreement between VeriSign and ICANN that would have allowed VeriSign to raise the wholesale .com price four times during the contract. Commerce froze the wholesale price for the duration of the six year contract.

Thank you for your important message. Greg Thomas  –  Oct 10, 2018 6:32 PM PDT

Christopher:

Thanks for your interest in my perspective and apologies if I have been unclear as to specific recommendations for what an ideal outcome could look like.  I have tried to focus primarily on raising awareness of this onrushing inflection point and the risk that an opportunity might be squandered.

You can review my comments which NTIA has posted on its' website, along with all of the other comments that were submitted.  The webpage with a directory of all submitted comments can be found at: ttps://www.ntia.doc.gov/federal-register-notice/2018/comments-international-internet-policy-priorities.  My specific comments can be found at: https://www.ntia.doc.gov/files/ntia/publications/responsible_consumers_alliance_commentsubmissionjuly172018.pdf.

Additionally, I expanded on some of my thinking in an open letter to stakeholders of the DNS, which was published on my Medium blog, Forthright Commentary, and can be found at: https://medium.com/forthright-commentary/an-open-letter-to-stakeholders-of-the-internets-dns-c7b7e7878031.

Lastly, thank you for providing the additional clarity regarding NTIA's modification of the ICANN-Verisign registry agreement for .com in 2012.  The only thing I would add is that NTIA acted in full partnership with the Antitrust Division of the Department of Justice, who provided the legal and economic analysis that NTIA relied upon to justify its actions with regards to the price restrictions. 

Very best regards,
Greg Thomas

Can you summarize the comments you say Kevin Murphy  –  Oct 10, 2018 12:58 AM PDT

Can you summarize the comments you say you made to the NTIA in understandable terms?

That's the million-dollar question.

Thanks for your important message Greg Thomas  –  Oct 10, 2018 6:36 PM PDT

Kevin:

As I stated in my response to Christopher previously:

--------
You can review my comments which NTIA has posted on its' website, along with all of the other comments that were submitted.  The webpage with a directory of all submitted comments can be found at: ttps://www.ntia.doc.gov/federal-register-notice/2018/comments-international-internet-policy-priorities.  My specific comments can be found at: https://www.ntia.doc.gov/files/ntia/publications/responsible_consumers_alliance_commentsubmissionjuly172018.pdf.

Additionally, I expanded on some of my thinking in an open letter to stakeholders of the DNS, which was published on my Medium blog, Forthright Commentary, and can be found at: https://medium.com/forthright-commentary/an-open-letter-to-stakeholders-of-the-internets-dns-c7b7e7878031.
---------

I think that my comments were fairly clear as to what outcome I think is most ideal.  Please let me know if, after reviewing the two documents I reference above, you need additional detail and I will do my best to provide it.

Very best regards,
Greg Thomas

Greg Kevin Murphy  –  Oct 10, 2018 7:32 PM PDT

Your comments were not "fairly clear", Greg.

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