ICANN explains how .org pricing decision was made

ICANN has responded to questions about how its decision to lift price caps on .org, along with .biz and .info, was made.
The buck stops with CEO Göran Marby, it seems, according to an ICANN statement, sent to DI last night.
ICANN confirmed that was no formal vote of the board of directors, though there were two “consultations” between staff and board and the board did not object to the staff’s plans.
The removal of price caps on .org — which had been limited to a 10% increase per year — proved controversial.
ICANN approved the changes to Public Interest Registry’s contract despite receiving over opposing messages from 3,200 people and organizations during its open public comment period.
Given that the board of directors had not voted, it was not at all clear how the decision to disregard these comments had been made and by whom.
The Internet Commerce Association, which coordinated much of the response to the comment period, has since written to ICANN to ask for clarity on this and other points.
ICANN’s response to DI may shed a little light.
ICANN staff first briefed the board about the RA changes at its retreat in Los Angeles from January 25 to 28 this year, according to the statement.
That briefing covered the reasons ICANN thinks it is desirable to migrate legacy gTLD Registry Agreements to the 2012-round’s base RA, which has no pricing controls.
The base RA “provides additional safeguards and security and stability requirements compared to legacy agreements” and “creates efficiencies for ICANN org in administration and compliance enforcement”, ICANN said.
Migrating old gTLDs to the standardized new contract complies with ICANN’s bylaws commitment “to introduce and promote competition in the registration of domain names and, where feasible and appropriate, depend upon market mechanisms to promote and sustain a competitive environment in the DNS market”, ICANN said.
They also contain provisions forcing the registry to give advance notice of price changes and to give registrants the chance to lock-in prices for 10 years by renewing during the notice period, the board was told.
After the January briefing, Marby made the call to continue negotiations. The statement says:

After consultation with the Board at the Los Angeles workshop, and with the Board’s support, the CEO decided to continue the plan to complete the renewal negotiations utilizing the Base RA. The Board has delegated the authority to sign contracts to the CEO or his designee.

A second board briefing took place after the public comment periods, at the board’s workshop in Marrakech last month.
The board was presented with ICANN’s staff summary of the public comments (pdf), along with other briefing documents, then Marby made the call to move forward with signing.

Following the discussion with the Board in Marrakech, and consistent with the Board’s support, the CEO made the decision for ICANN org to continue with renewal agreements as proposed, using the Base gTLD Registry Agreement.

Both LA and Marrakech briefings “were closed sessions and are not minuted”, ICANN said.
But it appears that the board of directors, while not voting, had at least two opportunities to object to the new contracts but chose not to stand in staff’s way.
At the root of the decision appears to be ICANN Org’s unswerving, doctrinal mission to make its life easier and stay out of price regulation to the greatest extent possible.
Reasonable people can disagree, I think, on whether this is a worthy goal. I’m on the fence.
But it does beg the question: what’s going to happen to .com?

Governments totally cool with two-letter domains

ICANN’s Governmental Advisory Committee does not plan to advise against the release of two-character domain names in new gTLDs.
In fact, judging by a GAC discussion at ICANN 51 in Los Angeles yesterday, the governments of many major nations are totally cool with the idea.
Under the standard Registry Agreement for new gTLD registries, all two-character domains (any combination of letters, numbers) must not be sold or activated in the DNS.
The blanket ban was designed to avoid clashes with two-letter ccTLD codes, both existing and future.
ICANN left the door open for registries to request the release of such names, however, and many companies have formally applied to do so via the Registry Services Evaluation Process.
Some registries want all two-character domains released, others have only asked for permission to sell those strings that do not match allocated ccTLDs.
There seems to have been an underlying assumption that governments may want to protect their geographic turf. That assumption may turn out to be untrue.
Representatives from the United States, Netherlands, Spain, Denmark, Australia, Austria and Iran all said yesterday that the GAC should not issue formal advice against the the two-character proposals.
No governments opposed that apparent consensus view.
“The use of the ‘US’ two-letter country code at the second level has not presented any technical or policy issues for the United States,” US rep Suzanne Radell said.
“We, in fact, do not require any approval for the use of US two-character country codes at the second level in existing gTLDs, and do not propose to require anything for new gTLDs,” she said.
She even highlighted domains such as us.com and us.org — which are marketed by UK-based CentralNic as alternatives to the .us ccTLD — as being just fine and dandy with the US government.
It seems likely that the GAC will instead suggest to ICANN that it is the responsibility of individual governments to challenge the registries’ requests via the RSEP process.
“What we see at the moment is that ICANN is putting these RSEP requests out for public comment and it would be open to any government to use that public comment period if they did feel in some instances that there was a concern,” Australian GACer Peter Nettlefold said.
I’ve not been able to find any government comments to the relevant RSEP requests.
For example, Neustar’s .neustar, which proposes the release of all two-character strings including country codes, has yet to receive a comment from a government.
Many comments in other RSEP fora appear to be from fellow dot-brand registries that want to use two-letter codes to represent the countries where they operate.

“Send registrars to jail!”, ICANN hears

ICANN is ramping up its focus on contractual compliance in the midst of calls for domain industry offenders to “go to jail”.
CEO Fadi Chehade yesterday revealed that he has has promoted chief contracting counsel Allen Grogan to the newly created role of chief contract compliance officer.
Grogan, who Chehade has worked with off and on since 1991, will report directly to him. Maguy Serad, who has been heading compliance under Chehade for the last couple of years, will now report to Grogan.
In a session with the GNSO Council at the ICANN 51 public meeting in Los Angeles yesterday, Chehade said the appointment was part of a new “strategic, analytical” approach to compliance.
It was hinted that the compliance focus may form part of Chehade’s address at the formal opening ceremony of ICANN 51 later today.
Ron Andruff of the Business Constituency made the “jail” comments in response.
“We need to see action, we need to see teeth,” he said. “We never see any really strong action taken and it’s time we did. It’s time we saw people go to jail for doing things, lose their contracts for doing things.”
“We’ve lived through 15 years of ICANN with all manner of transgressions, some very serious ones, but they all get slid off to the side and there’s never any mention of it,” he said.
“Should someone be the recipient of extremely strong actions — losing their contract, being thrown out the community — that would send a signal,” he said.
Andruff appeared to be relating comments made by the Intellectual Property Constituency’s Kristina Rosette, at a private Commercial Stakeholders Group meeting earlier that day.
However, Rosette was quick to take to Twitter to deny she’d said anything about jail time.

Um, I never said anything about people going to jail for compliance breaches. Yikes.

— Kristina Rosette (@kristinarosette) October 12, 2014

Chehade, in reply to Andruff, agreed with the need for action but clarified what he plans to do.
“It doesn’t mean to create a police force, that’s not what we need,” he said. “What we need is thoughtful, analytical analysis.”
“It doesn’t mean we’re going to take the job of all the global consumer protection agencies,” he said earlier in the session.
The notion of ICANN having the power to directly jail somebody is of course laughable — all of its power comes from its contracts with registrars and registries.
However, it’s not beyond the bounds of possibility that ICANN could refer registrars to law enforcement should it come across suspected illegality in the course of its compliance investigations.
ICANN Compliance currently employs 21 people and deals with 5,000 complaints per month, Chehade said.
In the last year, the number of breach, suspension and termination notices against registrars has been on the increase.
Notably, last November a registrar owned by “spam king” Scott Richter was terminated. Notorious domain “slammer” NameJuice faces possible termination this Friday based on a July suspension notice.

Fight over ICANN’s $400,000 Hollywood party

Corporate sponsors raised $250,000 to fund a $400,000 showbiz gala for ICANN 51 next month, but ICANN pulled the plug after deciding against making up the shortfall.
Sources tell DI that the lavish shindig was set to take place at Fox Studios in Los Angeles on October 15, but that ICANN reneged on a commitment to throw $150,000 into the pot.
Meanwhile, a senior ICANN source insists that there was no commitment and that a “misunderstanding” is to blame.
ICANN announced a week ago that its 51st public meeting would be the first in a while without a gala event. In a blog post, VP Christopher Mondini blamed a lack of sponsors and the large number of attendees, writing:

One change from past meetings is that there will not be an ICANN51 gala. Historically, the gala has been organized and supported by an outside sponsor. ICANN51 will not have such a sponsor, and therefore no gala. ICANN meetings have grown to around 3,000 attendees, and so have the challenges of finding a gala sponsor.

This explanation irked some of those involved in the aborted deal. They claim that the post was misleading.
Sources say that sponsors including Fox Studios, Neustar and MarkMonitor had contractually committed $250,000 to the event after ICANN promised to deliver the remaining $150,000.
But ICANN allegedly changed its mind about its own contribution and, the next day, published the Mondini post.
“The truth is there were sponsors, the truth is it wasn’t too big,” said a source who preferred not to be named. “There was enough money there for a gala.”
The venue was to be the Fox Studios backlot, which advertises itself as being able to handle receptions of up to 4,000 people — plenty of space for an ICANN gala.
I’ve confirmed with Neustar, operator of the .us ccTLD, that it had set aside $75,000 to partly sponsor the event.
But Mondini told DI that ICANN had not committed the $150,000, and that claims to the contrary were based on a “misunderstanding” — $150,000 was the amount ICANN spent on the Singapore gala (nominally sponsored by SGNIC), not how much it intended to spend on the LA event.
“There was no ICANN commitment to make up shortfall,” he said. “It was misheard as an ICANN commitment.”
More generally, ICANN’s top brass are of the opinion that “we shouldn’t be in the business of spending lots of money on galas”, Mondini added.
“ICANN paying for galas is the exception rather than the rule,” he said.
He added that he stood by his blog post, saying that a failure to find sponsors to cover the full $400,000 tab is in fact a failure to find sponsors.

ICANN board getting three new directors

ICANN 51 next month in Los Angeles is also the organization’s formal annual general meeting, and that means changes at the top.
The board of directors is replacing three members in October, and renewing the terms of two others.
Long-time ICANN participant and internet governance expert Markus Kummer has been selected for a seat by the Non-Contracted Parties House of the Generic Names Supporting Organization.
Kummer is currently vice president of public policy at the Internet Society. Prior to that, he was at the United Nations with the primary responsibility for organizing the Internet Governance Forum.
He replaces independent consultant Bill Graham, who’s leaving the board after one three-year term. Graham, until going solo in 2011, also held a senior position at ISOC.
Rinalia Abdul Rahim is to join the board as the new representative of the At Large, having beaten incumbent Sebastien Bachollet in elections early this year.
Based in Malaysia, Rahim is managing director at Compass Rose, her self-founded management consultancy. Between 2011 and 2013, she was a NomCom appointee to the At-Large Advisory Committee.
The last addition is Asha Hemrajani, a Nokia alum and currently a partner at the small Singapore-based business consultancy Knight Griffin. She was selected by the Nominating Committee.
Hemrajani replaces Wolfgang Kleinwachter, who will leave the seat after less than a year. Kleinwachter stepped in to replace Judith Vazquez, who mysteriously quit two years into her three-year term.
NomCom has, unsurprisingly, selected ICANN chair Steve Crocker for a board seat again. Under the ICANN bylaws, it will be Crocker’s third and final three-year term.
Chris Disspain of auDA will also begin his second term, having stood unopposed for one of the two ccNSO seats.
The changes take effect at the end of the LA meeting, which runs from October 12 to 16.

No Las Vegas, alas. ICANN picks LA for 2014 meeting

ICANN has picked Los Angeles for the third of its three 2014 public meetings.
The decision was approved by its board of directors at its retreat in Amsterdam last week.
As you may know, ICANN’s meeting schedule cycles through its five geographic regions, and North America’s next turn comes next year, picking up hopes that it might finally choose Las Vegas.
Alas, we get LA instead.
According to the board’s resolution, the cost of holding a meeting in LA should come in a couple hundred grand below the price of holding it elsewhere, presumably due to reduced travel expenses.
It will be the fourth time ICANN has gathered community members in its home town, but the first time since 2007. Back when ICANN did four meetings a year, LA was the home of its annual general meetings.
Recent North American meetings have been held in Toronto, San Francisco and Puerto Rico. The Mexico City meeting in 2009 counts as Latin America on ICANN’s map of the world.
Singapore and London have already been named at 2014 venues for Asia and Europe respectively.