Friday, August 9, 2013

Understanding restrictions removal on cross-ownership domains

On July 26, 2013 ICANN shared a resource among its community on request by Afilias Limited to remove restrictions on cross-ownership domains. REMMY NWEKE in this report shades more light on the processes of achieving this request.

Prologue:
It may have become a norm for accredited registrars and registry of the Internet Corporation for Assigned Names and Numbers (ICANN) to make one request or the other, but what seem to be gaining more ground is requests for removal of cross-ownership restrictions on domains.

The latest being the Afilias Limited requests for the removal of the cross-ownership restrictions reflected on the .PRO Registry Agreement dated 22 April 2010. Also, Afilias Limited requested the removal of the cross-ownership restrictions reflected on the .MOBI Registry Agreement dated 10 July 2005.

DigitalSENSE Business News recollects that on 22 April 2010, for instance, ICANN and RegistryPro Inc. entered into an unsponsored registry agreement under which RegistryPro operates the .pro top-level domain.

The agreement entails that RegistryPro, for instance has to deal on some list of reserved Top Level Domain (TLD) strings, while making a monthly report among other services as may be approved, which in this case comprises the registration of three-character numeric names; modification of handling of names pending verification; one, two and three-character names shall be released by the Registry Operator for registration.

The above approved services must be in tandem with the Registry Agreement which specifies a “Process for Consideration of Proposed Registry Services,” thus these services are specifically identified as having been approved by ICANN prior to the effective date of the Registry Agreement.

Subject to public comment:
Recent requests by Afilias Limited, a registry operator of the .info, .mobi and .pro top-level domain, and service provider for registry operators of .org, .asia, .aero, and a provider of domain name registry services, stated that its request was in line with the “Process for Handling Requests for Removal of Cross-Ownership Restrictions on Operators of Existing gTLDs” adopted by the Board of ICANN on 18 October 2012.

Also, DigitalSENSE Business News gathered that according to the approved process, in order to lift cross-ownership restrictions, existing Generic Top Level Domain (gTLD) registry operators could either request an amendment to their existing Registry Agreement to remove the cross-ownership restrictions or request transition to the new form of Registry Agreement for new gTLDs. Hence, any proposed material amendments to gTLD registry agreements would be subject to public comment prior to ICANN approval.

Our request by Afilias:
As said by Vice President and General Counsel for Afilias Limited, Mr. M. Scott Hemphill, the request was for instance, specific on Amendment No. 3 to the .MOBI sponsored TLD Agreement and the parties (ICANN and Afilias) agree to the modifications to Section 7.1 of the Agreement.

For the .PRO request, Afilias, he said is asking for deletion of Section 7.1(c), which states in part that “Restrictions on Acquisition of Ownership or Controlling Interest in Registrar. Registry Operator shall not acquire, directly or indirectly, control of, or a greater than fifteen percent ownership interest in, any ICANN-accredited registrar; provided, however that any ownership or controlling interest in any ICANN-accredited registrar as of the date of this Agreement held by Registry Operator or any of its affiliates shall not be in violation of this Section.” 

In addition to asking for the amendment of Section 7.1(b), adding of new Sections 7.1(c), 7.1(d) and 7(e) and in addition to adding Section 7.1(e) which Afilias proposed to read in part: “In connection with the operation of the registry for the TLD, Registry Operator shall comply with the Registry Code of Conduct as set forth in Appendix 12.”

And for .MOBO, areas Afilias seeks amendment which comprised the deletion of Section 7.1(c), amending Section 7.1(b), adding new sections 7.1(c) and 7.1(d) as well as adding Section 7.1(e), while adding Appendix 8 to the agreement in its entirety.

Process adopted by ICANN board:
As at October 18, 2012, the ICANN board adopted “Process for Handling Requests for Removal of Cross-Ownership Restrictions on Operators of Existing gTLDs” stating that in order to lift cross-ownership restrictions, existing gTLD registry operators could either request an amendment to their existing Registry Agreement to remove the cross-ownership restrictions or request to transition to the new form of Registry Agreement for new gTLDs. Any proposed material amendments to gTLD registry agreements would be subject to public comment prior to ICANN approval.

The process as outlined by Dr. Stephen Crocker-led board comprised that the gTLD registry operator submits a written request to ICANN to transition to the new form of Registry Agreement or a request to amend its current Registry Agreement and includes the proposed amendment. If the registry operator request an amendment, it will include “Adding covenants similar to those that appear in Sections 2.9(b) and (c) of the new gTLD agreement.
“(b) If Registry Operator (i) becomes an Affiliate or reseller of an ICANN accredited registrar, or (ii) subcontracts the provision of any Registry Services to an ICANN accredited registrar, registrar reseller or any of their respective Affiliates, then, in either such case of (i) or (ii) above, Registry Operator will give ICANN prompt notice of the contract, transaction or other arrangement that resulted in such affiliation, reseller relationship or subcontract, as applicable, including, if requested by ICANN, copies of any contract relating thereto; provided, that ICANN will not disclose such contracts to any third party other than relevant competition authorities. 

ICANN reserves the right, but not the obligation, to refer any such contract, transaction or other arrangement to relevant competition authorities in the event that ICANN determines that such contract, transaction or other arrangement might raise competition issues.

What affiliate means for this agreement:
(c) For the purposes of this Agreement: (i) “Affiliate” means a person or entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the person or entity specified, and (ii) “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of securities, as trustee or executor, by serving as an employee or a member of a board of directors or equivalent governing body, by contract, by credit arrangement or otherwise.”

According to the board, adding a covenant to comply with the new Registry Operator Code of Conduct, must be seen to be in line with Section 2.14 of the new gTLD agreement, which states that “In connection with the operation of the registry for the TLD, Registry Operator shall comply with the Registry Code of Conduct as set forth in the specification at [see specification 9].”

Be wary of Registry Operator Code of Conduct:
It was also gathered by DigitalSENSE Business News that the Registry Operator Code of Conduct would then need to be added as a new Appendix.

Also for amending Section 7.1(b) of, for example the biz/info/org agreements (or like terms in other agreements), have to read: (b) Registry Operator Shall Not Act as Own Registrar. Registry Operator shall not act as a registrar with respect to the TLD. This shall not preclude Registry Operator form registering names with the TLD to itself through a request made to an ICANN-accredited registrar or from becoming an Affiliate of or reseller for an ICANN-accredited registrar.

And for deletion of Section 7.1(c) of, for example the biz/info/org agreements (or like terms in other agreements), hence, each request to remove cross-ownership restrictions would be subject to a competition review, similar to that which is conducted in the preliminary determination phase of a Registry Services Evaluation Process request.

Days of judgment:
The board noted that in the event ICANN following consultation with its own experts, reasonably determines within 15 days that removal of the cross-ownership restrictions might raise significant competition issues, ICANN shall notify the registry operator that ICANN intends to refer the request to the appropriate governmental competition authority or authorities with jurisdiction over the matter.

Therefore, “the registry operator may at this point, at its discretion, withdraw its amendment request. If the registry operator opts to proceed with the request, the amendment request will remain in pending status until such time as the competition authority or authorities have provided a substantive response to ICANN,” part of the adopted agreement read, adding that upon response from the competition authority or authorities, ICANN will complete its review and consideration of the amendment request.

Further, the board stated that “If ICANN has not received a response from the competition authority or authorities within 90 days, ICANN in its sole discretion may, taking into account all relevant factors, either proceed to consider the amendment request, or if reasonable under the circumstances, defer consideration of the proposed amendment until such time as ICANN receives a substantive response from the competition authority or authorities.

No competition action:
As part of avoiding controversy whatsoever, ICANN noted that “nothing in this process is intended to suggest that a competition authority is required to take any action at any time.” Just as ICANN emphasised that an amendment requested under this process would be posted for public comment, as was the case of the .PRO and .MOBI by Afilias, which was posted on July 26, 2013 and to close on August 16, 2013, whereas the reply opens on August 17 through September 8, 2013.

Overall impression:

DigitalSENSE Business News recalls that in early 2013 FundaciĆ³ puntCAT, the registry responsible for .CAT had a similar request approved by the Board and whether .PRO and .MOBI being requested by Afilias Limited would both scale the hurdle, only time will tell, though the overall impression from the industry is very positive since ICANN has not rejected any amendment requested before now.

... Making SENSE of digital revolution!

No comments: