ICANN Global Domain Division (GDD) staff are at it again, engaging in top down policy decision-making through contract negotiations with older registries that pre-date the new gTLD program. The latest example is the announcement of a “Proposed Amendment to .XXX Registry Agreement to Transition to New Fee Structure and to Adopt Additional Safeguards” that would provide the adult content gTLD with an 87% percent reduction in its per transaction registry fees to ICANN — in exchange for implementing Uniform Rapid Suspension (URS) and other unidentified rights protection measures (RPMs).
We’ve seen this dirty movie before. Back in 2015 ICANN announced that the negotiated renewal registry agreements (RAs) for .Cat, .Travel and .Pro would all contain the URS because GDD staff had made the policy decision that legacy gTLD RAs should be “consistent” with the new gTLD RA. That position was adopted even though the new gTLD RPMs had been established as provisional implementation details, and the question of whether they should become Consensus Policy applicable to legacy gTLDs was to be explored and decided upon in the proper, bottom up consensus fashion by a then-pending working group (WG) to review all RPMs (that WG since launched in spring 2016).
That 2015 imposition of the URS via contract negotiations was overwhelmingly opposed by those who commented on the proposed RA. For example, the Electronic Frontier Foundation (EFF) weighed in with a letter taking the position that “ICANN should not apply URS to the .travel domain, or to any additional domains, by the unaccountable means of staff inserting new conditions into the renewal of the registry operator’s contract. Rather, the public policy implications of such a move demand that a full PDP be undertaken first.”
When GDD staff published the Report of Public Comments on .Travel in July 2015, it addressed the controversy with this self-exculpatory rationale:
Although the URS was developed and refined through the process described here, including public review and discussion in the GNSO, it has not been adopted as a consensus policy and ICANN staff has no ability to make it mandatory for any TLDs other than those subject to the new gTLD registry agreement. Accordingly, ICANN staff has not moved to make the URS mandatory for any legacy TLDs, and it would be inappropriate for staff to do so. In the case of .TRAVEL and other legacy TLD registry agreement renewals (.JOBS) and proposed renewals for .CAT and .PRO registry agreements, inclusion of the URS was developed as part of the proposal in bilateral negotiations between the registry operator and ICANN. (Emphasis added)
GDD subsequently approved the three revised RAs with the URS included. In response, ICA as well as ICANN’s Business Constituency (BC) and Non-Commercial Stakeholder Group (NCSG), appealed the decision by filing formal Requests for Reconsideration. ICANN’s Board finally acted on those requests in February 2016, in a decision stating:
The Requesters’ claims do not support reconsideration. The inclusion of the new gTLD RPMs in the Renewed Registry Agreements is part of the package of agreed-upon terms resulting from the bilateral negotiations between ICANN and each registry operator, and not, as Requesters claim, a “unilateral decision by ICANN contractual staff.” … the Board’s approval of the Renewal Registry Agreements[s] for .CAT, .PRO, and .TRAVEL] is not a move to make the URS mandatory for any legacy TLDs, and it would be inappropriate to do so.
The Board’s rationale requires the suspension of disbelief that a legacy registry operator can “voluntarily” agree to accept a new gTLD RPM that is proposed by GDD staff in exchange for an alteration of its RA that the registry operator believes is essential for the successful and more profitable operation of the registry. Of course, there is no way to know exactly what occurs during such negotiations, as they are closed door proceedings. And in the instance of the proposed .XXX amendment, there is also no way to know if GDD staff took an initial negotiating position urging adoption of provisions of the new gTLD registry contract, since the Announcement is conspicuously silent in providing any explanation of who broached the subject. But there’s no reason to believe that GDD has ever backed away from its consistency viewpoint, and urging supplicant registries in need of RA changes to adopt URS seems awfully close to a mandate. So add lack of transparency to deliberate interference in the policymaking process.
In the present instance, ICM Registry was laboring under a $2 per domain transaction fee imposed by ICANN in 2011 to “account for anticipated risks and compliance activities”. Those risks and activities never materialized at .XXX in any significant way, and ICM has since launched the new gTLDs of .Porn and .Sex paying only the standard $.25 transaction fee. As the request for public comment on the proposed changes states:
In February 2016 and pursuant to Section 4.3 of the .XXX Registry Agreement, ICM requested to engage in good faith negotiations regarding possible changes to the terms of the Agreement, including, without limitation, to Section 7.2 regarding fees and payments to ICANN. ICM’s request is that ICANN amend the .XXX Registry Agreement to lower the per transaction registry fee from $2.00 per transaction to the per transaction fee contained in the new gTLD Registry Agreement.
The proposed Amendment to the .XXX RA states in part:
- A new Section 3.1(i) is hereby added to the Agreement as follows: “(i) Protection of Legal Rights of Third Parties. Registry Operator must specify, and comply with, the processes and procedures for registration-related ongoing protection of the legal rights of third parties as set forth Appendix 8 attached hereto (“Appendix 8”). (Emphasis added)
And that Appendix 8 reads as follows:
.XXX AGREEMENT APPENDIX 8 MINIMUM REQUIREMENTS FOR RIGHTS PROTECTION MECHANISMS
- Rights Protection Mechanisms. Within 30 days following the first Registry Level Transaction Fee Adjustment Approval Date, Registry Operator shall implement and adhere to the rights protection mechanisms (“RPMs”) specified in this Specification. In addition to such RPMs, Registry Operator may develop and implement additional RPMs that discourage or prevent registration of domain names that violate or abuse another party’s legal rights. Within 30 days following the first Registry Level Transaction Fee Adjustment Approval Date, Registry Operator will include all RPMs required by this Appendix 8 and any additional RPMs developed and implemented by Registry Operator in the registry-registrar agreement entered into by ICANN accredited registrars authorized to register names in the TLD.
- Dispute Resolution Mechanisms. Within 30 days following the first Registry Level Transaction Fee Adjustment Approval Date, Registry Operator will comply with the following dispute resolution mechanisms as they may be revised from time to time:
- the Trademark Post-Delegation Dispute Resolution Procedure (PDDRP) adopted by ICANN (posted at http://www.icann.org/en/resources/registries/pddrp). Registry Operator agrees to implement and adhere to any remedies ICANN imposes (which may include any reasonable remedy, including for the avoidance of doubt, the termination of the Registry Agreement pursuant to Section 6.1(a) of the Agreement) following a determination by any PDDRP panel and to be bound by any such determination; and
- the Uniform Rapid Suspension system (“URS”) adopted by ICANN (posted at http://www.icann.org/en/resources/registries/urs), including the implementation of determinations issued by URS examiners. (Emphasis added)
We in no way fault ICM Registry for pursuing a reduction in registry fees that were eight times the standard rate. We do fault GDD staff for once again pursuing policy changes though RA negotiations – as well as ICANN’s Board, which ignored the community’s protests over interference in the policy process and blessed this unsavory practice last year.
ICA will of course file a protesting comment letter by the deadline, but we are under no illusions on the outcome. Staff will again maintain that the proposed RA resulted from balanced and bilateral negotiations and that all provisions were voluntarily acquiesced to — and if asked again, the Board will almost surely back them.
Fortunately, GDD staff will not have the same opportunity in regard to .Com in this decade, as the recent ICANN Board approval of that RA’s extension through 2024 should assure that the RPM Review WG will be the body that decides whether and in what form the URS will come to .Com and other major legacy gTLDs. Assuring that the standard policy process would apply to .Com was a significant reason for ICA’s non-objection to that RA extension, and that assurance seems even more valuable after the publication of the proposed .XXX amendment.