Folks, please find below the updated NCUC position on the TORs for the PDP on existing registry contractual conditions (PDP-Feb06). If there is no objections, I will forward it before the end of the year as our final position. If there are objections, please propose a workable formulation for the other to agree on. If there is no workable alternative formulation, or no consensus (or agreement with those involved in crafting the previous draft,) I will forward the current version. Thanks for your understanding, and Happy New Year! Mawaki TERM OF REFERENCE 1 ToR 1a. Registry agreement renewal --------------------------------- Examine whether or not there should be a policy guiding renewal, and if so, what the elements of that policy should be. Policy Recommendation A: There should be a policy guiding renewal. NCUC: Yes Policy Recommendation B: There should be a standard term for all gTLD registries that is a "commercially reasonable length." NCUC: Yes (SP consensus), subject to the definition of "Commercially reasonable" to be provided. Policy Recommendation C: There should be a reasonable expectation of renewal for all registry agreements. OR Policy Recommendation D: There should be a renewal expectancy for all registry agreements. OR Policy Recommendation E: There should be a presumption of renewal for all registry agreements NCUC: Current Option 3: no rebid unless there are repeated material breaches. (Note: this is the Renewal Expectancy/Presumption of Renewal Option as essentially expressed in the current .com etc contracts.) 1b. Registry agreement renewal standardization ---------------------------------------------- Recognizing that not all existing registry agreements share the same Rights of Renewal, use the findings from above to determine whether or not these conditions should be standardized across all future agreements. Policy Recommendation F: The 'right of renewal' should be standardized for all gTLD registry agreements. OR Policy Recommendation G: The 'right of renewal' should be standardized for gTLD registry agreements except when there is an exceptional situation, such as a situation of market dominance or market power. NCUC: G TERM OF REFERENCE 2 Relationship between registry agreements and consensus policies 2.a Policy Recommendation H: Consensus policies limitations are inappropriate. OR Policy Recommendation I: Consensus policies should always apply to all gTLD registries. OR Policy Recommendation J: Consensus policies should always be applied to all gTLD registries. On an individual basis, during the contract negotiation, a registry could present a situational analysis and justification, which should be posted for public comment before acceptance/inclusion in the contract, for an exception/or modification from a particular consensus policy, due to unique circumstances of how a particular policy would affect that registry. Such an exception will not create any prejudice for extension to any other gTLD registry. OR Policy Recommendation K: The present limitations to Consensus policies are appropriate and should continue. NCUC: Modified Policy Recommendation I: "Consensus policies should apply to all gTLD registries after the nearest contract term ends." (Shouldn't change a contract in mid-stream. After the contract ends if they don't like it they can get out.) 2b. Policy Recommendation L: Certain policy making responsibility should be delegated to the sponsored gTLD operators, but variations can be made, based on characteristics of the sponsoring community. Variations should be discussed/disclosed in charter for public comment. Examples of policy making responsibility to be delegated to the sponsored gTLD operators include but may not be limited to: - Charter and scope of 'sponsored community' - Eligibility to be in the 'sponsored category' - Eligibility for a particular name - The concept of a conflicts/dispute process as a service to the sponsored community NCUC: Yes TERM OF REFERENCE 3 Policy for price controls for registry services Policy recommendation M (option 1) Option 1 When a registry contract is up for renewal, there should be a determination whether that registry is market dominant. That determination should be made by a panel of competition experts including competition lawyers and economists. This panel would operate similarly to the panel that reviews the security and stability implications of new registry services. If the panel determines that there is a situation of market power, then the registry agreement must include a pricing provision for new registrations, as currently is included in all of the largest gTLD registry agreements. If the panel determines that there isn't market power, then there would be no need for a pricing provision related to new registrations, as is the practice in the recent round of sTLD registry agreements. Regardless of whether there is market dominance, consumers should be protected with regard to renewals due to the high switching costs associated with domain names. Therefore, this policy recommendation is to continue the system of pricing provisions in the current unsponsored TLD agreements with regard to domain name renewals. The price for new registrations and renewals for market dominant registries and for renewals for non-market dominant registries should be set at the time of the renewal of the registry agreement. Such a price should act as a ceiling and should not prohibit or discourage registries from providing promotions or market incentives to sell more names. In agreeing on such a price ceiling, ICANN should consider the domain name market, the price of names in the prior agreement, the market price in cases of competition through rebids, and the specific business plans of the registry. The pricing provision should include the ability for an increase if there is cost justification for such an increase, as is required in the current registry agreements with pricing provisions. Such increases should be evaluated and approved by a third party entity, such as an accounting or financial analyst firm. Differential pricing between domain names should be prohibited whenever there is a set price/price cap and should be permitted when there isn't such a price constraint. In other words, non-dominant registries may differentially price for new registrations, but not for renewals. Dominant registries may not differentially price for new registrations or renewals. Finally, as is the current practice, all registries should provide equitable pricing opportunities for all registrars and at least six months notice before any price increase. Policy Recommendation N (Option 2): The NCUC has argued that it is premature to formulate policy in the area of pricing without having had the benefit of an intensely focused study on this topic. They believe that a new PDP is required to address the specific issue of price controls. ("We believe that existing price caps should be left in place for the short term, and another, separate PDP inaugurated on methods and criteria for changing, raising or eliminating price caps in the future.") Thus, another option is to keep the status by encouraging ICANN to continue with existing pricing provisions and initiating a targeted PDP on this issue alone taking into account the upcoming economist's report (http://www.icann.org/minutes/resolutions-18oct06.htm). NCUC: N TERM OF REFERENCE 4 ICANN fees 4a. Examine whether or not there should be a policy guiding registry fees to ICANN, and if so, what the elements of that policy should be. Policy Recommendation O: In order to improve ICANN accountability and effective business planning by registries, ICANN staff should immediately implement a system of ICANN fees from registries that avoids individual negotiations of ICANN fees and provides consistency unless there is established justification for disparate treatment. NCUC: Yes (SP consensus 4b. Determine how ICANN's public budgeting process should relate to the negotiation of ICANN fees. Policy Recommendation P: The ICANN Board should establish a Task Force or Advisory Committee to examine budgeting issues, including the manner and allocation of revenue collection, budget oversight, and budget approval processes. This group should solicit and review public comments on the issues. NCUC: Yes (SP consensus) TERM OF REFERENCE 5 Uses of registry data 5a Examine whether or not there should be a policy regarding the use of registry data for purposes other than for which it was collected, and if so, what the elements of that policy should be. Policy Recommendation Q: There should be a policy regarding the use of registry data [which includes traffic data] for purposes other than that for which it was collected. NCUC: Yes (SP consensus) 5b. Determine whether any policy is necessary to ensure non-discriminatory access to registry data that is made available to third parties. Policy Recommendation R: There should be a policy to ensure non-discriminatory access to registry data that is made available, but that policy should include safeguards on protection against misuse of the data. Agreed by all the TF members that further work is needed at the Task Force level. NCUC: Yes (SP consensus) TERM OF REFERENCE 6 Investment in development and infrastructure 6a. Examine whether or not there should be a policy guiding investments in development and infrastructure, and if so, what the elements of that policy should be. Policy Recommendation S: There should not be a policy guiding investments in development and infrastructure. ICANN should, however, establish baseline requirements for the security and stability of the registries and anything above that would be negotiated on a case-by-case basis, if necessary. Such a baseline requirements should be recommended to the Board by the Security and Stability Advisory Committee ("SSAC") after consultation with the gTLD registry operators. In determining these recommendations, the SSAC also should solicit and consider public comments. Notes: Revised text developed by Jeff Neuman and Jon Nevett NCUC: Abstention until further clarification (there was no clear consensus expressed here, but my suggestion ītaking into account Avri's opinion and after reflection.)