RE: [ga] Re: Board descisions

[Alexander Svensson <alexander@svensson.de>]

Hello Roberto!

> I believe that, if there is the need to improve or better clarifie some
> specific points in the current contract, this can be achieved just by
> agreement of the parties without necessarily changing at the same time the
> decision about separation between Registry and Registrar.

After having read James Seng's mail
  http://www.dnso.org/clubpublic/ga/Arc06/msg01029.html
about a way VeriSign could follow the old agreement to
the letter, but keep their de facto power, I have been
trying to find out more about this. Bret Fausett asked
something similar at the Public Forum in Melbourne:
  http://cyber.law.harvard.edu/icann/melbourne/archive/scribe-icann-031201-pf.html

I am now doubtful as to whether VeriSign's understanding
of option A is the same as our understanding, and if a
*pseudo divestiture* really worked out, it would be the worst
case scenario IMHO:
-- VeriSign continues to control com/net/org at least until
   2007, if not longer -- thus remains the dominant *registry*
-- VeriSign secures a dominant reseller/pseudo registrar
   position by a strategic alliance with the NSI acquirer,
   maybe even using the NSI name
-- VeriSign pays less than the new TLD registries (which
   additionally all are registry-registrar-separated)
   while having longer contracts

Let me expand:
In the time of the original agreements, it seemed to be
a clean split. There was the company Network Solutions
providing both registry operator and registrar services,
so divestiture meant cutting the company in halves.
Nowadays things have changed: After the purchase of NSI
by VeriSign, there are additional services in question,
some relating more directly, some more indirectly to
domain name registration. You obviously don't have to be
an ICANN-accredited registrar to sell domain names --
e.g. CORE members are registering *via* CORE. If it was
possible to circumvent the divestiture requirements in
the old agreement (II.23) by opening a reselling business,
this could be VeriBad, and there can be no doubt VeriSign
would do it if the courts allowed it to.

It's of course very difficult for someone who isn't into
US contractual law to judge whether this would be possible,
and it seems that the views of lawyers on both sides of
the negotiating table have been differing, too. The lack
of time to tackle these questions thoroughly is frustrating,
but the threat of a pseudo divestiture should probably be
looked at seriously. (This may be one of points VeriSign
wouldn't mention and ICANN cannot mention without
endangering its position in possible future court proceedings.)

To return to your (Roberto's) mail: I'm not sure whether
the "clarification" of II.23 in the current contract
would be resolved amicably. Or in a way that is beneficial
to the Internet at large.

Best regards,
/// Alexander
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