RE: [registrars] Comments on Verisign Wait List proposal

[Bruce Tonkin <Bruce.Tonkin@melbourneit.com.au>]

Hello Ross,

Thanks for your comments.  I am not a lawyer, and have had no legal
training, so my initial comments could be taken as a first attempt to create
a framework for discussion based on the  contracts.


> 
> 1. 22 A) and B) are instruments designed to set the ceiling prices for
> Registry Services and provide the Registry with a mechanism 
> to increase the
> price for Registry Services when faced with increased cost 
> "arising from (i)
> new or revised ICANN specifications or policies adopted after 
> the Effective
> Date, or (ii) legislation specifically applicable to the provision of
> Registry Services adopted after the Effective Date"
> 

Agreed.  In fact the contracts have not really as far as I can tell
adequately addressed the adding of new registry services, hence my interest
in trying to clarify this with ICANN.  While you can say that the contract
doesn't necessarily give Verisign the right to create new services, it
doesn't give ICANN the right to stop the creation of such services
arbitrarily either.  I have tried to pick out clauses that relate to
registry services and price for discussion.


> 2. Appendix G very explicitly supports this and further 
> states that for
> existing Registry Services "Registry Operator may charge a
> lower-than-specified rate for services, including not charging for a
> specified service. Except as set forth herein or otherwise 
> agreed, Registry
> Operator shall not be entitled to charge for any Registry Service not
> specified in this Appendix G."
> 

Well spotted.  
My understanding of this is that the new WLS service would need to be added
to Appendix G, after approval by ICANN.

> 3. 22 A) explicitly states that the terms and pricing of 
> initial and renewal
> registrations shall be set in accordance with Appendix F (the Registry
> Registrar Agreement) - and therefore consistent with Appendix G.

So the legal and policy issue is whether WLS is a change in price for
initial or renewal of registration, or a price for a new service.

> 
> To bring this back to your analysis,
> 
> a) WLS could be classed as a Registry Service according to 
> the definition in
> the contracts. 

Agreed.

> It is also however a modification to the 
> existing agreements
> covering the terms, conditions and pricing surrounding the 
> provision of
> initial and renewal registrations.

This is the tricky bit.

I take renewal to mean renewal of the existing registrant's registration.
If the original registrant does not proceed to renew, then I assume the name
is deleted.  If someone subsequently registers the same name, then I take
that as an "initial" registration.

I assume the Verisign argument will be that WLS is a new service that is
provided on a first-come, first-served basis.  However once you have a WLS,
you effectively have a "first right of refusal" to register the domain name
at the "initial registration" price.

I think the change is less about the "price" of the initial registration,
but whether you are able to purchase a "first right of refusal" advantage
over another person that may wish to register the domain name once it is
deleted from the registry.

If the WLS price was $6, and if there was not further charge to the
registrant if the name became available, would this be a change in price (ie
total price to get the name still $6), or a change in access (ie the WLS
would be a first-come, first served access mechanisms for the name)?  

> b) The WLS proposition is not being introduced by VGRS pursuant to
> "reasonably demonstrated increases in the net costs of 
> providing Registry
> Services arising from (i) new or revised ICANN specifications 
> or policies
> adopted after the Effective Date, or (ii) legislation specifically
> applicable to the provision of Registry Services".
> 

Agreed.

> c) Given a) & b) above, the introduction of WLS would be a 
> violation of the
> terms and conditions of Appendix F & G that explicitly state that the
> Registry Operator may not price higher than the explicit 
> statements made in
> Appendix G and also may not charge for any Registry Service 
> not specified in
> Appendix G.

Agreed.  As I see it, ICANN must approve the change in price and subsequent
change in Appendix G, but I also don't think they can unreasonably withhold
such approval.

> 
> In my opinion (with the typical IANAL/IANYL disclaimer) I 
> can't see what
> basis in contract VGRS has for proceeding with the deployment of this
> service without first undertaking a negotiation of the terms with its
> clients. In other words, we each pay $6 for our names, that 
> really shouldn't
> change until a reasonable discussion has taken place to 
> determine what we
> are getting.
> 

You must first establish with ICANN that it is a change to the price for
initial registration and renewal.  I can see arguments both ways, it would
require legal advice.

> There may be other areas in the contracts that permit VGRS to 
> proceed with
> the deployment of the WLS, but this isn't it.
> 

Actually I was initially looking to see what provisions in the contracts
could restrict Verisign and require some approval.  I couldn't find those
either.  The only relevant parts of the contract I could find, I quoted.
They relate to pricing of registry services.  

The key issue to determine is, is this a new term and condition or price of
an existing service (registration and renewal), or is this a completely new
service.   

Regards,
Bruce Tonkin