[Urgent] [Public Comment] Proposed Renewal of .org Registry Agreement

[Mueller, Milton L]

Kathy,
What “the drafter” is proposing is that ICANN take on the power to set prices for registries. I don’t want ICANN to do that or be that. First, I think prices should be set by the market. Second, I think we can prevent registries from gouging their customers in better ways.

--MM

From: NCSG-Discuss <NCSG-DISCUSS at LISTSERV.SYR.EDU> On Behalf Of Nadira Alaraj
Sent: Saturday, April 27, 2019 5:03 PM
To: NCSG-DISCUSS at LISTSERV.SYR.EDU
Subject: Re: [Urgent] [Public Comment] Proposed Renewal of .org Registry Agreement

+1 Kathy
Thank you very much.


On Sat, Apr 27, 2019, 20:39 Kathy Kleiman <kathy at dnrc.tech> wrote:

Hi Nadira, Tx you for your comment.  The drafter appears to have the same thoughts in writing the comment.  He expresses a concern for the 10 million incumbent .ORG registrants, all of whom registered their domain names with the expectation of price caps and limited price increases - and many of whom have been in their domain name space for years if not decades, with well-known websites, email address and listservs making switching costs very, very high.

Here's what the comment proposes on this issue:

"On the other hand, as the home for schools, community organizations, open-source projects, and other non-profit entities, this registry should not necessarily operate under the same commercial realities that guide other domains. Fees should remain affordable, with domains which are priced within reach of everyone. Consequently, rather than removing the price cap provisions entirely, we suggest that they should be raised by a reasonable level, or at the very least, that this aspect of the contract should be subject to review at the midpoint of the contract, to assess its impact on the ability of potential registrants, particularly non-profits or charities, to register and renew domains at a reasonable cost."

Recommendations:

2.      Rather than removing price caps from the agreement entirely, these should be retained but raised by an appropriate amount. In the alternative, this aspect of the contract should be subject to a review midway through the contract, based on the impact of the price changes on non-profit registrants.

I think this address your middle ground of not typing PIR to its current 2013 prices, but not allowing unrestricted increases.

Best, Kathy


On 4/27/2019 9:34 AM, Nadira Alaraj wrote:
Note: I slipped the "not" from my sentence.

*so that the new contract not be retroactive, in order to the current .ORG registrants not be affected.
On Sat, Apr 27, 2019, 15:37 Nadira Alaraj <nadira.araj at gmail.com<mailto:nadira.araj at gmail.com>> wrote:
Dear Kathy and all
Thank you for the through investigations on this matter.
I was wondering if there is a way, so that the new contract to be retroactive, in order to the current .ORG registrants be affected. By any increase in case the community couldn't bring the cap increase down.

Another issue I didn't read in many of the comments that not all .ORG registrants are NGOs hence there are some registrants who might take advance of the current status.

These are my 2 naive thoughts,
Best wishes,
Nadira

On Sat, Apr 27, 2019, 02:21 Kathy Kleiman <kathy at dnrc.tech><mailto:kathy at dnrc.tech> wrote:
Hi Milton, Amr and All,
Unfortunately, I read the contract differently and fear that the current 10 million .ORG registrants face a difficult (and expensive) future. To Milton's excellent question, What, exactly, are those “protections for existing registrants”?, the answer is "not much." Here's the pricing provisions of the .ORG proposed agreement (and I’ve been checking with domain name attorneys all afternoon):
2.10(a) Registries provide registrars with a 30 day notice of price increases (registrations).
2.10(b) “With respect to renewal of domain name registrants” Registry will provide registrars with “advance written notice of any price increase, and “Registry Operator shall offer registrars the option to obtain domain name registration renewals at the current price (i.e., the price in place prior to any noticed increase) for periods of one (1) to ten (10) years at the discretion of the registrar, but no greater than ten (10) years.”
But the option to allow renewal for 1 to 10 years is at the option of the registrar. There’s nothing that requires the registrar to notify registrants that the price of their .ORG domain names will be going (possibly dramatically) and that the time to renew is now. This is something that is being written about a lot, but I don’t see it in the contract. (Some registrars may let their registrants know early; others may not.) There is absolutely no requirement of notice to the registrant of a price increase for renewals – for .ORG (or any other registry which has signed this agreement).
2.10(c) “In addition, Registry Operator must have uniform pricing for renewals of domain name registrations (“Renewal Pricing”). For the purposes of determining Renewal Pricing, the price for each domain registration renewal must be identical to the price of all other domain name registration renewals at the time of such renewal”  with some vague additional language about not wanting to allow abusive and discriminatory renewal pricing.
Thus, PIR’s job is to charge all registrars the same price for new registrations and renewals – whatever that price is and however much PIR wants to charge. This is no guidance about abusive and discriminatory renewal pricing, no definitions and no clear limitations.
Overall, I think Akriti Bopanna’s comment for The Centre for Internet and Society, India, today is right on point:
“Removal of Price Caps

“ICANN’s decision to remove price caps in the .org agreement will only intensify the unfettered power given to Registries with the presumption of renewal. The
organization has long heard accusations of engaging in closed door decision making
and with such a move that pushes for the rights of registries over registrars, such
concerns are only growing. As it is, .org can raise its prices by 10% every year which is
unduly generous in itself.5 Giving PIR a limitless ability to increase prices would be
doing grave injustice to domain owners who have bought such domains under the
assumption of price caps. This is in contrast to the new gTLDS where there is more of
a burden on such owners to keep up with the actions of private owners. Legacy
gTLDS, unlike the new ones, were not created and sold to private entities but handed
over to entities like PIR to maintain them in public interest.

“Being one of the first TLD’s to be introduced, a multitude of significant websites and
therein, initiatives, have their home on the .org domain. As pointed out in the
community discussions several times, these domains are used by NGO’s, nonprofit
trade associations, individual member associations as well as tax-exempt charities.6
ICANN’s justification for proposing these steps is to align legacy gTLD agreements with those of the other newer gTLDS but as argued by the Internet Commerce
Association;

“They have completely different characteristics, history, and ownership
structure. It is not acceptable for ICANN to ignore these differences and to
propose that they be treated the same.7

“Given the longevity of these domains on .org, they have put in substantial investment
in maintaining their online presence and cultivating their identity and brand. They
are entitled to protection from arbitrary pricing and having the same financial rules
as when they originally bought their domains. If such caps are removed then many of
these domain owners can find it too expensive to maintain their sites, especially with
no guarantee of future price stability as well. A look at the mailing lists is enough to
see how small organizations are actively pleading with ICANN to not go ahead with
this because it will increase their operational costs.8

“None of this is to say that PIR would, in fact, go ahead and increase the prices
exorbitantly or at all, however leaving that option to them does not bode well for any
party save them. Further, no clear reasoning has been provided for such a step like
the need for any additional funds to maintain the domain and in absence of any
exceptionally necessary situation, the price cap should continue to exist. Given that
PIR is a not-for-profit organization, the rationale to remove caps seems even less
unclear than it would be, for say, Verisign. Allowing the removals could very well be
opening Pandora’s box with other Registries then demanding removals too. Registries
own all the extensions to their domain and lack of a price ceiling only enriches the
revenue of, ultimately, the one owner leading to a bigger monopolistic situation than
already is currently prevalent.
Needless to say, I support NCSG’s comment too!
Best, Kathy
----------------------------
Proposed 2019 .ORG Registry Agreement
2.10 Pricing for Registry Services.
(a) With respect to initial domain name registrations, Registry Operator
shall provide each ICANN accredited registrar that has executed the Registry-Registrar
Agreement for the TLD advance written notice of any price increase (including as a result
of the elimination of any refunds, rebates, discounts, product tying or other programs
which had the effect of reducing the price charged to registrars, unless such refunds,
rebates, discounts, product tying or other programs are of a limited duration that is clearly
and conspicuously disclosed to the registrar when offered) of no less than thirty (30)
calendar days. Registry Operator shall offer registrars the option to obtain initial domain
name registrations for periods of one (1) to ten (10) years at the discretion of the registrar,
but no greater than ten (10) years.

(b) With respect to renewal of domain name registrations, Registry
Operator shall provide each ICANN accredited registrar that has executed the Registry-
Registrar Agreement for the TLD advance written notice of any price increase (including as
a result of the elimination of any refunds, rebates, discounts, product tying, Qualified
Marketing Programs or other programs which had the effect of reducing the price charged
to registrars) of no less than one hundred eighty (180) calendar days. Notwithstanding the
foregoing sentence, with respect to renewal of domain name registrations: (i) Registry
Operator need only provide thirty (30) calendar days notice of any price increase if the
resulting price is less than or equal to (A) for the period beginning on the Effective Date
and ending twelve (12) months following the Effective Date, the initial price charged for
registrations in the TLD, or (B) for subsequent periods, a price for which Registry Operator
provided a notice pursuant to the first sentence of this Section 2.10(b) within the twelve
(12) month period preceding the effective date of the proposed price increase; and (ii)
Registry Operator need not provide notice of any price increase for the imposition of the
Variable Registry-Level Fee set forth in Section 6.3. Registry Operator shall offer registrars
the option to obtain domain name registration renewals at the current price (i.e., the price in place prior to any noticed increase) for periods of one (1) to ten (10) years at the discretion of the registrar, but no greater than ten (10) years.

(c) In addition, Registry Operator must have uniform pricing for renewals
of domain name registrations (“Renewal Pricing”). For the purposes of determining
Renewal Pricing, the price for each domain registration renewal must be identical to the
price of all other domain name registration renewals in place at the time of such renewal,
and such price must take into account universal application of any refunds, rebates,
discounts, product tying or other programs in place at the time of renewal. The foregoing
requirements of this Section 2.10(c) shall not apply for (i) purposes of determining
Renewal Pricing if the registrar has provided Registry Operator with documentation that
demonstrates that the applicable registrant expressly agreed in its registration agreement
with registrar to higher Renewal Pricing at the time of the initial registration of the domain
name following clear and conspicuous disclosure of such Renewal Pricing to such
registrant, and (ii) discounted Renewal Pricing pursuant to a Qualified Marketing Program
(as defined below). The parties acknowledge that the purpose of this Section 2.10(c) is to
prohibit abusive and/or discriminatory Renewal Pricing practices imposed by Registry
Operator without the written consent of the applicable registrant at the time of the initial
registration of the domain and this Section 2.10(c) will be interpreted broadly to prohibit
such practices. For purposes of this Section 2.10(c), a “Qualified Marketing Program” is a
marketing program pursuant to which Registry Operator offers discounted Renewal
Pricing, provided that each of the following criteria is satisfied: (i) the program and related
discounts are offered for a period of time not to exceed one hundred eighty (180) calendar
days (with consecutive substantially similar programs aggregated for purposes of
determining the number of calendar days of the program), (ii) all ICANN accredited
registrars are provided the same opportunity to qualify for such discounted Renewal
Pricing; and (iii) the intent or effect of the program is not to exclude any particular
class(es) of registrations (e.g., registrations held by large corporations) or increase the
renewal price of any particular class(es) of registrations. Nothing in this Section 2.10(c)
shall limit Registry Operator’s obligations pursuant to Section 2.10(b).

(d) Registry Operator shall provide public query-based DNS lookup
service for the TLD (that is, operate the Registry TLD zone servers) at its sole expense.
-------------
Here’s PIR’s current pricing language, from its 2013 agreement:
Section 7.3. Pricing for Domain Name Registrations and Registry Services.
7.3(a) Pricing. From the Effective Date through 31 December 2013, the price to ICANN-accredited registrars for new and renewal domain name registrations and for transferring a domain name registration from one ICANN-accredited registrar to another, shall not exceed a total fee of US$8.25 (the "Maximum Service Fee"). Commencing on 1 January 2014, the Maximum Service Fee charged during a calendar year for each annual increment of a new and renewal domain name registration and for transferring a domain name registration from one ICANN-accredited registrar to another, may not exceed the Maximum Service Fee during the preceding calendar year multiplied by 1.10. The same Service Fee shall be charged to all ICANN-accredited registrars for new and renewal domain name registrations. Volume discounts and marketing support and incentive programs may be made if the same opportunities to qualify for those discounts and marketing support and incentive programs is available to all ICANN-accredited registrars.
 7.3(b) Adjustments to Pricing for Domain Name Registrations. Registry Operator shall provide no less than six months prior notice in advance of any price increase for domain name registrations and shall continue to offer domain name registrations for periods of up to ten years.  Registry Operator is not required to give notice of the imposition of the Variable Registry-Level Fee set forth in Section 7.2(c).
----------------------------
Hi Milton,

If my understanding of Section 2.10 of the Registry Agreement is correct, registrars can continue to renew existing registrations without an increase in price following an increase in pricing of new registrations by the Registry Operator (RO) for a period of up to 10 years. Additionally, ROs are required to have uniform pricing for registration renewals. This would mean that all renewal prices would remain unchanged, unless they all change across all registrars simultaneously.

The protections for existing registrants referred to are detailed in 2.10c of the Registry Agreement. The protection is basically that registrants have to agree to renewal prices higher than that of the original registration at the time of the initial registration. It can’t be forced upon them at a later date. This is meant as a provision to “prohibit abusive and/or discriminatory Renewal Pricing practices imposed by Registry Operator without the written consent of the applicable registrant at the time of the initial registration of the domain“.

Thanks.

Amr


On Apr 25, 2019, at 9:30 PM, Mueller, Milton L <milton at GATECH.EDU<mailto:milton at GATECH.EDU>> wrote:

I agree with the letter’s discussion of URS and other RPMs. I agree with Amr that we may need to moderate the language about “unilateral ICANN action” however because PIR may indeed have gone along with this.

On the issue of price caps, I think we need some factual clarification. If Amr is right and the potential price increases only apply to new registrants, then there is much less of an issue. The proposed renewal says “Protections for existing registrants will remain in place, in line with the base registry agreement.“

What, exactly, are those “protections for existing registrants”?

MM

From: NCSG-Discuss <NCSG-DISCUSS at LISTSERV.SYR.EDU<mailto:NCSG-DISCUSS at LISTSERV.SYR.EDU>> On Behalf Of Amr Elsadr
Sent: Thursday, April 25, 2019 10:33 AM
To: NCSG-DISCUSS at LISTSERV.SYR.EDU<mailto:NCSG-DISCUSS at LISTSERV.SYR.EDU>
Subject: Re: [Urgent] [Public Comment] Proposed Renewal of .org Registry Agreement

Hi,

Thanks for sharing this, Rafik. Speaking for myself, I very much agree with the comment on adding the new gTLD Rights Protection Mechanisms (RPMs) to the PIR contract for .org at this time. As the draft comment rightly points out, these RPMs will not actually be Consensus Policies until after the ICANN Board adopts the recommendations of the Review of all RPMs in all gTLDs PDP Working Group, and should not apply to any of the legacy gTLDs, including .org. However to characterize the decision to do so as a unilateral ICANN decision is something I’m not sure of. I presume that PIR negotiated this with ICANN before the public comment period began? I might be wrong, as I’m making an assumption here.

To be clear, the RPMs that would be applicable here (if I’m not mistaken) are the Uniform Rapid Suspension (URS) and the Trademark Claims RPM (part of the Trademark Clearing House), but not the Sunrise Registrations RPM, obviously, since .org has been around for a while.

Substantively, I don’t believe the URS will be much of an issue, since it is largely deemed to be an unappealing mechanism for use by Trademark holders, as the stats and anecdotal evidence that has been shared to date indicate. The impact of Trademark Claims, on the other hand, might be very different, and prior to it being reviewed by the RPMs PDP, and adopted as an ICANN policy, I don’t believe adding it to the .org contract in a renewal is a good move.

On the second issue, where the draft comment disagrees with removing price caps for .org registrations, I’m pretty sure I don’t agree with the rationale or conclusion. I don’t believe PIR’s status as a non-profit entity justifies this. IMO, it imposes unreasonable obligations on PIR that other Registry Operators are not subject to, so effectively penalizing PIR for its status, and its continued mission to “support many excellent causes”, as pointed out in the draft.

Furthermore, there is little to no evidence that I can see (at least in the draft) that registrants of .org domain names will be negatively impacted by removal of the price cap. My understanding is that this will mainly impact new registrations, not existing ones, but this isn’t addressed at all.

To me, PIR needs to set its own price taking in to consideration their own consumer base. If they make bad decisions that drive their customers away, I don’t believe this will negatively impact registrants as much as it would PIR itself, especially considering that there are over a thousand gTLDs for registrants to migrate to, should they choose to do so.

Thanks.

Amr</o

--

Kathy Kleiman

Visiting Scholar, Center for Information Technology, Princeton University

President (on leave), Domain Name Rights Coalition

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