[ALAC] Fwd: Blog Piece on Unilateral Right to Amend

Sun Mar 17 11:54:11 UTC 2013

Hi Alan,

Firstly, I will say that usually I do not favour unilateral contracts for
obvious reasons. However, the nature of ICANN's business model demands that
it is necessary or at least the exception must be a very limited one. The
community and ICANN can come into some sort of understanding on what the
narrow exception looks like and what series of circumstances justify this
limited exception.

I can understand why ICANN is introducing this and it is also reasonable.
It makes perfect and complete sense particularly when as an institution
that is exposed to potential antitrust suits to reserve the discretionary
right to unilaterally amend certain agreements so as to protect the
institution.

If ICANN were protected by law from potential litigation or there was some
kind of limitation on the liabilities that the institution can be exposed
to, then there would be no reason to reserve the discretionary right.

The challenge that ICANN faces is that by its very nature, it is a
corporation and since it is on record for saying constantly that it is not
a "Regulator" and the fact that it is also subject to the Sherman Act makes
it a different playing field and it is only reasonable to expect ICANN to
want to protect itself.

The issue that surfaces is how does ICANN protect itself if it does not
have this right to unilaterally change the contracts.

On Sat, Mar 16, 2013 at 10:29 AM, Alan Greenberg
<alan.greenberg at mcgill.ca>wrote:

>
> >From: "Neuman, Jeff" <Jeff.Neuman at neustar.us>
> >To: "council at gnso.icann.org" <council at gnso.icann.org>
> >Date: Fri, 15 Mar 2013 17:31:57 -0400
> >Subject: [council] FW: Blog Piece on Unilateral Right to Amend
>
> Given the conversation we had during the GNSO
> Council call, I thought you may find this blog
> post we drafted on the Unilateral Right to
> Amend:
> <
> http://blog.neustar.biz/neustar-insights/clearing-up-the-logjam-time-for-icann-to-drop-request-for-a-unilateral-right-to-amend-the-agreements/
> >
> http://blog.neustar.biz/neustar-insights/clearing-up-the-logjam-time-for-icann-to-drop-request-for-a-unilateral-right-to-amend-the-agreements/
>
> I have printed the full version below;
>
>
> Clearing Up the Logjam: Time for ICANN to Drop
> Request for a Unilateral Right to Amend the Agreements
> By: Jeff Neuman
>
> A very rare thing happened in the GNSO Council
> meeting this weekthe ICANN community spoke with
> one voice.  Registries, registrars,
> non-commercial interests, new TLD applicants, IP
> owners and businesses unanimously and
> unambiguously agreed that giving ICANN a
> "unilateral right to amend" the registry and
> registrar agreements is not compatible with
> ICANN’s bottom-up processes and poses a
> fundamental threat to the multi-stakeholder
> model.  There is true consensus that this change should be rejected.
>
> On February 5, 2013, ICANN surprised the
> community by re-introducing its demand for a
> unilateral right to amend the gTLD Registry
> Agreement.  ICANN made the same change in the
> Registrar Accreditation Agreements. (This was
> posted for public comment on March 7, 2013.  See:
> <http://www.icann.org/en/news/public-comment/proposed-raa-07mar13-en.htm>
> http://www.icann.org/en/news/public-comment/proposed-raa-07mar13-en.htm).
>
> This move came without consultation, nearly five
> years after the new gTLD Program moved into the
> implementation phase, and three years after the
> community and ICANN, through a bottom-up process,
> rejected this approach and reached a compromise on similar language.
>
> During the GNSO Council's monthly teleconference
> on March 14, 2013, while discussing the recent
> changes to the Registrar Accreditation Agreement,
> Council members raised the topic of ICANN's
> proposed unilateral right to amend the registry
> and registrar agreements.  ICANN staff present on
> the call explained its position, saying, "the
> amendment clause is actually intended to be last
> resort for when there is agreement that something
> needs to be done, but there is a logjam within
> the processes that we have that don’t allow us to
> move forward."  Essentially, ICANN is asking,
> "what happens when everyone agrees that a
> particular change is needed, but the
> multi-stakeholder processes – or someone
> manipulating those processes - prevents the
> community from moving forward with what the community wants."
>
> Taken in isolation and without any other context,
> this is a perfectly reasonable question.  If
> there truly were no mechanisms in the registry or
> registrar agreements to make necessary changes
> when the community demands action, then ICANN
> staff's concerns would be justified.  It would be
> a good question to ask if someone could use ICANN
> processes to block a change that everyone else
> supported.  The fact is, however, that there
> already are a number of mechanisms ICANN can take
> to implement community supported changes.
>
> First, of course, contracted-parties can agree to
> make a change they support.  Second, there is a
> bottom-up Consensus Policy mechanism for critical
> changes that ensures that any implementation is
> appropriately balanced across multiple
> constituencies and stakeholder groups.  Truly
> important and time-sensitive issues can be
> addressed via Temporary Policies that remain in
> place for up to a year and, during that year, can
> be adopted as Consensus Policies.  Finally, the
> new gTLD agreement contains a new mechanism that
> gives ICANN authority to make amendments
> supported by a specific percentage of the
> registry operators effective across the entire
> registry group.  This is the compromise that was
> developed through a bottom-up process in
> 2009-2010 when the community rejected the unilateral change provision.
>
> ICANN agreed in 2010 that these three mechanisms
> gave it the necessary tools to amend the registry
> contract to implement changes demanded by the
> community.  Apparently, it has had a change of
> heart and now wants the authority to unilaterally
> impose changes to the agreements.  To date,
> ICANN’s explanation is that the introduction of
> new gTLDs will change things in ways that cannot
> be anticipated. ICANN has not responded to
> community requests for a concrete example of when
> this right would actually be needed.
>
> Of course, the ICANN world is not unique – the
> future is inherently unknown, but parties enter
> into long-term contracts with high stakes all the
> time without introducing the kind of uncertainty
> that a unilateral amendment right would create.
> To borrow from the gTLD Registries comment made
> on February 26, 2013:  "we are in the midst of
> dramatic change in the administration of the
> top-level domain name system.  All businesses –
> whether for profit or nonprofit - require a
> measure of predictability, stability and
> certainty of contracts.  Public and
> multi-national company applicants are subject to
> regulatory regimes that cannot be reconciled with
> the expanded unilateral authority ICANN is
> seeking.  In deciding whether or not to utilize
> new gTLDs for their critical infrastructure
> assets, a key goal of the new gTLD program,
> registries cannot be subject to the whim of one
> private entity, even those acting under the guise
> of public interest, regardless of how
> well-intentioned that private entity purports to be."
>
> ICANN's proposal for this new mechanism, however,
> has been met with opposition not only from the
> new gTLD Applicants and existing registries, but
> also the registrars, non-commercial interests,
> businesses and IP owners.  In fact, every single
> comment on ICANN’s last minute changes to the new
> gTLD registry agreement called for its removal.
> EVERYONE is in agreement that this is a bad idea
> and should be withdrawn. The fact that the entire
> community has never been so aligned about a
> particular subject speaks volumes, but despite
> this clarity ICANN continues to insist on a
> unilateral right to amend the registry and registrar agreements,
>
> Ironically, in this case ICANN itself is creating
> a logjam that is preventing forward movement.  By
> walking away from the version of the legal
> agreement contained in the final Applicant
> Guidebook, ICANN is preventing the new gTLD
> Program from going forward.  This same issue is
> also the logjam preventing the roll out of a new
> registrar accreditation agreement containing
> enormous changes that would benefit registrants,
> law enforcement, intellectual property owners and Internet users in
> general.
>
> So in response to ICANN’s question about clearing
> logjams, we think they are asking the wrong
> question.  ICANN should stop worrying about the
> theoretical logjams of the future.  It’s time to
> take this request for extraordinary, unilateral
> power off the table in order to clear away
> today’s very real logjam.  Once this request is
> withdrawn, the new gTLD program can move forward
> and the Registrar Accreditation Agreement can be finalized.
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