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An Anti-Competitive .com Fait Accompli?

In a recent article, Is ICANN Staff Misleading the Board Into Violating Obligations to the U.S. Government, I wrote:

The referenced Memorandum of Understanding (MOU) is the vehicle by which the U.S. government delegates to ICANN the responsibilities for overseeing the technical management of the Internet’s Domain Name System (DNS). This (standalone) agreement expired in September 2009, and the base InterNIC® licensing agreement was originally intended to be coterminous with it. But the licensing agreement—with all of the merged prior representations, understandings, and agreements that include the MOU—has been extended twice by mutual consent, most recently until January 2025.

This is important for many reasons, and much remains to be analyzed for additional context that can help expose the rot at the Internet’s root. A thorough review of the MOU and its seven amendments—which have been merged into the InterNIC license agreement and, therefore, are in effect until 2025—is revealing.

Strangely, this license agreement isn’t included on the same NTIA webpage as all of the other agreements, past and present, between the U.S. Department of Commerce and ICANN. In fact, the InterNIC agreement resides on its own “orphan” page on the NTIA website and which cannot be navigated to except with the precise link address. But, luckily, what was lost has now been found.

More importantly, Amendment 1 of the MOU, as amended, says that:

ICANN agrees that, in the event of the termination by DOC of Cooperative Agreement NCR-9218742 pursuant to Section I.B.8 of Amendment 19, as amended, to that Cooperative Agreement, ICANN shall (1) exercise its rights under the .com Registry Agreement with VeriSign to terminate VeriSign as the operator of the registry database for the .com registry and (2) cooperate with DOC to facilitate the transfer of those registry operations to a successor registry.

ICANN also further agrees that:

... in the event of any inconsistency between the terms of (1) the .com Registry agreement, .net Registry Agreement, or .org Registry Agreement and (2) Cooperative Agreement NCR-9218742 between the DOC and VeriSign, while both the Cooperative Agreement and at least one of the Registry Agreements are in effect, the Cooperative Agreement shall take precedence over the terms of the affected registry agreement.

Here, the U.S. government asserts a special and somewhat proprietary relationship to the original legacy registries—.com, .net, and .org—that remains unchanged despite the creation of many new registries. Significantly, the language in force requires that ICANN defer to the Cooperative Agreement with respect to the .com Registry Agreement and mandates that ICANN terminate the current .com Registry Agreement subsequent to any termination or expiration of the Cooperative Agreement.

ICANN is violating many obligations to the U.S. government, but this particular obligation is significant, particularly when examined together with Amendment 35 to the Cooperative Agreement, which contains the following language:

Notwithstanding anything in the Cooperative Agreement to the contrary, the Department and Verisign agree that: (i) upon expiration or termination of the Cooperative Agreement, neither party shall have any further obligation to the other and nothing shall prevent Verisign from operating the .com TLD pursuant to an agreement with ICANN or its successor; and (ii) neither party may amend the Cooperative Agreement without the mutual written agreement of the other. (emphasis added)

This language seems likely to prevent the U.S. government from enjoying ICANN’s full and undivided cooperation for “facilitat(ing) the transfer of those (.com) registry operations to a successor registry.” This would particularly be the case if Verisign and ICANN executed a letter of intent or other legal instrument that binds ICANN to signing a new .com Registry Agreement with Verisign immediately following any termination of the current .com Registry Agreement, such as which is currently mandated upon expiration or termination of the Cooperative Agreement.

Perhaps an illustrative precedent might be VeriSign’s vehement insistence that ICANN was merely to “pass-through” the price increases that the U.S. government approved in 2018. It’s not hard to imagine a similar argument and approach being used to forestall any competitive bid for operating .com the same way that it was used to avoid any potential diminution of .com price increases or even basic consideration of whether additional .com pricing power benefits the public interest.

Considering that Amendment 35 also requires mutual consent for any future changes to the Cooperative Agreement, this appears to be setting up an anti-competitive fait accompli, whereby Verisign can simply refuse any regulatory attempt by the U.S. government and the only real recourse—termination of the Cooperative Agreement which triggers the mandated termination by ICANN of the current .com Registry Agreement—would actually result in the .com registry being spirited away from any regulatory oversight and straight into the pockets of ICANN, Verisign and the malefactors of great wealth which own them both.

So much for public interest Internet registries.

That this could possibly happen is deeply alarming and leaves one wondering when the next CFIT antitrust case will be filed to break up this ICANN-Verisign caper.

Or, perhaps it’s most appropriate to ask:

Car 54, where are you?

By Greg Thomas, Founder of DNSDecrypt

Greg Thomas is founder of DNSDecrypt and author of How to Save the Internet in Three Simple Steps: The Netizen’s Guide to Reboot the Root. The views expressed in this article are solely those of Greg Thomas and and are not made on behalf of or for any other individual or organization.

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Thank You. William Blackwood  –  Apr 7, 2021 2:25 PM

The U.S. owned Internet of, by, and for the Public Interest all thank you.  Deftly writing with common sense and true simple logic, you are The Thomas Paine of the Internet. 

You illuminate the fact ICANN is subordinate to its InterNIC® U.S. Government Licensor who also regulates .com User Based Fee Structure change under the Cooperative Agreement.

Thanks for your comment and kind words. Greg Thomas  –  Apr 7, 2021 2:57 PM

Thanks for your comment and kind words. I am merely trying to dispel the manufactured complexity and other various hocus-pocus so that the global community of stakeholders can see the truth for themselves in the words and agreements that remain in effect and that have been negligently unenforced. I would clarify that the U.S. does not own the Internet, but it is difficult to conclude other than that, as the originator of the first registries, the U.S. government maintains a special relationship that remains relatively unchanged and which it doesn’t assert towards any other domain name registries. Also, there is ample precedent that the U.S. government does not have the right or ability to choose not to enforce contracts which it is party to. If it is owed the fulfillment of contractual obligations, such as what ICANN agrees to in currently active agreements, then it must receive fulfillment of those contractual obligations. It may not create an orphan page on an agency website to house the critical linchpin agreement and just hope nobody ever finds it. But even if the U.S. government has relied on that hope as its avoidance strategy here, then that strategy has now failed because what was lost has now been found. Thanks again for your comment and for the benefit of your views. Regards, Greg

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