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: 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 had agreed merely to “pass-through” the price increases that the U.S. government approved in 2018.  It is irresponsible in the extreme not to consider how a similar agreement and approach might be 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 by ICANN and the multistakeholder community 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 and subsequent triggering of 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 is even a possible happenstance 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?