Vertical Integration – Post-Nairobi

The ICANN Board’s statement on vertical integration at Nairobi has left pretty much everyone in an awkward position.

Either it is:

  • a masterful move by the board
  • or an act of madness

I’d hope it was the masterful move, as it essentially forces everyone to reach a consensus. Failure to do so will have a negative impact on both registrars and registries, as nobody can really “win’ in the post-Nairobi world.

The Board’s statement is still being debated, but on the face of it they are blocking any form of relationship between registries and registrars:

5. New gTLDs Implementation – Vertical Integration

Whereas, decisions about industry structure affect many aspects of the public interest – prices, service offerings, sources and uses of data, and more;

Whereas, ICANN has obtained several studies, and heard from Industry participants about the possible benefits and detriments of choices related to ownership integration or non-integration;\

Whereas, the market for new gTLDs will be dynamic, and has yet to emerge. In particular, there are concerns about how industry structure could affect consumer data protection;

Whereas, the GNSO is in an active policy development process on the issue of Vertical Integration, and the Board does not want to create an environment in which it would be difficult to later harmonize the new gTLD marketplace with the GNSO policy result; and

Whereas, it is important to establish a baseline approach to registry-registrar separation for the new gTLD process to move ahead.

Resolved (2010.03.12.17), within the context of the new gTLD process, there will be strict separation of entities offering registry services and those acting as registrars. No co-ownership will be allowed.

Resolved (2010.03.12.18), if a policy becomes available from the GNSO, and approved by the Board prior to the launch of the new gTLD program, that policy will be considered by the Board for adoption as part of the New gTLD Program.

The second last line includes an incredibly vague reference to “registry services” without offering any definition. So is providing DNS to a registry covered? What about if I buy shares in a company that already owns shares in another company? Where do you draw the line?

The last sentence is the “opening”, but based on the interactions on the mailing list so far I’d suspect that there will be a lot of squabbling ..

Hopefully, however, there will be some progress, as it is now an issue of importance to a lot of parties

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