Original URL: http://www.theregister.co.uk/2007/03/26/icann_meeting_lisbon_registerfly/

Of ICANN and the registrar zombies

Or, how I stopped worrying and learned to love our internet overlords

By Burke Hansen

Posted in Law, 26th March 2007 22:54 GMT

ICANN Lisbon ICANN Lisbon 2007 officially opened today, although in true ICANN style work has been going on all weekend - it's just the public part began today, with the usual welcoming speeches by Chairman Vint Cerf and CEO Paul Twomey.

The opening speeches provided a glimpse into some recent ICANN accomplishments - Libya got its own Top Level Domain (TLD), .ly, after years of fighting for it, the Whois registry is still being fought over, and the Regional At Large Organization (RALO) concept continues to evolve - but much of the first day consisted of arguments about Registerfly, and what it means for ICANN.

The fate of Registerfly, which will be an ICANN accredited registrar until March 31, provided the opportunity for considerable soul-searching by what is euphemistically known as the ICANN community. The astonishingly sudden collapse of a major registrar, which came into the public spotlight through a very personal and seedy lawsuit between two of the founders, rather than through any actions of ICANN itself, has revealed some severe tensions within ICANN about the nature of ICANN's role as the standards body for the internet as a whole.

Allegations of fraud against Registerfly led to a torrent of complaints directed at ICANN - Registerfly's accreditor, remember - after ICANN's usual method of referring customers back to their registrars proved worse than useless, only pouring fuel on the fire.

The mediocre ICANN website - which is thankfully also in the process of being revamped - didn't really provide any kind of forum for public discussion (the General Manager for Public Participation position was left vacant for ages), and so people turned their frustrations to the ombudsman's office, which is meant for complaints about ICANN's own processes. Of course, those might have been part of the problem.

Although an entire gripe site, called Registerflies.com, spent over a year reporting on problems with Registerfly and its panoply of shortcomings and complaining to ICANN itself about the mess, ICANN refused even to post negative comments about Registerfly on its blog. The first week that ICANN opened its blog to the public it received over 500 complaints about Registerfly, the new General Manager for Public Participation, onetime Reg reporter Kieren McCarthy reported today, which included huge numbers of complaints about ICANN's ostrich-like lack of responsiveness to the public.

ICANN is now divided between those, such as ICANN Chairman Vint Cerf, who clings to the fantasy that ICANN is not a regulatory body, and others within the organization who realize that the internet is a unique medium whose very structure is a form of regulation, which is determined by ICANN itself.

Vint Cerf said on more than one occasion today that ICANN's role is to allow the market to shape the future of the internet. Using the carrot and the stick of market capitalism to influence human behavior is all well and good, but to pretend that any market exists absolutely unfettered is sheer delusion. The American capital markets have the Securities Exchange Commission (SEC) and London has its Financial Services Administration (FSA), and an almost surreal number of human behaviors are regulated by various criminal codes, for those who care to read them.

So why should the internet, which is as artificial a consruct as there can be, be different? Why is it that I can be criminally cited for crossing against a red light, as at times I have been, and corporate activity gets treated with idealogical kid gloves - we must let the market sort itself out! - solely because it's of a commercial nature? And, fundamentally, how is it the ICANN can even pretend to be something other than a regulatory body, when it determines the very parameters of the internet itself?

Vint Cerf, the "Father of the Internet" kept encouraging - this is not a joke - registrants to complain to the the equivalent of the Better Business Bureau in the country of origin of dodgy or uncooperative registrars, as if someone realistically would call the BBB halfway around the globe, to a country whose language they might not even speak, to lodge a complaint against a hometown enterprise. That's certainly a business-friendly solution, and one way to look at it, but Registerfly was an American company with mostly American customers who already understood well how worthless a complaint to such an organization is, which is why they wanted ICANN's nuts. Is that seriously a model for preventing a future Registerfly-style collapse?

In fact, in a somewhat self-serving factsheet published by ICANN on its website today, in which it tries to take credit for helping improve Registerfly's performance after an audit last summer without providing much explanation for ICANN's subsequent hands-off approach, ICANN clearly states that "ICANN's mission is to ensure the stable and secure operation of these unique identifier systems (such as domain names and numeric addresses), which are vital to the Internet's operation." Can't seem to find anything in there about the invisible hand of the market - in fact if anything it's the opposite, although that's not what Cerf's pals at the American Department of Commerce (DOC) want to hear.

ICANN's ongoing murky relationship with the DOC could well be at the root of this idealogical obstinance. However, to suggest that the invisible hand of the market will right the wrongs of Registerfly is laughable. Sure, the market has punished Registerfly - after all, the company is bankrupt - but markets are famously bad at dealing with externalities, in this case the registrants whose domains have vanished, and even ICANN is admitting that the current system is not working. Some form of regulation involving data escrow is clearly in order, and thankfully on the way.

ICANN CEO Paul Twomey was somewhat more nuanced than Cerf about the interplay between market forces and ICANN's role. Twomey also acknowledged that the real problem for ICANN is what happens in the period preceding the collapse of a registrar, when thin-margin companies teeter on the brink of collapse, and customers fall through the cracks. These so-called "zombie registrars" enter a vicious cycle in which customer service spirals downward and more customers flee, leaving mounting debts and a further erosion of service and the company's bottom line.

The use of market forces has admirably driven the cost of owning a domain name down from $50 per month to free, in some business models, and failure is as much a part of the market as success. The escrow system is an important part of the ICANN's role in maintaining its core responsibility, which is the stability of the net itself.

Property rights

The comments after the speeches and the panel revealed a continuing debate within the ICANN community about what a domain really is. The debate centered around whether or not it should be treated as a license or a property right, though from a legal perspective a license is simply a relatively narrowly drawn type of property right.

The registrars want it to be classed as a license to lessen their own potential liability - if you don't renew your license you lose it, simple as that. However, as the Security and Stability Advisory Committee (SSAC) Chair Dr. Stephen Crocker noted in the panel discussion, domain names perform a more critical role in certian business than a typical license. As he put it, it's not like having the electricity turned off. It truly is something more serious, and ICANN needs to acknowledge that.

In fact, in some ways a domain is more important to some businesses than any physical property right could ever be - although it performs some of the functionality of a physical address, for many domain holders, the domain is not just where to find them on the internet, it is very essence of their brand. Fundamentally, it is their business, in the same way that if the words "Coca Cola" somehow magically and impossibly vanished from the world's languages, and then reappeared in the hands of a rival, never to return, the original owners would be irreparably harmed.

The debate about what ICANN is for is a healthy one, but it is also one that as far as its responsibility towards registrars goes, needs to move quickly. As ICANN acknowledged publicly today, there are other sketchy registrars out there - out of over 850 registrars, 40 don't even have websites and another 27 don't maintain a Whois database for their registrants. Suggestions for a best practices statement and additional compliance tools are worthy, but ICANN needs clearly to do a better job enforcing the agreements it has now, although an overhaul of the Registrar Accreditation Agreement (RAA) needs to be done once ICANN installs the data escrow system.

The silver lining to the Registerfly fiasco is that this discussion is long overdue, and ICANN is listening. ®

Burke Hansen. attorney at large, heads a San Francisco law office