At a special meeting November 5, ICANN's Board passed a resolution decisively resolving the controversy surrounding vertical integration of domain name registries and registrars. To our surprise, it not only resolved the issue correctly, but also with admirable simplicity.
The basic decision is clear: “ICANN will not restrict cross-ownership between registries and registrars.” It appears as if it will retain a contractual separation between Registries and Registrars and that registry contracts will “include requirements and restrictions on any inappropriate or abusive conduct arising out of registry-registrar cross ownership…”
It is unclear from the board resolution whether highly specialized “boutique TLDs” or so-called .brand TLDs (e.g., .ibm or .nokia) will be able to dispense with registrars altogether and sell directly to customers. The resolution does not mention the concept of “Single Registrant, Single User” TLDs. From the tenor of the resolution – which still has to be translated into contractual language by ICANN's CEO and staff – it sounds as if truly vertically integrated registries will still have to become a registrar and pay registrar-like fees. This is not an ideal solution but it is certainly a step forward and a relatively simple one for the short term. The more important issue is whether registries that want to exert more control over their distribution channels for security or business reasons will need to be open to any and every registrar.
ICANN also says that it will have the ability to refer issues to relevant competition authorities, which is a welcome recognition of the fact that some things might best be left to existing regulatory agencies.