Hello Jeff,
I think the statement is pretty clear. Even discussions regarding a policy development process (from those in the community that could be compeititors (i.e., registrars, ISPs, other businesses, etc.)) on new registry services has implications on competition from a legal standpoint.
Just a reminder that the GNSO Council successfully completed a policy development process for transfers which is at its core a competition issue between registrars. The inclusion of members of council that are not registrars, along with extensive public comment processes, ensured that this process was handled without bias.
It is for this reason that we are requesting a formal legal opinion from ICANN's general counsel on this issue and are also obtaining our own legal advice from our own counsels.
That is the purpose of the issues report - it is a formal opinion from the ICANN staff and General counsel. The correct process is to raise issues that we would like addressed within the issues report. Regards, Bruce