Hello All, Following the various discussions about the relationship between policies and contracts, that was discussed in Washington a couple of weeks ago, I have set out some basic facts to help think through the relationships. (1) ICANN is a corporation and can enter into contracts with third parties. (2) The ICANN corporation must comply with its bylaws. (3) The Board of the ICANN corporation can establish Policies for the corporation that are consistent with the bylaws (which includes mission and core values). The staff of the ICANN corporation must comply with these policies. (4) The GNSO can recommend policies regarding gTLDs that are consistent with the ICANN Bylaws to the Board. The Board must approve the Policies. (5) ICANN has contracts with registries and registrars relating to gTLDs. (6) Once a contract is signed, the terms of the contract can usually only be changed with the agreement of both parties. (7) The gTLD registry and registrar agreements have a special provision in them that require registries and registrars to comply with certain ICANN policies called "Consensus Policies" that can be established or changed during the lifetime of the contract. These policies can have a significant impact on the business of registries and a registrars - thus the areas where these policies can apply are constrained in the contract, and also the process for establishing such Consensus policies is tightly defined (ie via the GNSO PDP in the bylaws, by the voting rules of the GNSO Council, and by the membership structure of the GNSO Council). (8) Contracts typically have a term (ie length of the contract), conditions for the termination of a contract, and also sometimes conditions that describe the renewal of the contract. Some of the gTLD registry contracts have a right of renewal and also specify that with the renewal that some terms from the previous contract must carry forward into the next contract. Conclusions =========== (a) A GNSO Consensus Policy may apply to an EXISTING contract ONLY with respect to the narrow definition of where such policies may apply in the contract. (b) An ICANN Policy would apply to any future contract signed by ICANN (including negotiating a change to a contract) (c) With respect to an existing contract, a change to a contract to reflect a new ICANN policy (other than a GNSO Consensus Policy as defined in the contract) would require mutual consent between the two parties. Example ======= The ICANN Board could create a policy that all gTLD registry agreements are for a term of one year. The term length is not an area in the existing contracts that could be changed by the Consensus Policy process. Thus existing contracts would not be affected. Also because term length may carry forward into a renewal of an existing contract - this would not be affected either. However for new contracts the term length would be one year. Another complicating factor is that ICANN must treat similar organisations such as registries and registrars equitably. So although it could establish a policy for 1 year contracts, this may seem to be inequitable for new registries compared to existing registries. Alternatively the ICANN Board could create a policy that all gTLD registry agreements are for a term of 10 years. In this scenario it is highly likely that an existing registry operator would agree with the ICANN corporation to adjust their existing registry contract. So as part of considering new policies, the GNSO needs to consider: - the existing contracts, which also have some provisions that carry forward when renewed - equity between holders of existing contracts and holders of new contracts Regards, Bruce Tonkin