Subject: Trust anchor key IPR issues within existing DNS operations business model

From: Thierry Moreau <[email-masked]>
Date: Tue, 22 Nov 2005 17:00:42 -0500

Dear IETF DNSEXT wg participants:

This post addresses the IPR issue with respect to trust anchor
key management for IETF purposes.

The current business model for DNS is registration fees paid by
registrants to registrars covering retail value of name
registration. DNSSEC is a value-added service for DNSSEC-aware
registrants who will pay some extra money for the registrar
(and/or registry) to maintain a secure delegation to the
registrant's zone. Part of the registration fees is passed at the
wholesale level represented by the registries, and then some
money goes to ICANN. As far as I can browse, the ICANN documents
seem silent about the registry right to charge extra fees for
secure delegations, but for IETF purposes, it is reasonable to
use this assumption.

For IETF purposes, it can be assumed that an IPR holder for a
trust anchor key management scheme would behave rationally (in
the economic sense) in shaping licensing arrangements along the
current business model with the assumed secure delegation addenda
explained in the above paragraph. Thus, the IPR licensing fees
would be included in DNS registration fees, no explicitly visible
impact for the masses of second level domain owners who are the
target of secure delegation service offering.

It can be argued that the DNS registration fees already include
compensation for proprietary systems. This is hinted by the
Verisign financial statements for proprietary protocols between
registrars and registries (reference: search the Verisign
financial statements for the word "proprietary"), and by some of
the patent applications assigned to Verisign in the US patent
office database.

Trust anchor key management has server-side procedures and
resolver-side procedures. The other participants are thus DNS
resolver software users, developers, and vendors. It would not be
rational for an IPR holder to impose licensing requirements to
users beyond embedded provisions in software licenses for
proprietary DNS resolver software. So, proprietary DNS resolver
software vendors might be the target of IPR holder greediness.
Again, this is without explicit visible impact to the masses,
because proprietary software customers are already paying for
software licenses. I.e. for software distributed without
restriction on multiple copy usage, it would be unrealistic for
an IPR holder to expect licensing revenues based end-user license
count.

So, a rational behavior from the part of IPR holder would hide
the IPR licensing mechanisms from the mass market participant
categories that are the second level domain owners and DNS
resolver software users. This is simply so because the existing
business models (and institutional framework) for Internet DNS
operations has been worked out quite well, in economic terms.

Furthermore, still for IETF purposes, it can be argued that an
IPR holder would behave rationally in negotiating licensing fees,
simply because the Internet DNS is a de-facto monopoly (i.e.
there is no more a global X.25, SNA, or IPX network where trust
anchor key IPR would allow a competitive advantage over
Internet).

I believe the above observations could have been made by some
other (moderately educated and knowledgeable) participants. I.e.
someone who can take a broader view on protocol engineering that
encompasses Internet governance, business strategy, economics,
and IPR management. I was assisted in these aspect by many
fascinating documents which I omit to refer for sake of brevity.

If the above observations facilitates the DNSEXT wg study of
competing proposals for DNS trust anchor key management, so much
the better.

Finally, the current IPR holder of the TAKREM for DNSSEC proposal
is my privately owned company. This may not be the case in the
future, so the above description of a rational economic behavior
is not a commitment from my part.

Regards,

-- 

- Thierry Moreau

CONNOTECH Experts-conseils inc.
9130 Place de Montgolfier
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Canada   H2M 2A1

Tel.: (514)385-5691
Fax:  (514)385-5900

web site: http://www.connotech.com
e-mail: [email-masked]

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