Tucows 2015 Annual Report Download - page 52

In addition, we and third-party service providers process and maintain our proprietary business information and
data related to our business-to-business customers or suppliers. Our information technology and other systems that
maintain and transmit this information, or those of service providers, may also be compromised by a malicious third-party
penetration of our network security or that of a third-party service provider, or impacted by intentional or inadvertent
actions or inactions by our employees or those of a third-party service provider. We also purchase equipment from third
parties that could contain software defects, Trojan horses, malware, or other means by which third parties could access our
network or the information stored or transmitted on such networks or equipment. As a result, our business information, or
subscriber or supplier data may be lost, disclosed, accessed, used, corrupted, destroyed or taken without consent.
Any major compromise of our data or network security, failure to prevent or mitigate the loss of our services or
customer information and delays in detecting any such compromise or loss could disrupt our operations, impact our
reputation and subscribers' willingness to purchase our service and subject us to additional costs and liabilities, including
litigation, which could be material.
Governmental and Regulatory Risks
Governmental and regulatory policies or claims concerning the domain registration system, and industry reactions to
those policies or claims, may cause instability in the industry and disrupt our business.
ICANN Oversight of Domain Name Registration System
ICANN is a private sector, not-for-profit corporation formed in 1998 by the U.S. Department of Commerce for
the express purposes of overseeing a number of Internet related tasks previously performed directly on behalf of the U.S.
government, including managing the domain name registration system. ICANN has been subject to strict scrutiny by the
public and by the U.S. and other governments around the world with many of those governments becoming increasingly
interested in Internet governance. For example, the U.S. Congress has held hearings to evaluate ICANN's selection process
for new TLDs. In addition, ICANN faces significant questions regarding efficacy as a private sector entity. ICANN may
continue to evolve both its long-term structure and mission to address perceived shortcomings such as a lack of
accountability to the public and a failure to maintain a diverse representation of interests on its board of directors. We
continue to face the risks that:
• the U.S. or any other government may reassess its decision to introduce competition into, or ICANN’s role in
overseeing, the domain registration market;
• the Internet community or the U.S. Department of Commerce or U.S. Congress may refuse to recognize
ICANN’s authority or support its policies, which could create instability in the domain registration system;
• some of ICANN’s policies and practices, and the policies and practices adopted by registries and registrars,
could be found to conflict with the laws of one or more jurisdictions;
• ICANN may lose any one of the several claims pending against it in both the U.S. and international courts, in
which case its credibility may suffer and its policies may be discredited;
• the terms of the Registrar Accreditation Agreement (the “RAA”), under which we are accredited as a registrar,
could change in ways that are disadvantageous to us or under certain circumstances could be terminated by
ICANN preventing us from operating our Registrar, or ICANN could adopt unilateral changes to the RAA that
are unfavorable to us, that are inconsistent with our current or future plans, or that affect our competitive
position;
• ICANN and, under their registry agreements, VeriSign and other registries may impose increased fees received
for each ICANN accredited registrar and/or domain name registration managed by those registries;
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