Re: [bc-gnso] Paper on Registry/Registrar separation

[George Kirikos <icann@xxxxxxxx>]

Hello,

On Fri, May 15, 2009 at 4:11 AM, Philip Sheppard wrote:
> The BC has I believe not formally changed its view on R/R separation (ie 
> against) but we did
> presume the issue may be less relevant with the expansion of new TLDs and may 
> be competition
> enhancing for smaller players.  This paper argues (to my mind) persuasively 
> against that
> presumption.

The paper is actually very ironic and amusing because a lot of the
arguments/examples the authors use can be turned right back upon
themselves. For example, "Gaming Scenario #5" (page 30 of the PDF)
where the registrar pays a "straw person" to apply for the TLD, and
then enters into favourable contractual arrangements in order to
garner the majority of revenues.

How is that any different from what Afilias did with dot-Asia?

http://www.webcitation.org/5fuGn3SYT

“Q7. Where did the seed money for DotAsia Organisation come from?

….Initial capital is obtained in the form of a zero-interest
unsecured loan from Afilias……the repayment terms are favourable to
DotAsia in that it is risk free and on a per-domain-year basis….this
greatly reduces the financial risk for DotAsia and is an important
element, among other technical and operational considerations for
choosing Afilias to be the back-end registry services provider.

Q26. Has Afilias provided any donation or subsidy to DotAsia?
….The loan is a zero-interest unsecured loan to DotAsia and with
repayment terms based on a per-domain-year schedule, after DotAsia
opens its registration operations. The structure of the loan, affords
the organisation and our members virtually no financial burden on the
start-up of the registry.

Q27 Why was Afilias chosen as the back-end registry services provider?
….The financial terms for the ongoing registry services as well as the
loan for start-up activities of DotAsia Organisation proposed by
Afilias is highly favourable and risk free, based entirely on a
per-domain-year structure. There would be no one-time set-up cost to
DotAsia so the organisation would have very little financial burden on
the capital expenses part during the start-up period. In other words,
it would be a risk sharing model which would encourage both parties to
do a better job.”

It's nice that on page 24 these registries mention the part
"Disregarded the concerns of the business and intellectual property
communities and USG about increased market safeguard to protect
consumers." But, these are the same registry operators that want
elimination of price caps, and want new gTLDs to go forward despite
business, IP and the USG being opposed to them.

So, sure the vertical separation elimination would be a bad thing, but
let's not kid ourselves --- the registry operators are no angels when
it comes to the things they're looking to do either. These kinds of
papers should highlight once again that these are all "win-lose"
scenarios that ICANN/etc are considering, and not the "win-win"
scenarios that would have a broad consensus.

Sincerely,

George Kirikos
416-588-0269
http://www.leap.com/