[bc-gnso] RE: Important--Regsitry Registrar Separation issue

["Mike Rodenbaugh" <icann@xxxxxxxxxxxxxx>]

I sent this around about five weeks ago, and other than George I do not
believe anyone has commented.  I have been asked if the BC has a view on
this issue.  It seems like a big issue with respect to new TLDs, and could
be retroapplied to existing TLDs.  Does anyone else care?

My view is that the proponents of the change (abolishing the longstanding
rule of separation) ought to have a fairly heavy burden to prove the need
for the change.  I have not seen a very good case for it, and think the
www.registryregistrarseparation.org website presents a compelling case
against it.  I also am bothered that Staff seemed to unilaterally
incorporate such a radical change into the Draft Applicant Guidebook,
without any formal direction to do so.  So I hope they change it back in the
next iteration, due in September.  If the BC is fairly unanimous on this
issue, then I would like us to make comments to that effect very soon.
Please let me know what you think.

I summarized the factual situation in a recent blog post on NameSmash.com:

NEW TLDs -- CONCERNS ABOUT REGISTRY-REGISTRAR SEPARATION

ICANN was formed eleven years ago, when the .com 'monopoly' was broken
apart.
At that time, Network Solutions was the sole registry and registrar of gTLD
domain names.  ICANN created the system we have today, where registrants
place orders with ICANN-accredited registrars, who in turn place the orders
with ICANN-contracted TLD registries, many of which use the back-end
services of third party registry operators.  It was thought that this system
would increase competition for the suppliers of domain names, and thus lower
prices for registrants.  It is hard to argue that this has not held true,
insofar as the price of .com domain names has dropped dramatically in that
time (but is now allowed to rise again by 7% almost every year, under the
2006 agreement between ICANN and VeriSign).

To ensure this structure held, ICANN restricted registries from acquiring
directly or indirectly a substantial percentage of any registrar, so
VeriSign cannot buy a controlling interest in GoDaddy, for example.  Some of
the largest registrars have become registry operators which also register
those TLD names to the public.  For example GoDaddy provides the registry
for country-code .me (so Montenegro makes the rules, not ICANN).  Other
large registrars, such as Network Solutions and eNom, now are pressing ICANN
to eliminate the restrictions on registry-registrar cross ownership of gTLD
registries, so that those registrars can compete as registry businesses,
sell new gTLD domains directly to the public, and sell them to all other
ICANN accredited registrars as well.

Existing registry operators, such as NeuStar (.biz), Public Interest
Registry (.org) and others, are in support of any entity becoming a registry
or registry operator, so long as that entity does not distribute domain
names in the same TLD that they operate as a registry.  They are fighting
this new proposal on the basis that registrars have a substantial head start
in marketing domain names to the public, and thus can offer prime
distribution opportunities to new registries.  These registries and registry
operators argue that allowing cross ownership would put them at a
competitive disadvantage in convincing new TLD operators to use their
back-end services.  

On the other hand, some large registrars argue that no registrar or registry
business -- other than VeriSign with .com and .net -- has any 'market power'
which can be exploited for anti-competitive purposes, and thus they ought
not be regulated by cross-ownership restrictions.  They note that, absent
proven 'market power', it is in consumers' interests to allow
cross-ownership because it will bring operational efficiencies and lower
prices to the marketplace.  The registries counter that a number registrars
do in fact have market power in deciding which TLDs to promote, and how.
They argue that a registrar that owns a registry will choose to promote its
own cross-owned TLDs over any non-affiliated TLD, thereby actually reducing
competition.  

A public comment forum concerning antitrust experts' reports on this issue
has recently closed,
http://forum.icann.org/lists/competition-pricing-final/, and ICANN staff is
expected to make recommendations which then will be subject to further
public debate and comment before the next iteration of the new TLD Applicant
Guidebook, expected in late September.

Mike Rodenbaugh
Rodenbaugh Law
548 Market Street
San Francisco, CA  94104
+1.415.738.8087
www.rodenbaugh.com


-----Original Message-----
From: Mike Rodenbaugh [mailto:mike@xxxxxxxxxxxxxx] 
Sent: Saturday, June 20, 2009 12:39 AM
To: bc-gnso@xxxxxxxxx
Subject: FW: Important--Regsitry Registrar Separation issue

FYI the site at www.registryregistrarseparation.org.  I know this issue is
of serious concern to many members.

Adam Palmer and Jeff Neuman have agree to present briefly and take questions
at our BC meeting on Tuesday.

All comments welcome, and it would be wonderful if a member or two wanted to
lead the BC thinking and engagement on this issue.

Thanks,
Mike

Mike Rodenbaugh
Rodenbaugh Law
548 Market Street
San Francisco, CA  94104
+1.415.738.8087
www.rodenbaugh.com
 

-----Original Message-----
From: Adam Palmer [mailto:APalmer@xxxxxxx]
Sent: Friday, June 19, 2009 5:51 PM
To: Adam Palmer
Subject: Important--Regsitry Registrar Separation issue

All,

 

Please see the below site on registry/registrar cross ownership.  ICANN will
also be having a panel on this on Monday.  Strong vocal support is welcome
both on the website and at the ICANN Monday panel meeting.

 

Please forward this site link to anyone else that might support our concerns
on this issue.

 

Let me know if any questions.

 

Thanks,

Adam Palmer

 

Link:    http://www.registryregistrarseparation.org/supporters