Re: [bc-gnso] RE: Important--Registry Registrar Separation issue

[George Kirikos <icann@xxxxxxxx>]

Hello,

On Fri, Jul 31, 2009 at 4:24 PM, Mike Rodenbaugh wrote:
> I have been asked by several people
> whether the BC is going to comment.  The issue is generally open

Once again, you've failed to identify who asked, and in what forum
those comments are going to be made. There are no open comment periods
on this topic. If it was someone from ICANN that asked, you should
fully disclose who it is, since ICANN has a duty to "operate to the
maximum extent feasible in an open and
transparent manner". If instead it's one of your clients that is
asking and you continue to refuse to identify, that just illustrates
the conflict of interest. What good reason exists to keep this context
secret?

> The next formal opportunity might be in comment to the next iteration of the
> Draft Applicant Guidebook, probably in late September.  But Staff could
> prepare a paper in the meanwhile, and certainly is discussing this issue
> internally in regards to the next Guidebook draft.  They might care what we
> think.

So, you're suggesting ICANN staff might care. Are they the ones who
asked? Why wouldn't they simply read the comments made by BC members
who actually made comments on time? If the next opportunity for formal
comments is the next iteration of the Guidebook, it would seem prudent
to wait and see what it says, before wasting time speculating on what
may or may not be in that guidebook.

> I thought the issue was important to discuss, and hadn't seen that
> discussion happen.  If any consensus comes of it, we can consider if anyone
> wants to draft a position.  I do not have any conflict of interest in this
> issue.  Any interest I have is disclosed in my statement of interest (which
> has not changed for more than a year).  If that changes, I will post to this
> list.

Of course it's important to you, as it could reduce the profitability
of wannabe registry operators (people like yourself and your clients)
if existing registrars could compete with you for new gTLDs. Do you
actually know what a "conflict of interest" even is? You have a direct
financial interest in the outcome of this policy for yourself and your
client, yet you say you have no conflict?

> There is nothing wrong with new registries withholding valuable domain
> names, auctioning them, developing them, or otherwise exploiting them.  The

"Exploiting" was a nice choice of words, as it keenly demonstrates
what the entire new gTLD process is about, exploitation of consumers,
IP holders, etc. Why isn't the BC pushing for those "economic studies"
which ICANN has promised yet failed to deliver? I know numerous BC
members in their comments to ICANN stated that those studies needed to
be completed, as did the DOC/DOJ/NTIA. Oops, I guess that would push
back the new gTLD rollout, and affect wannabe registry operators,
people like you and your client.

Is it a shock that you would find "nothing wrong" with new registries
auctioning off the most valuable domains, i.e. like .mobi, .asia,
etc., when that just coincidentally happens to be perfectly aligned
with your interests as a wannabe new TLD operator, and that of your
client? That must have taken an enormous amount of thought indeed
"What makes us the most money?" instead of looking at the broader
policy issues for consumers, the public, businesses, registrants, etc.

> alternative is that a few registrar conglomerates and sophisticated
> domainers get the bulk of them during the first ten minutes of landrush.  I 
> do not think that is an issue of consumer harm or antitrust, it is simply 
> reality.

Once again, the false choice that it's only door #1 (the registries
profit) or door #2 (the registrars and "domainers" profit). Here's a
door #4 (in addition to competitive tenders previously discussed): why
not auction the domains of any sunrise/landrush, BUT have 100% of the
proceeds go to charities selected by all gTLD registrants (i.e.
com/net/org/biz/info/etc. in proportion to the number of domains they
own)? Oh horror of horrors, what would these wannabe registry
operators do, to run a real registry operation that has price caps
(ala com/net/org) past the first 100,000 registrations i.e. the cream
of the crop that in your words need to be "exploited". What value do
registry operators create whatsoever on those first 100,000 names,
e.g. a Verizon.shop which Verizon *has* to defensively register at
premium sunrise costs (or otherwise waste money on legal fees later)?
Or on the short domains or dictionary word domains? The registry
operator does nothing in creating that "value" -- that value was
already there, i.e. it's a one-time goldmine that was already sitting
there. Take that away, and it ruins the parasitic business models of
most wanna-be registry operators.

> Between the two groups, new registry operators should get the rewards of
> investing in the registry, and so should be able to do anything they like
> with the names in that registry, subject to minimum anti-abuse standards and
> contract compliance.   Accredited registrars are free to offer

Wow, what a shocker, you plan to be a registry operator, and come down
on the side of registry operators. "Should be able to do anything they
like" demonstrates that it's not the public interest that is at stake,
it's giving private for-profit companies complete ownership of a TLD,
i.e. ala .tv, etc. where price caps aren't in effect.

Certainly price caps are a far more important issue than this
sideshow, yet price caps and economic studies aren't of concern to
you? Oh, right, price caps and economic studies are of interest to
other BC members, but not to wannabe gTLD registries. No conflicts of
interests, you say, are you so sure?

>  I would prefer that the BC adds our voice to the debate, since that is our 
> purpose.

I recall that on October 1, 2008, that you had made a statement (which
I won't quote, but members can find by searching for the word
"derogatory" in their archives, or the "M Rodenbaugh:
Superconstituency strawpoll" subject of that day) which was very apt.

Soon, you and your client will presumably be a member of the Registry
Constituency, Mike, if your gTLD ambitions are realized. Thus, your
views on this topic within the BC should be seen in that light by
other members who are "real businesses", i.e those that fit the
section 3.2 specificity criteria of our charter (like my company and
other companies).

I repeat that our constitiency's Divisional Separation rules say that
entities "will only represent user or consumer perspectives within the
Business Constituency". If you're a wanna-be gTLD registry operator,
or have a sister company that is a registrar or an ISP, it's clear
that those respective positions should be taken outside of the BC, and
folks should be recusing themselves here. Otherwise, the BC simply
becomes a battlefield for outsiders to try to gain influence within
another constituency.

Obviously that recusal extends to Mike R. not being rapporteur on this
topic, due to the obvious self-interest.

If folks are bored this summer and want to have the BC issue a
statement on a topic, I suggest we make a clear and convincing
statement on the topic of price caps, which is far more important than
this thread (or pick one of the several topics that actually have an
open comment period, like eUDRP, etc. where the constituency has not
submitted any comment!). My company is in favour of price caps,
obviously the ICA has spoken against them. Given Verizon's statement
on the IRT:

http://forum.icann.org/lists/irt-final-report/msg00220.html

(page 5) that "Given that some registries will inevitably use the
sunrise process as an opportunity to extract excessive defensive
registration fees from trademark owners, the standard sunrise should
be in addition to and not in lieu of other RPMs. We urge that ICANN to
restrict registries from engaging in anticompetitive pricing
strategies during the sunrise period. Registries should not be able to
charge much more during a sunrise period than the cost of a
registration after the sunrise expires."

I'd say that's likely another BC member in favour of price caps,
especially if eliminating them for new gTLDs would have the effect of
allowing VeriSign to charge $1 Billion/yr for Verizon.com, i.e.
unrestricted .tv style pricing for .com as a punishment to all
existing .com holders, that some people are willing to see happen as
long as they can get their own TLDs to operate.

I think the folks who are arguing for new TLDs need to be very clear, are they:

1) in favour of new TLDs, or
2) in favour of new TLDs if and only if their company gets one for
themselves (or their clients, etc.), or they can make money doing
consulting for new TLDs, as all these new TLDs need help with
paperwork, lawyers, etc.

There's a weeeeee difference, don't you think? If you're for #2, you
start saying all kinds of wacky things, like "Oh, of course,
registries *should* be able to charge $5 million/yr for hotels.newTLD,
isn't that obvious? (wink, wink) And they *should* be able to raise
prices anytime they want!"

If instead you're for #1, then your positions start to be moderate,
how do we do so in a manner where the benefits outweigh the costs. We
start looking at economic studies (where are the economic studies
ICANN promised?). We put in safeguards. We see that the maximum
benefits go to consumers, not those looking to extract excessive
registration fees from registrants.

Sincerely,

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