Vint Cerf/ICANN confirm my interpretation of .biz/info/org proposed contracts -- tiered/differential domain pricing would not be forbidden

[George Kirikos <gkirikos@xxxxxxxxx>]

Hi folks,

I finally got the "official" word from Vint Cerf of ICANN, "on the
record", who confirmed that my interpretation is correct, that
differential/tiered pricing on a domain-by-domain basis would not be
forbidden under the .biz/info/org proposed contracts. This means that
the registries could charge $100,000/yr for sex.biz, $25,000/yr for
movies.org, etc. if they wanted to -- it would not be forbidden the way
the proposed contracts are currently written. This would represent a
powerful pricing weapon for registries, and a fundamental shift in
possible domain name pricing, that could lead them to emulate .tv-style
price schedules.

One can read the proposed contracts at:

http://www.icann.org/announcements/announcement-2-28jul06.htm

Vint said it would be "suicide" for a registry to do it, because
there'd be the 6-month notice period to raise prices and the ability
for registrants to renew for up to 10 years at "old prices", that
supposedly "protects" registrants. Personally, as a business, my time
horizon is a lot longer than 10 years. I wonder if Vint felt
introducing "SiteFinder" was suicide, too....history has shown
registries will do whatever they can get away with, in order to
maximize profits long-term and short-term.

I don't think Vint understands the business at all, to think that a lag
of 10 years will deter a profit-maximizing registry, esp. VeriSign
should it try to match this contractual precedent in .com (and history
shows VeriSign will always try to get "more", especially if "another
registry" is able to do something -- they used that tactic in .com
renegotiations, saying various terms were already in the .net contract,
for instance).

Just to show one possible future, if PIR feels pressure or has a desire
to clean up porn from .org, it could announce that pussy.org (check its
Alexa ranking) will have its renewal price be $1 billion/yr. If it
takes 10 years to do it, many would wait, and it would not be
considered "suicide" for PIR. Who will stand against that as "we're
protecting the internet and children from porn", PIR might argue?
Leaving this temptation in the contract will likely become a slippery
slope, in my opinion, leading to profit-maximizing behaviour by
registries to emulate .tv. Acting in the interests of their
shareholders, registries are *compelled* to maximize profits.

It can be used as a political weapon, too. If a registry disagreed with
the views or content of a website for which they were the registry,
they could raise the renewal price to $100 billion/yr. 10 years later,
that website would not exist at that address, and nothing in the
contracts would forbid this pricing behaviour. More likely, it would be
used for profit maximization (if Google.com is a $100 billion company,
"certainly they are benefiting from their domain name, and can afford
our $1 billion/yr renewal fee" one might say -- see the net neutrality
debate and tiered pricing for websites that phone and cable companies
are pushing....). How far away is tiered domain name pricing??

ICANN would be opening up a Pandora's Box through this contractual
loophole, to not forbid .tv style pricing. The mistake would not be
able to be corrected, as the contracts explicitly say that Consensus
Policies do not apply to pricing issues. Since presumptive renewal
exists in these new deals, the contracts are essentially going to live
with ICANN forever, if approved.

If this pricing power eventually got extended to .com, nothing would
prevent the renewal fee for Yahoo.com, GoDaddy.com, Google.com,
Tucows.com, Business.com, Sex.com or any other domain in a registry
with similar terms to reach $1 billion per year, or any other price
that VeriSign or other registry operators wanted to maximize its
profits (net-neutrality debate is similar, for bandwidth pricing to
websites). You can imagine my VeriSignSucks.com won't last longer than
10 years, if VeriSign had the power to raise the renewal fee to $1
billion/year. :)

I believe that it is very important that this loophole be closed, in
order to not create the precedent that VeriSign could later exploit for
.com, and to protect registrants of .biz/org/info. If it is "suicide",
as Vint suggested, then surely a registry that would supposedly never
use the power would agree to remove the temptation by adding an
appropriate term to the contract. A registry not willing to add that
term....well, you know what they might be tempted to do later. If your
business horizon is the next quarter, this won't impact you. If it's
beyond 10 years, it could impact you. Can you live with that
uncertainty??

Feel free to spread the word on the mailing lists or media, and contact
Vint (vint AT google.com) or John Jeffrey (jeffrey AT icann.org) or
other ICANN staffers if you want to confirm things and voice your
concerns. Time is of the essence, as the public comment period ends
next Monday. Registrants DO NOT know what is coming (the public comment
board is almost empty), as it's the summer holidays! (typical ICANN
tactic, introduce 500+ page contracts for public comment when everyone
is on holiday)

Public comments can be sent using the addresses at:

http://www.icann.org/announcements/announcement-2-28jul06.htm

(be sure to send to all 3 email addresses for all 3 contracts, and also
click the link in the email ICANN will send you to authenticate your
email address, otherwise your comment doesn't get received)

There are a lot of other reasons to be opposed to the proposed
contracts, such as the presumptive renewal, the ability to sell traffic
data, the  removal of price caps, etc. I will be writing a longer
document soon, but wanted to give everyone a heads-up, so that you can
take appropriate action on your own now, and corroborate things
independently with Vint Cerf, John Jeffrey or other ICANN people.

These are fundamentally flawed contracts, and should not be approved by
ICANN. The precedents these contracts would create are ominous, even
worse then the .com proposed settlement agreement (that the DoC has yet
to approve). Why is ICANN even renegotiating these registry agreements,
when the existing terms don't expire for several years in some cases,
and the GNSO PDP process for registry services is ongoing??

Sincerely,

George Kirikos
http://www.kirikos.com/