Dot-com (and other gTLD registry operations) should be put out to competitive tender

[George Kirikos <gkirikos@xxxxxxxxx>]

By: George Kirikos
Title: President
Organization: Leap of Faith Financial Services Inc.
Website: http://www.leap.com/
Date: April 21, 2012


SUMMARY:

We oppose the renewal of the dot-com contract with VeriSign under the 
anti-competitive terms that have been posted by ICANN. It should instead be put 
out to competitive bidding.

DISCUSSION:

In 2008, NTIA/DOC/DOJ wrote a letter to ICANN which stated:

http://www.ntia.doc.gov/comments/2008/ICANN_081218.pdf

"Finally, ICANN should require competitive bidding for renewals of a gTLD 
registry agreement, rather than granting the incumbent operator a perpetual 
right to renew without competition.........competitive bidding has resulted in 
lower domain prices and higher operating specifications....ICANN's approach to 
TLD management demonstrates that it has adopted an ineffective approach with 
respect to its obligation to promote competition at the registry level. We 
respectfully suggest that the DOC refrain from expressing satisfaction with 
ICANN's progress toward the goal of promoting competition among TLDs unless and 
until ICANN develops a credible and effective policy that compels it to employ 
tools such as competitive bidding to manage TLDs in a manner that safeguards 
the interests of registrants in obtaining high quality domains at the lowest 
possible prices. To date, we believe that ICANN has not come close to 
fulfilling its obligations to employ
 competitive principles in its management of TLD registry operations."

We fully support that position. Under a competitive tender process, it is clear 
that wholesale costs for dot-com registrations would fall to below $3/yr per 
domain, far below current levels which are pushing towards $10/yr per domain 
and beyond. The registries are exploiting their monopolies/oligopolies at the 
expense of consumers.

VeriSign is not the only company in the world that can handle the "load" to run 
the dot-com registry. For example, Google's free Pubilc DNS surpasses 
VeriSign's in terms of daily number of queries, as documented at:

http://www.circleid.com/posts/google_free_public_dns_load_tops_verisign_raising_dot_com_contract_question/

Remember, that service is *free*. In the alternative, if one examines the 
posted prices of Amazon's Route 53 product, even without using any special 
volume discounts, the costs would be far lower than what VeriSign (and other 
gTLD registries) are charging, see:

http://aws.amazon.com/route53/pricing/


(along with analysis in the comments to the CircleID article) I'd expect that 
Akamai, Neustar, Afilias, Google, Amazon, Microsoft, HP, IBM, ISC, and perhaps 
other companies would participate in a competitive tender for operation of the 
dot-com registry.

It is clear that ICANN will not, under any circumstances whatsoever, introduce 
competitive bidding for management of gTLDs. This demonstrates total regulatory 
capture of ICANN by registry interests. There is a cozy DNS "club" consisting 
of ICANN and its insiders that works systematically against the public 
interest. The dot-com renewal is but the tip of the iceberg. We see it also in 
the new gTLDs process, WHOIS policy, registrar compliance procedures, executive 
compensation, UDRP process lack of review/oversight, and numerous other issues. 

It's time for that club to be finally disbanded and replaced with an entity 
that operates in the public interest. ICANN does not have the confidence of the 
public. NTIA/DOC/DOJ have lacked the courage and leadership to date to take 
charge and correct the situation, but it is my hope that they find that courage 
to act now to protect consumers.

We put forth this simple challenge to ICANN: Under what circumstances will 
ICANN put the dot-com registry contract out for public tender?

I'd expect that ICANN would either (a) ignore the question completely, like 
they do most public input, or (b) suggest that "presumptive renewal" clauses of 
registry contracts ties their hands, and prevents them from putting the 
contract out to public tender.

Under (b), this is proof that ICANN has failed, by writing anti-competitve 
contracts in the first place. The DOJ anti-trust division should step in and 
forcibly break the anti-competitive deal that ICANN has entered into with 
VeriSign. We are not talking small potatoes here, either --- under a tender 
process, consumers would instantly save over $500 million PER YEAR in domain 
registration fees. In a world where technology costs are falling, rising domain 
name wholesale fees stand out like a sore thumb --- the causality is clearly a 
regulatory failure.

Sincerely,

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