[gnso-vi-feb10] First stab at objectives and a definition of VI

[Milton L Mueller <mueller@xxxxxxx>]

Thanks, Chuck, for getting things rolling.

As my email yesterday indicated, the DT needs to define the objectives and 
scope of the PDP. I also indicated that definitions of terms would be 
important. Here is an initial proposal as to how the objectives could be 
defined. I will also propose a definition of vertical integration.

OBJECTIVES
If I read the motion authorizing this PDP carefully, I actually discern two 
distinct objectives. It is important to keep them distinct.

Objective 1: to set policy and procedures that provide clear direction to ICANN 
staff and new TLD applicants on whether, and if so under what conditions, 
contracts for new TLD registries can permit vertical integration or otherwise 
deviate from standard forms of registry-registrar separation and equal access.

Objective 2: to examine current gTLD contracts and practices approved by ICANN 
staff and determine if any of them are outside the current policy framework 
regarding vertical integration, and, if so make recommendations as to how to 
respond to these exceptions.

DEFINITION

In economics, vertical integration is defined as a situation where the 
activities of a firm extend over more than one successive stage in the 
production process. (Pearce, D.W. (ed.) MIT Dictionary of Modern Economics, 4th 
Edition 1996, p. 450.) Applied specifically to the domain name industry, a 
registry and a registrar can be considered successive stages in the production 
process. Vertical integration is thus defined as a business structure in which 
there is no separation between the registry operator and the registrar; they 
are owned and operated by the same company and the domain name supplier is not 
required to provide access to independent firms to sell names under its TLD. 
Note that a vertically integrated entity may voluntarily contract with 
independent entities to distribute or resell its names, but a policy that 
permits vertical integration means that the firm is not required to do so on 
regulated terms and conditions.

I'm thinking the definition should be uncontroversial, the objectives also seem 
straightforward to me but could spark a lot more discussion. I have further 
ideas about how to go forward from there, but let's take it one step at a time.
--MM