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

[Stéphane Van Gelder <stephane.vangelder@xxxxxxxxx>]

Equal access is a prerequisite in the new gTLD program. Are you suggesting we 
revisit this? If so, I think that's way out of scope of this group.

So if equal access is a given (i.e. a registry must treat all registrars 
indiscriminately), why should an analysis of VI cover anything beyond the 
possibility that one of the registrars is actually the registry (which doesn't 
preclude said registry from providing equal access to the other registrars)?

The only case that I can think of right now where equal access may not be a 
given, i.e. where a registry is its own registrar and doesn't service other 
registrars in the same way, is corporate or single-owner TLDs which are 
operated on such a narrow focus (registrants can only be employees of the 
corporation for example) that it cannot hope to attract many registrars to its 
TLD and therefore would be prevented from being able to operate a viable TLD by 
an equal access rule.

Apologies if I am still missing your point. 

Stéphane 

Le 5 févr. 2010 à 14:53, Milton L Mueller a écrit :

> 
> From: Stéphane Van Gelder [stephane.vangelder@xxxxxxxxx]
>> I have to admit don't understand why the equal access part is in the 
>> proposed definition. If a registry is >vertically integrated with a 
>> registrar, it can still be required to provide full and equal access to its 
>> TLD to all >accredited registrars. For me, any VI definition need only 
>> describe the relationship between the integrated >parties, not any 
>> theoretical relationship between them and other parties which may be 
>> governed by other >circumstances (such as an ICANN contract for example).
> 
>> Avri, Milton, as you say you have already discussed the subject at some 
>> length, perhaps you can enlighten me >as to why the equal access part was 
>> deemed necessary.
> 
> Yes, we did discuss that at length. Its basically a semantic distinction, but 
> one that I think avoids potentially serious confusion about policy. 
> 
> If there are regulations that require a bottleneck provider to provide equal 
> access to downstream suppliers, then market structure can no longer be said 
> to be "vertically integrated." Many if not most of the technical economies of 
> scope and scale made possible by VI are gone, and all you are left with is 
> cross ownership. The distinction between a cross-owned but fully separated 
> subsidiary subject to regulations governing its relationship with competing 
> suppliers (on the one hand) and true vertical integration (on the other) is 
> well-recognized in regulatory economics and has important implications for 
> how firms behave and are regulated.
> 
> If the effects of VI are "regulated away" via equal access, and uniform 
> contractual obligations, then there is no point in talking about or worrying 
> about VI anymore. Because it isn't VI. 
> 
> Thus, I have trouble understanding how you can say, "For me, any VI 
> definition need only describe the relationship between the integrated 
> parties, not any theoretical relationship between them and other parties." 
> Vertical integration is of interest to policy makers ONLY because of what it 
> does or might do to other parties; i.e., other suppliers and consumers. Does 
> it foreclose competitors? Does it facilitate lock-in of consumers? Does it 
> permit innovations or make a supplier more efficient, giving it a competitive 
> advantage over another? If VI simply describes what a company does in 
> isolation it is of no interest to us, it is nothing more than an internal 
> organizational issue. Why would we care? What do we need a PDP for? 
> 
> If allowing vertical integration is a real change in the policy regime, which 
> I am convinced it is, then it is likely to bring both potential benefits and 
> potential harms. 
> 
> --MM
> ________________________________________
> 
> 
> Thanks,
> 
> Stéphane
> 
> Le 4 févr. 2010 à 21:03, Milton L Mueller a écrit :
> 
>> 
>> 
>>> -----Original Message-----
>>> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx]
>> 
>>>> So just to make sure I got this right, the definition that is being
>>> proposed at this stage is the following?
>>>> 
>>>> Vertical integration is 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.
>> 
>> Yes, that's a perfectly fine definition. But the good news is that Avri's 
>> proposed definition really has very few, if any, substantive differences 
>> from a correct one:
>> 
>>> Vertical integration is defined as a business structure in which there is
>>> no separation between the registry operator and the registrar in relation
>>> to a particular gTLD; they are either owned and operated by the same
>>> company or have another contractual affiliation that covers the specific
>>> gTLD, and the domain name supplier is not required to provide full and
>>> equal access to independent firms to sell names under its TLD.
>> 
>> Other than the phrase " or have another contractual affiliation that covers 
>> the specific gTLD", which is a bit vague, I have no problem with this 
>> definition. This is in fact not what our difference was within NCUC. It is 
>> the equal access issue that didn't seem to be understood at the time, but 
>> this definition includes that.
>> 
>> I still think it wise to include the economic reference and the official 
>> definition used therein, so that policy experts and real economists who 
>> observe our work at least know we did our homework. I do not consider 
>> Wikipedia to be an authoritative source on anything, and typically no 
>> subject matter expert does.
>> 
>> --MM
>> 
>>