RE: [gnso-vi-feb10] Re: Draft agenda for the VI WG call next week

["Neuman, Jeff" <Jeff.Neuman@xxxxxxxxxx>]

When the registries, certain registrars, and a number of other parties read the 
definitions proposed by the drafting team (including the "relationship of VI to 
ownership", we took it to mean that if something did not constitute "vertical 
integration", you all were arguing that it was therefore outside the scope of 
the PDP.  In other words, it read to us like a value judgment that if a 
registry and registrar were co-owned, but granted equal access and 
non-discriminatory treatment to the registrars, this was to be allowed by 
ICANN, and therefore not for the Work Group to analyze.  But it appears from 
your note below that is not what you are saying.

If what you are saying is that it just means it doesn’t fit into your 
definition of "vertical integration", but all of that is still in scope of this 
group to look at, then perhaps we are in violent agreement.  I believe the 
group needs to figure out what its objectives are - namely, are we doing what 
we are doing to promote innovation, increase competition, etc.?  If the answer 
is yes, then we need to (1) look at safeguards to make sure there are no harms 
to consumers, and (2) examine the whole notion of equal non-discriminatory 
access to registrars as this may run completely counter to the objectives.  In 
other words, if there is a change to policy to allow vertical integration, 
co-ownership of registries/registrars, or indirect integration (through 
contract or otherwise), or whatever else we want to call it, then we need to 
examine changes to the policy of equal non-discriminatory access to registrars.

I look forward to the debate.

Thanks!

Jeffrey J. Neuman 
Neustar, Inc. / Vice President, Law & Policy


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-----Original Message-----
From: Milton L Mueller [mailto:mueller@xxxxxxx] 
Sent: Sunday, March 21, 2010 5:59 PM
To: Neuman, Jeff; 'richardtindal@xxxxxx'; 'icann@xxxxxxxxxxxxxx'
Cc: 'Gnso-vi-feb10@xxxxxxxxx'
Subject: RE: [gnso-vi-feb10] Re: Draft agenda for the VI WG call next week

Jeff, 


> Why are you tying the vertical integration issue with equal access.

I am doing exactly the opposite. I am insisting that they are separate and 
distinct things, and if equal access is enforced you don't have real vertical 
integration. 

> For example, if the motivation is to allow vertical integration to allow
> innovation, ICANN's economists have acknowledged on a number of
> occassions that the equal access requirement runs counter to the notion
> of innovation and competition at the registry level.  It may help

Without expressing an opinion on the normative judgment here (VI leads to 
innovation and competition among registries), in order to make that argument 
you have to distinguish between mere cross-ownership, which leaves Ry-Rr 
separation in place, and real VI, which eliminates that distinction. 

> competition at the registrar level but not the registry level.  That was
> the reason we could not support the drafting team's definitions.   We
> must analyze those subjects separately.

In that respect, we are in violent agreement, Jeff.
Now I am going to spend an hour trying to figure out why that wasn't evident 
from my message....
Please re-read my original message below and tell  me where I went wrong and 
confused you:

> Just a reminder that "co-ownership" (i.e., what normal people in
> regulatory economics call _cross-ownership_) is not the same thing as
> "vertical integration." A registry and registrar can be 100% owned by
> the same company, but if equivalent and nondiscriminatory access is
> required of the registry by ICANN contracts, and that separation is
> adequately enforced, they are not vertically integrated, they are merely
> jointly owned.
> 
> I will insist on maintaining this distinction as we go forward. It is
> important.