Re: [gnso-vi-feb10] So, what's best for consumers? Anyone? Bueller?

[Volker Greimann - Key-Systems GmbH <vgreimann@xxxxxxxxxxxxxxx>]

Jeff and Anthony, you are raising a good point here.

If we broaden our view to include the experiences made in the wide and
colorful world of ccTLDs as opposed to the ICANN regulated gTLDs, we can
find a significant number of registries that sell their on ccTLD
directly to consumers via their own registrar service while as well
selling to the registrar chain (I will exclude those registries not
operating on a registry-registrar model selling directly only for the
sake of this argument). Those registries usually offer registration
services only with no supplemental services and sell their domain names
at a higher price to consumers than to registrars. Up to now the sky has
not fallen and customers have not experienced any significant
disadvantages in this model.

However, if such a registry would be able to compete with registrars by
offering prices comparable to those of their registrars and also be
allowed to sell supplemental services, I can imagine a scenario where
they would be able to monopolize their TLD by driving out the
competition and then raising consumer prices again.

Effectively, even full vertical integration need not be problematic or
harmful to the consumer in itself, as long as it is properly regulated
and the registry is required to allow equal or better access to all
registrars. It is not the consumers that need immediate built-in
protection in scenarios of vertical integration, but rather the
competing registrars, which will in turn protect the consumers. By
defining the level of protection of competition required, we would be
able to allow gTLD registries to own registrars or registrars to invest
in new gTLD registries with no adverse effect to consumers.

After all, vertical integration models are already working in parts of
the domain world. They are not in themselves a demon that would ruin the
business as we know it. Unregulated, they could run against the
interests of the customers, but by putting safeguards in place this
could be prohibited.

> With regard to consumers, what is everyone afraid of with regard to 
> Vertical Integration?
> What are these supposed harms that will befall consumers if a Registry 
> owns a Registrar? What will happen if a Registrar distributes a TLD 
> that it owns?
> If we are going to move ahead can we at least start discussing what we 
> are so scared of?
> I'll take a stab at it: what the end user wants is:
> - cheap prices
> - good choice of names
> - good service
> - portability
> - perpetual right of renewal at a predictable price. 
--

Should you have any further questions, please do not hesitate to contact us.

Best regards,

Volker A. Greimann
- legal department -

Key-Systems GmbH
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Tel.: +49 (0) 6332 - 79 18 85
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Email: vgreimann@xxxxxxxxxxxxxxx

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