Re: [gnso-vi-feb10] A case for minority caps

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

Avri,

Sorry to be annoying, and I know there's now a list of acronyms that we can 
refer to, but I'm finding your emails difficult to read because they're so 
heavily laden with abbreviations and I find it inconvenient to refer to the 
acronyms list every time.

Just a little personal feedback. Please feel free to disregard. May not be an 
issue for others.

Thanks,

Stéphane

Le 8 avr. 2010 à 18:34, Avri Doria a écrit :

> 
> Hi,
> 
> Interesting.
> 
> you explain why having some Rr ownership of Ry and Ry ownership of Rr can be 
> helpful especially in CCLs.
> 
> why a cap? 
> why nominally 15%?
> 
> why restrict to minority?
> is there gradient in the benefit?  
> is there a point where the %age is too high and the benefit stops in your 
> calculation?
> 
> a.
> 
> On 8 Apr 2010, at 12:17, Eric Brunner-Williams wrote:
> 
>> 
>> We attempt to solve two problems by the least means.
>> 
>> -----
>> 
>> For a minority cap on registry ownership of registrars, nominally 15%.
>> 
>> Few existing registrars are equally or preferentially capable of
>> offering sales channels for registries which are IDN-centric, or
>> local-currency-centric, or regional, and other reasonable properties.
>> 
>> With .cat we had four registrars "in Catalonia". Other linguistic and
>> cultural applicants are not so lucky. There is only one ICANN
>> accredited registrar in all of Africa, etc.
>> 
>> A minority interest cap sufficient to allow equitable access to
>> registries operating a shared registrar is adequate to solve the
>> problem that at registry start-up, where the registry is sufficiently
>> distinct from the current market, it will lack registrars.
>> 
>> A consequence of economically executing a shared registrar is that the
>> EPP and business model divergence among the participating registries
>> is self-limiting, and any registrar implementing the same EPP and
>> business model supporting registration profiles has access to all of
>> the participating registries, reducing the cost of entry for second
>> and subsequent competitive registrars.
>> 
>> The competition policy benefit is that applications are not invisibly
>> constrained to the existing dominant model defined by ASCII, dollars
>> (or euros or ...) and the OEDC economies, creating diversity of models.
>> 
>> The public interest policy benefit is ending structural economic
>> discrimination reducing the abilities of unserved and underserved user
>> populations to use the domain name system.
>> 
>> The ICANN policy benefit is that exception to the general requirement
>> for registrars is not necessary to achieve these fundamental policy goals.
>> 
>> -----
>> 
>> For a minority cap on registrar ownership of registries, nominally 15%.
>> 
>> The existing dominant economic terms are $6 to VGRS and $1 to a
>> registrar. Prices have gone up some, and some registrars compete on
>> value propositions other than lowest price, but 6-and-1 characterize a
>> significant portion of the existing prices. Actual per entry cost for
>> domain database is on the order of $1/year.
>> 
>> Under this system, no competition for Verisign has emerged.
>> 
>> A minority interest cap sufficient to allow equitable access to
>> registrars operating a shared registry is adequate to create a 1-and-6
>> alternative to the 6-and-1 allocation of margin exists in the current
>> market.
>> 
>> A consequence of economically executing a shared registry with a
>> equivalent price point is that the registrar margin will be sufficient
>> to motivate registrars to preferentially sell the 1-and-6  over the
>> 6-and-1, creating competition for Verisign. For margin reasons, the
>> cooperating registrars may chose to set a price point below Verisign,
>> expanding the competitive benefit to registrants.
>> 
>> The competition policy benefit is that applications may rationally be
>> framed as price competitive with legacy market, rather than price
>> indifferent, or worse, and only "brand" or "other services"
>> competitive, with Verisign.
>> 
>> The public interest policy benefit is ending structural economic
>> price-support for the legacy market.
>> 
>> The ICANN policy benefit is that existing, and new registrars, rather
>> than some unanticipated, and possibly non-existent third party, are
>> sufficient to achieve these fundamental policy goals.
>> 
>> -----
>> 
>> Summary: Caps allowing minority cross ownership are a constructive
>> tool for achieving important competition and public interest policy goals.
>> 
>> Minority registry participation in registrars allows expansion of the
>> registries outside the existing market, in particular for IDN
>> registries, linguistic and cultural or geographically purposed
>> registries, and non-{dollar,euro,...} denominated markets.
>> 
>> Minority registrar participation in registries allows registrars to
>> set both registry and registrar margins, creating price competition to
>> the registry-capped incumbent monopoly, for which no competition has
>> been created by any other means, other than redelegation.
>> 
>> -----
>> 
>> "No change but symmetry on the pre-Nairobi cap" is the one-liner.
>> 
>> Comments, corrections, on the list or privately. To those that read
>> this, thanks for your time and thoughts.
>> 
>> Eric
> 
>