Re: [gnso-vi-feb10] Question on Proposals

[Richard Tindal <richardtindal@xxxxxx>]

Thanks Eric.

Interested to hear responses to this from the WG.    Especially from those who 
haven't been active so far.

RT



On Apr 10, 2010, at 2:17 PM, Eric Brunner-Williams wrote:

> On 4/9/10 11:45 PM, Richard Tindal wrote:
>> 
>> Eric B-W and Jeff N,
>> 
>> Your proposals strictly limit a registry operator from controlling a 
>> registrar in its TLD.
> 
> Correct, at least w.r.t. CORE's.
> 
>> What is the purpose of this limitation  (i.e.  what harms do you see coming 
>> from a registry controlling a registrar in its TLD)?
> 
> 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.
> 
> But you've read all that twice and are really asking why not some cap
> significantly in excess of the 11.2% to 15% in the current contracts.
> 
> First, because the policy goal of ending structural economic
> discrimination, in the presence of significantly larger than the 2000
> to 2006 experience cohorts of registries entering operations per
> quarter, is removed by a lower cap.
> 
> Second, because there does not appear to be even a linear relationship
> in control and benefit, to support a 2x claim for the nominal 30%, or
> a 3x claim for the nominal 45%, ... so the reduced diversity of
> control, the reduced size of the pool of registrar sharing registries,
> has no corresponding benefit, and at the figure you asked privately,
> 75% control, is indistinguishable from 100% control, which is an
> exception from Recommendation 19.
> 
> Third, because the least change to effect an identified goal is the
> best change.
> 
> Fourth, because the number of registries which must offer an EPP
> server set of extensions which a registrar is economically rational in
> implementing in its client is significantly greater than 1, the
> variation in EPP extensions, a problem since the 2000 round, is 1/Nth,
> where N is the number of registries necessary to form a registrar,
> nominally 7 at a 15% cap, the variation possible, and unfortunately
> likely, if the registry associated registrar had no economic
> motivation for commonality.
> 
> Restated, where registries are incented to deviate minimally from the
> core EPP standard, registrars are incented to implement their
> deviations from the core EPP standard, to mutual benefit.
> 
> Re-restated, a minority ownership or control cap provides nearly an
> order of magnitude reduction in the overall technical and contractual
> complexity of registry and registrar relationships. Complexity is
> cost, and as the number of registries approaches the number of
> registrars, the growth of complexity cost, to registrars, and to
> ICANN, and others with multi-registry interests, does not scale. This
> affects no registry directly until a complexity cost limit, at which
> point new registries have no default registrar interest.
> 
> Reminder, at Paris and subsequent I've asked the RC, now RSG, "who is
> going to implement the EPP warts of the new gTLDs?" I've never gotten
> a single registrar to indicate interest in the new gTLDs -- as a
> registrar.
> 
> Thanks for your question about the registry cap on ownership or
> control of registrars. Don't forget the other direction.
> 
> Eric