RE: [gnso-vi-feb10] Innovative Proposal

["Kathy Kleiman" <kKleiman@xxxxxxx>]

Hi Avri,
Tx for the support of the Proposal and especially the support of the Orphan 
TLD. I know it is one that NCUC/NCSG has been thinking about, but new to many 
on the list. More discussion of this to come in upcoming emails.

Re: fixed percentages. I know that this is not the strongest answer, but 15% 
works because it works. It may be been a random number at one point, but over 
the years, the 15% has shown us that it is enough to (in general) allow 
independence of the two entities (registries and registrars) and yet allowing 
some overlapping ownership.

But note that we do not rely on cross-ownership limits alone in our Proposal, 
but full Structural Separation as well -- true separation of operational and 
financial systems and control. This prevents the special cases where the 15% 
can become a controlling interest, as has been raised in a number of 
discussions.

I seem to recall that even with Verisign owning 15% of Network Solutions, Jon 
Nevett (then still at NSI) declared the separate path of NSI and took a clear 
opposing path of Verisign on a significant issue. Thus 15% was not too much 
ownership to ownership to prevent independence, but not Zero (0) which seems a 
bit draconian.

That's the thought: that it has served us well and continues to do so. 

Best,



Kathy Kleiman
Director of Policy
.ORG The Public Interest Registry
Direct: +1 703 889-5756  Mobile: +1 703 371-6846

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-----Original Message-----
From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Avri Doria
Sent: Tuesday, April 13, 2010 8:31 AM
To: Gnso-vi-feb10@xxxxxxxxx
Subject: Re: [gnso-vi-feb10] Innovative Proposal


Hi Kathy, 

I have a lot of sympathy for your proposal, and believe that if we cannot 
arrive at a satisfactory method of  getting review and approval from 
competition authorities for raising ones stake in the cross-ownership level, 
then your plan would be reasonable, especially since you have given such 
substantive consideration to the exceptional cases.  I especially think that 
the addition of the orphan registry support to the proposal is a good idea.

Would I would like to understand is, given your preference for strict vertical 
separation, why you support 15% cross ownership as opposed to pegging it at the 
0% cross ownership that the board has recently designated.  As most speakers 
have argued, 15% is a random number that has not real foundation - I understand 
it is an just a historical artifact in that one Registry had 15% of a Registrar 
at the time and thus that was the value settled upon.  What is the rationale 
for keeping this value if Vertical Integration of any sort ifs considered 
dangerous.

thanks
a.

On 12 Apr 2010, at 22:57, Kathy Kleiman wrote:

> 
> Dear Thomas,
> The points you make below are very valid, and I believe we agree on them -- 
> so something must be getting lost in my translation of our Proposal. Let me 
> give it a try again, and I'll clarify in the expanded version to come.
> 
> First, the default model, which we have entitled the "Main Model" posits that 
> the vast majority of new gTLDs will work in the traditional way: that the new 
> gTLD Registries, from the start, must use ICANN-Accredited Registrars for the 
> sale of their domain names. That's the model today, and it well serves 
> Registrars, large and small (as you point out), as well as the entire 
> Internet community.
> 
> In our proposal, there is no threshold cap for gTLDs falling under the "Main 
> Model," and no minimum number of registrations which a new gTLD Registry may 
> claim for itself to register. From the get-go, the new gTLD Registry must 
> sell its domain names through ICANN-Accredited Registrars -- from 
> registration number one. (Main Model, Section I). Like you, we feel this is 
> critically important.
> 
> However, there are a few exceptions which we intend, as did the Registry 
> Constituency in its Supermajority Position, to be narrowly-tailored, and 
> frankly few and far between. They are the Single Registrant and Community 
> TLDs and in our proposal, unlike others we have seen, if these gTLDs are 
> successful and register a large number of domain names then they effectively 
> "age out" of their exception -- and are required to switch to the Main Model 
> and distribute their gTLDs through ICANN-Accredited Registrars. That's for 
> precisely the reasons you outline below about the importance of Registars. 
> 
> It's the Orphan TLD that, admittedly, is a little more difficult to explain. 
> This category arises from discussions with registrars, and the knowledge that 
> no registrars must carry a gTLD. Registrars need not sell any gTLD, and we 
> absolutely do not want to change that. BUT, what if no registrar wants to 
> sell a new gTLD? What if only one or two registrars in the world are willing 
> to sell it? In that case, shouldn't the new gTLD Registry be allowed to sell 
> its domain names itself - at least until more Registrars want to carry it? 
> 
> We say yes, but only if the "Orphan gTLD" Registry truly can prove its case 
> to ICANN -- that it has tried hard and failed to find Registars. And even 
> here, the Orphan gTLD will lose its special status at a fixed low number, 
> 50,000, at which point, one trusts that Registrars will see that registrants 
> are interested and want to offer it. At that point, the gTLD Registry must 
> work through ICANN-Accredited Registrars. But this exception ensures that no 
> gTLD dies for lack of a way to reach registrants.
> 
> Thomas, as I read your email, our goals and concerns are very much the same. 
> We want to get new gTLDs from Registries to ICANN-Accredited Registrars to 
> registrants around the world and to the many different communities who will 
> be seeking these domain names. I hope I have outlined our path a little bit 
> better. 
> 
> Best, 
> Kathy 
> 
> -----Original Message-----
> From: Thomas Barrett - EnCirca [mailto:tbarrett@xxxxxxxxxxx]
> Sent: Mon 4/12/2010 5:22 PM
> To: Kathy Kleiman; Gnso-vi-feb10@xxxxxxxxx
> Subject: RE: [gnso-vi-feb10] Innovative Proposal
> 
> Dear Kathy,
> 
> It is nice to see another proposal being added to the possible options.  The 
> introduction of new gtld's is an opportunity not only for new registry 
> operators but also for new registrars willing to focus their efforts on 
> promoting a new gtld.  Let's make sure that we do not disadvantage possible 
> new or existing registrars with respect to re-selling new gtlds.
> 
> The whole concept of even having a threshold cap before registrars are 
> required is one that clearly disadvantages new registrars and smaller 
> registrars. (see anti-trust and competition memo sent out earlier today: 
> ...the WG participants should avoid engaging in discussions that could be 
> construed as an effort to exclude, disadvantage or boycott any particular 
> competitors, suppliers or customers. )
> 
> In this regard, your "innovation" idea becomes less viable by allowing 
> registries a threshold of 50,000 names before they need to use a registrar.  
> Experience already tells us that there can be viable stld's with far less 
> than 50,000 names.  Although some TLDs have complained about the lack of 
> registrars carrying their product, this implies that if they did, then more 
> registrations would magically accrue.  There are often other reasons why a 
> tld does does not meet expectations.
> 
> Aside from internal registry use, the threshold cap for not using a registrar 
> should INITIALLY be zero. Your idea to prevent "gaming" provides an avenue 
> for registries to first try the "Main Model" before they petition ICANN to 
> bypass the registrar channel.
> 
> The proposal has several areas which have a clear bias against new and small 
> registrars.  including these statements:
> 
> 1. Community-Based TLDs: "lest this TLD not be of interest to top-tier 
> registrars"
> 
> 2. Orphan TLDs: "has not been picked up for distribution by the top three 
> tiers of registrars"
> 
> Why are we only concerned with top-tier registrars?   Has ICANN decided not 
> to accredit any new registrars?   Are there any registries planning to drop 
> registrars and only serve the top-tiers? (all rhetorical questions).  How 
> will low-tier registrars ever become top-tier registrars if the system 
> excludes them from participating in launch of new tlds?
> 
> As you say, now is not the time to tamper with a tried and true system.
> 
> Creating a system that favors large registrars over new entrants and smaller 
> registrars will actually reduce consumer choice and harm competition.
> 
> Best regards,
> 
> tom barrett
> encirca, inc
> 
> 
> 
> ________________________________
> 
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
> Behalf Of Kathy Kleiman
> Sent: Monday, April 12, 2010 12:22 PM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: [gnso-vi-feb10] Innovative Proposal
> 
> 
> 
> Dear VI WG,
> 
> 
> 
> Now is the time to rollout new competition and new gTLDs that will service 
> the growth and future of the Net.  Now is not the time to tamper with tried 
> and true systems. 
> 
> 
> 
> The subprime mortgage crisis in the United States was led by cries for 
> innovation and unwinding of the regulations that had long held a steady hand 
> in the financial markets. Few relatively small experiments ultimately had the 
> unintended, unanticipated and domino-like effect of the collapse of multiple 
> financial institutions.  As one failure precipitated another, it soon became 
> evident that the damage could not be constrained, or easily reversed.  In the 
> end, the public trust was lost in not only in the institutions themselves but 
> also in the regulatory bodies which had heard but not heeded the call for 
> restraint.    
> 
> 
> 
> With stakes high for serving the public interest, and preserving the security 
> and stability of the Internet, tampering with a proven model is not an option 
> - not for us, nor for the millions of registrants, websites, listserves and 
> other systems which depend on the domain names we offer.  It is far easier to 
> determine the right structure to drive behavior, than to police conduct after 
> the fact.
> 
> 
> 
> PIR hereby submits a proposal which relies on the most basic of principles, 
> as well as some innovative ideas.  In the interest of delivering this 
> proposal to the Working Group by today's deadline, we provide a framework 
> here, and will follow with further details and explanations. We look forward 
> to the discussion today, and in the days and weeks ahead. Please find our new 
> proposal for our discussion attached. 
> 
> 
> 
> Best, 
> 
> Kathy Kleiman
> 
> Director of Policy, PIR
> 
> 
> 
> 
> 
> Kathy Kleiman
> 
> Director of Policy
> 
> .ORG The Public Interest Registry
> 
> Direct: +1 703 889-5756  Mobile: +1 703 371-6846
> 
> 
> 
> Visit us online!
> 
> Check out events & blogs at .ORG Buzz! <http://www.pir.org/orgbuzz> 
> 
> Find us on Facebook | dotorg 
> <http://www.facebook.com/pages/dotorg/203294399456?v=wall> 
> 
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> 
> See our video library on YouTube <http://youtube.com/orgbuzz> 
> 
> 
> 
> CONFIDENTIALITY NOTE:
> 
> Proprietary and confidential to .ORG, The Public Interest Registry.  If 
> received in error, please inform sender and then delete.
> 
> 
> 
> 
> 
> 
> 
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
> Behalf Of Margie Milam
> Sent: Sunday, April 11, 2010 11:53 PM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: [gnso-vi-feb10] Vertical Integration Antitrust and Competition 
> Memorandum
> 
> 
> 
> Dear All,
> 
> 
> 
> In preparation for tomorrow's call, please review the attached Antitrust 
> Memorandum.    Amy Stathos will be available to participate on the VI-WG  
> call to discuss this document.
> 
> 
> 
> Best Regards,
> 
> 
> 
> Margie 
> 
> 
> 
> ______________
> 
> 
> 
> Margie Milam
> 
> Senior Policy Counselor
> 
> ICANN
> 
> ______________
> 
> 
>