RE: [gnso-vi-feb10] RE: Innovative Proposal - Jeff E response

[Milton L Mueller <mueller@xxxxxxx>]

> As I watch this conversation, I find myself coming to the conclusion
> that the need for external audits with teeth comes in as soon as there
> is any cross-ownership at all.  For if the registries and registrars
> are not to trusted with higher degrees of ownership and if they are
> often so nefarious as to find a way to take advantage of any situation,
> then the 15% cap, an admittedly arbitrary number, is no protection at
> all.

Teeth yes, but proportionality first and foremost. We cannot lose sight of the 
fact that where there is no harm, there is no foul, and small start-up TLD 
operators are not in a position to do harm until and unless they have a 
sizeable base of registrants (a state which many of them will never reach, I 
suspect). 

I laugh out loud when I read Kathy's fretting about notes on blackboards and 
left over papers or other kinds of information sharing that might take place 
within a cross-owned entity. The laughing comes not from a disbelief that this 
will happen but from the complete lack of perspective on what stands to be 
gained or lost from that happening in a new gTLD. 
 
During the phase of gaining registrations, the incentives of a start-up TLD are 
completely constrained by competitive alternatives. There will be hundreds of 
places to get domain names, in the ascii world at least the market is quite 
saturated. If a new TLD front-runs, treats other registrars badly, price gouges 
or other bad things - who is going to register there and who is going to market 
the name? Reputation effects will be very strong. The assumption that this is a 
sellers' market seems to underlie so much of the comment about structural 
separation. But there is no basis for making that assumption today for new 
gTLDs. That assumption was correct for .com, .net and .org in 1999. It ain't 
now. 

Applying a .com model to an environment where there are hundreds of .new gTLDs 
is absurd.

--MM