Re: [gnso-vi-feb10] Competition authorities

[Eric Brunner-Williams <ebw@xxxxxxxxxxxxxxxxxxxx>]

On 4/26/10 4:23 PM, Richard Tindal wrote:
> 
> I think this is a scenario JN2 are trying to address in their proposal.
> 
> Under the CORE, Afilias and PIR proposals,  a large domain reseller,  let's 
> say Yahoo,  could become the registry for .WEB and still offer  .WEB names to 
> consumers.   Yahoo would simply become  a reseller for WEB,  buying names 
> from an unaffiliated registrar at a fraction above the registry price.   This 
> would give Yahoo the effective market presence of a registrar, even though 
> they were only a reseller.     

I confess I missed this in our last off-list Q&A.

RT: if WEB LLC (not owned by eNom) is the registry for .WEB can eNOM
be the back-end registry provider?

EB: Yes.

(here Yahoo is the hypothetical back-end registry provider, rather
than eNom)

EB: Try .cat (.web), PuntCat (WEB LLC) and CORE-Registrar (eNom).

RT: If so,  can eNom be accredited and sell WEB names?

EB: No. See .cat (.web), PuntCat (WEB LLC) and CORE-Registrar (eNom).

EB: CORE could sell .cat, but we don't because we can see where the
conflicts could arise.

(here, in Yahoo having a $6 true cost advantage over all other parties
engaging ultimately in registrations of .WEB)

So I suggest there is a slip of the pen, at least for the CORE model
being one which allows the nickle price of self-dealing. I'll let
Brian and Kathy examine their proposals to see if they think they've
caught the nickle self-deal. Alternatively, show me how to construct
the nickle exploit under CORE's proposal, as that will be a surprise.

> For example,  if the registry price was $6.00 Yahoo could probably buy names 
> from an unaffiliated  registrar for $6.05.    Even though Yahoo the reseller 
> paid $6.05 per name,  $6.00 of this flowed back to Yahoo the registry,  and 
> so Yahoo would have the presence of a registrar for an incremental cost of 
> only $0.05 per name.

The example has fundamental value, not just showing how to set up the
nickle exploit. The true cost of domains in bulk is pennies over the
wholesale price. Of course, this is only of interest to parties that
traffic in domains in bulk.

Eric

> The JN2 position is that Yahoo could create the same potential harms as a 
> .WEB reseller they could create as a .WEB registrar,  hence JN2 seek to treat 
> these affiliated resellers like affiliated registrars for the first 18 months 
> of TLD operation.
> 
> RT
> 
> 
> On Apr 26, 2010, at 10:28 AM, Antony Van Couvering wrote:
> 
>>
>> Yes, in general I think this is the out -- become a reseller of a registrar, 
>> which is not a registrar, and go from there.  This may not be ideal for 
>> some, however, and is probably not a long-term solution for many...
>>
>> Thanks Tim,
>>
>> Antony
>>
>> On Apr 25, 2010, at 8:03 PM, Tim Ruiz wrote:
>>
>>> Antony, I am sure we could help them get something going through our
>>> reseller program, either turnkey or API. Then they can put it where ever
>>> they want on their own drop down. The only catch is they may need to do
>>> some of their own translation for the site.
>>>
>>> Tim 
>>>
>>>
>>> -------- Original Message --------
>>> Subject: Re: [gnso-vi-feb10] Competition authorities
>>> From: Antony Van Couvering <avc@xxxxxxxxxxxxxxxxxxxx>
>>> Date: Wed, April 21, 2010 7:13 pm
>>> To: Avri Doria <avri@xxxxxxx>
>>> Cc: Gnso-vi-feb10@xxxxxxxxx
>>>
>>>
>>> Because there are likely to be -- if this doesn't take so long that
>>> everyone's completely exhausted, morally and financially, before the new
>>> gTLD round starts -- small registries that are simply not going to be
>>> interesting to registrars (because of their size), or for which existing
>>> registrars will not be appropriate (because they don't support the
>>> registry's language, for instance). In these cases, it makes perfect
>>> sense to have a registry and registrar integrated. 
>>>
>>> This is the case for many small ccTLDs, for instance, and they are a
>>> good case in point. Even if (to pick on them) GoDaddy does decide to
>>> carry .bt (Bhutan), it will be pretty hard to get to (low on a drop-down
>>> list), and it certainly won't be in the Bhutanese language or alphabet.
>>> That same dynamic will apply for .zulu or .kurd or .berber.
>>>
>>>
>>> On Apr 21, 2010, at 5:11 AM, Avri Doria wrote:
>>>
>>>> Why do people think that there will lots of application that include 
>>>> cross-ownership? for example in AVC message I felt like this was going to 
>>>> be a road block for every poor little new registry and I did not 
>>>> understand that.
>>>
>>
>>
> 
> 
>