RE: [gnso-vi-feb10] Competition authorities

["Thomas Barrett - EnCirca" <tbarrett@xxxxxxxxxxx>]

Richard,

So the proposal contains a special carve-out for back-end providers?  How do
we justify this special exemption?  
 
Doesn't this allow for a variant form of nickel-exploit?  (maybe it's a
quarter-exploit...)

Tom


-----Original Message-----
From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx]
On Behalf Of Richard Tindal
Sent: Monday, April 26, 2010 5:36 PM
To: Gnso-vi-feb10@xxxxxxxxx
Subject: Re: [gnso-vi-feb10] Competition authorities


In today's email I was talking about the actual registry, not the back-end
provider.

As with the JN2 proposal,  I think the only time a back-end provider should
be treated like the registry itself is when the back-end provider has
control over policies and/or pricing.

RT


On Apr 26, 2010, at 5:28 PM, Eric Brunner-Williams wrote:

> 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.
>>>> 
>>> 
>>> 
>> 
>> 
>> 
>