Re: [gnso-vi-feb10] Competition authorities

[Avri Doria <avri@xxxxxxx>]

Hi,

I tend to agree with this analysis.

It has been sort of confusing when thinking about these issues to try and deal 
with models that:

- include just 2 entities: Registries and Registrars, or
- include just 3 entities: Registry service providers, Registry owners and 
Registrars, or
- include 4 entities: Registry service providers, Registry owners, Registrars 
and Resellers.

I think the first two options are essentially illusions that miss some of the 
actual complexity, especially since it is the reality of there being 4 entities 
that allows for much of what some people might consider easy gaming.

a.


On 27 Apr 2010, at 12:37, Richard Tindal wrote:

> 
> i dont think its about profit margins or accounting
> 
> Some proposals (JN2, CORE, Afilias,  PIR and GoDaddy)  are based on the 
> premise that affiliated registrars could do harm and there is not a reliable 
> way of knowing in advance whether this harm will occur  (I understand the DM 
> proposal is not one of these)
> 
> I'm simply saying that if you believe affiliated registrars could do harm 
> then you should also believe that affiliated resellers could do harm -  as 
> they have essentially the same power
> 
> RT
> 
> 
> On Apr 27, 2010, at 12:13 PM, Jeff Eckhaus wrote:
> 
>> 
>> I have to agree with Roberto here that I do not see what the issue is here. 
>> This group is supposed to be looking at Co-ownership and Vertical 
>> Integration and the potential impacts of any recommendations on any affected 
>> parties. Is this now going to include profit margins and cost accounting? 
>> What happens if the affected parties like Registries lose money, should we 
>> have a relief fund for them as well ? 
>> 
>> 
>> The point below starts to reach into what companies charge and how they use 
>> their margins. If there are legitimate concerns about data sharing as 
>> Roberto says lets address those. 
>> 
>> 
>> Not sure why does it matter to this group if Yahoo has to pay $6 or $.05 for 
>> a domain? Still trying to figure out why these are issues that people feel 
>> need to be addressed at this time. 
>> 
>> 
>> Jeff Eckhaus
>> 
>> 
>> 
>> 
>> -----Original Message-----
>> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] 
>> On Behalf Of Richard Tindal
>> Sent: Tuesday, April 27, 2010 6:35 AM
>> To: Roberto Gaetano; Gnso-vi-feb10@xxxxxxxxx
>> Subject: Re: [gnso-vi-feb10] Competition authorities
>> 
>> 
>> Hi Roberto,
>> 
>> Not sure I understand your point in the context of resellers.
>> 
>> In my example,  Yahoo is the Registry,  Tucows (say) is the registrar, and 
>> Yahoo is the reseller.
>> 
>> Tucows is completely independent in all ways from Yahoo  (ownership, 
>> operations, finances).  There are no sham transactions.
>> 
>> Yahoo the reseller sells a .WEB name to a retail customer.   It then 
>> provides $6.05 to Tucows the registrar.   Tucows the registrar then pays 
>> $6.00 (the wholesale price) to Yahoo the registry.  When the dust has 
>> settled the incremental cost to Yahoo for this transaction is $.05.    As a 
>> retail player (via its reseller arm) Yahoo's cost has been $.05 yet it 
>> competes with unaffiliated registrars (e.g.  Register.com) whose cost is 
>> $6.00 per name.
>> 
>> The reason JN2 have included their reseller provision is that if you believe 
>> a registrar affiliated with the registry has an unfair advantage which may 
>> cause harms (which is the premise of many proposals to the WG)  then you 
>> should logically also believe that a reseller affiliated with the registry 
>> could cause those same harms.   
>> 
>> The CORE, Afilias, PIR and GoDaddy proposals all limit Yahoo's ability, in 
>> the example above, to own more than 15% of Tucows.  Yet by becoming a 
>> reseller Yahoo circumvents than limit.
>> 
>> RT
>> 
>> 
>> 
>> On Apr 27, 2010, at 7:36 AM, Roberto Gaetano wrote:
>> 
>>> 
>>> Please allow me to chime in with a consideration, coming from my
>>> recollection of previous discussions at the time of the NSI separation.
>>> If I remember correctly, one point made back then was not only about the
>>> operational separation in a Ry and Rr entity, but about a "full" separation.
>>> This means that in the books of the Rr the fee to be paid to the Ry has to
>>> be a real, not virtual, transaction. In other words, the revenue that the Rr
>>> will show in the books is, in the example made of a $6 cost and a $6.5
>>> price, just $.5, exactly as every other Rr, and the Rr would not be allowed
>>> to have any sort of subvention or other financial relationship with the Ry.
>>> If this is the case, and if it is enforced, it would seem to me that for the
>>> financial part there would be no difference whether the Ry and Rr have an
>>> ownership relationship, although this would still be a problem if we
>>> consider other relationships, like the access to Ry data by the Rr, which
>>> will put them at advantage.
>>> Regards,
>>> Roberto
>>> 
>>> 
>>>> -----Original Message-----
>>>> From: owner-gnso-vi-feb10@xxxxxxxxx 
>>>> [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On Behalf Of Richard Tindal
>>>> Sent: Tuesday, 27 April 2010 00:08
>>>> To: Eric Brunner-Williams; Gnso-vi-feb10@xxxxxxxxx
>>>> Subject: Re: [gnso-vi-feb10] Competition authorities
>>>> 
>>>> 
>>>> Yahoo could apply for a registry, as it is not 15%+ 
>>>> cross-owned by a registrar.
>>>> 
>>>> Yahoo could then become a reseller of its own TLD -- but this 
>>>> reseller would operate at a fraction of the per-name cost of 
>>>> the registrars with whom it competes.
>>>> 
>>>> RT
>>>> 
>>>> 
>>>> 
>>>> On Apr 26, 2010, at 5:58 PM, Eric Brunner-Williams wrote:
>>>> 
>>>>> Well, how does CORE's proposal allow Yahoo to run the 
>>>> nickle exploit?
>>> 
>> 
>> 
>