RE: [gnso-vi-feb10] Competition authorities

["Roberto Gaetano" <roberto@xxxxxxxxx>]

Richard,
Thanks for your comment, that made clear to me that I did not express myself
correctly.
I was not attempting at all to address the issue about registrars vs.
resellers. I was only pointing out that if we require, as it had been done
if I remember correctly at the time of the NSI separation, that the Ry and
the Rr have no cross funding, for the purely financial aspect it should be
by and large irrelevant whether the Rr (or reseller, to follow your example)
is partially owned by the Ry.
In your example below, the incremental cost for Yahoo (the Rr) would be not
$.05, but the full $6.05 if there is a full separation in the accounting of
Yahoo (the Ry) and Yahoo (the Rr). Of course, this separation has to be
verified, for instance via financial auditing.
Anyway, I am only bringing some contribution drawn from memory from the
past. I am not expressing any opinion on Ry and Rr cross-ownership, just
inviting to think that there are different ways to separate the business of
the Ry and Rr, and therefore if we talk about separation (or integration) we
need also to specify what has to be separated and what can be integrated.
Cheers,
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 15:35
> 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?
> >