RE: [gnso-vi-feb10] Competition authorities

["Kathy Kleiman" <kKleiman@xxxxxxx>]

To the extent that there is any ambiguity, this position below is the PIR 
Proposal position as well. 


Kathy Kleiman
Director of Policy
.ORG The Public Interest Registry
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-----Original Message-----
From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Tim Ruiz
Sent: Tuesday, April 27, 2010 11:40 AM
To: Richard Tindal
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: RE: [gnso-vi-feb10] Competition authorities


Our proposal prohibits greater than a 15% ownership in either direction
between a registry operator and a registrar, and between a registry
backend service provider (or any component of one) and a registrar. In
addition, if *any* amount of cross-ownership exists (>0%) then complete
administrative and structural separation must exist.

There is nothing about who can sell what under what conditions,
resellers, etc. 

Tim  
 
-------- Original Message --------
Subject: Re: [gnso-vi-feb10] Competition authorities
From: Richard Tindal <richardtindal@xxxxxx>
Date: Tue, April 27, 2010 7:59 am
To: Gnso-vi-feb10@xxxxxxxxx


JN2 is similar in this respect to the PIR, GoDaddy and Afilias
proposals. All of those proposals treat a registry back-end like a
registry if there is >15% cross ownership of the back-end. 

JN2 goes further by using a back-end's ability to control pricing or
policies as another reason to treat it like the registry (even if cross
ownership is <15% JN2 uses this 'control' as a reason to treat the
back-end like the registry).

With all four proposals the back-end is not restricted if it is
'independent' (less than 15% cross-owned or doesn't have pricing/policy
control).

I've probably lost nuance on some of the proposals, but I think this is
how all four generally treat back-end operators.

BRIAN/ KATHY/ TIM/ JON/ JEFF - Please jump in if I've misstated.

RT 



On Apr 26, 2010, at 10:00 PM, Neuman, Jeff wrote:

> 
> Actually, I think the opposite. The JN2 proposal regulates back-end operators 
> that have an affiliation with the Registry Operator or the Registrar. 
> 
> I think Richard oversimplified a little. If the back-end provider is 
> affiliated with the Registry Operator, then for the purposes of restrictions 
> it is treated as the registry operator. IN addition, even if there is no 
> "affiliation" under the definition provided (which includes control), but it 
> does have control over pricing, selection of registrars, etc., then it too 
> will be regulated as if it were the registry operator. If the back-end 
> registry operator is unaffiliated with the registry operator, but has an 
> affiliation with a Registrar, then certain audits, separation requirements, 
> etc. are in place.
> 
> Hope that helps.
> 
> Jeffrey J. Neuman 
> Neustar, Inc. / Vice President, Law & Policy
> 
> 
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> 
> -----Original Message-----
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
> Behalf Of Thomas Barrett - EnCirca
> Sent: Monday, April 26, 2010 7:57 PM
> To: Gnso-vi-feb10@xxxxxxxxx
> Subject: RE: [gnso-vi-feb10] Competition authorities
> 
> 
> 
> 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.
>>>>> 
>>>> 
>>>> 
>>> 
>>> 
>>> 
>> 
> 
>