RE: [gnso-vi-feb10] RE: Economists

[Jeff Eckhaus <eckhaus@xxxxxxxxxxxxxxx>]

After digesting the recent comments of Jeff N, Mike Rodenbaugh & Milton, on 
Registries and market power, consumer benefits and equal access requirements 
made me think about how well the original 100K limit would work. I wanted to 
expand on this idea since I think it not only addresses each of their concerns, 
but brings about the economic benefits that I distributed earlier and the 
Economists discussed as well.

This proposal is essentially the original Nevett proposal and yes, I am 
bringing it back because I think in the past people were not ready to 
compromise, but now this proposal is a middle ground that works for everyone:





1.  Allow a new Registry to sell up to 100,000 domains in their own TLD



*         Data sharing issues. Makes this essentially moot and addresses the 
concerns of (Kathy and others). Once any TLD gains anywhere close to a 
substantial market position, the registry will no longer be able to use the 
registrar data and vice versa.



*         Difficulty to audit issue. This issue is moot because there is no 
need to audit to ensure that data is not shared between a registry and 
affiliated registrar. There is a bright-line rule - once a TLD hits 100,000 
domains, the affiliated registrar can no longer sell the TLD



*         Orphan TLD issue. This issue is moot because a new TLD with no market 
power will be allowed to sell their own names through an affiliated Registrar.



*         Competitive pricing issues. Addresses (in my view unwarranted) 
concerns about an integrated registry/registrar being able to offer lower 
pricing. Well before a TLD has enough consumer demand for other registrars to 
care, the TLD owner will no longer be able to sell its own TLD.





2.The new TLD will not have to offer equal access for the first 100,000 domains 
since there is no market power. After the TLD reaches 100,000 domains, equal 
access will be required.



*         This addresses the recent concerns mentioned by many people on the 
list amd the consumer benefits will be attainable



*         The 100K domain name limit is much easier to quantify then "market 
power" and is a fair and equal number for all TLD operators.



*         I realize 100k is an arguably arbitrary number. However, I think we 
can all agree that 100k domains will enable a new TLD to get some market 
traction and is also well short of market power



3.  Once a Registry TLD hits 100,000 domains; all of the other standard 
practices would come into effect such as equal access requirements



This proposal is a compromise between all of the various proposals, and I 
believe addresses the primary concerns of each of the major constituencies 
represented here. If you disagree, please respond with your specific objection 
to the  list or to me personally as I think it would be help us on the path 
forward.







Thanks





Jeff Eckhaus









-----Original Message-----
From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Neuman, Jeff
Sent: Tuesday, May 04, 2010 2:16 PM
To: Eric Brunner-Williams; Milton L Mueller
Cc: Kathy Kleiman; Gnso-vi-feb10@xxxxxxxxx
Subject: RE: [gnso-vi-feb10] RE: Economists







"An exception from equal access was unwelcome by the Registrar Constituency in 
2001, and every year subsequent"



-- Hmmmm, Should we put that in the "no kidding" bucket or is that in the same 
bucket as the registrars every year refusing to accept registries acting as 
registrars from 2001 through 2007 (when it became apparent that registrars 
wanted to be registries in the "new" round coming up).



If we are talking about opening up the space with respect to VI/CO for the 
economic benefits Jeff E. sent around last week and discussed by the 
economists, then for those same economic benefits, we need to keep no equal 
access absent market power on the table as well.  We need to remain consistent. 
Otherwise the entire model falls apart.



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 Eric Brunner-Williams

Sent: Tuesday, May 04, 2010 4:55 PM

To: Milton L Mueller

Cc: Kathy Kleiman; Gnso-vi-feb10@xxxxxxxxx

Subject: Re: [gnso-vi-feb10] RE: Economists





Milton,



An exception from equal access was unwelcome by the Registrar

Constituency in 2001, and every year subsequent.



Is the consensus problem in this working group? That is, do you

believe that if there was consensus in this working group for

something historically, and without exception, opposed by an interest

group with Constituency status, now Stake Holder status, that this

consensus recommendation would be adopted by the Council?



Eric



On 5/4/10 10:25 AM, Milton L Mueller wrote:

>

> I agree that Salop and Wrights' responses to your questions about equal 
> access were not very informative, but that was a bilateral problem. They 
> didn't understand your perspective very well, and I don't think you 
> understood theirs very well, either.

>

> Here's the disconnect: Salop and Wright base their position on the amount of 
> market power actors have. Restrictions such as equal access requirements, 
> limits on cross ownership and vertical integration only make sense, in their 
> view, if the firms have some kind of market power. New, start-up TLDs, in 
> their view, have no market power. Ergo, they don't believe equal access is 
> necessary. As they put it, a small, start up TLD should be able to have 
> "selective" access. Whether you agree or disagree with that proposition, do 
> make an attempt to understand it.

>

> Personally I tend to agree with them that equal access is unnecessary for 
> start-up TLDs with no market power, but that is not part of the MMA proposal 
> because it's probably too radical a change from the status quo to gain 
> consensus.

>

> --MM

>

>> -----Original Message-----

>> From: Kathy Kleiman [mailto:kKleiman@xxxxxxx]

>> Sent: Tuesday, May 04, 2010 9:20 AM

>> To: Milton L Mueller

>> Cc: Gnso-vi-feb10@xxxxxxxxx

>> Subject: Economists

>>

>> Hi Milton,

>> Re: the antitrust economists, I think they showed us that they had not

>> evaluated the impact of the new models (which they proposed) on our

>> existing system (of Equal Access).  I asked the question, and they

>> didn't even factor it in to their work-- that means that so much of the

>> system we rely on for Registries to treat all Registrars equally in

>> terms of technical access to domain names, customer service access, and

>> EPP and other valuable data, was not even a part of their calculation. I

>> think that's a big shortcoming, I think Equal Access has served the

>> ICANN Community well, and I think it is a Principle of nearly every

>> proposal that has come before this WG.

>>

>> Further, the antitrust economists had not calculated the waiver of

>> jurisdiction by a registrant into their model development.  That a

>> Registrant must waive jurisdiction, e.g., for domain name disputes, to

>> the jurisdiction of the Registrar (for example if there is a court

>> appeal of a UDRP decision) is huge. It means finding the closest

>> registrar, or at least one in your own country, is important, valuable,

>> even business-saving or organization-saving.

>>

>> I find this WG's approach more systematic, more rigorous and more

>> informed than the economists. We know the current system, we know

>> Registries, Registrars and Registrants, and we know what is at stake.

>>

>> Best, Kathy

>>

>> -----Original Message-----

>> From: owner-gnso-vi-feb10@xxxxxxxxx

>> [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On Behalf Of Milton L Mueller

>> Sent: Monday, May 03, 2010 1:52 PM

>> To: 'Kathy Kleiman'

>> Cc: Gnso-vi-feb10@xxxxxxxxx

>> Subject: RE: [gnso-vi-feb10] Orphans, existance and exploitation of

>>

>>

>> Kathy

>> The problem with the orphan exception is that it has got the problem

>> exactly backwards. It imposes restrictions upon new entrants and lifts

>> those restrictions only AFTER they are teetering on the brink of

>> failure.

>>

>> As our conversation with the antitrust economists made clear, CO and

>> self-distribution among new TLD applicants should be _presumed legal_,

>> and restrictions imposed only if or and when a certain level of market

>> power is reached.

>>

>> No one has ever provided a plausible rationale for what these initial

>> restrictions are protecting us against when the new gTLD has no market

>> power. All of the arguments (e.g., "co-mingled data") presume that the

>> TLD in question is well-established and in high demand and multiple

>> registrars are competing for access to it. That will not be the case for

>> most new TLDs.

>>

>>> -----Original Message-----

>>> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-

>>> feb10@xxxxxxxxx] On Behalf Of Kathy Kleiman

>>> Sent: Monday, May 03, 2010 12:14 PM

>>> To: Eric Brunner-Williams

>>> Cc: Gnso-vi-feb10@xxxxxxxxx

>>> Subject: RE: [gnso-vi-feb10] Orphans, existance and exploitation of

>>>

>>>

>>> Hi Eric,

>>> Tx for your question. You are, of course, talking about the gaming of

>>> the exception, and not its intended purpose. But it's a fair question

>>> nonetheless.

>>>

>>> The purpose of the orphan exception is to reflect problems we have

>>> heard

>>> -- that with so many new gTLDs, a small one may not be picked up by

>>> registrars, and thus may not be distributed to its intended audience

>>> (e.g., a small community, a developing country set of groups, etc.).

>>>

>>> It is not intended to provide a way for a gTLD Registry of a new .BLOG

>>> or .WEB, for example, to keep their domain names to themselves and

>> away

>>> from the Equal Access provisions for registrars.

>>>

>>> So Eric, would the following restrictions protect against the problems

>>> you raise?

>>>

>>> 1.  You can only get Orphan status if 3 or fewer registrars offer your

>>> TLD --  at any point in time;

>>>

>>> 2.  You have to apply in writing to ICANN for Orphan status and there

>>> is

>>> a 30 day comment period before you can start operations with your own

>>> registrar or directly (e.g., 30 days for ICANN-Accredited Registrars

>> to

>>> say "Yes, I want to offer this gTLD!"; and

>>>

>>> 3.  If, after you start your own registrar operations,  additional

>>> registrars start offering your names (such that then more than 3

>>> unaffiliated registrars are offering your TLD) -- then your own

>>> affiliated registrar is limited to managing X thousand names (e.g.,

>>> 30,000 or 50,000) -- at which time you must stop distributing your TLD

>>> domain names entirely.

>>>

>>> Best,

>>> Kathy

>>> -----Original Message-----

>>> From: owner-gnso-vi-feb10@xxxxxxxxx

>>> [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On Behalf Of Eric

>>> Brunner-Williams

>>> Sent: Saturday, May 01, 2010 7:51 AM

>>> To: Kathy Kleiman

>>> Cc: Gnso-vi-feb10@xxxxxxxxx

>>> Subject: [gnso-vi-feb10] Orphans, existance and exploitation of

>>>

>>>

>>> Kathy,

>>>

>>> Am I correct in understanding the "orphan" status?

>>>

>>> Suppose Registrar X has a standing offer to every new gTLD registry

>>> applicant. For those applicants which garner no other offer, X is

>>> guaranteed 50,000 transactions at a margin it sets.

>>>

>>> X could set the price at 10x the registry price, prompting the

>>> registry to pay greenmail to get "orphan" status, and sell its

>>> inventory at the registry price, or fail.

>>>

>>> If the first 50k names are going to be generics and trademarks and so

>>> on, at sunrise and land rush pricing, will any applicant obtain

>>> "orphan" status before that inventory is exhausted?

>>>

>>> Thanks in advance,

>>> Eric

>>>

>>> ------------------

>>>

>>> Kathy Kleiman

>>> Director of Policy

>>> .ORG The Public Interest Registry

>>> Direct: +1 703 889-5756  Mobile: +1 703 371-6846

>>>

>>> Visit us online!

>>> Check out events & blogs at .ORG Buzz!

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>>>

>>> CONFIDENTIALITY NOTE:

>>> Proprietary and confidential to .ORG, The Public Interest Registry.

>> If

>>> received in error, please inform sender and then delete.

>>>

>>>

>>>

>>

>> ------------------------

>>

>>

>> Kathy Kleiman

>> Director of Policy

>> .ORG The Public Interest Registry

>> Direct: +1 703 889-5756  Mobile: +1 703 371-6846

>>

>> Visit us online!

>> Check out events & blogs at .ORG Buzz!

>> Find us on Facebook | dotorg

>> See the .ORG Buzz! Photo Gallery on Flickr

>> See our video library on YouTube

>>

>> CONFIDENTIALITY NOTE:

>> Proprietary and confidential to .ORG, The Public Interest Registry.  If

>> received in error, please inform sender and then delete.

>>

>>

>> ----------------------

>>

>>

>> Kathy Kleiman

>> Director of Policy

>> .ORG The Public Interest Registry

>> Direct: +1 703 889-5756  Mobile: +1 703 371-6846

>>

>> Visit us online!

>> Check out events & blogs at .ORG Buzz!

>> Find us on Facebook | dotorg

>> See the .ORG Buzz! Photo Gallery on Flickr

>> See our video library on YouTube

>>

>> CONFIDENTIALITY NOTE:

>> Proprietary and confidential to .ORG, The Public Interest Registry.  If

>> received in error, please inform sender and then delete.

>

>

>

>