RE: [gnso-vi-feb10] VI - An RSP Question..

[Jeff Eckhaus <eckhaus@xxxxxxxxxxxxxxx>]

Ron,

I think you make a great point below about thieves being thieves and just 
because a break in was not successful does not mean it will not happen again. 
The question I have is the remedy.

Unfortunately we have seen people who run charities loot the charity and put 
money into their own pocket, stealing from the people who they are supposed to 
serve. Is the way to stop this to not allow new charities to form and only 
allow existing charities to operate?
Gaming and bad actors are not related to cross-ownership and can occur with 0% 
separation and with 100% separation. As you say, we saw it happen with .travel 
which had the separation you feel is "something known"  and many others have 
called a system that works.

I believe the correct remedy is to move forward, promote competition, allow new 
entrants but have a system of reviews and enforcement. This is something that 
we saw in many proposals including JN2.

Let's be clear on one thing, the proposals to allow 0% or 15% ownership only 
does one thing, keeps out one class of entrants, Registrars. It allows all the 
bad actors in the world to apply, does not guarantee we will be free  of gaming 
at all. It is a false sense of security.
To those that state that separation lowers the chances of gaming occurring, I 
go back to Ron's original point, thieves will be thieves.


Jeff Eckhaus



From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Ron Andruff
Sent: Tuesday, May 25, 2010 8:27 AM
To: tim@xxxxxxxxxxx; 'Milton L Mueller'; owner-gnso-vi-feb10@xxxxxxxxx; 'Kathy 
Kleiman'; 'Graham Chynoweth'; 'StattonHammock'
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: RE: [gnso-vi-feb10] VI - An RSP Question..

I couldn't agree with Tim's response more fully.  The question asked was: "what 
gaming?" and an answer was given.  The rest of Milton's response is 
obfuscation.  Whether those that were doing the gaming had success or not is 
unknown, but the damage done to the sponsor community (harm) came in loss of 
credibility of the gTLD within that community, which now feels bereft of its 
own space on the Internet.  Underhanded tactics have damaged more than one TLD 
as the ICANN community has struggled over this last decade to figure out how to 
roll out TLDs with confidence, but the jury is still out as to their success or 
failure; time will determine that.

The point is that just because thieves try to break in once, and don't find any 
jewels, doesn't automatically mean that thieves will not try to break in again. 
 Given an opportunity, thieves will be theives.

Kind regards,

RA

Ronald N. Andruff
President

RNA Partners, Inc.
220 Fifth Avenue
New York, New York 10001
+ 1 212 481 2820 ext. 11

________________________________
From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of tim@xxxxxxxxxxx
Sent: Tuesday, May 25, 2010 9:18 AM
To: Milton L Mueller; owner-gnso-vi-feb10@xxxxxxxxx; Ron Andruff; Kathy 
Kleiman; 'Graham Chynoweth'; 'StattonHammock'
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: Re: [gnso-vi-feb10] VI - An RSP Question..

Can't speak for Ron, but my point would be that if there had not been 
separation rules it could be much worse.

It has nothing to do with how successful a TLD is. That is just a misdirection. 
It has to do with what the entities involved could do to game the situation. 
Just because fewer registrants may be involved does not mean those registrants 
should not be protected. And with dozens to hundreds of new TLDs the cumulative 
effect could still be huge.

Also, the TLDs may be small but the entities involved may not be, or have 
positions in related markets that open the potential for abusive behaviors we 
haven't imagined yet.

The initial approach, first round, should be conservative as possible. Work can 
continue taking into account what occurs during first round and some period 
afterward.

Tim
________________________________
From: Milton L Mueller <mueller@xxxxxxx>
Date: Tue, 25 May 2010 03:16:06 -0400
To: Ron Andruff<randruff@xxxxxxxxxxxxxxx>; 'Kathy Kleiman'<kKleiman@xxxxxxx>; 
'Graham Chynoweth'<gchynoweth@xxxxxxx>; 
'StattonHammock'<shammock@xxxxxxxxxxxxxxxxxxxx>
Cc: Gnso-vi-feb10@xxxxxxxxx<Gnso-vi-feb10@xxxxxxxxx>
Subject: RE: [gnso-vi-feb10] VI - An RSP Question..

Ron:
I think you have proven my point for me quite nicely.

New gTLDs have a very high risk of not succeeding, and .travel demonstrates 
that.
New gTLDs that think they are going to make money by "monetizing" generic names 
in the new name space can look at .travel for a very clear negative 
counterexample. And that was in a market with highly restricted entry! What 
happens when there are 200 - 1000 of them?
Because no one made money on .travel, no registrar was illegitimately excluded 
from participating in benefits.

There was, in short, nothing to game. TRAVEL's management played games, for 
sure, but not the kind of games we are concerned about and no one was really 
hurt except for the investors.

Now, clue me in: is it your belief that structural separations would have 
solved the problems with .travel's business? Are you saying that 'travel would 
have succeeded in attracting the world's travel and tourism industries and 
would have been a stellar name space if only we had imposed classical 
registry-registrar separation on it?

But wait a minute, we DID impose that level of separation on it.

So your point escapes me


There is always something to game.  .TRAVEL had 25,000 registrations.  Then, 
when there was no one left in management to impede them, the new management set 
up bulk purchase provisions and suddenly the registry had over 200,000 
registrations - some 90% of which were registered to companies far from arm's 
length from the Chair and CEO of the registry. Monetization anyone?  Whether 
they were successful in their end game or not is of no relevance.  What is 
relevant is that gaming took place in a registry with no market power and none 
of it served the sponsored community: travel and tourism entities in any way, 
shape or form.

Kind regards,

RA

Ronald N. Andruff
RNA Partners, Inc.

________________________________
From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Milton L Mueller
Sent: Monday, May 24, 2010 5:57 PM
To: Kathy Kleiman; Graham Chynoweth; Statton Hammock
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: RE: [gnso-vi-feb10] VI - An RSP Question..

My response to all these questions: Who Cares? When the TLD in question has no 
appreciable market share, or market power.
What is there to "game?"

From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Kathy Kleiman
Sent: Monday, May 24, 2010 12:57 PM
To: Graham Chynoweth; Statton Hammock
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: RE: [gnso-vi-feb10] VI - An RSP Question..

Concern with RSPs.  Graham and Statton, I have been thinking about this a lot, 
and the same questions keep coming to mind that have been raised throughout our 
WG process:


1.       How do you know? How do you know to what extent the Registry Back End 
is involved in the decision-making, and setting policy?



2.       How do you audit?  If you don't have the structural separation, then 
you don't know what is taking place behind closed doors.


3.       How do you reduce the incentive for gaming?  Again, I am not speaking 
to specific parties, who I trust. But we are trying to set up a system for a 
large group, a growing group. In that case, and given that the Registry Backend 
has access to considerable data, the same EPP data as the Registry, doesn't it 
make sense to treat the matter in a clear, consistent manner:  that the 
Registry, and the Registry Back End Provider, cannot own a Registrar more than 
15%?

Tx for the discussion,


Kathy Kleiman
Director of Policy
.ORG The Public Interest Registry
Direct: +1 703 889-5756  Mobile: +1 703 371-6846

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From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Graham Chynoweth
Sent: Monday, May 24, 2010 12:25 PM
To: Statton Hammock
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: Re: [gnso-vi-feb10] VI - An RSP Question..

All,

I had meant to raise this issue at the end of last weeks call, but forgot.  In 
any event, in the interests of making progress toward reducing the number of 
open issues, I wanted to raise Statton's point again to see if we can find some 
agreement on it, and if so, take it off the table.  The lack of more general 
response to Statton's question below suggests to me that the restriction is 
simply an artifact of a concern that doesn't apply wheen an RSPs doesn't 
control pricing policies or selection of registrars.  Additionally, having 
tried to noodle on the issue myself, I just can't see how, so long as the 
separation of pricing/policy/selection authority exists, an RSP cross ownership 
would give rise to the behavior that folks are concerned about.

Is there anyone out there still opposed to RSP cross ownership where there the 
RSP has no control over pricing/policy/selection of registrars?  If so, what 
is/are the reason(s)?

Thanks,
Gray

Graham H. Chynoweth
General Counsel & VP, Business Operations
Dynamic Network Services, Inc.
1230 Elm Street, 5th Floor
Manchester, NH 03101
(p) +1.603.296.1515
(e) gchynoweth@xxxxxxx<mailto:gchynoweth@xxxxxxx>
(w) http://www.dyn.com

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----- Original Message -----
From: "Statton Hammock" <shammock@xxxxxxxxxxxxxxxxxxxx>
To: Gnso-vi-feb10@xxxxxxxxx
Sent: Friday, May 14, 2010 2:51:52 PM GMT -05:00 US/Canada Eastern
Subject: [gnso-vi-feb10] VI -  An RSP Question..
Thanks for the updated matrix, Berry and Kathy.  This is very useful in helping 
to see the whole "proposal landscape."

As I was looking across the columns, my focus went to the descriptions of how 
the proposals treat back-end registry service providers (RSPs).  It appears to 
me that fewer than half of the proposals (4 out of 10) want the 15% 
cross-ownership restriction to apply to RSPs without qualification (I do not 
count the Board's resolution either as a "proposal" or a "policy because, to 
me, it's simply a "statement," (an ambiguous one, too)).  The other 6 either 
envision such a cap only when the RSP controls the pricing, policies, or 
selection of registrars for that TLD, or would allow complete cross-ownership 
so long as strict structural or financial separation exists.

So perhaps we're not too far from achieving a consensus on this particular 
issue.  So, I would like to pose the question to Proposers #2 (IPC) #3 
(Afflias), #4 (PIR), and #6(GoDaddy):  What is the rationale for proposing an 
*unqualified* cap of 15% on RSPs?   To me, this seems needlessly restrictive 
when the RSP is just a technical service provider with no policymaking 
authority for the TLD.  Registry operators, not their back-end service 
suppliers, are responsible for pricing and policy decisions for their TLD.  
Registry Operators also would not want, nor permit, RSPs to act in ways that 
are not compliant with their ICANN agreements and policies.   Also, it seems 
that there is no incentives for the RSP to discriminate against any registrar 
because they would want to see as many registrars as possible distribute the 
names in the relevant extension.   Additionally, if my understanding is 
correct, the current marketplace demonstrates that registrars (DomainPeople, 
for example) and their affiliates (Hostway) have provided back-end registry 
services and sold names (.PRO) in those registries without any negative 
consequences.

So again to those proposers, what is the rationale for an *unqualified* 15% cap 
on registry and/or registrar cross-ownership of a RSP in the absence of that 
RSP's control over the pricing, policies or selection of registrars for that 
TLD?

Thanks,

Statton

 Statton Hammock
 Sr. Director, Law, Policy & Business Affairs

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