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

[tim@xxxxxxxxxxx]

Gray,

I like the approach, but I wouldn't characterize where we are at as a 
stalemate. I and I think others are very willing to continue looking for 
solutions, using your approach or others. We've said that many times.

What I am convinced of though is that resolving the issues that many of us see 
associated with expanding VI will take time. So, if the initial rollout can be 
held up until we are able to adequetly address those issues, fine. If not, then 
a conservative approach makes the most sense for the first round.

Tim

-----Original Message-----
From: Graham Chynoweth <gchynoweth@xxxxxxx>
Date: Wed, 26 May 2010 11:32:54 
To: <tim@xxxxxxxxxxx>
Cc: <Gnso-vi-feb10@xxxxxxxxx>; Milton L Mueller<mueller@xxxxxxx>; 
<owner-gnso-vi-feb10@xxxxxxxxx>; Ron Andruff<randruff@xxxxxxxxxxxxxxx>; Kathy 
Kleiman<kkleiman@xxxxxxx>; StattonHammock<shammock@xxxxxxxxxxxxxxxxxxxx>
Subject: Re: [gnso-vi-feb10] VI -  An RSP Question..

All, 

Just an idea, but given that there seems to be a bit of a stalemate here, 
perhaps I could offer a more fruitful line of debate. 

I'll start with a question: is the *only* and/or *best* way to avoid the gaming 
that we fear enforcing vertical integration? To phrase this another way, 
knowing that we all agree on the nature of the problem (even if there 
disagreement as to its likelihood or impact), but have little agreement with 
respect to the particular solution (i.e., should we have any VI, and if so how 
much), perhaps we need to be a bit more creative about solving the problem. 

If we don't have any consensus on this issue (and, currently, it seems safe to 
say that) it is ALL of our responsibility, as each of us is participating in 
this effort in good faith, to come up with new ideas of how to solve the 
problem we understand. One straw man idea that popped into my head was whether 
we could borrow from another area where corruption is a serious concern and 
concerned actors have been trying to regulate the problem away - politics. In 
the US there have long been laws about how to keep corporate money out of 
politics, but it has proven a huge regulatory challenge, for a variety of 
reasons not least because the actors in the game are smart (and given the 
recent SCOTUS decision, a complex set of bounding rules). Part of the solution 
in this area has been to rely more on transparency and less on difficult to 
enforce prohibitions. 

I am not necessarily sure how this approach fits into this context, but I am 
open to ideas and encourage folks to help me in thinking creatively. There has 
got to be a way to address the gaming/corruption evil in a way that doesn't 
rely on resolving what seems to be turning into a debate about who gets how 
much of this version of 'holy ground'. 

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 
(w) http://www.dyn.com 

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----- Original Message ----- 
From: tim@xxxxxxxxxxx 
To: "Milton L Mueller" <mueller@xxxxxxx>, owner-gnso-vi-feb10@xxxxxxxxx, "Ron 
Andruff" <randruff@xxxxxxxxxxxxxxx>, "Kathy Kleiman" <kkleiman@xxxxxxx>, 
"Graham Chynoweth" <gchynoweth@xxxxxxx>, "StattonHammock" 
<shammock@xxxxxxxxxxxxxxxxxxxx> 
Cc: Gnso-vi-feb10@xxxxxxxxx 
Sent: Wednesday, May 26, 2010 9:39:58 AM GMT -05:00 US/Canada Eastern 
Subject: Re: [gnso-vi-feb10] VI - An RSP Question.. 

Milton, 

You are likely right about not carrying on this argument. You are caught up in 
your incumbent conspiracy theories and clearly aren't interested in considering 
anything else. 

Tim 


From: Milton L Mueller <mueller@xxxxxxx> 
Date: Wed, 26 May 2010 09:10:03 -0400 
To: tim@xxxxxxxxxxx<tim@xxxxxxxxxxx>; 
owner-gnso-vi-feb10@xxxxxxxxx<owner-gnso-vi-feb10@xxxxxxxxx>; 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.. 




Tim, we are arguing past each other. You don’t seem to understand the point I 
am making. 

However, I don’t think the argument is worth carrying on because I clearly do 
understand the point you and other industry incumbents (Afilias, etc.) are 
making, which is: 



“We are afraid of new sources of competition if we open the market to new 
business models and as the biggest frogs in a small pond we are quite 
comfortable with the way things are now, so we’re going to scare people into 
being ‘as conservative as possible.’” 



Message received. No point in debating the niceties of market power and 
competition policy. 



--MM 






From: tim@xxxxxxxxxxx [mailto: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 
(w) http://www.dyn.com 

Confidentiality Statement 

Privileged and Confidential. The information contained in this electronic 
message and any attachments to this message are intended for the exclusive use 
of the addressee(s) and may contain confidential or privileged information. If 
you are not the intended recipient, please notify Dynamic Network Services, 
Inc. immediately at +1.603.668.4998 or reply to gchynoweth@xxxxxxx and destroy 
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an electronic signature. 


----- 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    

        


P 703-668-5515 M 703-624-5031 www.networksolutions.com