[gnso-vi-feb10] Minds + Machines position

[Antony Van Couvering <avc@xxxxxxxxxxxxxxxxxxxx>]

Our position has not changed since this WG began.  Following many weeks of 
discussion, however, we are now able to restate it in terms of the various 
proposals on the table. 

In our view, cross-ownership and vertical integration restrictions are 
artifacts of 1999 conditions, and should be abolished in their entirety short 
of an actual showing of market dominance by a specific players.   Any 
restriction is very difficult for small and developing world registries which 
don't have the time or money for the regulatory burden or indeed for the 
lawyers to "fine-tune" their corporate structure to get around whatever rules 
may be cumbersome.  This last point is true in any case except when 
restrictions are completely abolished.  We also take seriously the findings of 
various economists who some find it convenient to ignore.  Finally, none of the 
proposals, with the exception of those that call for the elimination of 
vertical integration and cross-ownership controls, deal with the very real 
problem of small registries who cannot find a registrar to carry their TLDs. 

We strongly oppose the Afilias/PIR proposal, which we feel is very economical 
in promoting principles that either advance the Internet, help nascent 
registries, or reduce harms to consumers, yet quite thorough in advancing the 
interests of the proposers.  We further believe that the CAM model offered up 
by Palage et alia, which envisions an expensive and time-consuming 
anti-competition review without obtaining any indications that the review 
authorities are even interested, is fraught with hopefulness and liable to 
serious unintended consequences, up to and including wholesale governmental 
intervention in ICANN accreditation processes .  Furthermore, we will not 
support any proposal that includes an arbitrary percentage threshold of either 
ownership or control (such as the JN Squared proposal) just because it is less 
bad in other ways, or because the proposers seem less motivated by 
self-interest. 

As we see it, elimination of artificial limitations of ownership and/or control 
is the only principled way forward.  We are furthermore very concerned about 
the restriction of competition by a working group where most of the parties 
have a very real economic interest.  While this may or may not be illegal, the 
spectacle of registries and registrars deciding together to shape the 
competitive landscape is nonetheless, in our view, harmful to the Internet, to 
ICANN, and to the participants in the group.  

Competition authorities in Europe and U.S. have been very quick to examine what 
they consider to be anti-competitive behavior on the Internet, and they are the 
proper mechanism to examine and control this problem.  We note that these 
authorities tend to set the bar rather high, and this group should take note of 
their standards.  We reject the argument that various anti-competitive actions 
must be taken in order to reduce consumer harms and gaming, because these harms 
have yet to be been seen in the new gTLD regime and in our view cannot be 
convincingly inferred from the current state of affairs.  Specific actions to 
prevent specific harms should be undertaken once these problems reveal 
themselves.  We note that ICANN has been much quicker to address such issues in 
the recent past. 

Therefore we support either the original Demand Media proposal or the more 
recent proposal by Sivasubramanian M.   If instead we are asked to choose 
between the various other proposals, we prefer the Board/staff resolution.  The 
Board position at least has the value of not being self-serving, and, because 
proposed by the Board, avoids the accusation of this group being 
anti-competitive, which is awkward not least because there is ample evidence of 
it being true.  We readily acknowledge that the Board's proposal is helpful to 
Minds + Machines, but no proposal on the table is particularly harmful to us.  
We believe that this group has an obligation to help new gTLDs succeed and to 
act in the longer-term interests of the Internet.  Getting rid of competitive 
restrictions that hail from another era will do both, while at the same time 
relieving us of the imputation of trying to fix the economic landscape of new 
gTLDs. 

Antony