[gnso-vi-feb10] vertical relationships in the domain name mkt

[Milton L Mueller <mueller@xxxxxxx>]

Response to Jothan:

OK, now to focus on the response.
**** 1]  What I am saying is that this 'not in your own TLD'  exception is 
essentially the same as 100%.

I am beginning to find this argument persuasive. But you can also see, do you 
not, that this argument applies just as strongly to arbitrary ownership 
limitations, doesn't it? In other words if you can't enforce "not in your own 
TLD" you also can't enforce some specific ownership limitation such as 15%. 
Q.E.D.

**** 3] What I am saying it is *not* in the public interest if GoDaddy (or 
Key-Systems or swap in any other respected registrar) is *not* able to sell 
.WEB names.    It would be, however, in the interest of the .COM operator if 
.WEB is competitively restrained in that way.  Of course, VeriSign hasn't 
officially taken any stance on VI yet --  but as they know big registrars want 
TLDs my hunch is they'll come out in favor of JN2.    No criticism of them 
there - it would be in VeriSign's corporate interest to see new TLDs 
competitively restrained in that manner.

We keep talking as if this were a unique problem to the domain name industry. 
It isn't. Think of grocery stores (let's say, Wegmans). A major grocery chain 
such as Wegmans will sell numerous branded food products (e.g., breakfast 
cereals) such as Cheerios and Chex. It may also sell its own in-house brand 
(say, the Wegman's version of Cheerios).

General Mills may choose to withhold Cheerios from Wegman's because Wegman's 
sells its own, competing version of breakfast cereal. Or it may not. 
Conversely, Wegman's may choose not to carry Cheerios because they "undermine" 
the market for its own in-house cereal. Or it may not.

What we find in reality is that in most cases a big grocery chain will carry a 
lot of brands and its own brands both. It profits more from serving a larger 
market. But many, many smaller ones don't have their own brands and serve as 
pure retail intermediaries. And in a very few specialized cases, a purely 
vertically integrated food suppliers may carry nothing but their own brands.

These are business choices. As long as the market for breakfast cereals and 
grocery stores is reasonably competitive, no centralized regulator needs to 
dictate which of these choices market players make, nor do consumers need them 
to make those choices for them. Same is true of the DNS market.

So you haven't made a public interest case for your position. You are not 
thinking about what leads to the most competitive, robust and open domain name 
industry. You are, instead, still thinking: "how can I as a prospective 
registry operator use ICANN regulations to ensure that my product is guaranteed 
shelf space in every grocery store."

I suggest you stop thinking about how to use ICANN to "guarantee" your product 
this or that. I suggest that you, and everyone else, start thinking about how 
to compete and produce value to consumers.

Let's not complicate the issue with two choices that are so similar as to be 
the same thing.     Let's just call this 'not in your own TLD' exception what 
it really is --- Free Trade -- and one can continue to eloquently argue for the 
Free Trade choice.

That's pretty much the direction I'm headed
--MM