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Re: [gnso-vi-feb10] SRSU

  • To: Jothan Frakes <jothan@xxxxxxxxx>
  • Subject: Re: [gnso-vi-feb10] SRSU
  • From: Volker Greimann - Key-Systems GmbH <vgreimann@xxxxxxxxxxxxxxx>
  • Date: Thu, 08 Jul 2010 12:45:13 +0200


Hi Jothan,

To start, I'd like it to be very clear, I don't have any distrust for any specific registrars. I am certain that you'd not intended this to be a point in your response, but for the readers who participate in reviewing the mailing list.

I did not intend to make it sound like you were, but was rather making the point that we should not help in creating a public image that registrars are not to be trusted, similar to the baseless allegations made by Knujon and the like. Because by coming out with a position that says registrars cannot have substantial ownership in a registry, just because they are registrars, we are contributing in the creation such a public image. I said it before, but I will refuse to go there.
Are there some that pull some creative business activity under the justification of being under a business pressure to do so (ie emphasis on the second syllable in "fiduciary responsibility")? Sure, a small minority, but not all. Unfortunately those that do cause problems for the majority of the good actors and create burdensome policy and compliance issues. Gamers make problems for all.
Gamers exist not only in the registrar community (please note that I did not say constituency), but in all areas of the internet business. There are registrants (domainers) looking to bend the rules or even taking over a whole ccTLD to suit their needs, there are (from what I hear) registries bending the rules and trying to game the system, especially when the TLD underperforms. And yes, there are also Black Hats amonst the registrars.

I also agree that gaming should be controlled, but not by picking on one group of many, and not by prohibiting valid and legitimate business proposals. I agree there may be restrictions and controls, but prohibition is the wrong way, especially if the underlying probelms remain unsolved.
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%.
With one notable exception: The registrar cannot sell his own TLD, thus removing part of what is considered potential for abuse on his side.
**** 2] I am also saying that it is not possible to counter the myriad of things that a registrar *could* do. I suspect that Registrars know this, and that is why some are gravitating toward support of JN2.
Do not say "a registrar", say: "a potential abuser".
As for my argument that something like .WEB should have the widest distribution possible... If I understand you correctly, it seems like you are saying it's the registrar's choice, but that's not the point I'm making. **** 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.
I agree with you. I think registrars should be able to sell the TLD of registries they own shares in or even completely control. JN2 is a compromise position, which includes regular review intervals to revisit those restrictions. I think I have been quite clear on this position, even when arguing for JN2.
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.
I still stand behind the Open registrar Proposal, but I have come to the conclusion that this is not a consensus position in this WG. My arguments remain the same:

Fix the problems and potential harms, but do it in a non-discriminating way that makes sense instead of fixing on partial legacy limitations.

Volker

===================
Jothan Frakes
+1.206-355-0230 tel
+1.206-201-6881 fax


On Wed, Jul 7, 2010 at 2:59 AM, Volker Greimann - Key-Systems GmbH <vgreimann@xxxxxxxxxxxxxxx <mailto:vgreimann@xxxxxxxxxxxxxxx>> wrote:

    Hi Jothan,*

    *

        *From my perspective, I think creating an exception that says
        a registrar can control a registry as long as the registrar
        doesn't sell the TLD can be gamed in so many ways it's
        effectively the same as saying 100% cross ownership.  *

    Anything can be gamed. 0% Ownership can be gamed. Not allowing
    registrars to participate in bids for new gTLDs is already gaming
    the system in favor of un-affiliated registry service providers. I
    have much more confidence in the compliance of contractually bound
    and controlled registrars, who usually have a lot more to lose
    than just the registry business (such as complete
    de-accreditation) by abusing the system then some fly-by-night
    operators, who only provide registry services and may be tempted
    into abusing their position/selling their data much more easily.
    Capital investors who do not see their expected results after a
    few years may be tempted to pressure registries they effectively
    control into abusive business practices to improve the bottom line
    of their investment funds.

    I refuse to support any policy that effectively says on its label:
    "Look, we do not trust registrars. Anybody else is fine, but
    registrars, they must be controlled." We need a policy that
    addresses the actual and potential harms directly, and does not
    discriminate against a particular group of applicants, most of
    whom have no interest whatsoever in jeopardizing their main
    businesses.

    Yes, there are still possibilities of gaming, but these need to be
    eleiminated by rules and procedures of compliance sureillance, not
    by blanket prohibitions.

        *I think supporting this exception is actually endorsing the
        100% approach ---  which is anyone’s prerogative --- but I
        think making a "not in the registry's TLD" exception is a
        distinction without a difference when compared to 100% cross
        ownership.*

    There is a very large difference. The ability not to sell or
    resell, directly or through any affiliates, removes a large amount
    of gaming potential, and avoids the public perception of possible
    collusion or use of data.  Personally, I believe such control is
    possible even if the registrar is allowed to sell or resell the
    TLD in which he holds a controlling interest and would love to get
    rid of this restriction, but I acknowledge that this is not a
    position with any shot at consensus at this time.Later policy
    reviews may come to the conclusion the limitation barring a
    registrar from retailing his own TLD can be removed.

        *It's not just a matter of trying to identify and monitor all
        the varied registrar and reseller operations owned by the
        registrar's parent company.   There are also myriad of
        cross-marketing, bundling and promotional methods by which the
        affiliated registrar can circumvent the safeguard.     *

    And those will have to be prohibited as well. Not in the TLDs own
    registry means just that: No selling, giving away, bundling,
    cross-marketing, etc by a registrar for a TLD he
    owns/controls/co-owns a registry for.

        *I believe this to be part of the reason why existing
        contracts limit cross ownership of registries and registrars
        to 15% -- regardless of the TLDs they offer.   Or at least
        that it has some predictable edges that are well known.*

    Even though they do not, actually? This limitation has
    historically only affected the ability of registries to own
    registrars. Ownership the other way round was never prohibited for
    registrars. They fact that no registrar owns a share larger than
    15% in a registry today does not mean it would not have been possible.

        *If one is to believe such registrar actions can be
        controlled, which I don't,  it creates another problem in that
        it limits access to a TLD for the public at large.   I'm not
        sure it's in our competitive interest to limit the
        distribution available to a new TLD.  *

    Which is why I support JN2 with its exception for SRSU/Brand TLDs
    and community TLDs up to a certain size. Amadeu has also made an
    interesting addition that fits in with this proposal nicely, which
    is adding another limiting factor in relative and absolute market
    share of a registrar.

        *A TLD that can potentially compete with .COM should be
        available to every registrar to sell.  I believe we'd have
        failed as a group if we produced a rule that resulted that a
        TLD Registry shouldn't be owned by a registrar, who then
        cannot sell it to the public (unless the registry and
        registrar have separate policy making/control in place).   *

    Effectively, it is that registrars own choice. If he wants
    ownership a general purpose TLD, he must agree to certain
    restrictions, one of which is the ability to sell their own TLD as
    registrar  as long as this provision is in place.

        *If I were the .COM operator, I'd embrace a rule that said
        GoDaddy, for example (but any registrar for that matter) could
        own the .WEB registry but not directly retail .WEB names.  I
        would view such a restriction as a great way to competitively
        restrain the success of .WEB versus .COM and a good 'chess move'.*
        *"Not in your own TLD" is a really bad idea.*

    If GoDaddy were to apply for .web under these conditions, they
    would know what they are getting into.  They would be unable to
    sell .web to their customers. I agree that this puts GoDaddy into
    a position where they effectively support their competitors, but
    in the end, it would have been their choice.  They will do it if
    it makes business sense, if it doesn't they won't do it, but
    someone else may go for it instead, allowing GoDaddy to sell the TLD.

    Volker




--
Bei weiteren Fragen stehen wir Ihnen gerne zur Verfügung.

Mit freundlichen Grüßen,

Volker A. Greimann
- Rechtsabteilung -

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