Re: [gnso-vi-feb10] SRSU

[Graham Chynoweth <gchynoweth@xxxxxxx>]

Jothan,

I have to concur with Volker here.  The discussed exception is most certainly 
not the same thing as 100% cross ownership because 'it can be gamed' (in some 
unspecified way).  Taking that position is like saying day is the same as night 
because people can close their eyes and make the sun go away.  IMHO, that 
position just doesn't make any sense at all.

I also don't think the argument that we should be concerned about 'GoDaddy 
going after .web just so they can bury it' holds any water, and even if it did, 
it I don't see it as good reason to argue against the exception.  First, this 
argument relies upon the very 'DNS 1.0' assumption that there is a single TLD 
that will dominate and that every registrant needs to have access to.  This 
makes zero sense on a going forward basis because no one has any idea, in 
advance, which TLDs will be the 'it' TLDs (if there even is an 'it' TLD in the 
.com sense in the nTLD space).  Additionally, even if .web were really 'it', 
there will be plenty of strings that people could turn to to get what they need 
from the gTLD (in the early days, there wasn't a good alternative to .com).  
Further, even if this argument was theoretically sound, preventing a class of 
applicants from applying because there is a *chance* that one of that class 
*might* submit a application for a TLD they didn't really want to 'succeed' 
(whatever that means) baselessly and, IMHO, improperly punishes that class.  To 
put it in more colloquial terms - just because a single kid might pee in the 
pool, doesn't mean that all kids should be prevented from swimming.

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: "Volker Greimann - Key-Systems GmbH" <vgreimann@xxxxxxxxxxxxxxx>
To: "Jothan Frakes" <jothan@xxxxxxxxx>, "Gnso-vi-feb10@xxxxxxxxx" 
<Gnso-vi-feb10@xxxxxxxxx>
Sent: Wednesday, July 7, 2010 5:59:13 AM GMT -05:00 US/Canada Eastern
Subject: Re: [gnso-vi-feb10] SRSU


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