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

[frederick felman <ffelman@xxxxxxxxxxxxxxx>]

There are instances where using a registrar makes sense.   Both consumers
and companies will look to registrars to help them aggregate their purchases
of domains across registries.  Usage of a registrar will become a choice of
convenience and service when compared to direct registry relationships.
Fair access to non-SR registries by registrars and non-discriminatory
pricing guidelines are more important than a requirement to use an
intermediary like a registrar.


On 7/8/10 7:59 AM, "Milton L Mueller" <mueller@xxxxxxx> wrote:

> Jeff,
> I am puzzled by this comment. You say ³we would also have to ask whether there
> should ever be a requirement to use ICANN-accredited registrars.² That is
> precisely the question I am asking. The answer I and other CAM supporters have
> provided to that question is pretty simple and clear: there should be no such
> requirement for new TLDs unless there is a compelling competition
> policy/market power or consumer protection justification.
>  
> As for other real-world cases, there are examples where vertical separation is
> required. Unbundled local loop for facilities based telecom providers in
> Europe and Canada comes to mind. But this is based ­ as it should be ­ on the
> presence of monopoly power over the first mile facility. There is no such
> constraint for new TLDs, therefore it¹s hard to justify a vertical separation
> requirement. 
>  
> I have cited this example many times, so I am not using the real world
> selectively. I happen to have been involved in regulatory economics in
> telecoms for 25 years and can supply many real world examples if you like.
>  
> --MM
>  
> 
> From: Neuman, Jeff [mailto:Jeff.Neuman@xxxxxxxxxx]
> Sent: Thursday, July 08, 2010 8:54 AM
> To: Hammock, Statton; Milton L Mueller; Jothan Frakes;
> vgreimann@xxxxxxxxxxxxxxx
> Cc: Gnso-vi-feb10@xxxxxxxxx
> Subject: RE: [gnso-vi-feb10] vertical relationships in the domain name mkt
>  
> Statton & Milton,
>  
> If we were to consider the ³real world², then we would also have to ask the
> question as to whether there should ever be a requirement to use
> ICANN-Accredited Registrars in the first place.  In the real world an entity
> can choose whether or not to have resellers, and if it does choose to have
> resellers, it can treat them all differently as it sees fit.  There is no
> concept of equal access among resellers.  In fact, how many of the registrars
> on this list either choose to have resellers (or not) and if you do choose to
> have them, how many of them choose to treat all of their resellers equally.
>  
> So while I like looking to the real world for some examples, if we are using
> the ³real world² as our guide, we cannot pick and choose which parts of the
> real world we like and which we do not and choose to only apply the ones we
> like.  By definition, that takes us back out of the real world and back into
> ICANN land.
>  
>  
>  
> 
> Jeffrey J. Neuman
> Neustar, Inc. / Vice President, Law & Policy
> 
> 
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>  
> 
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On
> Behalf Of Hammock, Statton
> Sent: Thursday, July 08, 2010 8:21 AM
> To: Milton L Mueller; Jothan Frakes; vgreimann@xxxxxxxxxxxxxxx
> Cc: Gnso-vi-feb10@xxxxxxxxx
> Subject: RE: [gnso-vi-feb10] vertical relationships in the domain name mkt
>  
> Thank you Milton for using the cereal analogy. I think it¹s a good one and we
> all should stop and consider what usually happens in ³real life² or (³business
> life,² whatever) when we think about and discuss aspects of selling and
> distributing new gTLDs.
>  
> Statton  
>  
> 
>  Statton Hammock 
>  Sr. Director, Law, Policy & Business Affairs
>  
>       P 703-668-5515  M 703-624-5031 www.networksolutions.com
> <http://www.networksolutions.com>
>     
>   
> From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On
> Behalf Of Milton L Mueller
> Sent: Thursday, July 08, 2010 12:28 AM
> To: Jothan Frakes; vgreimann@xxxxxxxxxxxxxxx
> Cc: Gnso-vi-feb10@xxxxxxxxx
> Subject: [gnso-vi-feb10] vertical relationships in the domain name mkt
>  
> 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, doesn¹t it? In other words if you can¹t enforce ³not in your own
> TLD² you also can¹t 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 isn¹t. Think of grocery stores (let¹s 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 Wegman¹s version of Cheerios).
>  
> General Mills may choose to withhold Cheerios from Wegman¹s because Wegman¹s
> sells its own, competing version of breakfast cereal. Or it may not.
> Conversely, Wegman¹s may choose not to carry Cheerios because they ³undermine²
> 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 don¹t 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 haven¹t 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: ³how can I as a prospective
> registry operator use ICANN regulations to ensure that my product is
> guaranteed shelf space in every grocery store.²
>  
> I suggest you stop thinking about how to use ICANN to ³guarantee² 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.
>  
> That¹s pretty much the direction I¹m headed
> --MM
>  
>  
>