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

[Jon Nevett <jon@xxxxxxxxxx>]

We now have come full circle back to Recommendation 19 where the GNSO policy 
recommendation requires the use of registrars in the domain name registration 
process for all of the reasons articulated on this list in the March/April 
timeframe.  Some folks seem to champion the bottom-up policy development 
process in all cases except those in which it has succeeded in coming up with a 
policy with which they disagree!  


On Jul 8, 2010, at 10:59 AM, Milton L Mueller wrote:

> Jeff,
> I am puzzled by this comment. You say “we would also have to ask whether 
> there should ever be a requirement to use ICANN-accredited registrars.” 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 it’s 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 “real world”, 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 “real world” 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 it’s a good one and we 
> all should stop and consider what usually happens in “real life” or 
> (“business life,” 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 703-624-5031www.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, 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
> 
>  
> 
>