Re: [gnso-vi-feb10] SRSU

[Jothan Frakes <jothan@xxxxxxxxx>]

Hi Mike-


>>  [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


>Can you further explain this premise?

Maybe the most clear way to explain is that I believe it is "not in the
public interest" to have a registrar excluded entirely from offering the TLD
they are operating a registry for.   From the perspective of the domain
registrant, limited availability is not helpful to making access to being a
registrant or managing a name or having the ability to transfer a domain to
a different registrar.
 The registrant's experience needs to have some consideration in all this
discussion of how we divide up percentages and control and what not.
 Availability = good.

>I think it very well might be in the public interest, since the public must
pay the registrar a markup, but would not >need to pay that markup if they
buy direct from the registry.


On your second point, I would not want to suggest pricing for a scenario
like you describe.  I look at Nominet with and recognize that they have in
place a good model for the preservation of channel, where they charge
significantly higher prices than their wholesalers.  This offsets the
additional costs which exist to support registrants en masse (vs supporting
a smaller number of wholesale consumers and letting them support the
registrants).

I do recognize that the wholesale cost spread between registry and and
registrar/retail is present, yet that markup supplements increased
infrastructure costs (ie customer support, IT, legal, etc.) that need to
factor in to the argument.

While the argument that some registrars that currently operate might have
such an infrastructure, there are many new registrars that might be solely
created for the purpose of a specific TLD or class of TLDs in the new TLD
round.  These participants would be at a  disadvantage if there was not a
margin present to fund the larger staffing and resource needs that
supporting end-user registrants requires vs supporting only wholesale.

>Also, if distribution is restricted to registrants who are

>likely (or even required)

>to use the names, rather than warehouse them, that would also benefit

>the public interest.
That seems to be out of scope with VI in my opinion, but it could be
stitched into the registry application.  I understand your thoughts on this.

-Jothan


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


On Wed, Jul 7, 2010 at 6:40 PM, Mike Rodenbaugh <icann@xxxxxxxxxxxxxx>wrote:

>  Jothan,
>
>
>
> Mike Rodenbaugh
>
> RODENBAUGH LAW
>
> tel/fax:  +1 (415) 738-8087
>
> http://rodenbaugh.com
>
>
>
> *From:* owner-gnso-vi-feb10@xxxxxxxxx [mailto:
> owner-gnso-vi-feb10@xxxxxxxxx] *On Behalf Of *Jothan Frakes
>
> *Sent:* Wednesday, July 07, 2010 4:14 PM
> *To:* vgreimann@xxxxxxxxxxxxxxx
> *Cc:* Gnso-vi-feb10@xxxxxxxxx
>
> *Subject:* Re: [gnso-vi-feb10] SRSU
>
>
>
> Hi Volker-
>
>
> 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 know and trust the majority of the registrars and my support of RACK+ had
> in no way the intention to speak that I do not have respect and trust in the
> registrars.
>
> 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.
>
> 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%.
>
> ****  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.
>
>
>
> 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.
>
>
>
> 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.
>
>
> -Jothan
>
> ===================
> 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> 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
>
>
>