Re: [gnso-vi-feb10] Re: Feedback: Amended Statement on Exceptions for Vertical Integration Group

[Volker Greimann - Key-Systems GmbH <vgreimann@xxxxxxxxxxxxxxx>]

Dear Constantine,

thank you for your comments. You are effectively proposing a system 
where "social benefit" decides on the possibility of vertical 
integration and excemption from equal registrar access. I see many 
problems with such an approach. Vertical integration WITH excemption 
from equal registrar access is something I will continue to oppose 
unless severely limited and curtailed as it effectively creates a 
monopoly situation which is open for abuse and exploitation in a way 
which would be curtailed with equal access rights guaranteed.
> In the case of new entrants, we have a completely different scenario 
> because new, innovative models that provide service and reduce search 
> costs beyond the novelty new gTLD domain name bring more social 
> benefits. I can equate this to the policy that the US Government has 
> to award Green Cards to "Persons with Extraordinary Ability." These 
> are case by case scenarios and the "persons" have the burden of proof 
> to plead their case. I equate new gTLDs as "normal persons" and 
> extraordinary new TLDs as "persons with extraordinary ability" that 
> provide more cumulative social benefits on aggregate, provide lower 
> search costs than normal as well as compete beyond the domain space 
> using new, innovative technology or platforms that bring life to new 
> services/products for society.
You may call it a green card, I would call it a _carte blanche_. 
Effectively, creative writing of the application can make sure the 
registry/registrar has absolute freedom.
> *Some Exceptions for Vertical Integration*
>
>     * Cumulative social benefits greatly outweigh social losses on
>       aggregate
As Avri said, your mileage may vary.
>     * New gTLDs with "Extraordinary Ability" beyond the traditional
>       new gTLD, which introduce transformative innovation in the space.
Paper is patient. A lot of claims can be made in the application that 
will never see reality in the real world.
>     * Services/products (not the TLD name alone) provide competition
>       beyond the traditional domain space e.g Digital Music (vs Apple
>       which controls 80% of market)
Should ICANN really enter the battleground as a new competition agency? 
This is way beyond their set competence and would invite lawsuits by the 
dozens.
>     * Where the registrar set-up is customized and requires a more
>       complex structure with other technology to service specialized
>       community needs, which registrars will not provide.
Will they not? If the proposal is right and the TLD is as innovative as 
it is supposed to be, registrars will jump at the chance of being able 
to promote said TLD. Special policies have been implemented by 
registrars for years.
>     * Where traditional marketing distribution of registrars is not
>       needed and a separate marketing campaign is required targeting
>       specialized communities. In the case of .music, we have no
>       interest in domainers registering domains and will only target
>       members of our community organizations. Hence, we will not be
>       leveraging existing, traditional registrar channels, because our
>       gTLD is restricted and highly specialized.
And that is your right, but you can (and should) still use registrars. 
Many TLDs have very restrictive registration policies, which are 
implemented by registrars. If membership is vetted at the registry-level 
anyway, just give out access codes for each applicant which registrars 
need to include with each application. Make up any restriction you want 
and there will be ways to implement it. See .Museum as an example of a 
highliy restricted TLD.
>     * Where registration threshold is detrimental and costly to new
>       entrants if premium domains are used and leveraged by all gTLD
>       registrants for their best interest. e.g. All .music premium
>       domains will be used to benefit the community according to their
>       tagging selection and which
>       genre/sub-genre/language/city/country/ they select to be in. To
>       bring this social benefit to both the music community and to
>       music fans (new products & services/reducing search costs via
>       direct navigation), we have to incur significant costs which
>       include payments to our registry backend provider, to ICANN, to
>       the server provider and the CDN (content delivery network) for
>       bandwidth costs which will be very high since it is media based.
>       In addition, we have incurred development costs over the last 6
>       years to provide the technology and platform. Caps such as 100k
>       might be beneficial for some scenarios and not for others
>       depending what counts as a registration or not and what costs
>       are incurred to bring social benefits to registrants.
These investments were made either way. No need to remove equal access 
for registrars.
>     * Where society gains by lowering search costs through technology
>       that aids in discovery and search
Not sure what you mean by "lowering search costs". Is that not what 
Google is for? ;-)
>     * Where society gains by preventing confusion and trademark
>       concerns e.g Bands like Eagles, Prince, Queen, Kiss do not have
>       their .com. By providing all international music brands with
>       platinum sales their .music address, both music fans and the
>       artist wins since trusted direct navigation "artist.music" can
>       be used to find their favorite artists directly, also lowering
>       search costs and increasing monies paid to artists, since users
>       do not have to use "middlemen" Google, iTunes or 3rd party sites
>       to find them.
100% implementable with registrars as well, if applications are vetted 
after registration and deleted if registered in violation. Also these 
names could be registered directly with the registry within the limits 
of the xxK domain names registrable under the community-exception of JN2.
> These bullet points are real life examples. The 2 main costs that the 
> Economic Report has is about trademark issues and user confusion. If 
> those are alleviated while bringing an added benefit, it is without a 
> doubt a social benefit, even if there is a small associated cost to it.
None of these examples require "full exclusive" VI, i.e. excemption from 
Rec. 19.
> /"The more I think about it the more I see a flexible "exceptions" 
> process as the only way to achieve the short-term agreement needed to 
> move ahead. It allows us to agree that the first round of new TLD 
> additions would go ahead on a presumption of the standard 
> registry-registrar separation, and then allow applicants to request 
> exceptions, which are then vetted on a case by case basis according to 
> some simple criteria agreed by this group (Milton)" /
I think a more flexible approach will fail to reach consensus in this 
group more likely than a very unflexible approach.
> I have to agree with Milton on this. I think the criteria should make 
> sense, be legitimate and not complicated. I really like the statement/ 
> "///That market power should also be a consideration in denying 
> exception claims/ (Milton)"/
> Also Volker makes a great argument: /"Regarding market power, one 
> should also consider the market power an entity has in a range of 
> similar TLDs, not just the one it is proposing to become 
> registry/registrar for (Volker)"/
I wish I had come up with it, but the credit goes elsewhere. Still, it 
makes sense to me, so I support it.
> While this does not effect .music much because we are a specialized 
> TLD, I do believe this can be valid for gTLDs of generic nature such 
> as .web, .site etc.
.music still sounds very generic to me. While your proposal for this 
string may be very specialized, who is to say there won`t be others that 
aren't? Anyway, I do not follow your argument that your TLD necessitates 
an excemption from equal access for registrars and the obligation to use 
registrars.
Best regards,

Volker