[gnso-vi-feb10] VeriSign Position Statement on Vertical Integration/Cross-Ownership

["Drazek, Keith" <kdrazek@xxxxxxxxxxxx>]

The following is VeriSign's position statement on Vertical Integration
and Cross-Ownership. I will also complete the final VI-WG poll prior to
today's meeting.  

 

VeriSign welcomes the addition of new TLDs and the resulting increase in
gTLD marketplace competition. VeriSign believes that the current model,
under which multiple registrars offer retail registrations in different
gTLDs on equal footing, with separation of functionality and ownership,
has served the community well and facilitates a wide variety of product
offerings, responsive customer service, and competitive pricing.  

 

However, with the likely introduction of hundreds of new TLDs, we
recognize there may be situations where allowing a greater degree of
vertical integration could be important in promoting the growth of new
entrants, which will in turn stimulate competition and better serve the
public. 

 

In exceptional cases where a new gTLD is targeted at a narrow community,
or the applicant is a single-registrant, single user (SRSU) or .brand,
or the TLD is unable to gain support and distribution from existing
registrars, a limited exception could enhance competition, guarantee
distribution, and serve the public interest. Similarly, allowing a
registry to also be a registrar, provided it does not externally
distribute its own TLD, may also stimulate innovation and enhance
competition. 

 

We believe any changes to the current policy should be targeted and
focused so that they accomplish the purpose of promoting the growth of
new entrants that otherwise might find it difficult to gain traction in
the market, without inadvertently creating barriers to competition or
loopholes for gaming that could negatively impact new or existing market
participants, including registrants. In the case of any exception, we
believe numerical registration caps should exist and the criteria for
exceptions should be applied equally to all potential applicants.

 

In summary, for the first round of new TLDs, VeriSign supports the
following:

 

*         100% cross-ownership allowed without self-distribution;

*         De minimus (10% to 15%) cross-ownership with
self-distribution;

*         Contractual language that restricts "control" beyond de
minimus ownership percentages;

*         Contracts and enforcement primarily focused on structural
separation, ownership restrictions, and restrictions on sharing of
sensitive registry data;

*         Clearly defined exceptions process for SRSU and orphaned TLDs
(all with numerical registration caps);

*         Independent, 3rd-party audits (funded by ICANN) for
cross-owned exceptions above the de minimus percentage;

*         Restrictions on ownership, self-distribution, data-sharing,
and control should also apply to Registry Service Providers (RSPs);

*         Short-term results of the VI-WG should apply to the first
round of new TLDs, but its work should continue for later rounds.

 

 

Regards, Keith

 

____________________

Keith Drazek

Director of Policy

VeriSign, Inc.

+1-571-377-9182 (m)

kdrazek@xxxxxxxxxxxx