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RE: [gnso-vi-feb10] Board resolution on Vertical Integration

  • To: "'Volker Greimann'" <vgreimann@xxxxxxxxxxxxxxx>, Richard Tindal <richardtindal@xxxxxx>
  • Subject: RE: [gnso-vi-feb10] Board resolution on Vertical Integration
  • From: Milton L Mueller <mueller@xxxxxxx>
  • Date: Mon, 27 Sep 2010 14:31:32 -0400

Again, your problem with understanding the application of the term "market 
power" is the root of the problem, just as it was with Tim.
To take up the GAC statement, governments "generally support restrictions on VI 
and CO" to promote competition when VI and CO are used by entities with 
monopolies or market power in one segment of the market to extend it to 
another. If that market power or monopoly power is absent, generally there is 
no need to restrict VI and CO. There is no contradiction here.

This principle does not just apply to small, community TLDs - indeed, in the 
scientific literature on competition law, economics and policy the "community" 
concept does not exist, and is never an excuse for applying or not applying 
economic restrictions. (if monopoly power is exercised by a "community" it is 
still just as harmful). Rather, the GAC statement suggests - as does any 
economically-informed policy - that you apply vertical separation only when it 
is a tool against the exercise of power and otherwise you don't need to.

From: owner-gnso-vi-feb10@xxxxxxxxx [mailto:owner-gnso-vi-feb10@xxxxxxxxx] On 
Behalf Of Volker Greimann
Sent: Monday, September 27, 2010 1:26 PM
To: Richard Tindal
Cc: Gnso-vi-feb10@xxxxxxxxx
Subject: Re: [gnso-vi-feb10] Board resolution on Vertical Integration

Not sure what the GAC position in general is, but the GAC members I talked to 
shared that view:

in general VS is a good idea, but in some exceptions it would not make sense, 
i.e. communities of a limited size of domain registrations and SRSUs. In those 
scenarios they supported exceptions from VS.


It's hard to determine the specific position advocated by GAC.

When you read specific sentences in isolation they seem to support certain 
positions.   But when the thing is read in totality
it can be contradictory.    For example,  this in the 2nd para -- "Governments 
generally support restrictions on vertical integration
and cross- ownership as important devices for promoting competition, preventing 
market dominance and averting market distortions".

Overall (to me)  they seem to me to be advocating exceptions only for smaller, 
Community TLDs.  If they had meant full integration
except with market power, in any situation,  it would have been an easy thing 
for them to say.


On Sep 27, 2010, at 8:57 AM, Jeff Eckhaus wrote:

Or we could ask Salop/Wright since the GAC specifically references them:

preventing market dominance and averting market distortions. The GAC notes in 
this regard the Salop

and Wright report and recognizes that vertical separation may be warranted 
where a market participant wields, or may in the future wield, market power

----- Original Message -----
From: owner-gnso-vi-feb10@xxxxxxxxx<mailto:owner-gnso-vi-feb10@xxxxxxxxx> 
To: Gnso-vi-feb10@xxxxxxxxx<mailto:Gnso-vi-feb10@xxxxxxxxx> 
Sent: Mon Sep 27 06:46:00 2010
Subject: Re: [gnso-vi-feb10] Board resolution on Vertical Integration


To Mikey's question:

Another thing we did in the MaPO group, when we wondered what the GAC meant, we 


On 27 Sep 2010, at 09:40, Richard Tindal wrote:

I agree with Eric.

Its unclear to me precisely what the GAC meant.  I'm leaning towards the 
interpretation that its about exceptions.


On Sep 27, 2010, at 8:31 AM, Eric Brunner-Williams wrote:

Warning. Not the product of a long and considered thinkum.

What is "wrong" with ...

0% (Nairobi): It does not match the GAC recommendation that an exception exist 
for registries operated by and for communities located in developing economies.

3% (Staff): Ditto.

RACK+: There's the no-exception version, and the "++" version that was the 
subject of discussion involving myself and others, which had exception for 
communities. The "+" version shares the defect above. The "++" version has the 
defect that the community exception did not specifically promote communities 
located in developing economies or under-served scripts.

JN2: It has exceptions for communities, as well as exceptions for "single 
registrant", and for "orphan". The defect(s) are arguably that the scope of the 
exception promotes brands and fail(ing) standard applications more than 
communities located in developing economies or under-served scripts, _and_, 
after 18 months, the per-registry test of separation as a market protection 

Free Trade: It does not match the GAC recommendation that separation is the 
appropriate tool for market protection, and shares the first defect of JN2.

CAM: Ditto. The utility of my commenting on anything from Meuller/Palage/Doria 
is less than zero.

I suppose a key issue is how one reads the GAC recommendation.

Are the references to market power informative to the recommendation that 
registries operated by and for communities in developing economies be allowed 
to operate the registrar function, OR are they free standing, and applicable to 
any registry lacking market power?

Are the references to national competition authorities illustrative of the 
issues to consider when evaluating a request for vertical integration, or are 
they recommendations to delegations of authority from the Board to some 
national competition authorities?

Then there's the hoary old standard, what is meant in this document by "market 
power"? Is it in the CNOBI++ market, whether registry or registrar function is 
considered, or is it in each .NEWDOT market, or is it across all similar 
.NEWDOT instances?

See you at call-time.

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