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

  • To: Milton L Mueller <mueller@xxxxxxx>
  • Subject: Re: [gnso-vi-feb10] Board resolution on Vertical Integration
  • From: Volker Greimann <vgreimann@xxxxxxxxxxxxxxx>
  • Date: Tue, 28 Sep 2010 14:05:32 +0200

 Hi Milton,

I do not agree in some of the points within the GAC comments, I was just trying to summarize the main point of what I think some GAC members indicated to me this position would mean:

VS as a general principle, but with enough exceptions to allow smaller TLDs some flexibility in their setup. Essentially, the JN2 proposal was viewed as a good example. Not sure about their view on "not in your own TLD though".



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> <owner-gnso-vi-feb10@xxxxxxxxx <mailto:owner-gnso-vi-feb10@xxxxxxxxx>> To: Gnso-vi-feb10@xxxxxxxxx <mailto:Gnso-vi-feb10@xxxxxxxxx> <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 asked.


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

        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 policy.

        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

        See you at call-time.


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