Re: [gnso-vi-feb10] Board resolution on Vertical Integration
Following up on the "We Failed" "No we didn't" thread ...We advised Counsel that we understood 0% to mean that no current contracted party, registrar _or_ registry, could apply without risk of loosing its application fee.
Staff responded by raising the limit from 0% to a de minimus value, and I think we made it clear that this allowed all but at least one current contracted party, a registry, to apply without risk of loosing its application fee.
All of the proposals offered subsequent to Nairobi were of the form that would allow all contracted parties currently registries, to apply without risk of loosing their application fees.
However, there was no consensus on that proposition in isolation.Restated, there was consensus that no proposal that allowed some contracted parties, but not all contracted parties, to apply without risk of loosing their application fees could be adopted.
Similarly, there was consensus that no proposal that allowed only brand managers to exercise a registrar function while operating a registry to apply without risk of loosing their application fees could be adopted.
These appear to be broad areas of consensus that:a) no existing operator will, through its access to a existing registry's cash flow (registry margin), unfairly compete with new operators establishing new markets,
b) no existing (or future) registrar will, through its access to a existing registry's cash flow (registrar margin), unfairly compete with new operators establishing new markets,
andc) no brand manager, and possibly no other applicants (this is the point of the GAC's recommendation), will, through its access to private revenues, unfairly compete with registrars establishing new markets.
As an applicant, this looks pretty good. VGRS won't define the new market. Neither will any accidental or intentional common business model of Afilias and NeuStar and GoDaddy and eNom and TuCows and NetSol. Registrars with the overwhelming bulk of their revenue in the CNOBI market won't be re-marketing the same business model as new markets. What happens in Vegas, stays in Vegas, where "Vegas" means the market as it is, at present, less the .coop, .cat, .museum, bits, that are distinct gTLD markets.
Since I've worn a registry's hat, and a registrar's hat, and a registry back-end operator's hat, the first two contracted parties, the third only incidentally a contracted party, I'm going to offer my opinion as if I were representing a contracted party on this as an outcome.
This isn't an especially adverse outcome. No existing competing contracted party will gain market share through the first round. The risk of new market creation will be born by new entrants. All new market entrants are prospective investment opportunities at some point in the future, after the winners and losers have been shaken out. There is adequate time to reach a consensus position that will inform the Board prior to the second round.
This also allows brand and walled garden managers time to reconcile or revise their various value claims -- that .brand will end the risk of dilution, or that consumers prefer subscriber relationships with vendors for whom name spaces are an after-market activity.
I think 0% works out pretty good for new entrants. Eric