Re: [gnso-vi-feb10] Re: Comment on Vertical Integration

[Richard Tindal <richardtindal@xxxxxx>]

Hi Michele,

Regarding this observation ---  "While most (not all) gTLD registries have been 
contractually restricted in their ownership of registrars, no such restriction 
ever existed in registrar agreements". 

As discussed in the early days of the WG, many believe there is (and must be) 
an implied reciprocity in the current registry agreement language.  Namely,  
that a registry cannot own more than 15% of registrar  AND  that  a registrar 
cannot own more than 15% of registry.  

If such reciprocity was not the case it would be an easy matter for an existing 
registry to circumvent the rule  (i.e.  why would a rule have be set up that 
was so easy to evade?).   For example,  Verisign would simply need to establish 
a new registrar company that was the nominal owner of its registry company.    
If the ownership limit was only in one direction  (registry to registrar) the 
Verisign registrar company could then sell .COM names as it owned the registry 
(and not vice versa).        

Any sort of control is pointless if it's only in one direction.  It must be 
bi-directional to have any meaning.

Richard



On Oct 29, 2010, at 12:01 PM, Michele Neylon :: Blacknight wrote:

> 
> Tim / Peter / Chuck
> 
> having read the statement Tim posted to Peter and the list, I see that the 
> old and frankly misleading claims of a "longstanding policy of separation" 
> have resurfaced. 
> 
> Analysis of current gTLD shows however that no such longstanding policy 
> actually exists:
> 
> While most (not all) gTLD registries have been contractually restricted in 
> their ownership of registrars, no such restriction ever existed in registrar 
> agreements. 
> 
> ICANN accredited Registrars have always been permitted to own shares or 
> membership interests in registries (AFILIAS: .INFO, .MOBI) as well as 
> registry service providers (CORE: .CAT). 
> 
> The current .PRO Registry Agreement does not have a prohibition against cross 
> ownership of registry and registrar functions within the same operating 
> entity. 
> 
> Currently, RegistryPro has two ICANN-accredited registrar sister companies 
> (Domain People and Hostway Services, Inc.) and all three entities are wholly 
> owned subsidiaries of Hostway Corp. 
> 
> But we don't need to limit our perspective to gTLDs alone: 
> 
> A large number of ccTLD providers such as .de, .se, .at, .ch and many more 
> operate their own registrar in addition to the regular registrar channel. 
> 
> ICANN accredited registrars are partners in the operation of some ccTLDs and 
> are even selling domain name registrations in that TLD (GoDaddy with Afilias 
> for .me being an obvious example).
> 
> Tim's mail shows very succinctly the reason why the GNSO working group on VI 
> was unable to find a compromise solution: The complete lack of incentive for 
> the advocates of strict seperation to contribute to finding a compromise 
> solution as the Nairobi board decision and current wording of the DAG suits 
> their purpose perfectly. 
> By assuming "no compromise" will lead to the desired result, blocking all 
> progress is the logical solution. The claim of a longstanding policy of 
> separation is an invention of those opposing any form of Vertical Integration 
> in the gTLD marketplace even though they support it for ccTLDs, and are 
> already acting in both roles.
> 
> The VI WG always had the secondary mission not to delay the launch of the new 
> gTLD project. Now that the WG has failed to reach consensus, there needs to 
> be a decision by the board if the knot of VI is to be untied without delaying 
> the process. Needless to say, I hope that the ICANN board will not be 
> pressured into any decision, but will weigh all alternatives and find a 
> solution that is acceptable to most without unfairly barring any party from 
> participating in the new gTLD process, serving their customers best and most 
> of all for the good of the internet community when it comes to competition 
> and offering choices.
> 
> As it stands, there are only two solutions: Delaying the process until a 
> bottom-up policy is developed, or making a top-down decision.
> 
> 
> Some sources:
> Afilias Ownership: http://www.icann.org/en/tlds/report/info1.html
> CORE Membership: http://www.corenic.org/The_CORE_Association.htm
> CORE ICANN Accreditation: 
> http://www.icann.org/en/registrars/accredited-list.html
> .PRO Cross-Ownership: 
> http://www.icann.org/en/announcements/announcement-09mar10-en.htm
> Godaddy as partner in .ME: http://www.nic.me/about.html
> 
> 
> Regards
> 
> Michele
> 
> 
> On 28 Oct 2010, at 01:13, Tim Ruiz wrote:
> 
>> Peter,
>> 
>> The community could not come to consensus on a change to 
>> the longstanding policy of separation. I am hopeful that 
>> you did not intend to imply that if the bottom up process 
>> does not produce the reults that some of the Board and 
>> Staff wanted then the Board will just create its own policy
>> top down. 
>> 
>> I hope that the Board keeps its word regarding VI as it
>> was given to the GNSO. To not do so would make it difficult 
>> to have any confidence in the Board whatsoever.
>> 
>> 
>> Tim
>> 
>> 
>>> -------- Original Message --------
>>> Subject: [gnso-vi-feb10] Re: Comment on Vertical Integration
>>> From: Peter Dengate Thrush 
>>> Date: Wed, October 27, 2010 4:41 pm
>>> To: Roberto Gaetano 
>>> Cc: Chuck Gomes , Gnso-vi-feb10@xxxxxxxxx, 
>>> ICANN Board Members Only 
>>> 
>>> Dear RobertoAllow me to begin by thanking you and Chuck both, as co-chairs, 
>>> for leading work on what has proved to be one of the most difficult issues 
>>> the GNSO has faced.
>>> It has been a long march, and the board is aware of the many hours put in 
>>> by you both in leading this effort, and of the considerable time taken by 
>>> members of the WG in studying this problem, and attempting to reach a 
>>> compromise solution. Thank you.
>>> 
>>> By copy of this email, I am sharing your report below with the board - 
>>> thank you for the clarity of your expression.
>>> 
>>> The board is faced, in the face of absence of a GNSO position, to examine 
>>> what should be done.
>>> This is a matter we are actively considering.
>>> �
>>> My sense is that, while reluctant to appear to be making policy, the Board 
>>> is unwilling to allow stalemate in the GNSO policy development process to 
>>> act as an impediment to implementing other major policy work of the GNSO, 
>>> which calls for the introduction of new gTLDS.
>>> Some kind of Board intervention appears to be required, and we are 
>>> considering that.
>>> 
>>> Again, my thanks to you both, and to those contributing through the Working 
>>> Group.
>>> 
>>> my personal regards
>>> �
>>> 
>>> 
>>> Peter Dengate Thrush
>>> Chairman of the Board of Directors,�
>>> Internet Corporation for Assigned Names and Numbers�
>>> 
>>> +64 4 4998959 (DDI)
>>> +64 21499888� (mobile)
>>> +64 4 4710672 (fax)
>>> 
>>> 
>>> 
>>> 
>>> 
>>> 
>>> On Oct 28, 2010, at 8:17 AM, Roberto Gaetano wrote:
>>> 
>>> 
>>> Peter,
>>> 
>>> As you know, we co-chair the Vertical Integration WG.
>>> 
>>> Our aim, as co-chairs, has been to reach consensus on a document that could 
>>> be useful input for the Board's imminent decisions on the deployment of new 
>>> TLDs. However, the report that will conclude Phase 1 of the process is 
>>> still being reworked, and the working group will not be able to send it to 
>>> the GNSO Council in time for the Council to make a decision (and formulate 
>>> a timely recommendation for the Board) in compliance with the GNSO PDP 
>>> process.
>>> Thus, we would like to submit a few broad points to the attention of the 
>>> Board in our personal capacity.� We believe that the WG has worked hard and 
>>> has reached some agreement (although no consensus call has been made yet) 
>>> on the following points:
>>> 
>>> 
>>> Compliance is key (the working group spent a considerable amount of time 
>>> discussing the issue).� Whatever the rules established for the new TLDs, we 
>>> need adequate leadership, reasonable goals, appropriate levels of staffing, 
>>> risk informed processes and resources in place to enforce them;
>>> 
>>> 
>>> There is no consensus on full vertical integration, complete vertical 
>>> separation, or any hybrid proposal to date;
>>> 
>>> 
>>> The working group has compiled a list of potential harms that may be 
>>> associated with either complete separation or complete integration. We have 
>>> not finalized the list, we have not focused on potential harms associated 
>>> with partial integration or separation, and we do not have consensus on the 
>>> list we do have; 
>>> 
>>> 
>>> While the WG has not identified exact examples, there is a general feeling 
>>> that some exceptions could be granted.
>>> 
>>> To the best of our knowledge, two Directors have been subscribing to the WG 
>>> list.�� They can provide you and the rest of the Board with more details on 
>>> the process followed and the results achieved.
>>> Please let us know if there is anything else that could be useful from our 
>>> side.
>>> 
>>> Best regards,
>>> 
>>> Roberto Gaetano
>>> 
>>> 
>>> Mike O'Connor
>>> 
>>> 
>>> 
>>> 
>>> 
>>> 
>>> 
>> 
> 
> Mr Michele Neylon
> Blacknight Solutions
> Hosting & Colocation, Brand Protection
> ICANN Accredited Registrar
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