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  • To: <gtld-transition@xxxxxxxxx>, "Charles Christopher" <charles@xxxxxxxxx>
  • Subject:
  • From: "Charles Christopher" <charles@xxxxxxxxx>
  • Date: Mon, 8 Dec 2008 16:11:09 -0500

ICANN contracts with registrars not registrants who are the true end users of 
the assets ICANN effectively regulates. From what I can see registrants needs 
are being ignored and the industry is moving in a very dangerous and increasing 
predatory direction.

Domains are each unique, the idea of registry-registry competition makes no 
sense. Domains individually are like basic utilities, and as such demand 
regulation just like electricity and other utility monopolies have.

These regulations include; pricing, and handling of domain expiration.

Pricing regulation is needed to prevent extortion of businesses who can't 
survive without continued access, and predictable pricing, of their domain 
names. Any policy changes that allow tiered pricing, will eventually result in 
some form of pricing extortion by the registries.

If fact this is already taking place at the registrar level. For example 
transfer fulfillment has reduced competition between registrars and caused 
consolidation of domains in just a few registrars. Smaller registrars can't 
compete any longer. If transfer fulfillment were ended (require domain 
ownership to be locked upon expiration) registrar's would then have more 
incentive to insure their customer's domains are renewed. Now registrars have 
incentive not to renew domains so they may be auctioned of. In fact income is 
orders of magnitude greater flipping domains in auctions each year versus 
renewing them.

Allowing tiered pricing is the same, it now moves incentive to the registries 
to manipulate pricing and take over the actions from the registrars. In fact 
the so called "Waiting List Service" (WLS) has been approved for registries. In 
combination with no price controls, perhaps a competitor could make a WLS bid 
that sufficiently incentivized the registry to raise the renewal fee on just 
that domain so the competitor could kill their competition and obtain all their 

While the given example might seem extreme, it is in fact happening right now. 
Today registrar use the renewal grace period to promote the domain as for sale 
at auction. Placing a bid for a domain in this state DOES effect how the 
registrar handles the domain at that point. With tiered pricing this moves down 
to registry control due to registrar low margins preventing markups over the 
registry price - In other words tiered pricing immediately shifts the auctions 
to the registries.

Again, each domain name is effectively a "monopoly", but since a registrant 
must lease the domain and can't purchase it, domains are no different than a 
farmer in a country without land ownership laws ... After the farmer 
establishes a successful farm those more powerful kill the farmer and family to 
takeover the now profitable land. This is the very basis for the market success 
of .COM, and as time goes on individual domains increase do to the work of 
their previous registrants (the very basis of the secondary market).

ICANN can not remove price controls from the registries. ICANN must follow, in 
some way, the same regulations used to control utilities and the prices they 
charge customers and that the pricing structure must be identical for all 

ICANN must not create any more "divide and conquer" conditions in this industry 
and in fact needs to increase regulations on registrars and registries.

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