John Berryhill's comments: When Is a "Price Control" Not A "Price Control"?

[George Kirikos <gkirikos@xxxxxxxxx>]

[The comments below are those of John Berryhill, whose prior attempts
at submitting comments appeared to have ended up in a black hole or
something]

When it is merely a contract price.

I congratulate several of the participants on their masterful
re-defining of the vocabulary of much of the discussion here.  Using
the language of "market regulation" and "price controls" obscures the
registry contract negotiation function in a manner worthy of Orwell.

A negotiated contract price for services is not a "price control", it
is the basis of a bargain between a community and a service provider to
that community.  When my homeowners association negotiated trash
removal services for my neighborhood for the next year, we were not a
"market regulator" establishing "pricing controls", we were merely a
group of consumers seeking a stable infrastructure service at a
predictable rate.  Not to have negotiated a price would have been to
throw stability and predictability to the wind.  That is what ICANN is
doing here.

It is the community of domain name registrants which ICANN is intended
to represent in negotiating these contracts.  As noted in the
Memorandum of Understanding:

----------
This Agreement promotes the management of the DNS in a manner that will
permit market mechanisms to support competition and consumer choice in
the technical management of the DNS. This competition will lower costs,
promote innovation, and enhance user choice and satisfaction.
--------

ICANN is not intended to be a consumer protection agency, nor is ICANN
intended to be a market regulator.  Everyone seems to agree on those 
points. However, providing "lower costs" is a function that results
from bargaining on behalf of those consumers that ICANN is intended to
represent in registry contract negotiations.

While the .net TLD re-bid process had its flaws, it was an inevitable
result of a competitive bidding process that cost was among the
considerations which ostensibly resulted in the selection of the .net
registry operator. It is an inevitable result of any competitive
bidding process.

Remarkably, governments all over the planet manage to negotiate
critical services such as medical care, sanitation, sewage,
electricity, and other necessary community functions and services, at a
specified contract price, without endangering the lives and welfare of
their populations.

It is not "market regulation" or establishing a "price control" to
negotiate one of the fundamental elements of a contract - "How much am
I going to pay under this contract".  Allowing periodic re-bid of
services is also not "market regulation" - in fact, such periodic
re-bid is merely the only mechanism to allow the market to regulate
itself.  Surely, an incumbent and competently-managed registry would be
in the best position to prevail 
in a periodic competitive environment, but there is simply no better
way to ensure that promised "investment in stability" than to ensure
that such investments are made,  The notion that innovation or
responsible management are promoted by the absence of an agreed pricing
model and presumptive renewal simply flies in the face of human nature.
 These are the components of the sort of stagnant and exorbitant
monopoly which the US 
experienced during decades of single-source telephone service.  Do we
need to run 
that experiment again?

We have the comments of Verisign to the effect that presumptive renewal
on predictable terms provides an incentive for registry operators to
"invest" in the stability of the internet, however that might be
defined from the perspective of a registry shareholder.  Implicit in
these comments is that internet "stability" is a function of the
financial interests of registry
operators.

Where is the incentive on the part of anyone else to make an investment
in building a stable internet?  The absence of any basis on which the
most basic investment can be made is a leg which ICANN kicks out from
under the table in these proposed new contracts.  I would like to be
able to make an informed investment in an online business without being
subject to a
six-month "bed check" on whether my success has attracted the attention
of a new pricing model or "registry service" aimed at cutting into my
bottom line.

ICANN, get back into the ring and negotiate a real contract, at a price
certain, for services upon which the stability of the internet depends.
The registries are perfectly able to advocate their interests in
contract negotiations.  The rest of the community would like to know
who is
advocating their interests. When the internet community sends you out 
to sell the cow, we expect more in return than a handful of magic
beans.

John B. Berryhill, Ph.d. esq.
http://www.johnberryhill.com