Comments on New gTLDS

[bhavin.t@xxxxxxxxxxx]

Comments from: Bhavin Turakhia
        Title: CEO
 Organization: Directi


  1.  After reading the Initial Report, are there any other selection criteria
  which may be helpful for a new top level domain application round?

There is a single glaring issue in the "Term of Reference 2. Selection Criteria
for New Top Level Domains" as it is currently stated. One of the
recommendations within this terms of references states -

"Applicants (for new gTLDs) must offer a clearly differentiated domain name
space with respect to defining the purpose of the application"

Please find implications of the above statement as below -

* One of ICANNs mandate is to foster and create competition in such a manner so
as to benefit consumers
  
* Competition, along with "stability" and "security" has been of of the
founding principles of ICANN. This has been mentioned repeatedly in the Green
paper, White paper, ICANN MoU and the ICANN by-laws. Few excerpts of the same
have been attached below for reference
  
* A portion of this mandate has been achieved by creating Domain Registrars who
compete amongst themselves globally and offer Domain Registration services to a
worldwide audience. This accreditation process of Registrars has resulted in
the price of a domain name reducing from $35 to $7
  
* This has resulted in significant benefit to consumers in terms of price and
availability. Various different business models have emerged due to this
competition which have increased domain name proliferation, availability and
service levels
  
* However, this aspect has only created a choice from a distribution
perspective for customers ie Customers have the choice to now buy the SAME
Domain Name from multiple different Registrars
  
* This however has not given the Customer a choice of the TLD string itself
  
* The white paper states "The U.S. Government is of the view, however, that
competitive systems generally result in greater innovation, consumer choice,
and satisfaction in the long run. Moreover, the pressure of competition is
likely to be the most effective means of discouraging registries from acting
monopolistically." and "The Internet succeeds in great measure because it is a
decentralized system that encourages innovation and maximizes individual
freedom. Where possible, market mechanisms that support competition and
consumer choice should drive the management of the Internet because they will
lower costs, promote innovation, encourage diversity, and enhance user choice
and satisfaction."
  
* It is true that competition has resulted in choice for consumers and lowered
costs for consumers. For instance, as an example since the last 2 years .INFO
Domain names have been sold at very low prices since the Registry is offering
them at $0.49 to $0.99. This has resulted in a LARGE number of potential
customers worldwide opting for .INFO domain names instead of .com domain names.
We are a large ICANN Accredited Domain Registrar, and we have seen .INFO domain
names registered by our Customers in the last few months is equal to the number
of .COM domain names registered by our Customers.
  
* The fact that .INFO offers a similar proposition to some consumers has also
resulted in the .INFO space growing rapidly to 3 million domain names, and the
.BIZ space growing to 1.5 million.
  
* .INFO and .BIZ are gTLDs which DO NOT offer a "clearly differentiated domain
space" as compared to existing incumbents. Infact most Registrars market them
as a TLD equivalent of .com, .net, .org etc. This blur allows a Customer the
ability to register domain names at a cheaper cost, or register a particular
string that is not available in the .COM space
  
* This also results in competition for the Registry operator of .COM. While we
are still aware that nothing can truly compete with .COM, atleast the existence
of other overlapping gTLD options such as ,BIZ, .INFO etc provide some basic
level of choice to a Customer and thus create a certain level of competition
for incumbent Registries
  
* Other TLDs such as .travel, .aero, .jobs do not directly compete with .com
and hence cannot bring in competition amongst registries.
  
* The only way to allow competition in the gTLD space is to allow other gTLDs
which do not have a restrictive or differentiated space
  
* This is even more imperative now than before. Earlier gTLD contracts did not
stipulate "almost-perpetual" renewal and did not create circumstances which
allowed a Registry operator to arbitrarily modify prices. The recent trend has
however demonstrated that gTLD Registry contracts may have more latitude in
creating a monopolistic position. It seems like gTLD contracts may not be rebid
and may have the discretionary ability to change prices. This position allows
Registries to increase prices without cost justifications and will have a
detrimental effect on consumers and registrants and Registrars
  
* The past history demonstrates that competition within gTLD Registries can
only be created in two ways -
  
- By rebid of a Registry (and hence not have a perpetual contract). This was
clearly observed in case of .NET where the open bid reduced the pricing for
Domain Registrations in the TLD thus benefiting consumers. It is another matter
that due to skillful negotiations this benefit turned out to be short lived

- In the absence of open bidding for Registries the only other way to create a
basic level of competition is to allow other TLD string options and choices to
consumers. This cannot be achieved if each TLD space created is non-overlapping
and clearly demarcated separately. In that case each TLD will become a monopoly
and there will be no competition amongst TLD Registries
 
* The recommendations by the GNSO already cover technical competence as a
criterion for selecting a new TLD Registry. Therefore any Registry applicant
must pass certain technical criteria to ensure that they would not pose a
threat to the stability and security
  
* However other than that there should be no reason to discourage someone from
applying a generic string which may overlap with existing TLD Registries such
as com/net/org/biz/info
  
* Such a stipulation would be similar to a stipulation that may say that a
Registrar can ONLY sell domain names within a specific Country. Imagine if that
stipulation were to be created when the Registrar accreditation process was
opened up. That would not create competition and benefit the customers
  
* Similarly restricting the reach and audience of a TLD Registry will not
create competition amongst TLD Registries
  
* I think that the notion of strong support for this criteria may be a misnomer
inasmuch as for someone like me, this criteria in the GNSO terms of reference
has slipped by unnoticed amongst the bigger things. I may be incorrect, but I
would like to take this opportunity to ensure that the above implications and
ramifications of this particular term of reference are considered by the GNSO
before any final reccommendations are made in this regards.


  2.  Thinking about the issue of application fees for any new top level domain
  application, is there merit in graduated application fees to assist
  applicants?

I am neutral to any proposal on Application fees as long as -

* They are fair

* They cover the cost of the process

* They ensure that the applicant is serious about the registry business (unlike
the registrar accreditation process which allows any and everyone to apply
since the costs are low)


  3.  Taking into account the experiences from the 2000 and 2004 round of new
  top level domains, do you have further comments to make about streamlining
  the application process?




  4.  Thinking about ICANN's responsibility to ensure competition in registry
  services operation, do you have any additional comments about how to
  encourage applications which would serve needs which are not met by the
  existing top level domains?

* Please refer to answer (1)


  5.  Looking closely at the technical selection criteria section of the
  Report, are there any further comments which would assist with identifying
  appropriate base line technical criteria for new applications?




  6.  Do you have any further comment to make on the use of the first come
  first served system for processing applications and then whether auctions or
  lotteries are appropriate ways of resolving competition between applications?




  7.  Do you have any further views on the kinds of new TLDs that might be
  encouraged? Specifically, do members of the community expect the existing
  differentiation between sponsored, generic, chartered and open TLDs to
  remain?
  

I believe that history has demonstrated that gTLDs are more sucessful than
sTLDs and are less complex for Customers, Registrars, and everyone to
understand and implement

I am however not conclusive as yet on whether there should exist different
types of TLDs.