When Is a "Price Control" Not A "Price Control"?

["John Berryhill" <john@xxxxxxxxxxxxxxxxx>]

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.
4 West Front St.
Media, PA 19063
(610) 565-5601 voice
(267) 386-8115 voicemail/fax
john@xxxxxxxxxxxxxxxxx