on registry pricing, persistence, and stability

[Thomas Roessler <roessler@xxxxxxxxxxxxxxxxxx>]

I am writing this note in my personl capacity, as a long time
observer of and some time participant in ICANN.  It applies equally
to the .biz, .info, and .org agreements.

The apparent ability for registries to arbitrarily increase prices
for domain names at the time of renewal puts one of the most
fundamental factors in the DNS's success to date at risk (one might
say, its very purpose): The easy availability of persistent globally
unique identifiers.

Pricing on the registrar level is balanced by market forces, at
every stage of a domain's life cycle: If an incumbent registrar
threatens to charge an exorbitant price, the registrant will be
likely to move to a registrar that offers the same registration at a
reasonable price.  The cost of changing registrars is low, and ICANN
has -- rightly! -- made a substantive investment of time and energy
in ensuring that it stays low: Ultimately, this was the entire point
of the GNSO's multi-year transfers policy development effort, and
the staff's significant efforts in implementing this policy.

Pricing on the registry level has a similar balance in effect when a
domain name is initially registered.  When a domain name is up for
renewal, however, then there is no competition on the registry
level.  The price "that the market bears" is essentially a function
of the registrant's switching costs.

These costs can be significant, and ICANN should keep in mind that
changing a domain name is a cost that is not just borne by
registrants: Where online resources that are identified through the
DNS are part of infrastructure -- be it the Net's, the Web's, or
critical infrastructure offline --, the switching cost for the 
registrant will be negligible when compared to the cost that the 
general community would incur.

ICANN must act as the guardian of these overall interests in the
"stable and secure operation of the Internet's unique identifier
sytems", as the first sentence of its Bylaws puts it.  ICANN must
make sure that globally unique, dependable, and persistent
identifiers remain available, within a reasonable and predictable
economic framework.  ICANN must understand that economic stability
of these identifiers is a crucial part of the overall equation.

Conversely, ICANN should not expect registry operators to guard the
public interest, when these operators' paramount interest might --
quite legitimately -- be in the next quarter's bottom line.

Thank you for your consideration,
-- 
Thomas Roessler   <roessler@xxxxxxxxxxxxxxxxxx>