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Re: [ga] Responses by .biz/info/org Registry Operators are Unacceptable

  • To: George Kirikos <gkirikos@xxxxxxxxx>
  • Subject: Re: [ga] Responses by .biz/info/org Registry Operators are Unacceptable
  • From: Jeff Williams <jwkckid1@xxxxxxxxxxxxx>
  • Date: Mon, 16 Oct 2006 23:15:56 -0700

George and all,

  Nicely put here George.  Maybe someone should file an official
complaint wit h DOJ along these lines?

George Kirikos wrote:

> Hello,
> --- "Michael D. Palage" <Michael@xxxxxxxxxx> wrote:
> > Although a lot has been said about the proposed .BIZ, .INFO and .ORG
> > contracts lets talk about what has not been said. Most of the vocal
> > people in this current debate could care less about the .BIZ, .INFO
> > and
> > .ORG contracts, but only care about its potential impact in
> > connection
> > with the VeriSign .COM contract. You yourself even admitted the same
> > during our exchange on the BC list, when you admitted that neither
> > .BIZ
> > or .INFO had any market power.
> I care about the .org contract (I and others have nice .org domain
> names). I care about the .biz and .info contracts just as an older
> brother would care about his younger siblings, that they not be thrown
> under the bus, as well as the precedent value for .com.
> .biz and .info have limited market power for brand new registrations
> (not counting reserved names, which do have some value). However, they
> *do* have market power for existing registrations, due to the "lock-in"
> effect and costs to transition to other domains.
> > Now I think the proposed wording by the registry operators is not
> > unreasonable, and here is why. Both of us agree that the reasonable
> > expectation interests of registrants need to be protected. For the
> > purposes of this discussion lets use VALUABLE-DOMAIN-NAME.TLD that
> > was
> > registered by a registrant for $9 of which $6 went to the registry
> > operator. Now lets suppose that the management of a registry operator
> > wanted to do something really stupid and greedy and decided to raise
> > the
> > price of all renewals to $1000.
> Notice you never suggest they're going to reduce prices. :) Something
> is anti-competitive when higher prices result for consumers that would
> not have otherwise been the case.
> http://www.usdoj.gov/atr/overview.html
> "They prohibit a variety of practices that restrain trade, such as
> price-fixing conspiracies, corporate mergers likely to reduce the
> competitive vigor of particular markets, and predatory acts designed to
> achieve or maintain monopoly power."
> Presumptive renewal would go along with that. What's funny is that
> ICANN thinks "presumptive renewal" is so normal, yet if you do a Google
> search for "presumptive renewal", virtually *ALL* of the matches have
> to do with ICANN, lol.
> http://www.google.com/search?hl=en&q=%22presumptive+renewal%22&btnG=Google+Search
>  [15,400 matches]
> http://www.google.com/search?num=30&hl=en&lr=&safe=off&q=%22presumptive+renewal%22+-icann+-verisign&btnG=Search
>  [search of "presumptive renewal" excluding "ICANN" and "verisign" --
> 74 matches, lol]
> > Under the proposed wording of the
> > Afilias and Neustar modified contractual language that would not be
> > possible. Because all new and renewal registrations need to be
> > charged
> > at a uniform rate, the only exception being in connection with
> > marketing
> > programs.
> Bzzt, wrong answer. Given *sponsored* gTLDs already have the ability to
> set prices any way they want, these *unsponsored* gTLDs now essentially
> want the same thing, as the exception language would get triggered
> easily, i.e.
> ""to the extent a variable pricing model for active Registered Names
> has
> been implemented in any other new or existing gTLD"
> Notice that they don't make a distinction between sponsored or
> unsponsored gTLDs. Take a look at page 44 of the .asia proposed
> Appendix (which is probably similar to what's in .mobi, .tel, .cat,
> etc.), for example:
> http://www.icann.org/tlds/agreements/asia/registry-agmt-app-28jul06.pdf
> "Registry Operator shall have delegated authority to develop policy for
> the TLD in the following areas:
> ......c. Pricing."
> That's essentially what .biz/info/org want, too.
> > Thus the only way registry operator would be able to charge $1000
> > dollars per domain name year was if they charged all registrants (new
> > and renewal) $1000 per domain name year. Now if a registry operator
> > was
> > stupid enough to try that particular move here is what would happen.
> > Because of the six month notice period, coupled with the ten year
> > maximum registration period, all registrants would max out their
> > registration agreements at the lower $6 rate. After the registry
> > raised
> > their rates, there would likely be no new registrants into the space
> > at
> > the $1000 per domain name year rate, and the registry would
> > eventually
> > fail in 10 years after all of the existing registrants migrated
> > toward a
> > new TLD.
> Not necessarily, as they could charge $1000 per domain name for
> existing domain names, and then call any other sales at $6/yr a
> "marketing program". They built in another loophole for themselves with
> that "marketing program" language, to price discriminate. Take a look
> at the newspapers -- some stores have "specials" every day of the year!
> > That is what would happen in .BIZ, .INFO and .ORG. Now
> > perhaps
> > you could argue that registrants would pay the ransom to stay in the
> > .COM space, however, that is not relevant to the current issue at
> > hand
> > regarding the pending .BIZ, .INFO and .ORG contracts.
> Wait and see, see below....
> > Another hypothetical that has been discussed under the tiered
> > variable
> > pricing models is how a registry operator could impose per domain
> > name
> > pricing. Under the proposed restrictions this type of pricing would
> > not
> > impact active domain name registrations. It would only potentially
> > apply
> > to domain names that have never been allocated (i.e. single or two
> > letter domain names) or in connection with domain names that were
> > initially registered and then later deleted. In either case there is
> > no
> > registrant's reasonable expectation interest to protect. Thus as long
> > as
> > the registrant of VALUABLE-DOMAIN-NAME.TLD maintained his/her
> > registration, he/she would never be subject to any tiered variable
> > pricing models.
> Also, "active" registration is never defined. Is a parked domain
> considered "active"? Expired domains, but not yet deleted ones, would
> fall under that language with certainty.
> So, basically registries want to introduce WLS, etc., another registry
> service for dropped domains, but don't want to go through the proper
> "New Registry Services" procedures mechanism, to judge their impact on
> SnapNames, Pool.com, etc. Gotcha. (of course, unacceptable)
> > Having read most of the exchanges between you and Jeff Neuman, I
> > believe
> > you have taken a number of his quotes out of context.
> I don't believe so. Folks can read the actual posts for themselves, and
> judge. They're in the mailing list archives.
> > This is
> > unfortunate because this is why many people avoid engaging in an open
> > dialog on this and other lists.
> What's more likely is that they engaged and provided useful ammo
> *against* their position, by revealing things that in hindsight they
> shouldn't, or had to say "nothing" when asked a particularly good
> question. Their silence spoke volumes. And they've probably been since
> ordered not to engage at all, lest they provide more useful ammo for
> the opposition. By being silent, and negotiating instead in the
> shadows, directly with ICANN staff, they're able to say things that are
> not able to be challenged by the public. Just like VeriSign is able to
> seemingly get away with talks of "costly DDoS attacks", while never
> actually costing it out for the public, or ever disclosing their
> Appendix W R&D expenditures, for example.
> I doubt the ICANN staffers, for example, were informed enough to know
> about Neustar's telephone database management negotiations, for
> example, see below. The registries prey on the ignorance of their
> incompetent ICANN counterparts, and of course they don't want to make
> it easier for the public to help ICANN become better informed.
> > With regard to your quotes by
> > Neustar's
> > CEO Ganek, I believe you are comparing apples to oranges. For example
> > NeuStar does have a monopoly over the telephone number space in the
> > U.S., I have no choice but to use their service should I want a
> > telephone number within the North American number plan. Although each
> > registry operator is a sole source provider (monopoly) for their
> > respective TLD, as a consumer I have the ability to pick from any one
> > of
> > a number of TLDs when deciding to create an online presence.
> Nope, I'm not comparing apples to oranges. Managing a telephone
> database/registry is very similar, technologically, to managing a
> domain name database/registry. Indeed, VeriSign was rumoured to be one
> of the competitors to Neustar, forcing the prices lower for the
> telephone database management contract LOWER, not higher.
> http://www.lightreading.com/document.asp?doc_id=104396
> ?The pricing change may reflect competition, I suspect from players
> like Telcordia Technologies Inc. and VeriSign Inc. (Nasdaq: VRSN -
> message board), for what are NeuStar's core contracts, and also
> represents volume pricing based on continuing growth,? says Heavy
> Reading analyst John Longo. ?The real question is how effectively they
> continue to manage their performance for the rest of the term of the
> contract.?
> "NeuStar CEO Jeff Ganek denies his company was pressured by competition
> into reducing its rates. Ganek says his company is merely trying to
> ?strengthen its position? as the sole owner of the contract in the
> future."
> So, according to NeuStar's CEO,  competitive pressure didn't compel him
> to reduce rates. He obviously did so out of the goodness of his heart.
> :) If, under no competitive pressure he's lowering rates to "strengthen
> its position" as the sole owner of the contract for a few more years,
> why do not the .biz/info/org operators, who are under greater
> competitive pressure, not be offering even GREATER concessions for
> contract extensions? Instead, they want to have their cake (longer
> contracts and presumptive renewal) and eat it too (get unlimited
> pricing power).
> VeriSign's ATLAS has telephone number protocol support:
> http://www.verisign.com/stellent/groups/public/documents/white_paper/016076.pdf
> By the way, your words: "I have no choice but to use their service
> should I want a telephone number within the North American number
> plan."
> With services like Vonage, etc., I'm able to register a phone number in
> many countries around the world, and am not limited to North American
> anymore:
> http://www.vonage.com/features.php?feature=virtual_phone_number
> Similar to a .com owner who also wants a .net, .org, .biz, .info, .org,
> etc., or needs one for brand protection, etc. Welcome to the Real
> World.
> > So here is the factual scorecard as I see it:
> Seen it, or spinned it? :)
> > The ICANN Board has approved the following registry contracts (.COM
> > and
> > .TEL) during the pendency of the Feb-06 PDP.
> Of course, the new .com proposed settlement was never approved by the
> DoC, so we're still under the old contract.The .biz/info/org registries
> are racing to try to get things approved, before the DoC would wisely
> REJECT the proposed .com settlement.
> TEL is a *sponsored* gTLD, not an unsponsored one like .biz/info/org.
> .biz/info/org don't need to be approved by the DoC, so that's why
> mistakes can't be fixed later.
> And of course, the .com registry contracts contain *PRICE CAPS*! Are
> you suggesting that .biz/info/org would be happy with price caps too?
> If they were, that'd be one less item to argue about.
> And, for the folks who want to talk about "context", .com was a
> contract negotiated under gunpoint, with a lawsuit. The directors
> admitted to that, and likely would not have done the same has the
> SiteFinder issue not have been there.
> > Notwithstanding the ICANN Board's approval of the following registry
> > contracts (.TRAVEL, .JOBS, .NET, .MOBI, .CAT, .COM, and .TEL) that
> > potentially allowed for tiered/variable pricing, the current registry
> > operators have voluntarily agreed to include additional restrictive
> > language into their contracts.
> .com/net have caps, and undoubtedly VeriSign would ALWAYS choose to
> price at the maximum permitted cap price. The other registries are
> *sponsored* TLDs, not unsponsored like .biz/info/org. In a sponsored
> TLD, registrants can appeal to the sponsoring organization to ensure
> that pricing policy is fair.
> However, under unsponsored gTLDs, the only protection is ICANN itself.
> With these contracts, ICANN would be abdicating its responsibilities to
> protect .biz/info/org registrants.
> > Under the ICANN by-laws, ICANN shall not apply its "practices
> > inequitably or single out any particular party for disparate
> > treatment
> > unless justified by substantial and reasonable cause, such as the
> > promotion of effective competition."
> Yes, and the .com contract has similar language. So,  you're basically
> arguing that precedent value of a bad .biz/info/org contract could be
> later be used by VeriSign, arguing that otherwise it's being "singled
> out". Thanks.
> > In accordance with paragraph 5.2 of the existing Neustar and Afilias
> > registry contracts, both registry operators are within the period of
> > time during which their contract should have been extended. The only
> > reason their contract would not have been extended is if the parties
> > could not reach an agreement and the registry contract would need to
> > be
> > rebid. However, that is not the case as both ICANN and the registry
> > operators have agreed upon proposed terms to a new contract.
> As Danny Younger correctly pointed out:
> http://gnso.icann.org/mailing-lists/archives/ga/msg04985.html
> That "detailed report" has never been submitted by the operators of the
> .biz and .info registries.
> Also, an agreement with incompetent ICANN negotiators/staff is not the
> same as one that is approved by the Board. Thus, it's not fair to say
> that "both ICANN and the registry operators have agreed" on anything at
> all. They engaged in a discussion, a waste of everyone's time, and
> hopefully ICANN's Board has the guts to slap them down.
> Furthermore, how does it *hurt* ICANN to listen to other competing
> proposals? There are either two scenarios:
> 1) No other prospective registry operator makes a better proposal than
> these contracts. In this case, you go with the current contracts.
> 2) Someone else makes a better proposal. In this case, you either force
> Afilias, Neustar and PIR to do better, or you deal with the other
> prospective registry operator.
> > Thus the ICANN Board has two options as I see it:
> >
> > (1) Approve the registry contracts that are materially the same as
> > the
> > recent registry contracts the Board has approved, and allow validly
> > constituted policy development processes to make the appropriate
> > changes
> > as currently set forth in the registry agreements; or
> Bzzt. That's a mistake, given that the current proposed contracts
> *explicitly* place limits on what the PDP can do. Of course, a wise
> lawyer like yourself wouldn't point that out, but will leave it to me,
> a non-lawyer, to do the heavy lifting: e.g.:
> http://www.icann.org/tlds/agreements/biz/registry-agmt-28jul06.pdf
> "3.1 (b)(v) In addition to the other limitations on Consensus Policies,
> they shall not:
> 3.1 (b)(v)(A) prescribe or limit the price of Registry Services;
> 3.1 (b)(v)(B) modify the standards for the consideration of  proposed
> Registry Services, including the definitions of Security and Stability
> (set forth below) and the standards applied by ICANN;
> 3.1 (b)(v)(C) for two years following the Effective Date, modify the
> procedure for the consideration of proposed Registry Services;
> 3.1 (b)(v)(D) modify the terms or conditions for the renewal or
> termination of this Agreement;  "
> and so on. Some of us have actually read the contracts, Mike. :)
> > (2) Reject the contracts and explain the substantial and reasonable
> > cause why they have singled out these registry operators for
> disparate treatment.
> Let competition decide whether the community can get better deals. #2
> is also something VeriSign might use, to ask why they're "singled out",
> in your words, to not have unlimited pricing power, say relative to
> .asia or .mobi (which are SPONSORED gTLDs).
> In conclusion, there's only one thing for ICANN's Board to do at
> present, which is to sit on their hands and wait for the conclusion of
> the Sao Paulo meeting, as per the GNSO Council resolution. Some of the
> Board members might actually want to *read* the contracts, and the
> public comments.
> If ICANN is acting in good faith and wants to maximize the benefits for
> domain name registrants (i.e. the public, for whom it serves), and to
> promote competition amongst registry operators, it will in the meantime
> institute a NO-FEE "Request for Proposals" process, whereby prospective
> registry operators are invited to simply submit very short (3 page max)
> indications as to whether they might be interested in operating
> .biz/info/org, and that ICANN would  be under no obligation to proceed
> with any of those proposals. By introducing such a proposal, which only
> need take 10 minutes to post on the ICANN homepage, ICANN would be
> gaining MORE INFORMATION, which is always valuable in any negotiation.
> Perhaps ICANN will eventually do deals with PIR, Neustar, and Afilias,
> but it should do so with the MAXIMUM information possible, and not NO
> INFORMATION, like at present, as to potential alternatives.
> I imagine that prospective registry operators will be lining up to
> manage the .biz/info/org registries with:
> a) no presumptive renewal
> b) no use of traffic data
> c) price caps that are *lower* than the current ones.
> Prove me wrong, that the proposed .biz/info/org deals are the BEST that
> ICANN can negotiate on behalf of the public. Without information, we're
> both engaging in rhetoric. However, I'm the one asking for MORE
> INFORMATION, whereas it's the incumbent registries who are shaking in
> their boots at the prospect of allowing the public to see what other
> offers are out there by prospective contracting parties. If incumbent
> registry operators were so secure and confident about the high quality
> and value of their proposed contracts, they would not fear the scrutiny
> that competing proposals would quickly permit. If instead their
> proposed contracts are so anti-competive and easily beaten by others,
> they are right to be pushing for a quick decision.
> Sincerely,
> George Kirikos
> http://www.kirikos.com/


Jeffrey A. Williams
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