[stld-rfp-mobi] Serious Concerns over .Mobi

["Tom Spalding" <tom.d.spalding@xxxxxxxxxx>]

The proposed .mobi sTLD raises serious questions regarding control, policy formulation, 
allocation of  valuable generic domain names, and ultimately the appropriateness of 
granting a monopoly to three industrial giants with dominant market positions.

Who will control this sTLD? The .mobi application provides scant information regarding 
control of the sTLD other than to say that 17 Board members will be appointed from the 
Mobi JV consortium. However, the applicant does not specify whether the 3 founding 
members Microsoft, Nokia, and Vodafone have a controlling stake and veto power in this 
JV.  Are the voting rights equal for each investor and pro rata the sums invested? Will 
each JV member invest the same amount? Unfortunately, there are no details relating to 
ownership and allocation of shares which is essential to understanding who and how the 
.Mobi Sponsoring Organization will operate. Furthermore, there are no provisions for 
community representation on the Mobi JV Board.

Policy formulation, at least in theory, will reside with the Policy Advisory Group 
(PAG), a group of unknown size to be drawn from the .mobi community. Unfortunately, the 
.mobi community is defined so broadly as to include virtually every individual or 
entity in the industrialized world. The MAG and PAG are proposed to be self-funded. In 
practice, actual participation will default to the elite few whose companies are 
willing to pay the costs, and to the few not-for-profit organizations that are anointed 
to receive financial assistance from, and therefore remain beholding to the Mobi JV. In 
this environment it appears unlikely that this ornamental PAG will represent any 
interests beyond those of the Mobi JV founders. 

The proposed auction of generic names is also counter to established procedures. 
Auctions, while appearing to represent the ultimate in free enterprise, actually 
enhance the Mobi JV's revenue at the expense of the community. They eliminate the 
traditional first-come, first-served approach to registrations. In addition, in the 
absence of transparent procedures and without substantial advertising, this process 
will likely favor Mobi JV insiders. 

The financial model provides additional evidence of possible anticompetitive plans. The 
application describes a vast potential market, including 2.2 billion mobile subscribers 
by 2006. Despite these rosy predictions, Mobi JV's financial model projects only 12.5 
million Euros in sales in 2007 which represents about 2 million registrations, or 
approximately 0.1% of the projected 2.2 billion subscribers. The obvious question is 
where did the potential 2.2 billion subscriber registrations go? The only logical 
assumption is that the Mobi JV plans for network operators to continue to register 
their subscribers at the third level. Thus, a subscriber will become 
subscriber(at)vodafone.mobi. This approach will strengthen the operators' control over 
their subscribers, and insures that content providers will have little opportunity to 
reach these 2.2 billion subscribers without paying placement fees on the operators' 
portals. 

Finally, there is the question of granting what amounts to a legal monopoly to Mobi JV. 
The European Commission just fined Microsoft a record 497 million Euros, alleging that 
Microsoft is improperly using its near monopoly position in personal computer operating 
systems to achieve market power in two additional markets: the market for operating 
systems on workgroup servers and the market for media companies. Only a few years 
earlier, the US government found that Microsoft had used similar tactics to decimate 
Netscape and take control of the browser market. In both of these cases, Microsoft's 
approach was to enter an established market, and use product bundling, vendor 
intimidation, and sheer market power to extend their domination to new arenas. This 
established pattern is bound to continue should Microsoft obtain the .Mobi sTLD.

Placing control of the mobile domain registry in the hands of Mobi JV will pose serious 
problems to the Internet community. Can this risk be taken?

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