Vertical Integration comments by Leap of Faith Financial Services Inc.

[George Kirikos <gkirikos@xxxxxxxxx>]

Comments on Initial Report on Vertical Integration Between Registrars and 
Registries

By: George Kirikos
Company: Leap of Faith Financial Services Inc.
Website: http://www.leap.com/
Date: August 9, 2010

Normally, we would not bother to even comment, as per our recent statement at:

http://forum.icann.org/lists/pednr-initial-report/msg00000.html

But, I shall be brief, to be on the record. The Vertical Integration "debate" 
only exists because ICANN is planning to allocate new TLDs in a manner that is 
against the public interest, where all the "surplus" goes to the registry 
operator, rather than to consumers. This happens because price caps continue to 
not exist in the latest version of the DAG. If TLDs were operated via a regular 
tender process, whereby the registry applicant with the lowest price to 
consumers wins the contract for a set period, like 5 years, and *without 
presumptive renewal* (like just about every procurement contract in existence), 
then it would be *consumers* who would receive most of the benefits.

Recall that VeriSign owned 100% of Network Solutions, but that wasn't a huge 
issue because the wholesale prices were capped at $6/yr (and it would have been 
even less of an issue with a proper tender process for the registry operation, 
which would have yielded a price closer to $2/yr).

Eliminate presumptive renewal. Have regular tender processes (including for 
important existing TLDs like com/net/org). Then it won't matter which vertical 
integration policy is chosen.

In conclusion, this "debate" is a smokescreen that distracts from the important 
issues of price caps, presumptive renewal, and regular tender processes. While 
registrars and registries debate amongst themselves on the best ways to help 
themselves, it is the consumers (registrants) who are the losers, paying higher 
prices than they would under a tender process.

Sincerely,

George Kirikos
President
Leap of Faith Financial Services Inc.
http://www.leap.com/