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Username: arbitrage
Date/Time: Sun, September 30, 2001 at 11:30 AM GMT
Browser: Microsoft Internet Explorer V6.0 using Windows 98
Subject: Follow the Money


It is difficult to believe that the Sunrise fiasco was unintentional, because every step of the way the existence of fraudulent sunrise registrations has resulted in more money for Afilias. Consider this sunrise challenge rule:

"(g)    The Center will transfer to the Registry a portion in the amount of USD 25 of each Challengerís and Respondentís fee which it has effectively received and which is not to be reimbursed to the Parties in accordance with the preceding provisions of this Paragraph."

So Afilias is paid at least $25 per registration challenged, and for what?  The sunrise challenge policy says this:

"g.    Our Involvement in Administrative Proceedings.  We do not, and will not, participate in the administration or conduct of any proceeding before the Center under this Policy.  In addition, we will not be liable as a result of any decisions rendered by the Center."

The kickback from WIPO to Afilias amounts to a financial incentive for generating challenges. Every bogus sunrise registration (in addition to the non-refundable registration fee paid by the registrant) is another opportunity for profit. Only when this revenue stream is exhausted (December 26, if not extended) will Afilias take any action with regard to fraudulent registrations.

The rules and policies in place, whether accidental or part of an ingenious scheme, have given the directors of Afilias a major conflict of interest.  Anything they do to mitigate the damage to the general public caused by the sunrise abomination will cost the company, and its shareholders, money.  They have an obligation to the shareholders to maximize value, so in the absence of a credible lawsuit I wouldn't expect them to do anything to disturb the cash flow.


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