Re: [gnso-vi-feb10] Board resolution on Vertical Integration

[Eric Brunner-Williams <ebw@xxxxxxxxxxxxxxxxxxxx>]

Keith,

The Nairobi statement and the DAGv4 statements of zero and nominal 
cross ownerships, respectively have no affirmative consensus policy 
alternative originating from this PDP WG.
The new gTLD PDP did not address the eligibility of contracted 
parties, and Counsel has offered advice on the subject, as you 
observe. However, the Board at Nairobi is the more recent source of 
policy, as is, subject to Community and public comment, the Staff in 
DAGv4.
It is possible that one or more registrars hold equity in all of the 
capitalized, facilities-based contracted parties (registries). It is 
also possible that contracted parties (registries) who's operations 
are conducted by capitalized, facilities-based contracted parties 
(registries), share the liability of their operators arising from 
equity holdings by registrars.
If the limit on cross ownership is substantively less than the [RACK+ 
and initial 18 months JN2] number, but greater than some nominal 
value, then at least one capitalized, facilities-based contracted 
parties (registry) will be adversely affected, and at least one 
capitalized, facilities-based contracted parties (registry) will not 
be adversely affected.
The basis of the adversity would be the equity formation of the 
affected contracted party, in effect, on capitalization, not its past 
conduct, or credibly its future conduct. This has at least one 
possible consequence.
If the limit on cross ownership is zero, then by the possibility of 
equity liability common to all current registries exists.
I don't dispute your view as to what the VI PDP WG should do, there is 
a charter after all, but absent consensus on a policy recommendation, 
what it does has no immediate bearing on the present policies.
I was not referring to market share at the retail/registrar level.

You're welcome,
Eric