Marchex Opposition

["Ethan A. Caldwell" <eac@xxxxxxxxxxx>]

We have several concerns with the proposed .BIZ, .INFO and .ORG registry
agreements, the main one being the anticompetitive nature of the
proposed agreements, which opens the door to potential, disastrous
abuse.

First, the renewal provisions in each proposed agreement effectively
guarantees the registry operators continued control over their
respective gTLDs.  Under the proposed terms, ICANN could only terminate
the registry agreements in an extremely limited set of circumstances.
By relinquishing nearly all of its discretion in the renewal process,
ICANN essentially abandons its registry oversight duties and surrenders
its ability to promote competition.

Second, the lifting of price controls to permit potentially outrageous
pricing is clearly anticompetitive in a single supplier market where
registries are the single suppliers for each TLD.  Wholly unrestricted
by price caps or cost justification restrictions in this single supplier
market, the respective registries are free to charge exorbitant fees at
their sole discretion and whim.  It is imperative in this inherently
anticompetitive market that ICANN adhere to its charter and stated
mission of promoting stability and competition by negotiating into the
terms effective contractual prohibitions and restrictions with respect
to pricing.

Whether registries abuse the anticompetitive scenario by imposing
exorbitant fees across the board or by imposing such fees only to select
domains names, the registrants and ultimately end user consumers are
significantly harmed.  The prospect of exorbitant, exclusionary renewal
fees would discourage all registrants from investing in and developing
their domains and corresponding Web sites, which in turn, would diminish
the consumer utility of the affected Web sites.  Such a pricing scheme
would also likely cause a decline in Web-based commerce and the services
supporting such commerce, as well as the technologies driving Web
development.  These are not insignificant parts of the world economy.

It should not be made permissible and acceptable for registries to
capitalize unfairly on the labor of registrants.  As an example, our
core business is in connecting merchants with online customers through a
large network of local and vertical Web sites.  We have invested and
will continue to invest a tremendous amount of resources to develop our
Web sites, increase their utility and enhance the user experience in our
network.  The proposed lifting of price controls would permit registries
to potentially target companies such as ours through exorbitant pricing
and thereby unjustly reap the benefits of our investments, development
and efforts.  That such abuse may not occur until ten years into the
future or without six-months advance notice makes it no more acceptable.

The current .BIZ and .INFO agreements expire in 2007, and the current
.ORG agreement expires in 2009.  To approve these proposals well before
the existing agreements expire and prior to release of the Department of
Commerce's findings on the proposed .COM agreement would unnecessarily
preclude further, proper discussion and development of many important
issues involved.  We urge ICANN to use the period between now and the
expiration of the current registry agreements to reconsider its core
principles and duties and, with them in mind, to engage in a more
thorough and public deliberation of the key components of successor
.BIZ, .INFO and .ORG registry agreements.  There is far too much at
stake to act in haste.


Ethan A. Caldwell
Chief Administrative Officer and General Counsel
Marchex, Inc.