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Re: [council] Re: [domains-gen] Vint Cerf/ICANN confirm my interpretation of .biz/info/org proposed contracts -- tiered/differential domain pricing would not be forbidden

  • To: Mawaki Chango <ki_chango@xxxxxxxxx>
  • Subject: Re: [council] Re: [domains-gen] Vint Cerf/ICANN confirm my interpretation of .biz/info/org proposed contracts -- tiered/differential domain pricing would not be forbidden
  • From: Ross Rader <ross@xxxxxxxxxx>
  • Date: Wed, 23 Aug 2006 14:21:44 -0400
  • Cc: Council GNSO <council@xxxxxxxxxxxxxx>
  • In-reply-to: <20060823174034.76613.qmail@web54707.mail.yahoo.com>
  • Organization: Tucows Inc.
  • References: <20060823174034.76613.qmail@web54707.mail.yahoo.com>
  • Reply-to: ross@xxxxxxxxxx
  • Sender: owner-council@xxxxxxxxxxxxxx
  • User-agent: Thunderbird 1.5.0.5 (Windows/20060719)
The essence of George's analysis is that the registries may charge whatever they want for specific domain names under these arrangements. i.e. that google.biz might be singled out for a $1mm renewal fee, whereas silllylongnamethatnoonecaresabout.biz would be allowed to renew at $6.
I am not arguing against George per se, but rather that my understanding of the agreement isn't consistent with ICANN's stated interpretation, and more importantly, that if their interpretation is correct, these agreements are heinous. (which at least makes them consistent with the other agreements we've seen lately.) 

Mawaki Chango wrote:

I'm not sure I fully understand this argument, from both sides.

We are talking about TLD registry agreements, and as far as I
understand, registries trade the portion of the DNS space under their
control (.org, .biz, .info, etc.), but they don't sale individual
domain names, which is the business of the registrars - right?

I of course may still need to get a handle of the full scope of the
leverage that those TLD agreements have on the way registrars do
business.

On the other hand meanwhile, I remember Ross drawing, a good while
ago, our attention to the "bad" practices pertaining to the
redemption grace period (the 'drop catchers' problem, etc.), and a
few registrars were pointed out in the article forwarded. I'm not
sure whether the concerned registrars make any profit by allegedly
helping (alerting) the 'drop catchers' at a very early period of
expiration of a specific domain name, or they resell it at the same
flat rate that they would register a new domaine name. If they do
make any profit with such practices (e.g., reselling to a new
owner/intermediary a specific domain name at an increased price based
on, say, the name semantics or supposed business value), then I'm
afraid it might be possible as well for any DNS operator (I mean
registry AND registrar) to single out a specific domain name to which
they would claim to only offer "special" services at a "special"
rate. Unless there is regulation or contractual provision that
clearly prevent that?

Or am I even more confused than I thought?

Mawaki

--- Ross Rader <ross@xxxxxxxxxx> wrote:


Yes of course, but the price for the Registry Service (new
registrations and renewal registrations) would have to increase equally in order for the service being provided by the Registry to stay the same. They are allowed to price whatever they want for new registrations and renewals, which is a blanketing statement. Singling out specific domains for different pricing treatment would, IMHO, require the deployment of a new registry service. 

And keep in mind that I'm not arguing against your view, I'm simply

stating that a) I hope you are wrong and b) you should be wrong and
c) that an ICANN that thinks you are right is completely and totally out of touch with reality. 

George Kirikos wrote:

Hi again,

[I can't post to the Registrars or Council lists, so someone

would have

to forward it]

--- Ross Rader <ross@xxxxxxxxxx> wrote:

George - I  understand what you've laid out, but your analysis
ignores the fact that the contract is for the provisioning of initial registration and renewal of those registration of domain names,
not 
specific domain names. I don't see how one could possible

interpret
the definition of these services to include tiered pricing for the services based on new criteria that don't fix the existing definition of
the 
current registry services.

In other words, the registries have a contract to provide
registration services for all names in the namespace at the prices included 
in the

agreement.

They are still providing registration services for all names.

They are

still providing it for prices that are "in the agreement".

The contracts specifically state an initial fee, one that is

identical

for all domains. However, registries are free to amend the

pricing

schedule in any way they see fit, as long as it is not in a

manner

forbidden by the contract.

They do not have a contract for the provision of some of these
services at one price, and the provision of the same service to other 
people
at a different price. i.e. there is no registry service that provides 
for
the sale of specific domain names, there is only a registry service
that 
provides for the sale of new registrations and renewed

registrations
in the entire namespace. There is a huge difference between the 
sale of
a domain name, and registration in a namespace. 
A price schedule is perfectly consistent with pages 80 and 81 of:



http://www.icann.org/tlds/agreements/biz/registry-agmt-app-28jul06.pdf

The first sentence of page 80 is:

"Initial Registration. Registrar agrees to pay the non-refundable
amounts as set forth below: " 

and it contains a box below.

Registrar announces, and gives 6 months notice, that the box has
changed as follows (as an example):

sex.biz -- $100,000/yr
music.biz -- $60,000/yr
google.biz -- $1 billion/yr
kirikos.biz -- $100 billion/yr <<--- Neustar loves me :)
ghkghs.biz -- 10 cents/yr

These sure look like "non-refundable amounts" to me, and are "set

forth

below".

The words on page 81 are "Registry Operator reserves the right to
increase the Fees set forth above prospectively upon six months

advance

notice to Registrar."

A price schedule fits that definition. That table of values can

be

called "fees". There can be many other possible forms. Only forms

that

do not provide equal access to all registrars are forbidden, i.e.

due

to section 7.1 of page 17:



http://www.icann.org/tlds/agreements/biz/registry-agmt-28jul06.pdf

 Fees have been increased, with six months notice. They have

increased

by varying amounts (indeed, some have DECREASED, but that's ok

too).

The contract does not forbid this.

I can't believe that Vint has lost track of this distinction.

And if
he has, if ICANN has, we are all in much worse shape than we 
thought.
"3.1 (b)(v) In addition to the other limitations on Consensus Policies, they shall not: 3.1 (b)(v)(A) prescribe or limit the price of Registry Services;" 

(from page 4 of


http://www.icann.org/tlds/agreements/biz/registry-agmt-28jul06.pdf
)

ICANN can't prescribe

http://www.answers.com/prescribe&r=67

"To set down as a rule or guide; enjoin. See synonyms at

dictate.; To

order the use of (a medicine or other treatment). To establish

rules,

laws, or directions."

or limit

http://www.answers.com/limit

"To confine or restrict within a boundary or bounds. ; To fix
definitely; to specify."

the price of registry services. A pricing schedule is perfectly
consistent with the meaning of those words, i.e. not forbidden.

How

else would volume pricing be able to be implemented, except

through a

table of some sort, a modification of page 80's box? Since there

do not

appear to be any words that prescribe or place limits on what

goes in

the box (besides 7.1 for equal access amongst registrars),
differential/tiered domain by domain pricing can go into that

box.

All one needs to do is find the specific words in the contract

that

forbid that confine how that box can change. John Jeffrey

couldn't,

neither could external counsel, or 2 other registrars (who've not

gone

public so I won't name them), that's why Vint confirmed the
interpretation. I'd be happy if there was a limit on how that box

could

change. Until someone finds that limit by pointing to a line in

the

contract, or adds a term to the contract to create a limitation,

then

differential/tiered pricing might become a reality.

I asked Jeff Neuman on the GA list directly, after a series of

messages

back and forth (all archived) precisely the following:

http://gnso.icann.org/mailing-lists/archives/ga/msg04301.html

"As a sign of good faith, would Neustar agree as a simple matter

that

the draft contracts be amended to forbid differential pricing on

a

domain-by-domain basis, i.e. to forbid .tv-style non-neutral and
discriminatory pricing?"

Jeff chose that moment to stop participation in the discussions

(he

hasn't posted since).

One can read the full archives,
http://gnso.icann.org/mailing-lists/archives/ga/index.html ,

starting

from July 29th or so, and working to the present.

Registry says:

http://gnso.icann.org/mailing-lists/archives/ga/msg04294.html

" In other words, do you really think .BIZ could get away with

raising

prices above
 that for a .com domain name and survive?  We do not."

I challenge him directly on that, i.e. if what he says is true,

then

why not agree to caps? You can follow the thread and see where

that

went.

If the registries agree to amend the contracts, there is no

issue. i.e.

one can clarify the language to be more explicit and not permit

these

differing opinions (in which I appear to be in the majority view

at

present, although occasionally the majority is incorrect). With
language that has perfect clarity, there'd be unanimity as to

what the

contract allows and does not allow. Ask yourself, why won't the
registries agree to clarify it? Is it because the contract is

"perfect"

and can't be improved upon, or is it because they agree with my
interpretation, Vint's interpretation, John Jeffrey's

interpretation,

external counsel's interpretation, and want to reserve the right

to do

as they please later?

3 phone calls, one to each registry operator, to see if they wish

to

add clarity to the contract. See what they say. Would ICANN have

any

reason to not accept that added clarity? What's their great
fear....that, egads, registrants might be protected??!??? 
Sincerely,

George Kirikos
http://www.kirikos.com/


George Kirikos wrote:

Hi Ross,

Here's my analysis of the .biz variation of the contract (the

.info

and

.org are similar, albeit different page numbers, etc.).  I'm

not a

member of the Registars Constituency or Council lists, so you'd

need to

forward this reply to them.

You can confirm with John Jeffrey or Vint Cerf that they don't

disagree

with the interpretation, namely that nothing in the new

contracts

forbids tiered/differential pricing on a domain by domain

basis:

A] The contract between the registry and registrars must be

"non

discriminatory", as per Article 7 (section 7.1) of the main

contract

(page 17 of the .biz version):



http://www.icann.org/tlds/agreements/biz/registry-agmt-28jul06.pdf

But, if you read the language very carefully, all it talks

about is

equal access, equal treatment. It does not forbid a pricing

schedule

for different domain names (i.e. .tv has this differential
pricing). 
B] When one views pages 80 and 81 of the Appendix document

(Exhibit

E):

http://www.icann.org/tlds/agreements/biz/registry-agmt-app-28jul06.pdf

the last sentence does not prescribe any restriction on how

prices

can

increase, or forbid differential pricing. Indeed, a

profit-maximizing

registry could immediately announce that the fees in Appendix E

are

replaced by a table of values, e.g. sex.biz = $100,000/yr,

music.biz =

$50,000/yr, gsjkhgkjshgs.biz = $1/yr, and so on, or other

formulas.

Remember, volume pricing is already allowed by the existing

contracts.

That volume pricing is a schedule, too (albeit of a different

style).

There's no restriction on the type of schedule, it just must be
consistent with A] above (i.e. registry can't have a different

price

schedule for Tucows, GoDaddy, NSI, etc.).

C] Nothing  in Section 4.1 (page 64) prevents it either. And

since

3.1(b)(V)(A) [page 4 of the main contract] prevents consensus

policies

from influencing pricing, one can't fix this problem later.

D] The only place I could find where fees are fixed on a domain

by

domain basis are the fees the registry operator pays to ICANN

(i.e.

page 18 of the main contract, section 7.2). Of course, the

registries

seek cost certainty and non-discrimination for themselves. :)

This

doesn't affect pricing to registrars, though, and through them

to

registrants --- it would still
appear that the registries could introduce price schedules on a
differential domain-by-domain basis (in any manner they choose;

e.g. if
they don't like the owners of pussy.org, a porn site, they 
could

make

the price be $1 billion/yr to force out the owner, albeit after

a

10-year time lag), if my interpretation is correct and I didn't

miss

anything.

E] There are lots of other problems with these new contracts

(i.e.

presumptive  renewal, elimination of price caps, use of traffic
data, 
etc.), so even if  the above issue is "fixed", I'd be against

them,

especially before the DoC  rules on the .com settlement

agreement,

and

the lawsuits (e.g. by www.cfit.info) are concluded.

ICANN's lawyers have even said in the CFIT court case documents

that

price controls in a single supplier market are pro-competitive,

so

lifting the price caps is very hypocritical. These bad new

contracts

would create a dangerous precedent for VeriSign to exploit in

future

contract negotiations over operation of the .com registry. I

elaborated

on this at:

http://forum.icann.org/lists/biz-tld-agreement/msg00009.html

Note that this issue could easily be solved, the loophole

removed,

by

having ICANN add one sentence to each contract, dictating that

renewal

prices must be identical for all domains. Ask yourself why

ICANN

and

the registries won't add that sentence. I've been pressing them

for

3+

weeks on this issue, and they're sticking to their guns, even

after

agreeing on my interpretation of what's not forbidden. Their

position

is that the 6-month price increase notice period and the

ability to

renew for 10 years is sufficient to prevent a "suicide" move by
registries. Ask yourself if you're willing to trust registries

won't

open Pandora's Box. I'll be around in 10+ years, God willing.

I'll

bet

current ICANN Board members won't be on the board in 10 years.

BTW, see the eloquent comments of Frank Schilling (of
NameAdministration), who has also posted on this matter:

http://forum.icann.org/lists/biz-tld-agreement/msg00005.html

Sincerely,

George Kirikos
http://www.kirikos.com/

--- Ross Rader <ross@xxxxxxxxxx> wrote:


(I have cc'ed this to both the Council and Registrar lists as
George's message has popped up on both of these lists and I would like 
to

hear

more from my colleagues in those circles on this subject...)

George Kirikos wrote:

Hello,

--- JB <info@xxxxxxx> wrote:

Or holding an auction for a popular name to find it's market

price.

My reading of the contracts is that they wouldn't be allowed

to

hold a

traditional English auction for the domain name, because

they'd

have to

set a price on an equal basis for all registrars. It might be

possible,

though, as the contracts are so poorly written.

Poorly written indeed.

I would like to hear the basis for ICANN's opinion. My read of
these 
contracts is very different (keep in mind that IANAL,

NDIPOOTV) in
that the combination of the registry services provisions, and the definition of the registry service itself prevents per domain price discrimination, in the absence of a different registry service specifically 
intended
to allow for this type of pricing. 

i.e. the new contracts state;

Main Agreement,  "3.1 (d)(iii) Registry Services are, for

purposes

of this Agreement, defined as the following: (a) those
services that are both (i) operations of the registry critical

to

the following tasks: the receipt of data from registrars
concerning registrations of domain names and name
servers; provision to registrars of status information

relating

to the zone servers for the TLD; dissemination of TLD zone
files; operation of the registry zone servers; and
dissemination of contact and other information concerning
domain name server registrations in the TLD as required by
this Agreement; and (ii) provided by the Registry Operator
for the .biz registry as of the Effective Date as set forth on
Appendix 9; (b) other products or services that the Registry
Operator is required to provide because of the establishment
of a Consensus Policy (as defined in Section 3.1(b) above);
(c) any other products or services that only a registry
operator is capable of providing, by reason of its designation
as the registry operator; and (d) material changes to any
Registry Service within the scope of (a), (b) or (c) above.

Appendix 8, "4.1.1 Registrar agrees to pay Registry Operator

the

fees

set forth in Exhibit E for initial and renewal registrations

and
other services provided by Registry Operator to Registrar 
(collectively,

"Fees"). Registry Operator reserves the right to increase the

Fees

prospectively upon six (6) months prior notice to Registrar."

Exhibit E to Appendix 8, "Initial Registration Fe(Per Domain

Name)

US

$5.30, Renewal Fee (Per Domain Name) US $5.30"

In other words, one of the existing Registry Services is

providing

initial registrations in the .biz namespace. The price for

this
service is currently $5.30. This price for this service may be revised 
with
six months notice. 

There are no provisions for any service that provides the

registry
with the capability to reserve specific names and make them 
available
through other means. There are only provisions for registry services 
for
initial and renewal registrations. The wording of these provisions 
makes

it
very clear that the pricing of these services is for all initial 
and
renewal registrations, not for specific initial or renewal 
registrations
based on the string of the domain. 

I can't for one second believe that Vint's interpretation is

in

any
way correct and I'd like to hear an absolute official 
determination

based
on the existing definition of registry services as outlined in
these 
proposed agreements. If your interpretation is correct, the

entire

definition of registry services is flawed in that it would
basically 
mean that Registry Services includes variations on Initial and
Renewal registrations that aren't specifically covered in the existing agreement (i.e. the registry can provide whatever variations on these 
two
services it wants without going through the Registry Services Approval 
Process).



Regards,

--

                        -rr








                 "Don't be too timid and squeamish about your
actions.
                                            All life is an
experiment.
                             The more experiments you make the
better."
                         - Ralph Waldo Emerson


Contact Info:

Ross Rader
Director, Research & Innovation
Tucows Inc.
t. 416.538.5492
c. 416.828.8783

Get Started: http://start.tucows.com
My Blogware: http://www.byte.org
_______________________________________________
domains-gen mailing list
domains-gen@xxxxxxxxxxxxxxxxxx
http://discuss.tucows.com/mailman/listinfo/domains-gen


Regards,

--

                        -rr








                 "Don't be too timid and squeamish about your
actions.
                                            All life is an
experiment.
                             The more experiments you make the
better."
                         - Ralph Waldo Emerson


Contact Info:

Ross Rader
Director, Research & Innovation
Tucows Inc.
t. 416.538.5492
c. 416.828.8783

Get Started: http://start.tucows.com
My Blogware: http://www.byte.org
_______________________________________________
domains-gen mailing list
domains-gen@xxxxxxxxxxxxxxxxxx
http://discuss.tucows.com/mailman/listinfo/domains-gen



Regards,

--

                        -rr








                 "Don't be too timid and squeamish about your
actions.
                                            All life is an
experiment.
                             The more experiments you make the
better."
                         - Ralph Waldo Emerson


Contact Info:

Ross Rader
Director, Research & Innovation
Tucows Inc.
t. 416.538.5492
c. 416.828.8783

Get Started: http://start.tucows.com
My Blogware: http://www.byte.org






Regards,

--

                       -ross rader
                        general manager,
                        domain direct/netidentity/nameplanet

Have you checked out the NetIdentity/Nameplanet Weblog?
http://netidentity.weblog.info
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