RE: [ga] A Windfall for VeriSign?

["Michael D. Palage" <mike@xxxxxxxxxx>]

Elliot/Ross,

Let me begin by saying I look forward to a series of constructive exchanges
on this topic.

While I fully support Elliot's view of lessening the ICANN administrative
fee burden on domain name registrants, the likely reality of any excessive
revenue flowing back to ICANN will like go to expand it ever growing
operations and NOT to reduce the existing burden on registrants.

In fact I am willing to make a friendly wager that any excessive fees
attributed to any single letter/digit auctions or next year's TLD auctions
will not go toward reducing the existing burden on registrants, but to some
yet unfunded mandate in the interest of security and stability. Now this
potential scenario may not be totally bad.  For example funding allocations
to registration authorities to help with DNSSEC implementations might be one
possible positive outcome. However, while ICANN is efficient at extracting
upwards of 90% of its operating budget from gTLD registrants, registrars and
registries, I personally have not seen a equal return on investment to this
particular sector of the ICANN community.

Turning to Ross's comments about the .com registry being a public resource.
The reality of the situation is that the highest single letter .com
registration will likely be equal to most if not all of the single
letter/digit revenue of all other gTLD registries combined. This is yet
another example of the .COM tail wagging the gTLD policy dog. 

Now the announcement by ICANN talks about how the allocation of reserve
names will result in revenue and how this allocation process is part of the
consensus driven process. What I find totally ironic about this logic is
that over the past couple of weeks dotMobi has auctioned off upwards of two
million dollars in premium domain names through Sedo and Traffic auctions.
And how much money did ICANN get from these proceedings? Oh yhea I forgot,
they are a "sponsored registry" so these market and financial regulations do
not apply :-)

Further evidence of the inconsistentcy in logic regarding the the allocation
of these "reserved names" can be seen by the following. ICANN recently
permitted numerous registries (.JOBS, .CAT and .COOP to allocate certain two
letter domain names).  These names are reserved under the same appendix as
the single letter domain names. Did ICANN have a consensus policy to
determine how these two letter names would be allocated? Did ICANN mandate
the price at which these domain names would be allocated? Did ICANN demand
that they receive additional revenue above and beyond the fixed ICANN fees
in the existing registry agreement? 

The answer to all these questions are NO, they did not. So again someone
please help me understand why the allocation of these two letter "reserved
names" can happen by the registry merely by submitting a funnel request to
ICANN through a mechanism already provided for in its contract. Could it be
that all of the two letter names have already been allocated in .COM, so the
policy wonks that love to make the ICANN policy dog do flips by jerking .COM
tail do not apply?

Let me be clear, I support the right of a registry to recognize additional
revenue from domain name allocations through processes that are fair and
equitable. That is what competition and different business models within the
registry marketplace are all about. Unfortunately this process seems
destined to make all the square non-market dominant registries fit into the
round hole that the ICANN policy process will create to appease the fear of
VeriSign recognizing an unjust windfall.

Now while on the subject of the DNS being an public resource, I find it
amazing that some participants within the ICANN process will wave this
public resource flag when a registry tries to exploit a business
opportunity, but when it comes to some of the freedoms that some registrars
take with non-renewed or expiring names the public resource analogy does not
apply.

Unfortunately, most people just fail to publicly acknowledges that the
public resource issue only applies when it deals with someone else making a
windfall. However, when it interferes with one's own windfall then public
resource principles need not apply. Just to be clear these comments are not
directed at TUCOWS, both other participants within the ICANN family. I only
raise them within the context of Ross's initial public policy comments.

Look forward to a constructive exchange.

Best regards,

Michael




-----Original Message-----
From: owner-ga@xxxxxxxxxxxxxx [mailto:owner-ga@xxxxxxxxxxxxxx] On Behalf Of
elliot noss
Sent: Tuesday, October 16, 2007 6:10 PM
To: ga
Subject: Re: [ga] A Windfall for VeriSign?



I will post on the forum at some later point, but would like to be  
clear on one point here. this not only should, but MUST be a  
"windfall" for ICANN. now you and I may view "windfall" differently.  
in this case it would mean ICANN needing to generate significantly  
less, and perhaps none, of their budget from registrants going  
forward. to me this means revenue for ICANN and a windfall for  
registrants.

Regards

On 16-Oct-07, at 4:43 PM, Danny Younger wrote:

>
> Karl and I have already sent through preliminary
> comments to the new forum on potential allocation
> methods for single-letter and single-digit domain
> names at the second level in gTLDs.  GA participants
> should likewise send through comments.
>
> If this very bad recommendation winds up being adopted
> by ICANN, then we'll need to first determine who is
> entitled to the capital raised by the proposed
> auctions.   Karl is of the view that Verisign, will
> garner the lion's share of the proceeds.  This is
> likely if the New Registry Services Process is
> invoked.  In conjunction with this approach, the BC
> has already suggested the release and allocation of
> single letters in the non sponsored gTLDs via auction
> to parties with "demonstrated rights".
>
> An alternative that hasn't been much discussed (as
> greed has become everyone's "First Principle") is
> "First Come First Served", with such domains put out
> on a normal registration fee basis -- with this
> approach, VeriSign won't profit from the release of
> these names (profits instead will be made by the
> registrants that fairly acquired these names who
> choose to put them up for sale or auction in the
> secondary market).
>
> The big question therefore is this:  If ICANN adopts
> the GNSO recommendation, will it automatically result
> in a windfall for VeriSign?  or will such a windfall
> be rejected allowing registrants to profit?  or will
> ICANN find a way to turn this into a windfall for
> ICANN?
>
> As for me, as I stated in my posted comments, I side
> with John Klensin on the inadvisability of accepting
> this recommendation.
>
> Thoughts?
>
>
>
>
>
>
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