[ga] Issues with GNSO Initial Report on new gTLDs

[Danny Younger <dannyyounger@xxxxxxxxx>]

>From the registrar list:

Hi all,

I just went through the "Initial Report on new gTLDs"
at -
http://gnso.icann.org/drafts/newgtlds-issues-report-01-28jul06.htm

There is a single glaring issue in the "Term of
Reference 2. Selection Criteria for New Top Level
Domains" as it is currently stated. One of the
recommendations within this terms of references states
-

"Applicants (for new gTLDs) must offer a clearly
differentiated domain name space with respect to
defining the purpose of the application"

Please find implications of the above statement as
below -

*	One of ICANNs mandate is to foster and create
competition in such a manner so as to benefit
consumers
 
*	Competition, along with "stability" and "security"
has been one of the founding principles of ICANN. This
has been mentioned repeatedly in the Green paper,
White paper, ICANN MoU and the ICANN by-laws. Few
excerpts of the same have been attached below for
reference
 
*	A portion of this mandate has been achieved by
creating Domain Registrars who compete amongst
themselves globally and offer Domain
Registration services to a worldwide audience. This
accreditation process of Registrars has resulted in
the price of a domain name reducing from $35 to $7
 
*	This has resulted in significant benefit to
consumers in terms of price and availability. Various
different business models have emerged due to this
competition which have increased domain name
proliferation, availability and service levels
 
*	However, this aspect has only created a choice from
a distribution perspective for customers ie Customers
have the choice to now buy the SAME
Domain Name from multiple different Registrars
 
*	This however has not given the Customer a choice of
the TLD string itself
 
*	The white paper states "The U.S. Government is of
the view, however, that competitive systems generally
result in greater innovation, consumer
choice, and satisfaction in the long run. Moreover,
the pressure of competition is likely to be the most
effective means of discouraging registries from acting
monopolistically." and "The Internet succeeds in great
measure because it is a decentralized system that
encourages innovation and maximizes individual
freedom. Where possible, market mechanisms that
support competition and consumer choice should drive
the management of the Internet because they will lower
costs, promote innovation, encourage diversity, and
enhance user choice and satisfaction."
 
*	It is true that competition has resulted in choice
for consumers and lowered costs for consumers. For
instance, as an example since the last 2 years .INFO
Domain names have been sold at very low prices since
the Registry is offering them at $0.49 to $0.99. This
has resulted in a LARGE number of potential customers
worldwide opting for .INFO domain names instead of
.com domain names. We are a large ICANN Accredited
Domain Registrar, and we have seen .INFO domain names
registered by our Customers
in the last few months is equal to the number of .COM
domain names registered by our Customers.
 
*	The fact that .INFO offers a similar proposition to
some consumers has also resulted in the .INFO space
growing rapidly to 3 million domain
names, and the .BIZ space growing to 1.5 million.
 
*	.INFO and .BIZ are gTLDs which DO NOT offer a
"clearly differentiated domain space" as compared to
existing incumbents. In fact most Registrars market
them as a TLD equivalent of .com, .net, .org etc. This
blur allows a Customer the ability to register domain
names at a cheaper cost, or register a particular
string that is not available in the .COM
space
 
*	This also results in competition for the Registry
operator of .COM.  While we are still aware that
nothing can truly compete with .COM, at least
the existence of other overlapping gTLD options such
as ,BIZ, .INFO etc provide some basic level of choice
to a Customer and thus create a certain level of
competition for incumbent Registries
 
*	Other TLDs such as .travel, .aero, .jobs do not
directly compete with .com and hence cannot bring in
competition amongst registries.
 
*	The only way to allow competition in the gTLD space
is to allow other gTLDs which do not have a
restrictive or differentiated space
 
*	This is even more imperative now than before.
Earlier gTLD contracts did not stipulate
"almost-perpetual" renewal and did not create
circumstances which allowed a Registry operator to
arbitrarily modify prices. The recent trend has
however demonstrated that gTLD Registry contracts may
have more latitude in creating a monopolistic
position. It seems like gTLD contracts may not be
rebid and may have the discretionary ability to change
prices. This position allows Registries to increase
prices without cost justifications and will have a
detrimental effect on consumers and registrants and
Registrars
 
*	The past history demonstrates that competition
within gTLD Registries can only be created in two ways
-
  
1.	By rebid of a Registry (and hence not have a
perpetual contract). This was clearly observed in case
of .NET where the open bid reduced the
pricing for Domain Registrations in the TLD thus
benefiting consumers. It is another matter that due to
skillful negotiations this benefit turned out to
be short lived

2.	In the absence of open bidding for Registries the
only other way to create a basic level of competition
is to allow other TLD string options and
choices to consumers. This cannot be achieved if each
TLD space created is non-overlapping and clearly
demarcated separately. In that case each TLD will
become a monopoly and there will be no competition
amongst TLD Registries
 

*	The recommendations by the GNSO already cover
technical competence as a criterion for selecting a
new TLD Registry. Therefore any Registry
applicant must pass certain technical criteria to
ensure that they would not pose a threat to the
stability and security
 
*	However other than that there should be no reason to
discourage someone from applying a generic string
which may overlap with existing TLD
Registries such as com/net/org/biz/info
 
*	Such a stipulation would be similar to a stipulation
that may say that a Registrar can ONLY sell domain
names within a specific Country.
Imagine if that stipulation were to be created when
the Registrar accreditation process was opened up.
That would not create competition and benefit the
customers
 
*	Similarly restricting the reach and audience of a
TLD Registry will not create competition amongst TLD
Registries
 
*	I think that the notion of strong support for this
criteria may be a misnomer inasmuch as for someone
like me, this criteria in the GNSO terms of
reference has slipped by unnoticed amongst the bigger
things. I may be incorrect, but I would like to take
this opportunity to ensure that the above implications
and ramifications of this particular term of reference
are considered by the GNSO before any final
reccommendations are made in this regards.

I would strongly recommend that Registrars voice out
their comments about this by sending an email to
newgtlds-comments[at]icann.org and filling the web
form at http://survey.icann.org/cgi/comments

I would also recommend that we should come up with a
Constituency statement concerning this particular Term
of Reference. In its current position it may
eliminate any and all possibility of competition in
the gTLD space.

Thanks
Best Regards
Bhavin Turakhia
CEO
Directi

http://gnso.icann.org/mailing-lists/archives/registrars/msg04155.html

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