RE: [ga] The End of Domain Tasting and its Consequences

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

Chris:

The domain name industry is very dynamic, and you are correct that no
registry contract cannot account for every variable. That is why as I
stated in my original email the referral to national competition
authorities in the new registry contracts is so important. Even ICANN
with a 40 million dollar annual budget lacks the skill set (in house or
through outside consultants) to function as a registry price regulator
and enforcer. 

Article I, Section 2, subparagraph 6 clearly states part of ICANN's Core
Values is "[i]ntroducing and promoting competition in the registration
of domain names where practicable and beneficial in the public
interest." It is not tasked with regulating competition or setting price
controls. I often recall a quote by ICANN's formal general counsel,
Louis Touton, ICANN is about protecting competition, not individuals
competitors.

I want a competitive marketplace, and part of that competitive
marketplace is one in which consumers have the choice to choose between
new TLD offerings, especial if a dominant registry operator seeks to
abuse its power. As Thomas can tell you, during my time on the Board I
was a vocal advocate regarding the expanse of the name space. However, I
found it sad that so few people commented on the public forum for the
new gTLD PDP. I think ICANN staff, particularly Liz Williams has done an
admirable job conducting outreach and producing documents to move this
important task forward.

I am not asking you to trust either my or Vint's judgment/opinion.
Instead I would ask you to place your trust on two mechanisms. First is
in the market to resolve pricing fluctuations /variations over the long
term. Many people have talked about what if VeriSign was to charge
Google 1 million dollars for google.com. Assuming that VeriSign somehow
put forth a registry service pricing model that passed both ICANN and
government approval, here is likely what would happen in my humble
opinion. Google would pay the money, and would simultaneously submit an
application for a new .GOOGLE or .G TLD to ICANN. Then guess how much
money VeriSign makes in year two of the million dollar pricing model?  

My second trust is in the referral process to the national competition
authorities. However, as noted in my previously emails, I am concerned
about the functionality of this safeguard given the shortness of the 45
day window.

Thanks for your comments. I hear your concerns, but I do believe that
there are adequate safeguards to address them if mechanism two (national
competition authorities) is ironed out.

Best regards,

Michael D. Palage







-----Original Message-----
From: kidsearch [mailto:kidsearch@xxxxxxxxxxxxx] 
Sent: Thursday, August 24, 2006 12:33 PM
To: Michael D. Palage; 'Thomas Narten'
Cc: ga@xxxxxxxxxxxxxx; vint@xxxxxxxxxx
Subject: Re: [ga] The End of Domain Tasting and its Consequences 


"As Vint properly noted in his email, it would be virtual suicide for
"most" registry operators to abuse this discretion."

That is the equivalent about what gw bush said about giving 15 years of
back taxes to the corporations. Congress wanted to put in a stipulation
that if the US Gov gave them this tax break they have to create x number
of new jobs with it since it was meant or sold as being for the creation
of jobs. Bush's reply was that you don't need to have strings attached,
these corporations will do the right thing.

Sorry but contracts are not in place because we assume everyone will do
the right thing. If that were the case why have any contract for the
registries at all. Why not just trust them to do the right thing always?
You cannot assume they will not do something because YOU or VINT thinks
it would not be in their best interest to do it, therefore meaning they
will not do it.

A contract is put into place and you attempt to cover every scenario you
can think of. You cannot imagine every possibility in the world, but
this one has been brought to your attention and you can do something
about it by placing it into the contract.

Chris McElroy aka NameCritic http://icann.thingsthatjustpissmeoff.com

----- Original Message ----- 
From: "Michael D. Palage" <Michael@xxxxxxxxxx>
To: "'Thomas Narten'" <narten@xxxxxxxxxx>
Cc: <ga@xxxxxxxxxxxxxx>; <vint@xxxxxxxxxx>
Sent: Thursday, August 24, 2006 12:27 PM
Subject: RE: [ga] The End of Domain Tasting and its Consequences


> Thomas:
>
> Thanks for pointing this "nondiscrimatory" provision out to the GA 
> list. I agree that this would prevent against the specific scenario 
> which Danny has outlined in his email.
>
> I also think it is important that this "nondiscriminatory" concept be 
> analyzed in connection with the pricing models which has been a recent

> topic of discussion on the GA list as well. I appreciate Vint's 
> professionalism in providing the answer to George's  had sought in 
> advance of the close of the public comment period.
>
> I have some points of agreement and divergence with George's response 
> to Vint's email so let me begin from the top.
>
> Under existing ICANN registry contracts, not all domain names are 
> created equal, this may surprise many people. For example, if you look

> at the .MOBI registry contract Appendix S, Part 4 Attachment 1, 
> http://www.icann.org/tlds/agreements/mobi/mobi-appendixS-23nov05.htm,
> you will see that the .MOBI registry operator currently has the legal 
> right to allocate domain names on an otherwise than first come first 
> serve basis at a uniform price.  Specifically, it can allocate 
> "Premium Names on a One time initial purchase", or as listed in the 
> future registry services section "Premium names sold via multi-year 
> fee structure." This is also consistent with the .MOBI launch which 
> has done so with multiple price points (sunrise, landrush, premium, 
> post landrush).
>
> My personal opinion is that ICANN needs to focus on preventing a 
> registry operator due to its sole source contract from abusing that 
> position within the marketplace by allowing discriminatory pricing. If

> a registry operator is merely imposing an equitable pricing model on 
> the same class of domain names, that is not discriminatory. As Vint 
> properly noted in his email, it would be virtual suicide for "most" 
> registry operators to abuse this discretion. George and I have 
> discussed on the Business Constituency list how .COM is the dominant 
> registry operator in the marketplace. Being a lawyer I refrain from 
> throwing around the "M" word (monopoly) as it has significant legal 
> consequences. But I believe an email by Jeff Neuman on the GA list a 
> couple of weeks ago acknowledged the importance that VeriSign has on 
> setting price within the gTLD marketplace.
>
> The portfolio of most professional registrants (domainers) are 
> composed of .com domain names. They are probably only concerned with 
> what happens in .info, .biz or .org as the precedent that this may set

> for VeriSign having that same legal right under the .COM contract.
>
> As I tried to discuss with George on the Business constituency list, I

> believe the provision in the new registry contracts to refer to 
> "appropriate governmental competition authorit[ies]" matters involving

> new registry services (i.e. differential pricing) is very important. 
> This change in the new ICANN registry contracts is important as it 
> recognizes ICANN's limited scope of authority, which ties into a 
> recent exchange I had with Karl regarding the scope and source of 
> ICANN's authority.
>
> I think as ICANN gains experience with the new Funnel Process which 
> went live earlier this week, the real question needs to focus on is 
> the 45 day referral window to the appropriate competition authority 
> reasonable? Additionally, are these competition authorities suitably 
> tasked with handling submissions from ICANN?
>
> If I was still on the Board this is the one question that I would be 
> asking. Given ICANN's recent decisions to extricate itself from 
> overseeing registry pricing, are the governmental safeguards that it 
> has in place adequate to protect domain name registrants. Given the 
> length of the DoC/DoJ review of the VeriSign .COM agreement, I think 
> the 45 day period as currently contained in the base registry 
> contracts may not be suitable. However, these are questions not 
> specifically directed to the .BIZ, .INFO and .ORG contracts but to all

> the ICANN registry contracts which have this important provision 
> (.NET, .TRAVEL, .JOBS, MOBI, and .CAT).
>
> Thanks again for your constructive comments and I hope my feedback is 
> equally constructive. I also appreciate both your and Veni's 
> contribution to the GA list.
>
> Best regards,
>
> Michael
>
>
>
>
> -----Original Message-----
> From: owner-ga@xxxxxxxxxxxxxx [mailto:owner-ga@xxxxxxxxxxxxxx] On 
> Behalf Of Thomas Narten
> Sent: Thursday, August 24, 2006 10:21 AM
> To: Danny Younger
> Cc: ga@xxxxxxxxxxxxxx; vint@xxxxxxxxxx
> Subject: Re: [ga] The End of Domain Tasting and its Consequences
>
>
> Danny Younger <dannyyounger@xxxxxxxxx> writes:
>
> > For example, what if VeriSign and/or others decided to
> > sell this data for a high price to a single speculator
> > that had a relationship with a single registrar.
> > Would this violate current registrar equal access requirements 
> > created to ensure competition?  Probably not, as the registry would 
> > be selling data to a third party and not directly to the registrar 
> > community.
>
> > What if these registries decided to put all their data (including 
> > data
>
> > on existing domains) up for auction? Most likely a single party such

> > as Google or Yahoo would prevail at auction.  Is it appropriate for 
> > a single entity to have exclusive use of such registry data?
>
> Wouldn't this run afoul of the last sentence of the clause relating to

> "Traffic Data", namely:
>
> > To the extent that traffic data subject to this provision is made 
> > available, access shall be on terms that are nondiscriminatory.
>
> Thomas
>
>
>
>
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