Re: [ga] Responses by .biz/info/org Registry Operators are Unacceptable

["kidsearch" <kidsearch@xxxxxxxxxxxxx>]

Michael. This is all well an dgood. Not all of us are only concerned because
of it's affect on dot com and are actually looking at these contracts on
their own merit or lack of it.

Again, it needs to be repeated that IF as the registry operators keep
saying, they would never do this, why is everyone going to so much trouble
to make sure the options are left in the contract. If it will never happen
and they do not intend to do it, there is no need for it in the contract.
Pretty simple stuff here.

Also, you mention, and others have done the same, that if they did raise
prices or do anything greedy that the remedy is that everyone would seek a
new TLD to move to. I have to assume that everyone who makes that assumption
or tries to make that point has never owned a business on the web and has no
knowledge whatsoever toward Internet Marketing.

Large and small companies alike spend a lot of money and time to build link
popularity and to brand their domain name. The registries can, and in my
opinion, would hold them up for as much money as possible to improve their
own bottom line. Moving to a new TLD is NOT an option for most companies who
have already put their money and effort into their current domain name.

All I ask is that people quit offering this as a viable option if registries
abused the pricing structure. It's just smoke and mirrors if you do so.
Repeat: If they are not ever going to do this, why leave it in the contract?
How about I sell you a house and in the contract say If I feel I need to I
will charge you a few thousand more for your house even after you have paid
the current contract price for the house. Of course I would never do that
because you would just move out, but I want to leave it in the contract
anyway, although as I said I would never exercize that option.

Chris McElroy aka NameCritic
http://www.articlecontentprovider.com

----- Original Message ----- 
From: "Michael D. Palage" <Michael@xxxxxxxxxx>
To: "'George Kirikos'" <gkirikos@xxxxxxxxx>; <ga@xxxxxxxxxxxxxx>
Sent: Friday, October 13, 2006 1:25 PM
Subject: RE: [ga] Responses by .biz/info/org Registry Operators are
Unacceptable


> George:
>
> You and I have had a number of constructive discussions via email on the
> GA and BC list, as well as over the telephone on this topic.
>
> Although a lot has been said about the proposed .BIZ, .INFO and .ORG
> contracts lets talk about what has not been said. Most of the vocal
> people in this current debate could care less about the .BIZ, .INFO and
> .ORG contracts, but only care about its potential impact in connection
> with the VeriSign .COM contract. You yourself even admitted the same
> during our exchange on the BC list, when you admitted that neither .BIZ
> or .INFO had any market power.
>
> Now I think the proposed wording by the registry operators is not
> unreasonable, and here is why. Both of us agree that the reasonable
> expectation interests of registrants need to be protected. For the
> purposes of this discussion lets use VALUABLE-DOMAIN-NAME.TLD that was
> registered by a registrant for $9 of which $6 went to the registry
> operator. Now lets suppose that the management of a registry operator
> wanted to do something really stupid and greedy and decided to raise the
> price of all renewals to $1000. Under the proposed wording of the
> Afilias and Neustar modified contractual language that would not be
> possible. Because all new and renewal registrations need to be charged
> at a uniform rate, the only exception being in connection with marketing
> programs.
>
> Thus the only way registry operator would be able to charge $1000
> dollars per domain name year was if they charged all registrants (new
> and renewal) $1000 per domain name year. Now if a registry operator was
> stupid enough to try that particular move here is what would happen.
> Because of the six month notice period, coupled with the ten year
> maximum registration period, all registrants would max out their
> registration agreements at the lower $6 rate. After the registry raised
> their rates, there would likely be no new registrants into the space at
> the $1000 per domain name year rate, and the registry would eventually
> fail in 10 years after all of the existing registrants migrated toward a
> new TLD. That is what would happen in .BIZ, .INFO and .ORG. Now perhaps
> you could argue that registrants would pay the ransom to stay in the
> .COM space, however, that is not relevant to the current issue at hand
> regarding the pending .BIZ, .INFO and .ORG contracts.
>
> Another hypothetical that has been discussed under the tiered variable
> pricing models is how a registry operator could impose per domain name
> pricing. Under the proposed restrictions this type of pricing would not
> impact active domain name registrations. It would only potentially apply
> to domain names that have never been allocated (i.e. single or two
> letter domain names) or in connection with domain names that were
> initially registered and then later deleted. In either case there is no
> registrant's reasonable expectation interest to protect. Thus as long as
> the registrant of VALUABLE-DOMAIN-NAME.TLD maintained his/her
> registration, he/she would never be subject to any tiered variable
> pricing models.
>
> Having read most of the exchanges between you and Jeff Neuman, I believe
> you have taken a number of his quotes out of context. This is
> unfortunate because this is why many people avoid engaging in an open
> dialog on this and other lists. With regard to your quotes by Neustar's
> CEO Ganek, I believe you are comparing apples to oranges. For example
> NeuStar does have a monopoly over the telephone number space in the
> U.S., I have no choice but to use their service should I want a
> telephone number within the North American number plan. Although each
> registry operator is a sole source provider (monopoly) for their
> respective TLD, as a consumer I have the ability to pick from any one of
> a number of TLDs when deciding to create an online presence.
>
> So here is the factual scorecard as I see it:
>
> The ICANN Board has voted in favor of presumptive renewal in connection
> with the following registry contracts: (.TRAVEL, .JOBS, .NET, .MOBI,
> .CAT, .COM, and .TEL).
>
> The ICANN Board has approved the following registry contracts (.COM and
> .TEL) during the pendency of the Feb-06 PDP.
>
> Notwithstanding the ICANN Board's approval of the following registry
> contracts (.TRAVEL, .JOBS, .NET, .MOBI, .CAT, .COM, and .TEL) that
> potentially allowed for tiered/variable pricing, the current registry
> operators have voluntarily agreed to include additional restrictive
> language into their contracts.
>
> Under the ICANN by-laws, ICANN shall not apply its "practices
> inequitably or single out any particular party for disparate treatment
> unless justified by substantial and reasonable cause, such as the
> promotion of effective competition."
>
> In accordance with paragraph 5.2 of the existing Neustar and Afilias
> registry contracts, both registry operators are within the period of
> time during which their contract should have been extended. The only
> reason their contract would not have been extended is if the parties
> could not reach an agreement and the registry contract would need to be
> rebid. However, that is not the case as both ICANN and the registry
> operators have agreed upon proposed terms to a new contract.
>
> Thus the ICANN Board has two options as I see it:
>
> (1) Approve the registry contracts that are materially the same as the
> recent registry contracts the Board has approved, and allow validly
> constituted policy development processes to make the appropriate changes
> as currently set forth in the registry agreements; or
>
> (2) Reject the contracts and explain the substantial and reasonable
> cause why they have singled out these registry operators for disparate
> treatment.
>
> Just my two cents for what they are worth.
>
> Best regards,
>
> Michael D. Palage
>
>
>
>
> -----Original Message-----
> From: owner-ga@xxxxxxxxxxxxxx [mailto:owner-ga@xxxxxxxxxxxxxx] On Behalf
> Of George Kirikos
> Sent: Friday, October 13, 2006 2:00 AM
> To: ga@xxxxxxxxxxxxxx
> Cc: biz-tld-agreement@xxxxxxxxx; info-tld-agreement@xxxxxxxxx;
> org-tld-agreement@xxxxxxxxx
> Subject: [ga] Responses by .biz/info/org Registry Operators are
> Unacceptable
>
>
> Hello,
>
> ICANN has posted the responses of the .biz, .info and .org registries
> regarding the proposed new contracts at:
>
> http://www.icann.org/announcements/announcement-1-12oct06.htm
>
> They are unacceptable, and the proposed contracts should continue to be
> rejected.
>
> 1) Tiered/Differential pricing -- Each of the registries proposes that
> new language be added to the contracts that would continue to leave in a
> big loophole to implement differential pricing. In particular, they
> would allow it:
>
> "to the extent a variable pricing model for active Registered Names has
> been implemented in any other new or existing gTLD"
>
> (effectively the equivalent language in all 3 proposed revisions)
>
> This is an enormous loophole. Indeed, it's a loophole that may
> *ALREADY* have been triggered, or be able to be triggered due to
> existing contracts for newer gTLDs that don't have any theoretical
> restrictions on pricing (e.g. it might be allowed in .asia or .mobi,
> where more pricing policy discretion was given to the registry
> operators). All it would take is *1* new gTLD to introduce differential
> pricing, and these three registries would be permitted to do the same.
> And of course by logical progression, VeriSign would want the same for
> .com/net.
>
> The big difference is that registrants in any new gTLD that permitted
> diffferential pricing knew this ex ante. Here, in the legacy
> .biz/info/org agreements, the registry operators want to change the
> rules for registrants ex post.
>
> It's funny, because when this was first brought up, some registries were
> suggesting that differential pricing was something that they didn't even
> think was permitted in their first drafted contracts:
>
> http://gnso.icann.org/mailing-lists/archives/ga/msg04293.html
>
> "AGAIN, I AM NOT SURE WHERE YOU GET THE PERCEPTION THAT WE ARE ABLE TO
> CHARGE DIFFERENT PRICES FOR DIFFERENT DOMAIN NAMES."
>
> And argued that they couldn't get away with raising prices:
>
> http://gnso.icann.org/mailing-lists/archives/ga/msg04292.html
>
> "Although you insinuate that we could raise prices, do you honestly
> believe that we could really get away with raising prices and not suffer
> a huge loss in the demand for our services?  We operate in a real
> economic market and not in a theoretical hypothetical world.  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.  We believe that if
> we were to raise prices without a corresponding increase in .com prices,
> registrants would switch from .BIZ to .com or .net in a heartbeat."
>
> In other words, the registries "played dumb". In their new comments,
> they continue to "play dumb". However, I believe they are much smarter
> than that.
>
> What matters is not this rhetoric of the registries about "Oh, we'd
> never be able to raise prices", or that "we'd never do differential
> pricing". What matters is what's in the actual contracts. The contracts
> propose removing price caps. Registries do not need price caps to be
> removed if they plan to REDUCE prices --- they only need price caps to
> be removed in order to RAISE prices. And though they say they don't want
> differential pricing, their proposed contracts say if *ANY* other gTLD
> registry somehow gets it, then we want it too! Sheesh. How stupid do
> these registry operators think that ICANN and the public are?
>
> Given the poorly scrutinized contracts for .mobi, .cat, .tel, .asia,
> .eu, etc., where differential pricing might be introduced one day, even
> on a limited basis, that springs the trap on .biz/info/org holders under
> the proposed new contract language.
>
> It's clear even stronger language is needed than that proposed by these
> registry operators, that gives greater certainty to helpless
> registrants. If indeed these registry operators believe that they can
> never price higher than .com, perhaps one simple solution is to put in
> the identical caps as exist on .com. With identical caps to .com,
> nothing would prevent the registry operators from lowering the prices to
> registrants below those caps, if that is their noble intention. If
> instead it's their evil intention to raise prices, they would be
> thwarted.
>
> 2) PDP-FEB06 - None of the registries wants to wait until PDP-Feb06. Of
> course, that's unacceptable. The renegotiation of their contracts was
> far in advance of their expiration, and attempted to preclude
> competitive tenders by other prospective registry operators. Registries
> are simply contractors. They're in no position to dictate timelines to
> ICANN and to the public it represents that only benefit themselves.
> Limiting the debate and further scrutiny of their contracts to find
> other flaws is not in the public interest.
>
> The last group that gave ICANN an ultimatum to make a decision on a
> proposed contract on a specific date was ICM Registry, for .xxx. These
> registry operators should suffer the same fate, if a decision on October
> 18th is demanded --- the Board should simply reject the proposed
> contracts, period. The registry operators can then serve out the
> remainder of their contracts, and then be subject to the renewal terms
> contained therein, including the provisions from competing bids by other
> prospective registry operators for .biz/info/org. Indeed, it is in the
> public's interest that ICANN determine whether other prospective
> registry operators might serve registrants of .biz/info/org more cost
> effectively and/or with better service. Without a public tender or
> "expression of interest" or similar process, ICANN is flying blindly and
> by the seat of its pants, without any information. To make informed
> decisions, one needs information, and these incumbent registries are
> proposing to deny ICANN the opportunity to gather that information. It
> would seem to me that the incumbent registry operators are scared that
> competitors might emerge from that process, competitors who would
> replace them, and thus they are trying to lock-in ICANN to long-term
> (indeed perpetual) bad deals for consumers.
>
> 3) Presumptive Renewal: As discussed above, presumptive renewal should
> not be a part of any new contracts. It's no surprise that all of the
> registry operators wanted it. They say they "need" it, in order to
> invest in their businesses.
>
> Yet, somehow they were able to submit applications to run .biz/info/org
> initially that did not give them presumptive renewal. Presumptive
> renewal does not exist in most government contracts, or other business
> contracts. They were aware of this from the beginning. ICANN will have
> no trouble finding alternate registry operators who are willing to bid
> on operation of the .biz/info/org registries for fixed terms. Indeed, I
> imagine these same registry operators, and perhaps VeriSign, DENIC,
> Nominet, and others would be aggressively bidding at even lower prices
> than exist today for fixed term new deals. This would benefit consumers.
>
> One only need look at the example of our friends at Neustar, who agreed
> to LOWER their telephone database management pricing, in exchange for a
> contract extension:
>
> http://gnso.icann.org/mailing-lists/archives/ga/msg04807.html
>
> "The contracts have been extended by 48 months to June 2015. Pricing
> remains unchanged at $1.05 through the rest of the year, the company
> said, and in 2007 transactions will cost 91 cents each regardless of
> volume. Beginning in 2008 until the contract expires, transaction rates
> will range from 95 cents to 75 cents depending on volume."
>
> ""You can't complete a telephone call in the U.S. without using
> NeuStar," Ganek says. "We cannot charge monopoly rents; we have to share
> the benefits of fast volume growth with our industry?"
>
> As I wrote before, it is perfectly consistent to have renewals of
> contracts with price cuts, and allow the registry operators to have
> enough money to invest in infrastructure, yet share the benefits of
> economies of scale with consumers. ICANN's feeble negotiators seem to
> have ignored this economic reality, because they fall for the FUD spread
> by incumbent registries.
>
> You can't fault registry operators for trying to get a price increase,
> and lock out competitors -- that's in the interest of their
> shareholders.  But, ICANN should see through their smokescreen, and be
> negotiating price cuts. There's no "presumptive renewal" for Neustar in
> these telephoone deals, either.
>
> How can Neustar, and the other registry operators, argue that they
> require presumptive renewal, when they are signing very similar
> technological deals like telephone database management that DO NOT
> CONTAIN PRESUMPTIVE RENEWAL? (and certainly differential pricing doesn't
> exist for telephone number management)
>
> In conclusion, one must ask whether the registry operators think that
> ICANN, its Board, and the public are that stupid, to not see that price
> decreases, price caps, uniform pricing and fixed-length contracts are
> the norm? While one must applaud the registries for trying to take
> advantage of the likely inexperienced and inept ICANN staffers who think
> these contracts are somehow acceptable, anyone with an iota of business
> experience can see that these are terrible deals for the public.
>
> In the wise words of Vint Cerf,
>
> http://www.infoworld.com/article/06/07/17/HNnetneutralitypioneers_1.html
> ?BROADBAND
>
> "What's worse than a regulated monopoly? The answer is, an unregulated
> monopoly."
>
> By approving these proposed contracts, ICANN would be creating new
> unregulated monopolies, to the detriment of the public. ICANN's Board
> hopefully has the business acumen and experience to reject these
> proposed contracts, and ensure that any new proposed contracts reflect
> price decreases, price caps that protect consumers, uniform pricing, and
> fixed-length contracts.
>
> Sincerely,
>
> George Kirikos
> http://www.kirikos.com/
>
>
>
>
> -- 
> No virus found in this incoming message.
> Checked by AVG Free Edition.
> Version: 7.1.408 / Virus Database: 268.13.3/473 - Release Date: 10/12/06
>
>