[ga] Alternative Domain Name Distribution Models

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

Elizabeth,

ICANN was born against a back drop when there was a monopoly within the
name space, as .COM, .NET and .ORG were king and NSI held the keys to
all three. At that time ccTLDs provided no real alternative in the
marketplace, although today .DE and .CN are the second and third largest
TLDs in the world behind only .COM. So change can and does happen. 

Here is the reality of the marketplace, all the Big Registries seek to
cut deals with the Big Registrars to get priority placement on the pull
down menus or tick boxes on the registrar's home page. Much like in the
retail marketplace, there is a limited amount of premium shelf space on
that registrar's home page, and the big registries structure deals so
that premium shelf space goes to the established brands or those willing
to make it financially attractive to the registrars. The problem as
identified in Danny's most recent example, is that some registries are
not-for-profit and serve small communities. Thus they have a slim chance
of ever appearing on GoDaddy's or TUCOWS homepage. 

This is why as in the case of .MUSEUM I believe the proposed alternate
language strikes the proper balance between preserving the existing
registry/registrar dichotomy and allowing a registry to represent and
serve the interests of that community. 

Now while this further explanation may not address Elizabeth's specific
concerns, it is important to discuss how the proposed recommendations
that have been discussed in the registrar community will not address her
concerns either. As previously mentioned, ICANN accredited registrars
have advocated removing the restrictions regarding ownership of an ICANN
accredited registrar by a registry. In the Google hypothetical discussed
previously, the new Google registry would simply use the existing Google
registrar. If the domain names were given away for free, it is highly
doubtful that any ICANN competitive registrar would even bother
providing an interface where the profit margin would likely be near
zero. 

The reason I find your discussion important is that it draws an
important distinction between the role ICANN does and does not play.
ICANN is about fostering competition in its role as a technical
coordinator, however, it is not a competition authority. If a registry
such as Google was to potentially abuse its position in the marketplace
as a registry operator (either direct or through its Google registrar)
this is where GOVERNMENTS need to step in an take action. ICANN lacks
the skill set and authority to serve as competition regulator. That is
why the registry funnel request has a mechanism by which ICANN can refer
potential new registry service requests to a competent competition
authority for investigation where appropriate.

Getting back to Roberto's comments about looking at situations that make
"little sense", I think there is a real need to incorporate this type of
common sense approach into the new ICANN's gTLD process. 

I hope this email adds to the constructive dialog on this topic.

With regard to Elizabeth's email to Danny regarding the level of fee, I
share your concerns about any fee levels that could act as a barrier to
entry, especially in developing countries.

Best regards,

Michael


P.S. Given the current exchage rate, in future can I have your 0.02
Euros instead of cents :-)



-----Original Message-----
From: Elisabeth Porteneuve [mailto:elisabeth.porteneuve@xxxxxxxxxxxx] 
Sent: Wednesday, September 05, 2007 8:21 AM
To: Michael D. Palage; 'elliot noss'; ga@xxxxxxxxxxxxxx
Cc: 'Danny Younger'
Subject: Re: [ga] GNSO Council: Taking 21 monthsto arrive at bad
decisions


The registry-registrar scheme, and subsequently ICANN, were put in place

against a monopoly, which we did not like. The registrant-registrar 
contract, with some general policy rules established in ICANN forum is a

guarantee for users to have a freedom of choice. In the scheme of
vertical 
integration, giving domain names away for free to an existing client -
the very possible Google scenario - you have in place all elements 
allowing for unwanted concentration of powers.

My two cents,
Elisabeth Porteneuve

----- Original Message ----- 
From: "Michael D. Palage" <mike@xxxxxxxxxx>
To: "'elliot noss'" <enoss@xxxxxxxxxx>; <ga@xxxxxxxxxxxxxx>
Cc: "'Danny Younger'" <dannyyounger@xxxxxxxxx>
Sent: Wednesday, September 05, 2007 4:05 AM
Subject: RE: [ga] GNSO Council: Taking 21 monthsto arrive at bad
decisions


> Elliot:
>
> I thought I provided this answer previously, but just so there is no 
> confusion let me restate my personal opinion.
>
> I believe there should be a presumption that all ICANN accredited 
> registries use ICANN accredited registrars. However, I believe this 
> should be a rebutable presumption where the registry operator can 
> demonstrate a unique set of circumstances, i.e enhancing diversity, 
> competition, and/or innovation, etc. I believe Danny's Google 
> hypothetical is one such example, and is potentially relevant in other

> circumstances, especially where the registry operator's business model

> may involve giving away domain names for free.
>
> I believe TUCOWS own history points to the fact of why people need to 
> keep an open mind on expanding the name space and spurring innovation.

> Prior to TUCOWS OPENSRS, most of the original test bed registrars were

> selling domain names at about $30 per year, a $5 per domain name year 
> savings. Your OpenSRS model kind of rocked the registrar landscape 
> early on dropping prices to around $10 per domain name year.
>
> Having worked with a number of smaller sponsored registries, I have 
> seen first hand how the existing registrar distribution chain can be 
> rather restrictive. Based upon this experience, I had originally 
> thought that a fixed domain names under management threshold would be 
> a good measuring stick for when a registry had to use ICANN accredited

> registrars. You may recall our discussions with Louie back in 
> Montevideo in 2001 on this topic. However, as Danny's Google hypo 
> illustrated, there may be a case where a registry wants to give domain

> names away for free to an existing client, in which case the 
> imposition of using ICANN accredited registrars seem less than 
> logical.
>
> So to answer your question, I do not see a situation in the current 
> marketplace that would justify VeriSign being able to go direct with 
> either the .COM or .NET registries.  I do believe however there are 
> likely a number of business models for new TLDs that I have not even 
> dreamed of that would benefit by a more liberal distribution model.
>
> I hope that answers your question, and thanks for the constructive 
> question.
>
> Best regards,
>
> Michael
>
>
>
>
>
>
>
>
> -----Original Message-----
> From: elliot noss [mailto:enoss@xxxxxxxxxx]
> Sent: Tuesday, September 04, 2007 9:27 PM
> To: Michael D. Palage; ga@xxxxxxxxxxxxxx
> Cc: Danny Younger
> Subject: Re: [ga] GNSO Council: Taking 21 months to arrive at bad 
> decisions
>
>
> mike, danny, do you feel this way for new tlds or for com/net as well?
>
> On Sep 4, 2007, at 3:00 PM, Michael D. Palage wrote:
>
>> Jon,
>>
>> I believe I find myself with Danny on this issue, and it should come 
>> as no surprise to you based upon our previous in-depth discussions on
>> this
>> issue. In fact I specifically raised this point in the recently
closed
>> public forum on new gTLDs, see
>> http://forum.icann.org/lists/gtldfinalreport-2007/msg00073.html
>>
>> However, I am a little confused over your claims that allowing 
>> registries to go direct will place consumers at risk. If the registry

>> is providing domain name registration services either directly or
>> indirectly to the registrant, ICANN has a direct contractual
>> relationship with the registry.
>>
>> To demonstrate how registries can go direct and still protect 
>> registrant's interests, consider the following four gTLDs: .EDU, 
>> .GOV,
>
>> ..MIL and .INT. While these are all legacy gTLDs, they are 
>> nonetheless
>
>> still gTLDs in which the respective registries value very highly the 
>> interests of their registrants. However, none of these four TLDs uses

>> registrars. The registry merely deals with the registrant. As I have 
>> previously said, I do believe that at this time the default mechanism

>> for domain name distribution should be through ICANN accredited 
>> registrars, however, I do believe there are situations in which this 
>> requirement is a burden and impedes competition and innovation.
>>
>> While some registrars have put forward the compromise of allowing 
>> ICANN accredited registries to own ICANN accredited registrars, I 
>> find this "compromise" rather self serving given that a number of 
>> ICANN accredited
>> registrars are likely to be submitting bids on new gTLDs next year
>> either directly or through one of their sister companies. Given that
>> this comprise only raises the cost for a new registry entrant to the
>> market place that wishes to go direct, I believe this fact goes
>> directly
>> to the legal concerns raised by Danny.
>>
>> Obviously if a registry goes direct there is the need for scrutiny to

>> make sure that a registry does not abuse its position as a sole 
>> source
>
>> provider. However, as has been demonstrated in the case of .EDU, 
>> .GOV,
>
>> ..MIL and .INT, consumers are not being harmed even though they are I

>> some cases paying higher per domain name registrant costs than 
>> equivalent registrants in the .COM space.
>>
>> Just my two cents and I look forward to a rather constructive dialog 
>> on this topic.
>>
>> Best regards,
>>
>> Michael
>>
>>
>>
>>
>>
>> -----Original Message-----
>> From: owner-ga@xxxxxxxxxxxxxx [mailto:owner-ga@xxxxxxxxxxxxxx] On 
>> Behalf Of Nevett, Jonathon
>> Sent: Tuesday, September 04, 2007 12:29 PM
>> To: Danny Younger; ga@xxxxxxxxxxxxxx
>> Subject: RE: [ga] GNSO Council: Taking 21 months to arrive at bad
>> decisions
>>
>>
>> Danny:
>>
>> In the wake of the RegisterFly controversy, you and other folks on 
>> this list have been advocating for ICANN to enforce requirements in 
>> the Registrar Accreditation Agreement (RAA) in order to better 
>> "protect registrants."  I have been very vocal in encouraging ICANN 
>> to enforce the requirements in the RAA.  Doing so is good for 
>> registrants and the DNS, as well as helps to level the competitive 
>> playing field for registrars.
>>
>> You also have been advocating for changes to the RAA to add 
>> additional requirements or regulations on registrars.  Indeed, as of 
>> this morning, you alone account for over 70% of the posts on the 
>> comment forum on potential changes to the RAA.  I am leading a group 
>> of registrars that will work with ICANN to discuss potential changes 
>> to the RAA.
>>
>> With this background, I was quite surprised to read the below post 
>> from you, in which you argue that the current model of having 
>> registries only
>> selling domain name services through registrars is a "poor
>> recommendation" for new TLDs.  I can't imagine how you can argue that
>> ICANN should add additional requirements on registrars on one hand
and
>> then seek the abolishment of the current registrar model for new
>> TLDs on
>> the other.  Only ICANN-accredited registrars are bound by the terms
of
>> the RAA.  If registries sold domain name services outside of the
>> registrar channel, ICANN would have no contractual relationship
>> with the
>> sales channel and no rights whatsoever to enforce.  How could opening
>> the floodgates to permit any entity to sell such services without any
>> contractual requirements place registrants in a more protected
>> position?
>>
>>
>> The GNSO Councilors must have understood this to be the case when 
>> they approved Recommendation 19 without dissent.
>>
>> Thanks.
>>
>> Jon
>> -----Original Message-----
>> From: owner-ga@xxxxxxxxxxxxxx [mailto:owner-ga@xxxxxxxxxxxxxx] On 
>> Behalf Of Danny Younger
>> Sent: Monday, September 03, 2007 10:09 AM
>> To: ga@xxxxxxxxxxxxxx
>> Subject: [ga] GNSO Council: Taking 21 months to arrive at bad
>> decisions
>>
>> The GNSO new gTLDs PDP was launched quite some time
>> ago and has arrived at a number of horrible
>> recommendations.  Consider recommendation #19 that
>> would require all new gTLD registries to rely
>> exclusively on ICANN-accredited registrars.  Public
>> comments thus far have shown opposition from a chinese registrar 
>> (BeijingIDC.com), from Michael Palage, from Karl Auerbach, from 
>> Guanghao Li, from Milton Mueller, and from Vittorio Bertola.  Beyond 
>> that, we now
>> see that the .museum proposed agreement also serves to undermine the
>> proposed recommendation.  Earlier, I too, raised my concerns with the
>> prospect of anti-trust issues.  Finally, even the registries have
>> cited
>> concerns with this recommendation -- see their "Impact Statement" at
>> http://www.gtldregistries.org/news/2007/2007-06-07-01.pdf
>>
>> This leads one to ask:  If that many well-informed and reasonable 
>> people are in opposition to a particular GNSO recommendation, then 
>> how did the
>> process allow for this poor recommendation to be agreed upon by the
>> GNSO
>> Councillors?  What is so fundamentally wrong with GNSO mechanisms
that
>> results in bad decision-making?
>> Logically, we should also be asking "How do we go
>> about correcting the problem?"
>>
>> I'm told that the Board Governance Committee's Working
>> Group on GNSO Improvements will soon be meeting with
>> current and former GNSO Council Chairs prior to
>> issuing a new draft recommendation.  Let's hope that
>> this committee asks some of the hard questions lest
>> they arrive at nothing but cosmetic changes in their
>> new iteration of "GNSO improvements".
>>
>>
>>
>> _____________________________________________________________________
>> _
>
>> __
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>>
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>>
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