[council] Reply comments to the gTLD Comments on .org

["Milton Mueller" <Mueller@syr.edu>]

Reply comments of Milton Mueller
to the gTLD comments on the .org Task Force.

Please note that the entirety of the gTLDs' comments are aimed 
at the additional positions of two DNSO constituencies and not at 
the Task Force Report itself. 

The Task Force as a whole deliberately refrained from taking a position 
on the competition policy issue for two reasons: 
   First, because it did not seem to command a complete consensus
among the constituencies;
   Second, because we did not want the policymaking process to 
become bogged down in questions of defining "dominance" or in 
debate over phrasings that might be construed to include or exclude
specific applicants. 

That being said, when the Board makes its final selection among
applicants, it seems to me to be impossible for the Board to ignore
questions of competition policy. The whole process of removing
control of dot org from Verisign was motivated by a desire
to increase the number of players in the market and to reduce
Verisign's dominance of the registry marketplace. If we were
concerned exclusively with who was the low-cost provider
we might not need to divest .org at all.

Obviously the pro-competition policy proposed by NCDNHC and
B&C does not enjoy the same unanimous support enjoyed
by the Task Force report as a whole. That fact should not, 
however, prevent the Board from using simple common 
sense and taking competition, dominance and diversity into account 
when faced with a set of qualified applicants that differ significantly
in those dimensions. Consensus policies are binding on the 
Board, but while the consensus we are forwarding does not
REQUIRE the Board to exclude dominant providers, neither does it 
PREVENT it from doing so.

The economic reasoning behind Mr. Neumann's comments is
weak. Virtually any new registry is bound to have higher initial
costs than a dominant incumbent because of economies of
scale. However, it is well known in economics that in the long term
competition encourages DYNAMIC efficiencies that are far
more important to society than the static efficiencies that can
be measured by looking at current cost structures. For example,
the unit costs of new entrants in long distance telecommunications
were often higher than the incumbent in the 1980s; but their
competition led to investment in new transmission technolgoies,
notably fiber, that improved overall efficiency. 

Also, I would note that by Jeff's reasoning, ANY exclusion "reduces 
competition" and therefore we should not even exclude Verisign itself 
from applying for administration of the .org domain. Which seems
a bit absurd given the purpose of the .org divestiture.

It is not surprising that the gTLD constituency, which represents
incumbent registries who either collectively or individually 
account for a dominant share of the gTLD registry market, would
oppose a call for attentiveness to dominance in the final selection 
process. I am sure that the Board will be wise enough to take this 
into account in weighing the comments.