-----Original Message-----
From: Peter Girard
[mailto:peter_girard@yahoo.com]
Sent: Tuesday, January 08, 2002
3:06 PM
To: Ron Wiener; icann-delete@total.confusion.net
Cc: ga@dnso.org
Subject: RE: [icann-delete]
Proposal: Registry Re-circulation System
Hello
Ron,
I think
you misread the Afternic RRS proposal, confusing some elements with Afternic's
previously published pre-delete solution. (Mea culpa, we've got multiple balls
in the air.)
It must have been a remnant from your last
draft. It's right on page one
of the RRS proposal document.
To your
first point, RRS does not require this permission. I know Chuck Gomes
has weighed in with a landlord analogy with which I agree, concerning the right
of the registry to resell deleted names. And that's what these
are--post-deletes. To sell pre-deletes at any time, the registrant must become
the de facto seller. Policy experts seem clear on this (same for 1b). But
as a post-delete proposal, the RRS suggests neither
contacting former-registrants nor selling names in a limited window (ie.
45-day grace period).
Let's assume it is post-delete, then, and
current registrant's permission is not required. (I still would like to understand though, would you employ a XFER command or DEL command?)
What is to prevent a registrar who does not
want to participate from running his own auction on his inventory of
post-delete names? This, in fact,
is what several registrars have either been starting to do or have been testing
with the intention of rolling out their own systems shortly. In so doing they in effect anoint themselves
as a "non-accredited registry" for a portion of the market
represented by no more than the names they themselves currently have under
management, and they exclude competition from other registrars for these names.
In other words, any system which relies upon
the cooperation of a registrar to actually send the delete command down on an expired
name and potentially lose that customer to another registrar (e.g. another
registrar gets the winning bid in the RRS model) leaves itself exposed to abuse. Only with the accredited registry's
involvement and enforcement of compliance to established procedures can fair
redistribution of domain names amongst ALL registrars be assured.
You bring
up a valid point in (1a). Publically available knowledge that another person
wants your domain name (WLS, RRS, etc.) might influence your decision to
renew it. It's possible that this will keep a percentage of registered names
from end users. Can we stop this? Should we? You dispute that the RRS eliminates
some first mover advantage and high-tech gaming, but I'm not sure what you
mean. Clever speculators are the ultimate first-movers--they saw value in
domain names before anyone else. They know the value of WLS, and they'll use it
and maybe game it, and I don't think that's necessarily illegal. But RRS places
them in competition with their target customers. And we all benefit whenever an
end user buys a domain name, regardless of how or from whom.
This brings up another point, somewhat related: An unfortunately
large number of SnapNames customers are people who lost their domain name
because of accidental non-payment, who were then told by their registrar to
contact us because the delete command had already been sent down the pipe, and
the name would purge out 5 days later.
It's bad enough that with a 70% present efficacy rate, 30% of the
time we have to tell that registrant that their name is now in the hands of someone
else. I can show you a hundred
letters from such customers upset about the fact that there is no 100% secure
method for getting back their own name. Their recourse is generally to negotiate
with the speculator who got the name, unless they have a strong enough trademark
(rare) to file a UDRP claim. I
cannot imagine the outrage of customers in a situation being told that -
even worse than a 70% efficacy situation - they would have to enter a
competitive bid to get their own name back. From our experience with thousands of
customers in this situation, as the only vendor offering a "rescue
service" in this case, if you will, there is at least one significant constituency
of domain name consumers out there who would scream at the notion of having to
compete with swift or robotic counter-bidders. Or, as is often the case, would have
their lawyers scream on their behalf.
I really
question your defense of the consumer, though. "Goaded into paying
unwarranted prices?" What's an unwarranted price? For some names, the
dearth of consumer demand suggests that $6 is too much. Some have warranted
thousands. But of all the warrantors of value in the marketplace, a
"quasi-professional speculator" might be the least attactive to the
consumer. Unless you disincentivize speculation, speculators will identify
attractive names, buy low and sell high, and their customers
will determine what are warranted prices.
I was merely pointing out the historical issues
that eBay has encountered with the FTC in this regard. We can't pretend that domain names
are "different" from other goods and services and somehow would not
be subject to similar phenomenon.
Perhaps you can speak to this in regard to Afternic's own
experience? Have you ever been
threatened with a law suit, actually sued, or been investigated by the FTC
based on such consumer claims? If
not, I'll retract the argument in whole.
And if
the arbitrary price for an attractive registration rises, whether to $40 or
$99, those names considered by end users to be worth less than that price will
not be registered. Demand will soften. And if demand softens, registrars will
find little comfort in knowing ahead of time that their queued re-registrations
represent a fraction of last year's registration volume. You're right that my
parent company, Register.com, may be less damaged initially by the loss of
volume vs. the increase in price than would some registrars, but there is some concern
industry-wide that the upside might not compensate for the loss.
Names that don't have a perceived value
at or above the WLS retail price would naturally be deleted in the normal
fashion they are today. All the
existing "choices" that George and Harold referred to will still be
there for picking up those names, probably with a single ping. Many of the largest speculator operations
are focused entirely or predominantly on these lower-value names, and would
have a very easy time of getting them (particularly since if this WLS system is
enacted, SnapNames would - by contractual agreement with VGRS - no longer
be servicing COM and NET names in any other way, I'm sure to the pleasure
of our competitors). Statistically,
99% of the 100M-some daily SRS pings are transmitted in order to capture high-value
names. If the high-value names are
all dealt with by WLS subscriptions, all of the registry's load problems
would immediately be resolved. I
don't follow where the loss of volume would come from. What I can see is higher "inventory
turns" and higher revenue for registrars as a result of waiting list
positions being sold all year long.
I
appreciate your commentary. We must find a satisfactory solution, and only
through dialogue can we develop consensus. I know Harold Whiting commented
(with quotes) that I have positioned my idea as "the only one worth
looking at," but I assure you, that is not my position.
I didn't think that was your position,
don't worry. Again, thanks
for the refreshing "healthy" debate style.
Thanks,
Peter
Ron Wiener <Ron@Snapnames.com>
wrote:
Peter,
I enjoyed reading your proposal, and
have admired the way you continue to carry the flag for a variable-priced
auction mechanism. If you please, I
have a couple of questions followed by a few general comments:
- If you are requiring the permission of the former registrant in
order for the auction to "close"...
- ...are you not then in effect alerting him or her to the fact
that their name may have some value, and encouraging
them to renew rather than allow the name to expire? This may be a brilliant scheme for
goosing up renewal rates, but how does it help registrars and registries
gain any upside that they would presumably only enjoy if the name
actually changed hands?
- Correct me if I'm mistaken, but the reason you NEED the current
registrant's permission is that in order to circumvent the registry, you
want to be able to use the XFER command instead of actually deleting the
name. I suspect the IP
constituency might have some serious heartburn over this as it creates all sorts of liability problems when the
creation date of a domain name record is not reset upon a new registrant
receiving the name.
Using the XFER command in this way exposes the new registrant to
potential litigation from the prior registrant who may claim the
registrar did a lousy job of tracking him down with a renewal notice
"because they'd make a lot more money auctioning off my name than
letting me renew it."
The original transfer date matching his filed invoices could imply
that the name is still his since apparently it was never deleted.
- It's also not clear to me that registrars Terms & Conditions
extend the current registrant's rights to the domain name past the actual
expiration date and into the grace period. If
this is the case that the current registrant's rights have already ended
then the registrar would essentially be warehousing and speculating with
this name during the grace period. Perhaps someone from ICANN or VGRS
can clarify this for us. Dan
or Chuck?
- It seems to me that there is a distinction between the WLS (as
proposed) and the RRS (as proposed), in that the WLS allows registrars to
capture "backup demand" for any name throughout the entire
year. The RRS only allows the
capture of demand during a portion of the 45-day grace period window, which inherently means it would be primarily
of interest to, and accessible to, speculators, not mainstream consumers.
Mainstream customers are unlikely to happen to discover a need for a
domain name during any particular 45-day period, learn how to search for
it from about 1.5M names that would presumably be up for auction during
such period, learn how the bidding mechanism works, dig in their pockets
for a credit card to pay a $2 fee (smacks a bit too much of $2 .biz
lottery fees - yikes - bad memories!), and sit around to monitor the whole
thing. Odds are 9:1 that the
discovered need for a name would happen sometime other than that 45-day
window. (I'm simplifying this
by assuming the average registration is about one year in term
anyway.) The RRS proposal
states that consumers would have "open, fair access to
deleting domain names in an environment free from high-tech gaming and
first-mover advantage" but the method described doesn't
seem to meet this definition.
Consumers are not likely to want to
participate in an auction process which can easily be gamed, much like eBay
auctions often are, with shill bids.
Witness the thick file at the FTC and the number of lawsuits that were
generated. In fact, a savvy
speculator could whip up a robotic algorithm to outbid others milliseconds
before auction close, or to pump fraudulent bids into the system using stolen
credit card numbers - a problem already plaguing too many registrars and
secondary name sites.
Consumers are also not likely to wait
anywhere from 1 to 344 days to then have to monitor an auction process, and
then be prepared to spend an undefined amount of money to get the name. I can see speculators
being willing to do this all day long - they're good at it - but mainstream
consumers? For them I
believe this type of mechanism would be deemed yet another "game of chance" with $2 betting fees, and could become
a lightning rod for litigation against registrars, ICANN, VeriSign, et al. Speculators may be just fine with the
game of change (some seem to even thrive on it) but mainstream customers would
be anything but enamored by the prospect of it.
Further, while I fundamentally agree
that variable-pricing makes a lot of sense in the long run,
it's extraordinarily tricky getting it right when it comes to domain names, and
now doesn't seem the right time to implement such an advanced marketplace
concept. Witness the number of
different models that have been tried and abandoned by some of the ccTLDs - a
perfect one is yet to be found.
One concern from an FTC standpoint is that uninitiated domain name
buyers might be goaded into paying unwarranted prices for domain names because
of the heated action of an auction.
This is where sites like NameWinner are actually safer, because everyone
there is at least a quasi-professional speculator and knows how to appraise the
value of a name. If unwitting consumers are successfully drawn into an active bidding
event for domain names, they could potentially be misled into paying exorbitant
prices. One benefit of
the flat pricing of the WLS structure is that it eliminates the possibility of
this sort of complex and problematic consumer experience. Again, you might ask the FTC how many
such complaints they've received from eBay customers over this sort of thing.
Finally, putting on my Wall Street hat
for a moment, the RRS lacks two especially nice financial features of the WLS
which is that it provides no forward visibility on certain
revenues (i.e. if 60% of my registrants do not renew next year I know
that x% of the names in question would automatically go to a wait listed
customer) and no growth in deferred revenue, a
key valuation driver. For public
companies (there are currently six publicly-held registrars) this is
particularly important, as it is for the valuation of any registrar that hopes
to be acquired someday.
Cheers,
Ron
Ron Wiener, Chairman and
CEO
SnapNames.com, Inc.
115 NW First Avenue, Third
Floor
Portland, OR 97209
tel: 503-219-9990 x222
cell: 503-502-5016
fax: 503-274-9749
mailto:ronw@SnapNames.com
http://www.SnapNames.com
-----Original Message-----
From: Peter Girard
[mailto:peter_girard@yahoo.com]
Sent: Monday, January 07, 2002
11:27 AM
To:
icann-delete@total.confusion.net
Subject: [icann-delete] Proposal:
Registry Re-circulation System
With the
help of several members of the registrar community, we have migrated our
dynamically priced delete proposal to a registry-level service in which
the bulk of the revenue opportunity goes to the registrars. This system would
be cheaper, fairer, more transparent, and better for Internet growth than
earlier proposals. Perhaps most important, it would reward the sector of this
industry (registrars) that faces market risks and creates value.
I have
attached a Word document. If this is problematic, I will happily provide an
alternative format.
Peter
Girard, Afternic.com
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