Re: [ga] Date: Wed, 9 Jan 2002 15:53:53 -0500

["Elliot Noss" <enoss@tucows.com>]

Good comments Don. I will deal with the last three first, as they are easy.

We will continue to work diligently on the transfer issue. We hope to see
the release of the last "missing" names soon. The number was recently put by
Verisign publicly as "two or three million". As for registrars rights in the
grace period, we think this issue is covered by 3.7.5 of the RAA which
creates a positive obligation on the registrar to release names absent
policy not to. This is not 100% clear, but appears to be the case.

The two points you first make are not so clear. I was not saying that
nothing is wrong in the current process around expired names. There is alot
wrong. The point I was making was that the current solution was working
sufficiently such that it was no longer slowing down our business and those
of our customers during the business day or otherwise. This was previously a
crisis situation first at 6 am est, then moving to 2 pm est on many business
days. This has been alleviated.

To me, the current market situation with expired names borders on perverse.
Names drop in batches rather than real time. A few (primarily one) registrar
drops names with no discernable pattern (ie seemingly at random rather than
at a set number of days). There is no easily accessable public information
regarding names dropping. These and other inefficiencies combine with
flat-pricing to create a situation where registrars "rent" their rights as
registrars, run inefficient limited auctions not for names, but for the
amount of facilities used to pursue names, and other "innovations". I do not
begrudge anyone their practices in this regard. They are simply reacting to
other inefficiencies in the market.

In summary, there is, IMHO, something to fix.

As to the second point, what I suggest to do is more to deregulate the
price, not regulate it. It is currently regulated. Any proposal that moves
to variable pricing is by definition moving from a fixed price regulated by
someone, in this case ICANN. I am suggesting a regulated fee in the context
of a variable price. In addition, as you can see from my above comments I do
not see the current competition as healthy. Again, I can live with it if I
have to, but since the issue is on the table I wanted to present to it.

Now as to the priority of the various issues you mention, since we are just
talking between friends, I would say:

- transfers;
- dropping all existing expired names;
- dealing with technical issues at registry (as discussed in my previous
note);
- wls and all alternatives.

So it seems we agree.

Regards

----- Original Message -----
From: "Don Brown" <donbrown_l@inetconcepts.net>
To: <ga@dnso.org>
Cc: <discuss-list@opensrs.org>; "Elliot Noss" <enoss@tucows.com>
Sent: Wednesday, January 09, 2002 10:29 PM
Subject: Re: [ga] Date: Wed, 9 Jan 2002 15:53:53 -0500


> Elliot,
>
> I, for one, appreciate your presentation of an objective view on, and
> a potential resolution for, this issue. Much of the recent traffic on
> this list has sunk to the personal level, which destroys the focus on
> the issue and equally diminishes the opportunity for consensus and a
> resolution.
>
> The theory behind the WLS proposal, as I read it, was that it
> addressed technical issues which could not otherwise be addressed on a
> technical level. Your comments say, in contrast, that there is no
> immediate technical problem with dropping deletions or, IOW that the
> problem has been solved.
>
> Since it is no longer broken and, therefore, does not demand a fix,
> then I summize that the only motivation for a change in the business
> model is for the Registry and certain Registrars to make additional
> revenue from the secondary market, but in a structured and regulated
> way.
>
> Personally, I am not against anyone making a buck and I support free
> enterprise, democracy and the entrepreneurial spirit. The premise is
> that free enterprise spurs healthy competition, fosters R&D and
> technological advances, drives down the price to the consumer and
> expands the power and capabilities of humankind.  I support those
> ideals and I believe in them.
>
> Therefore, with all due respect to you and your noble intentions, with
> respect to a workable resolution for this issue, I disagree with your
> proposal for a least two reasons:
>
> 1. There is no compelling reason to change anything, since, in
> contrast to the premise behind the WLS proposal, there is nothing to
> fix.
>
> 2. There are already Registrars and others participating, in one
> fashion or another, in the after-market.  The proposal would,
> essentially, thwart healthy competition, since it regulates the price
> and, therefore, service and innovation.
>
> I do not mean the foregoing to convey the notion that I am resistive
> to change.  In contrast, I remember when RAM was called CORE and I had
> a PC before anyone ever called them by that name.  I am in favor of
> "healthy" change, but I don't view any change with respect to the
> after-market to be either healthy or warranted at this time.
>
> There are several more elementary challenges which need to be solved
> before a "moving forward" mind-set is warranted, in my view.  Some,
> are, as follows:
>
> 1. At least one Registrar admitted to a back room deal concerning the
> registration of expired domain names during the 45 day period. I won't
> mention the name out of respect, but it does tell me that there is the
> potential for abuse currently in the system. I am told, but have
> not read it for myself, that the ICANN contract is not clear on this
> particular issue, since it speaks to ICANN's pertinent
> regulations/procedures, but no such regulations/procedures currently
> exist.
>
> 2. There seems to be an abundance of complaints, which I have read on
> other lists, about the Registry's (or it's brother/sister the Registrar)
> concerning the hoarding of expired domain names.
>
> 3. There are issues with respect to domain name transfers.  It seems
> that some Registrars have departed from the main-stream and introduced
> there own policies and procedures which depart from the ICANN
> agreement.
>
> So, with all due respect to you, Elliot, and the other poor souls who
> have labored through this long post, I think we should fix the current
> problems with the system first -- making those a priority over new
> ventures (or adventures) into different markets.  IOW, I favor putting
> the after-market on the "back-burner" for now and doing some much
> needed house cleaning and maintenance.
>
> Thanks,
>
>
>
> Wednesday, January 09, 2002, 3:26:44 PM, Elliot Noss <enoss@tucows.com>
wrote:
>
> EN> I wanted to take a bit of a "clean-sheet" approach to this discussion
as the
> EN> points I wish to communicate cut across a number of different threads
on a
> EN> number of different lists.
>
> EN> There are really four topics I wish to raise as follows:
>
> EN> - Who has the "right" to deal with expired/expiring names?
> EN> - The mixing in this discussion of two seperate issues, registry load
and
> EN> the allocation of expired/expiring names;
> EN> - The inefficiency that results from any flat-price solution;
> EN> - A way forward.
>
> EN> Who has the "right" to expired/expiring names?
> EN> -----------------------------------------------
> EN> This is an issue that creates an interesting sub-text to this entire
> EN> discussion, yet has not been fully examined. There are three potential
> EN> claimants for this right and three possible states for these names.
> EN> Claimants include registrants, registry and registrars. States include
> EN> unexpired, expired in the grace period and expired o/s the grace
period.
> EN> There are two things that are clear. First, that no one party is
clearly
> EN> entitled to stake a claim. Registrars are limited by the terms of
3.7.5 of
> EN> the RAA which require that names be put back in the pool if not
renewed. The
> EN> registry is limited by its role as monopoly technical supplier and by
the
> EN> Registry agreement which entitles it to a fee for the services it is
> EN> contracted to perform and confers upon it no property rights beyond
that.
> EN> Registrants are limited by a number of practical issues including
their
> EN> limited rights in a name and their diffuse nature.
>
> EN> What is clear to me is that this IS NOT a function of a registrars
terms of
> EN> service, nor is it an inherent right contained in the registry
agreement.
>
> EN> At the same time we must keep our eye on the fact that the role of
> EN> registrars and registry is, most purely, to efficiently administer the
> EN> allocation and provisioning of domain names. This means that the best
> EN> approach is the one that puts names into the hands of those who would
put
> EN> them to the most use. Names in the hands of those who most desire them
will
> EN> lead to a fuller utilization of the Internet, more value for users and
more
> EN> revenue for registrars and registries.
>
> EN> This point should not be seen as at odds with an egalitarian (as
opposed to
> EN> equitable) view of domain names and first-come-first-served ("FCFS"),
but I
> EN> realize this is a point that would be the subject of much debate. What
is
> EN> interesting today is that we are at a unique time and place in the
history
> EN> of the DNS which makes this less contentious. We have one extremely
mature
> EN> namespace in .com/.net/.org. It is almost certain to be the largest
> EN> namespace throughout the lifecycle of the current DNS. It also has a
> EN> secondary market that is more evolved than any other will ever be. We
also
> EN> have the recent introduction of new gTLDs that provide a fresh supply
of
> EN> names. This means any solution effected can be tailored to the current
> EN> circumstance.
>
> EN> We must also remember that there are two groups of registrants that we
must
> EN> consider, current registrants and potential registrants. They have
distinct
> EN> interests. Current registrants have rights around their existing
names, both
> EN> in terms of security from losing a name through inadvertance and in
excess
> EN> economic value. Potential registrants benefit from being able to
efficiently
> EN> obtain names that are currently owned. With the introduction of new
gTLDs
> EN> potential registrants have, and will continue to have more and better
> EN> alternatives. The maximum value in the secondary market exists right
now,
> EN> today.
>
> EN> At the end of the day the competing claims of registries and
registrars are
> EN> likely subordinate to those of registrants. Accordingly, any solution
should
> EN> start with this underpinning.
>
> EN> Registry load and the allocation of expired/expiring names
> EN> -----------------------------------------------------------
> EN> It has been noted by a number of people in this debate, and has been
my
> EN> position for many months, that the issues of registry load and the the
> EN> allocation of expired/expiring names are being mixed together
unnecessarily.
>
> EN> I wish to add my voice to the chorus saying that these issues are
related
> EN> only remotely, almost accidentally. There have been a number of very
good
> EN> suggestions as to simple steps the registry could take to lessen the
load.
> EN> There are a couple additional points worth noting here. First, the
current
> EN> solution is no longer broken. While I am not a fan of the status quo,
the
> EN> registry has weathered the storm and there seems to currently be no
> EN> appreciable impact on our day-to-day business (which was not the case
a
> EN> short time ago). An additional measure or two (a modified check
command,
> EN> additional, transparent compliance, all names dropping in real time
and a
> EN> published drop list are the easiest and most effective IMHO) would
make this
> EN> a non-issue.
>
> EN> It is worth noting my personal dealings with the registry on the
question of
> EN> load have been positive and I was impressed with their genuine desire
to
> EN> solve the issues at hand.
>
> EN> This last point leads me to feel comfortable that these issues are not
being
> EN> presented as being directly connected and can be dealt with
seperately. I
> EN> would, of course, love to hear Chuck confirm this.
>
>
> EN> The Inefficiency of flat pricing
> EN> ---------------------------------
> EN> The current market for domain names is characterized by flat-priced
supply
> EN> and variable-priced demand. I do not take a politial position on this,
I
> EN> merely note it as observation. This market inefficiency (again
observation
> EN> not position) has lead to the existance of a robust secondary market.
It has
> EN> also lead to a significant amount of the current CNO namespace sitting
> EN> unused.
>
> EN> I have strong reservations about any solution geared at the expiring
market
> EN> that magnifies that inefficiency. By definition it leaves money on the
table
> EN> and leaves demand unfulfilled at the same time. The worst of both
worlds.
> EN> Ideally we could find a solution that was able to create a robust,
efficient
> EN> secondary market which would benefit registrars and the registry, but
if
> EN> done properly would most benefit registrants.
>
> EN> A suggested way forward
> EN> ------------------------
> EN> Unfortunately, for me, the existing WLS proposal is not acceptable.
The
> EN> inefficiencies are large and the economics are miles away from either
fair
> EN> or realistic. With significantly re-worked economics it could be an
> EN> acceptable interim step, but I am not sure we need an interim step,
> EN> especially given the decoupling of the registry load issue.
>
> EN> It seems to me there is a way forward that addresses all of the above
> EN> issues. I would suggest two important modifications to the existing
Peter
> EN> Girard proposal. An unlimited bidding period and the bulk of the fees
going
> EN> to existing registrants rather than registrars.
>
> EN> All names should be available to "bid" on at any time. A "bid" by a
> EN> prospective registrant would require an administrative fee collected
by a
> EN> registrar, shared with registry and would be available for acceptance
by the
> EN> existing registrant at any time. A sucessful transaction would lead to
a fee
> EN> to both registry and registrars. An example:
>
> EN> - Potential registrant places a bid of $150 on abcd.com and for doing
so
> EN> pays a non-refundable administrative fee to registrar x of $10 and in
turn
> EN> registrar pays registry $5;
> EN> - Original registrant is made aware of his ability to "transfer" the
name
> EN> and any unexpired term to a potential registrant for $120;
> EN> - If original registrant decides to accept he contacts the existing
> EN> registrar of record and informs him of his desire;
> EN> - If the registrars are different the $30 transaction fee is split 1/3
each,
> EN> if the same than the split is equal between registrar and registry;
> EN> - The fee would be a % of bid, capped at a relatively low number
($30?).
>
> EN> To be clear, this is described in very brief terms and would need
> EN> significant rounding out as well as a champion so please work the
principals
> EN> not the specifics.
>
> EN> This solution would provide significant benefits to everyone involved
in
> EN> both an equitable and palatable fashion. It would also keep both
registrars
> EN> and registries in their role of market makers not market participants
and
> EN> would create a level of efficiency that would lead to increased
revenues,
> EN> increased registrant satisfaction and, perhaps most importantly,
maximized
> EN> use of the namespace.
>
> EN> The original administrative fee would/should act so as to deter nearly
all
> EN> wasteful behaviour. Technically, it need be no more complicated than
an
> EN> interface between the SRS and EBay's open APIs (full credit here to
Joyce
> EN> Lin in Montevideo, if only we would have listened to you then!). It
could be
> EN> completely done by the registry, by the registry with technical
partners,
> EN> Peter could do it, or it could be put out to a completely new tender
> EN> process. I know we would love to build it (but to be clear we are not
> EN> throwing our hat in the ring whatsoever). I know perhaps fifty people
> EN> reading this message would love to build it. That kind of excites me,
> EN> thinking of all of the extremely capable people who could nail this
> EN> technically. Innovation would abound if we let it.
>
> EN> The single largest beneficiary would be the registry. Ok by me. The
largest
> EN> cumulative benefit would accrue to registrants. Again, that works for
me. I
> EN> think this would be an absolutely elegant outcome for everyone.
>
> EN> Regards
>
> EN> Elliot Noss
> EN> Tucows inc.
> EN> 416-538-5494
>
> EN> --
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>
>
>
> ----
> Don Brown - Dallas, Texas USA     Internet Concepts, Inc.
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