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[ga] Fwd: Considerations on the separation of Registrars and Registries
FYI,
Michael Schneider
>Date: Sat, 24 Mar 2001 20:09:41 +0100
>To: touton@icann.org
>Subject: Considerations on the separation of Registrars and Registries
>Cc: [...]
>
>Louis et.al.,
>
>I would like to make the following personal statement (i.e. in this case
>not acting on behalf of the ISPCP nor the NC) to the Board in order to
>address the issue of separation of Registrars and Registries.
>
>Best regards,
>Michael Schneider
>
>================================ CUT HERE ================================
>
>Considerations on the separation of Registrars and Registries
>
>The provision in section 23 C of the proposed .Com Registry Agreement
>(sections 3.5.3. of the .Net and .Org Registry Agreements), under which
>the agreements "shall not preclude an affiliate (including wholly-owned
>subsidiaries) of Registry Operator from acting as a registrar with respect
>to the Registry TLD" constitutes in my view (and here I agree with much of
>the DNSO) a major change in policy which I do not accept.
>
>At and after Melbourne ICANN Staff and Verisign took the position that
>there was never any such policy, and that it had rather been solely for
>Verisign to decide if it wished to give up its registry or registrar
>business. I explicitly reject this position for the following reasons:
>
>1. First the provision calling for the divestment in either the registry
>or the registrar constitutes at least as the ICANN staff puts it in its
>justification of the new agreements an "attractive incentive to NSI
>(VeriSign) to complete an ownership separation", apparently so attractive
>in fact that Verisign has never left any room for doubt that it will
>accept this requirement in order not to lose the option to extend the
>contract. Further, in Melbourne Verisign presented the fact that it would
>have to divest itself of one of the two entities under "Plan A" as a key
>argument in favour of reaching a quick decision and not allowing further
>negotiations on "Plan B". To this extent we can take it as a given that
>under the prevailing agreements we will see a separation of registrar and
>registry, so that it is essentially irrelevant whether Verisign feels it
>is legally or only practically forced to do so.
>
>2. This situation led me and others (despite very great reservations) to
>put aside our concerns about signing the 1999 agreements at that time and
>to abandon the idea of approaching entities outside ICANN (such as the
>European Commission) to take action against these agreements. If these are
>to be abandoned now, some of us might feel compelled to reconsider our
>original position.
>
>3. ICANN staff is further arguing that the separation of the registry and
>registrar can be dropped because it was only an "additional protection"
>and is no longer necessary in the current market situation. To support
>this argument market data has been published showing that Verisign only
>has a market share of around 52% in the gTLDs it handles as registry.
>This, it is claimed, means that the "once-dominant market position [has
>been] severely eroded". For anyone who has been closely concerned with the
>deregulation of monopolies and this is very much an area of interest to
>ISPs and Connectivity Providers this is a remarkable conclusion. Figures
>like these have led in the US and other countries not only to replacing
>monopolistic structures by competitive ones but also to breaking up the
>former monopolists into a number of independent entities frequently with
>emphasis on prohibiting or permanently impeding suppliers dominating the
>market in one segment from operating in adjoining market segments. I am
>unable to understand why this should not be expedient in the
>registry/registrar business.
>
>I understand and accept, however, that Verisign does not wish to be
>treated differently from its competitors, which ICANN also intends to
>allow to have interests simultaneously in a registry and a registrar. To
>satisfy these justified interests and at the same time the desire of the
>DNSO not to promote market-dominating positions, I recommend that the
>Board adopt the following policy:
>
>a) Registries themselves may not also be registrars, unless they split off
>the registrar business as an independent entity. The registry shall not be
>allowed to re-insource the registrar business de facto by performing
>essential technical and administrative functions for the registrar on a
>contractual basis.
>
>b) If the share of registrations for which a registry is responsible
>(because it is administering a very important TLD or a number of smaller
>ones) reaches or exceeds 20% of the registrations calculated for either
>all gTLDs or all ccTLDs, the registry may not hold an interest of 50% or
>more or otherwise exercise management control of any registrar.
>
>c) Registrars shall not be entitled to hold an interest of 50% or more in
>registry operators or otherwise exercise management control of these if
>
>aa) the registry operator administers more than 2,500,000 SLDs or
>bb) the registrar has a market share of more than 50% in one TLD, or more
>than 25% of all gTLDs, or more than 12.5% in all ccTLDs.
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