[ga] Fw: [icann-delete] Proposal: Registry Re-circulation System

["Ross Wm. Rader" <ross@tucows.com>]

Ron asked me to pass this on to the Registrars list for the benefit of those
that aren't subscribed to the ICANN-Delete list. I've taken the liberty of
posting this additionally to GA and discuss-list - apologies to those that
receive all four copies.

Thanks,

-rwr
----- Original Message -----
From: "Ron Wiener" <Ron@Snapnames.com>
To: "'Peter Girard'" <peter_girard@yahoo.com>;
<icann-delete@total.confusion.net>
Sent: Monday, January 07, 2002 9:08 PM
Subject: RE: [icann-delete] Proposal: Registry Re-circulation System


> 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:
>
> 1. If you are requiring the permission of the former registrant in
> order for the auction to "close"...
>
>
> a. ...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?
>
>
> b. 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.
>
>
> c. 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?
>
>
> 2. 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> mailto:ronw@SnapNames.com
>  <http://www.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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