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

[Jeff Williams <jwkckid1@ix.netcom.com>]

WXW and all assembly members,

  Perhaps WXW, you didn't read Ron's post very closely.  It would
appear from your comments below in part anyway that you didn't.
For instance Ron made it pretty clear that most of snapnames
customers are "Mainstream Users" From below in Rons comments:
"Of our 74,000 active customers, by far and away the majority
are mainstream users." and "I'd say about half our business
 today is from speculators."  Hence WXW, trying to make the case
that Ron's creditability is questionable given his comments and statements
is a bit of a stretch at best.

William X Walsh wrote:

> Well Ron, are you going to accuse me of being a speculator and thus
> biased in sharing Harold's opinion 100%?
>
> Do yourself and your credibility a favor and do be so casual about
> dismissing concerns in this fashion.  It really does not make your
> comments appear to be any more valid.
>
> Not to mention that the VAST majority of your company's income is
> almost certainly from domain speculators anyway.
>
> Talk about the Pot calling the Kettle black.
>
> Tuesday, Tuesday, January 08, 2002, 6:06:53 PM, Ron Wiener wrote:
>
> > Harold,
>
> > Speaking for myself, I appreciate knowing your position on this issue --
> > which is to maintain the status quo, as it favors your current methods --
> > even if your input here and in other forums is caustic.  Though I don't
> > recall the RC inviting professional speculators to this icann-delete
> > listserv, if that is the intent, I don't object but would ask that others be
> > invited in order to provide balanced perspectives.
>
> > Many speculators are in favor of the WLS, but are unwilling to post their
> > sentiments publicly because, here and in other private forums (under your
> > "cartoonz" screen alias, for example) you are infamous for
> > less-than-professional attacks on such postings, and you have to do business
> > with one another.  I understand that.  However, we've been bcc'd on
> > supportive e-mails sent to ICANN and ICANN constituents over the past few
> > days, and of course many of our own customers have contacted us to express
> > their support and hope that the WLS is approved as proposed.   Though it's
> > unfortunate that some are not yet comfortable voicing their support, we have
> > learned that MANY, on all sides of the industry, view 100% efficacy as being
> > far more important than the price of the subscription, since their upside is
> > so significant.
>
> > I can't directly answer your question of how many of our customers are
> > speculators because it is difficult to determine who they are.  Yes, there
> > are some that are quickly identifiable by the number of names they backorder
> > in a single transaction, but others (large companies, law firms, etc.) do
> > this as well.  If you forced me to guess, I'd say about half our business
> > today is from speculators.  For our competitors who cater specifically to
> > this customer segment, of course the percentage is typically 100%.  In terms
> > of our daily site traffic, approximately 95% is generated by registrars
> > sending through mainstream customers.   Of our 74,000 active customers, by
> > far and away the majority are mainstream users.
>
> > To be clear, the WLS deals with names that have already been dropped by
> > their current registrants, and there is NOTHING inherent within the WLS
> > system or proposal that in any way interacts with an existing registrant and
> > somehow encourages abandonment of domain names.  Your allegations on this
> > point are moot.
>
> > I have not edited your comments in this string.  They appear to me to be
> > 100% intact.
>
> > So, since you're unwilling to disclose your true agenda and true identity to
> > this listserv of registrars and registries, I'm pasting in below some
> > postings that have been forwarded to me by fellow members of your private
> > forum that don't necessarily agree with your position or tactics.  There are
> > mentions herein from "toonz" (you), "drewbert" and some of your other
> > colleagues, and I've even included one at the end that is a rare balanced
> > perspective, just to be fair.  After reading through this there should no
> > longer be a question in anybody's mind as to your true views towards
> > fairness, intellectual property rights, mainstream users rights, etc.
>
> > - Ron
>
> > ================================================================
> >>>After March 20th there will be no one grabbing names with scripts and no
> > registrars selling names out the back door.
>
> > Eh? What did I miss? "No registrars selling names out the back door"? That
> > is EXACTLY what will start happening more and more.
>
> > Wicked, get a clue.
>
> > cartoonz,  <http://> http:///
> > Sat Jan 5 20:05:53 2002 - 64.30.193.201 - message #43526
> > =================================================================
>
> >>>>Surely since domain names have to be registered in the central REGISTRY,
> > back-door REGISTRAR deals can be eliminated by automatically deleting domain
> > names from the central REGISTRY the same day they expire.
>
> > Edwin, get a clue.
> > Names cannot be simply "deleted" from the central registry "the day they
> > expire"... even with a 45 day window now, mistakes still happen. There is
> > nothing stopping a registrar from either allowing the current registrant to
> > renew (which is what this time is for) or to actually find a new registrant
> > (which is unethical, dirty, sleazy business - but it will be done more and
> > more if this goes through).
>
> > Confusing the real issues with "in my perfect world, things would work like
> > this..." is not really addressing the problem, however entertaining it may
> > be.
> > cartoonz,  <http://> http:///
> > Sat Jan 5 20:24:11 2002 - 64.30.193.201 - message #43531
> > =>
>
> > I do not set Registrar's prices, they do.  Registrars are not making
> > "continuous investments in hardware and software to support MY business,
> > they do this to support thier own business. Many are doing this to profit
> > from the deletion business too, without "your help".  The REGISTRY is the
> > only one making the huge cash grab with YOUR proposal, from what I can tell.
> > Oh, yes, SnapNames profits too.  Do Not put words into my mouth, I never
> > said anything about Registrar's making a profit was a crime.  That the
> > Registry is finding a way around the government mandated $6 cap might be a
> > different matter though...
> > 1.      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.
> > Please give us the facts.  What percentage of SnapNames' income is derived
> > from speculators?  Why would the WLS be any less of a percentage?
>
> > SnapNames' site traffic is 100% registrar-driven and as such our customer
> > mix is like registrars' typical customer mix - some speculators, some
> > mainstream, as one might naturally expect.  We physically cannot and
> > ethically will not (were we physically able to) discriminate between them,
> > any more so than any registrar can or would.  The WLS mechanism collects
> > buyer demand all year long, however, not just during the last five days of a
> > batch-deleted name's existence, and as such will create fair and equal
> > access for mainstream customers who are not scouring delete lists looking
> > for opportunities.
>
> > You have edited my question above, I wonder why? You also did not give me a
> > direct answer.  What percentage of SnapName's income is derived from
> > speculators?  Do I need to name the top 5 speculators so that you can get a
> > handle on this?  If it is such an even "blend" of mainstream/speculators,
> > why is this a tough question?
> > Also, have there been ANY "SnapBack" subscriptions that have even gone to
> > term so that you could definitively state the number of subscriptions that
> > failed?  I do not believe that you have been offering the "1 year"
> > subscription for even close to a year now, am I correct?  Your statements
> > the "most SnapBacks 'ripen' within the first 60 days indicates to me that
> > most of your customers must be doing thier homework on which names to
> > choose, is this something that most "mainstream" customers do?  I know that
> > speculators certainly do this...  I also know that most speculators I have
> > spoken with (and you know I talk with a lot of them) do not care for this
> > "100% success for one person" idea either, except for the top five who
> > already know how to game your system.
> > 1.      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.
>
> > I know for a fact that speculators are already "whipping up robotic
> > algorithms" to immediately pounce on WLS slots on names the second they go
> > on hold.  This seems like a red herring to me.
>
> > Which argument are you making Harold?  On the one hand you say that a $69 to
> > $99 retail price for a WLS subscription is too high, but on the other hand
> > you say that you know "for a fact" that speculators are already planning to
> > pounce on these slots.  You can't be making both arguments at once, so just
> > pick ONE, would you?
>
> > Where did I say the RETAIL price was to high? Which hand was that? My
> > argument, or one of them, has consistently been that the WHOLESALE price is
> > way out of line.  Just because your "market reseach" shows that the market
> > will "bear" high Retail prices does not mean that the Registrars will charge
> > that, nor does it remotely justify the wholesale price.  My comment about
> > the top speculators already formulating "pounce plans" are true. That is
> > what speculators do.  You know this, as well as you know just how much
> > income those same speculators bring you today.
>
> > 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.
>
> > The WLS proposal is still a "Game of Chance", in my opinion, due to the fact
> > that it encourages the sale of WLS "positions" on names NOT known to be
> > deleting.  If total market saturation were to occur on 32 million names, how
> > many consumers would recieve absolutely nothing?  The idea of being able to
> > "switch names" 3 times also indicates to me that this is still something
> > that would require the consumer's attention during the subscription period,
> > if only to avoid recieving nothing in return for whatever fees they paid.
> > Why can a consumer buy a WLS on a name that isn't even going to expire
> > during the term of the WLS? If a name were "accidentally" deleted during
> > this term, would it not have to be returned to the original registrant
> > anyway?
>
> > It's a matter of degree, if nothing else, Harold.  If there is a chance that
> > a name will renew and not expire, that's outside the registrar/registry's
> > control.  But if it expires and the efficacy is less than 100% then, from a
> > consumer's perspective, it is a "game of chance" because this is something
> > that seemingly should be within the control of the registrar/registry.  It
> > would be a controllable factor in the instance of the WLS, but not with the
> > status quo, nor with the RRS proposal.  WLS subscribers do not need to
> > "monitor" their subscriptions in the same way as having to monitor an
> > auction to make sure they are not outbid by some swift or robotic
> > counter-bidder.
>
> > I am not too keen on Peter's auction proposal either, but if it is only a
> > "matter of degree" it is still a "Game of Chance".  Again, you failed to
> > address the other questions I posed in the above secion as well.
> > 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.
>
> > What this has to do with anything, I don't know.  The FTC doesn't much care
> > for monopolies either, as far as I can tell.
>
> > You've made your disinterest in mainstream customers' experiences very clear
> > over and over during the past few months; no need to repeat it again. We all
> > understand your agenda.
>
> > MY AGENDA?  Am I the one trying to form a monopoly?  And when have I
> > disparaged the "mainstream customer"?  All I have done is repeatedly remind
> > you that your biggest customers are the very same speculators that you
> > consistently eviscerate in the press.  For the record, My "agenda", if that
> > is what I have, is for equal access and competition for registrars and
> > registrants alike. My position is that your proposal does neither.
> > Registrars can now choose a number of different models to compete. With your
> > proposal, I see only one.
> > 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.
>
> > While the WLS may indeed provide these nice "Wall Street" benefits for
> > SnapNames and Verisign, it has been stated already by some registrars that
> > the margin on WLS sales by registrars will most likely only be a dollar or
> > two.  All it takes is for ONE registrar to do it and ALL the others will
> > have to follow suit in order to be competitive.  Again, this also seems to
> > be "encouraging domain abandonment" rather than "registration retention",
> > although I agree that a certain percentage will not renew anyway.
>
> > Again, you are espousing two conflicting positions, Harry.  If, as you say,
> > the registrars will inevitably, through some "curse of nature," choose to
> > price their products $1 above cost, then what difference does it make where
> > the product is priced?  The wholesale price proposal was based on a standard
> > healthy margin range predicated upon a retail price that market research
> > indicated the market would bear, producing the 5% market penetration
> > estimate.  By your theory it doesn't matter if VGRS proposed a $0.40 price
> > or a $400 price, the registrars would only charge a $1 or $2 mark-up.
>
> > My name is not "Harry", and you know that too.  I have kept my dialog
> > restricted to the subject and respectful. I strongly suggest that you do the
> > same.
>
> > Again, you conveniently edited my question above too.  I repeat, is it your
> > contention that every registrar "hopes to be aquired someday"? By whom?
> > Verisign?
>
> > As far as the $1 or $2 over cost retail pricing, I was not the one to
> > suggest that. The registrars themselves have stated this several times, and
> > strangely enough "curse of nature" was not one of the reasons given.  From
> > your statement above, am I to read that you arrived at the $40 wholesale
> > cost only because of what you deducted  the "Retail cost" that you decided
> > "the market would bear" and NOT justified by actual cost to produce and
> > operate?  Thank you for confirming one of the most common complaints of all
> > the registrars that I have seen post.  I do not believe it is me espousing
> > two conflicting positions here, Ron.  Perhaps you have me mistaken with
> > somebody else?  By the way, you might have a better chance of selling this
> > proposal to the registrars if the cost was lowered to $0.40, but even then I
> > think you would still find resistance.
>
> > Many registrars would prefer to have the chance of creating a significant
> > new revenue stream, nonetheless.  And in case you hadn't noticed, those
> > registrars who do hold the high water mark on domain name pricing, at $35
> > retail, are by far the most profitable and successful of the lot, despite
> > the continued marketing of $6.50 names at the bottom end of the market.  I
> > know you subscribe to State of the Domain, so I'm somewhat surprised you are
> > not aware of these readily available financial analyses.  This assertion
> > that all registrars would be "forced" to discount the price to $1 above cost
> > is the most absurd thing I've heard since Bin Laden's last videotape.  It's
> > a very poor argument for how to properly price a new product.
>
> > Again, I submit that yours is not the only "true path to enlightenment" for
> > the registrars to "create a new revenue stream".  I never stated that
> > registrars were not interested in more revenues, just that the vast majority
> > of the "revenues" from your offering does not seem to go to the registrars.
> > I do indeed enjoy your "State of the Domain" reports, and those same
> > Registrars you speak of charging the high dollars seem to be the same ones
> > losing maket share.  I am sure that the same registrars that shared thier
> > thoughts on the inevitability of $1 to $2 markups will appreciate your
> > connection to Bin Laden's last videotape as well.
>
> > For the record, while it is true that I do have a vested inerest in the
> > outcome of this, no matter what that may be, my position is and always has
> > been focused.  My Position is equal access to this resource combined with
> > CHOICE for registrars and registrants alike. Your model does not fit my
> > definition of choice in that there is only your model to choose from.
>
> > As far as your model giving "equal access" to the mainstream registrant, it
> > is undeniable that you have the most market exposure but I still submit that
> > it is only a few keen speculators that know how to get the jump on everybody
> > else (and have the bankroll behind them) for the premium names, leaving the
> > "little guy" out in the cold.  At least with the current system, the "little
> > guy" still has a chance by utilizing any of the several other services
> > available.  What happens if your proposal becomes reality? The "little guy"
> > will just get left out in the cold, with nowhere else to turn.
>
> > Honestly, does SnapNames derive a majority of its income from speculators,
> > including a few that spend $50,000 at a time, or is it really just the all
> > the "little guys" that make up the majority?  Would those same High Rollers
> > "spread the wealth" amongst the registrars (as they do now, for the
> > registrars active in the deletion game) or will they just gravitate towards
> > one spot with your proposal, presumably the least expensive, since all other
> > incentives are gone?
>
> > Harold Whiting
> > webmaster@buildable.com
> > 805.886.4164
>
> --
> Best regards,
> William X Walsh <william@wxsoft.info>
> --
>
>

Regards,
--
Jeffrey A. Williams
Spokesman for INEGroup - (Over 121k members/stakeholdes strong!)
CEO/DIR. Internet Network Eng/SR. Java/CORBA Development Eng.
Information Network Eng. Group. INEG. INC.
E-Mail jwkckid1@ix.netcom.com
Contact Number:  972-244-3801 or 214-244-4827
Address: 5 East Kirkwood Blvd. Grapevine Texas 75208


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