Re: [ga] Thoughts/question on the WLS, and the Cookie Challenge

[George Kirikos <gkirikos@yahoo.com>]

Hey Bret,

--- Bret Fausett <fausett@lextext.com> wrote:
> George Kirikos wrote:
> > ICANN exists to make the tough decisions. If they can't handle the
> job, give
> > it to someone who will.
> 
> I think that's exactly what I was suggesting: give the job to a Court
> because deciding what is "anticompetitive" is outside ICANN's core
> competency.

As mentioned in my initial reply, fostering competition is part of
ICANN's mission. Whether ICANN is competent or not in delivering upon
their mission is an open question. ;) Perhaps they need more folks with
an economics background (pick me, pick me!) on their Board. :)

All kidding aside, you're basically describing a laissez-faire legal
doctrine that says all disputes should be resolved through private
parties in courts, without government or quasi-government involvement.
In an academic and pure environment, I can see the attractiveness of
that (my own philosophy is moderately right-wing too, and I'm for less
government, not more).

However, in the real world this has problems for various reasons.

1) introduces legal costs and delays. Take the example of Microsoft vs.
Netscape, for instance. There is no question now that Netscape was
harmed by Microsoft's anti-trust activities, and they can collect
damages. However, how many years has it taken to get there, and still
Netscape hasn't seen a dime? The lawyers of course are big winners in
the meantime.

2) consumers and society are harmed in the meantime. While the "big
boys" fight things out in court, little guys and gals don't stop and
wait -- they have to live with the repercussions, through higher prices
and fewer choices. While some corporations have infinite lives, and
justice will eventually serve their interests, individual consumers
don't live forever! Getting $500 damages 10 years later is not a
perfect substitute for having had competition and increased choice for
those 10 years.

3) related to #2, one can only really sue for money damages, which is
not a perfect compensation for the harm done to consumers and society.
Collecting on those damages is also difficult (e.g. VRSN goes bankrupt,
or something, because they spent all their cash on lawyers defending
themselves to the bitter end, to rob their victims even further).

4) Verisign's contracts are with ICANN. Registrar's agreements are with
ICANN. It makes sense for ICANN to be involved. It's harder for
individual victims to organize, and Verisign knows this.

Thus, efficiency can be improved by stopping this anti-competitive
behaviour before it begins.

Take a look at what happened in the Microsoft/Netscape matter. To
survive, Netscape had to sell themselves to Sun Microsystems, at a
price that reflected a lower value due to the harm that had been
caused.

Verisign will harm the valuations of all registrars, allowing them to
continue to cherry pick them at low price, as they consolidate the
industry. Dotster said it clearly -- they make a significant profit
from their expired names service. If Verisign takes that away, VRSN can
buy up Dotster, or others, for less. It's naive to think that VRSN
hasn't thought of these things. One of the "funniest" parts of the
Bucharest transcripts at:

http://www.icann.org/bucharest/captioning-afternoon-27jun02.htm

was Chuck Gomes saying:

"I’ll be very honest with you.
There are registrar-based services that will likely experience negative
impact in a case or two.
Their particular business in going after the deleted names will
probably be change drastically.
And it certainly was not our intent to harm our customers' businesses;
okay?"

I leave it to the psychologists amongst us to interpret this, but I
personally know how to interpret things when one prefaces statements
with "I'll be very honest with you" (i.e. the more cynical people will
read that as buzzwords for "I'm getting ready to lie to you!" ;) ) and
end them with the question "okay?" (as though they're not convinced
themselves of the statements, and are asking you!). Verisign and their
army of consultants/lobbyists/lawyers are more sophisticated than
Chuck's statement suggests.

If anyone's read this far ;) I find it so predictable of Verisign and
proponents of WLS to continue to avoid the tough questions. So, let's
up the stakes a little, and provide them with an incentive. Before, I
asked at:

http://www.dnso.org/clubpublic/ga/Arc10/msg02800.html

"Consider the following scenario. The Status Quo exists, and SnapNames
approaches VGRS to make a private deal, whereby SnapBack holders get
first dibs on all expiring domain names for the first day. SnapNames
then announces that any registrar can resell SnapBacks for $30 ($24+$6
registration fee). SnapNames negotiates a private deal with VGRS to
split the cash.

Do you not think the above scenario would have consumers and registrars
up in arms? I REALLY want someone to answer that question -- yes or no,
would that deal as described above be allowed?

Now, how do you differentiate the above scenario with the WLS proposal?
The *impact* on the marketplace is IDENTICAL, the only thing that has
changed is that VGRS is the one with the "public face" saying they'll
collect the proceeds from participating Registrars.

If anyone can explain to me how they would logically Reject the
scenario above, yet accept WLS, that would put to rest the WLS debate
completely. I issue that as a challenge to Jeff, Chuck, your lawyers,
lobbyists, and any other proponent of WLS -- your silence will be
telling."

Since their silence is deafening, I renew and repeat the challenge --
and to make things more interesting, I'll send a basket of cookies
anywhere in the world to the first proponent of WLS at
Verisign/SnapNames/etc. who takes on the challenge of answering that!
:) Come on, Chuck, Roger, Mason, Becky Burr, Jeff, etc. -- take my
challenge, and earn some cookies. :)

Showing you the money, errr, cookies, :)

George Kirikos
http://www.kirikos.com/

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