[registrars] RE: Comments on Proposed Domain Name Wait Listing Service

[Bruce Tonkin <Bruce.Tonkin@melbourneit.com.au>]

Hello Chuck,

> 
> Thanks for the very thoughtful comments.  I have provided some initial
> responses below and will forward all of your suggestions to 
> our business
> development people.
> 

Thanks for your quick response.  I will also briefly follow up on some of
your points.

> 
> Making a modification to Whois would introduce several complications.
> First of all, large numbers of people use Whois, oftentimes using
> automated scripts, so changes in the display can create problems for
> users.  Second, because this is proposed as a 12-month trial, it might
> not make sense to consider doing the work necessary to change Whois
> until the WLS becomes a permanent offering.  Third, we would have to
> have our engineers scope out the level of effort required to do this.
> 
> I will ask our business development people to investigate this further
> and possible provide further feedback in this regard.

If a change to your standard WHOIS is not possible, perhaps you could make
available a simple service that allows an Internet user to query the
registry to see whether a particular domain name has a WLS subscrption
associated with it.

Again I think that it is important for an internet user to find out from the
source the status of a particular domain name in the registry.


> 
> I will ask our business development team to consider the 
> possibility of
> an extension of the proposed 15 days.  I personally think that however
> many days is given that the name should be removed from the 
> zone because
> that is sometimes the only way a registrant discovers there is a
> problem.
> 

Yes - that makes sense.

>In my opinion it would be very inappropriate and totally unacceptable
>for the DNSO to be provided VGRS cost information.  That would be well
>beyond the limited technical coordination functions of ICANN and would
>involve disclosure of business sensitive information.  It would also
>create problems for us as a publicly traded company with regard to the
>public disclosure of such sensitive information.


I view ICANN as an industry self regulator, in addition to its role with
respect to technical coordination.  The application process for new TLDs was
certainly outside the role as a technical coordinator.  The contracts
between ICANN and the Registry operators certainly give ICANN responsibility
for agreeing the prices for Registry Services (see clause 22 of the ".com"
agreement).

It is normal for a regulator to require some information on costs that
justify a particular price point for a monopoly function.  It is also normal
for an independent assessment be made on these costs.  This works best when
the company being regulated is open about the cost models.  In other
postings you have provided a framework for the items in your cost model
which was useful and valid, but you have not provided the numbers necessary
to assess the costs.

The issue of being a public traded company is not relevant unless the
information is not made generally public.  I also work for a publicly traded
company and I am well aware of the issues.

I expect that Verisign and the other gtld operators will increasingly
innovate with new services, and thus in the case of this first new service
provided on a monopoly basis (following the signing of the registry
agreements) it is important to have a framework for determining the registry
price.  I urge Verisign to propose a method of doing this.

It is important that there is an incentive for the registry operators to
introduce new services, but also important that undue advantage of their
monopoly position with respect to the specific gltd is not taken.  


> 
> The 5% figure is just an estimate of possible penetration; it could be
> high or low, but it seems to me if it is an accurate estimate that it
> quite likely would take a number of years to reach that level of
> penetration.  The WLS is proposed as a 12-month trial.  That 
> means that
> it could be disbanded at the end of the trial, so the initial 
> investment
> costs could actually create a loss.
> 
> The reality of the matter is that there are lots of unknowns 
> associated
> with the WLS.  We would not be pursuing it if we didn't think the
> potential was good, but in fact we will not know for sure 
> until we test
> it.  As with any new service offering, there are risks; some new ideas
> work out well, some don't.  Hopefully, by the end of the 
> trial we should
> have good data upon which to evaluate the price point.
> 
> All that said, I will still go back to our business people 
> and to see if
> they think there is room for any adjustments.

I agree there is market uncertainty - as there is for each of the new gtld
registries which had to provide business model information as part of the
application process for a new gtld.

On the one hand I hear people saying (including yourself and Snapnames) that
this is a great opportunity for registrars as the market is large (which
will all be fiercely competing), and on the other hand I hear the company
(Versign( that gets revenue for every WLS subscription saying that the
market may not be as large hence the need for large margin to offset the
business risk.

> 
> > 
> > If agreement can't be made on the "costs", then perhaps the 
> > provision of the
> > service should be put out to competitive tender.
> > 
> > I agree that the "price point" should be set high enough so 
> as not to
> > encourage abusive speculation of WLS subscriptions.
> 
> This is an issue that I personally feel very strongly about.  If the
> price point is anywhere close to what registrations now cost, we will
> simply create a problem with the WLS service that mimics what has
> happened with deleted names.

I agree with you there.  I have pointed out in the past, that you may need a
WLS service for the WLS service etc.  There is a danger that the same
problems will repeat themselves - e.g high check loads on the WLS offering
etc.  I recommend that the trial last for at least 18 months, to allow the
renewal behaviour for the WLS subscription after 12 months to be evaluated.


> 
> I think we are in agreement with regard to the concern for inadvertant
> deletions, but I don't think I fully understand what you are 
> suggesting
> with a sunrise period.  If, as we proposed, there is a Registry Hold
> period before deletions occur in the 45-day grace period, 
> wouldn't that
> solve the problem you are dealing with?
> 

No, I am thinking in terms of the registrant with a valuable business,
wanting to maximise the protection on their domain name.
This can be done via:
(1) Purchasing up to a 10 year registration (to avoid a renewal problem)
(2) Purchasing an option on the domain name via WLS - as added protection in
case of system errors that may result in inadvertently deleting the domain
name

The above is an attractive "insurance" package that can be sold by
registrars as an up-sell on the price of a basic 1 year domain name
registration.  The up-sell can be made to those that already have their
domain names, via the sunrise period.  It provides a revenue benefit to
registrars and the registry.

It is similar to the concept of 1+1 redundancy in telecommunication networks
- ie you purchase two links to the same place, in case one fails.

My view is that the existing registrant should have the first right to
subscribe to the option on their domain.

Regards,
Bruce
>