[registrars] WLS Opinion: DomainSite

["Rick Zaniboni" <rickz@domainsite.com>]

To Rick and the drafting committee:
Thank you for inviting responses to your drafting work on the RC statement
regarding WLS.  Though our positions on WLS differ, I would like to
contribute in some areas that concern me as a constituency member because I
believe they are of both short- and long-term importance to us as
businesspeople-short-term, it affects the manner in which we have
discussions and offer our input, and long-term will be important to our
credibility as businesspeople long after the WLS is implemented.

I don't intend to sign the draft response of the RC's drafting committee,
but even if I did not support the WLS (which I do), I could not sign my
company's name to the proposed RC response.  It invites legal liability to
anyone who signs, and contains inaccuracies and extraneous material that I
fear would reflect poorly on the credibility of my company and of the RC as
well.

Just a few examples:

First, considering the anti-trust seminar the RC apparently put on in
Dulles, I'm taking it seriously that we shouldn't be talking about price.
No group of buyers should attempt to block a service by their vendor based
on price-doing so opens up too much exposure.  I could not in good faith
ever sign my company's name to something that treads so close to potentially
serious legal liability.  So, consider this statement the equivalent of my
turning over the water pitcher.

Second, as VGRS' last document made clear, there is no "grandfathering" of
SnapBack(tm) orders, which would mean that SnapBack holders get automatic
WLS subscriptions.  That's not happening.  Nor are SnapBack customers "made
whole"; they (and SnapNames) clearly still have to compete for names just as
they do today.

So to the heart of the issue:  Why are the names sought by other "entities"
not excluded from WLS orders, as are SnapBack contracts?  One reason is
surely that it would be prohibitively expensive for any "entity" to
integrate a system for excluding its own orders for deleting names (if it
had any) into VGRS' WLS-assuming the entity even had contracts for such
orders.  But an even simpler reason is that no entities other than
SnapNames' customers even have contracts on specific names to be deleted in
the future-only SnapNames now, today, has paid contracts for specific names.
The rest take orders only during the delete cycle, and they are not pre-paid
contracts.

Why does this matter?  Because SnapNames' customers could sue ICANN and
VeriSign under a cause of action known as "tortious interference with
contract," and no other customers-lacking pre-paid contracts today-have even
a prayer of that kind of claim.

ICANN, VeriSign, SnapNames, or anyone else who intentionally interferes with
the performance of a contract between one entity (like SnapNames) and
another (like a SnapBack customer) that would make the contract incapable of
being performed could be subject to liability for the resulting losses.
Only customers of the SnapBack product could plausibly claim the elements of
tortious interference would be met if VeriSign and ICANN intentionally and
systematically interfered with those customers' contracts with SnapNames
(and with some registrars) by quashing the customers' pre-existing, paid-up
contractual rights.

Third, I'm also concerned that the posted RC statement harms our credibility
by re-running the tired and disproved Red Herring that WLS somehow
"pre-empts" all other business models.  This sort of unfounded claim really
hurts our credibility as a constituency.  For one thing, the current
"system" creates a nightmare of unequal (and for most, non-existent)
customer access that we can no longer afford to ignore.  More importantly,
as has been pointed out before, during any WLS trial period, the following
business models may be affected, but not "pre-empted

* For names on which no one chooses to take out a WLS subscription (and if
the price is too high, as some say, there will be many such names), some
registrars will still take large amounts of money from anyone (usually from
people other than end-users) in return for preferential access registry
connections;
* For the same names, some registrars will still engage in the one-sided
race between speculators (i.e., fully armed, preferentially treated,
professional domain buyers), and mainstream end-users (i.e., people who do
not live on domain-related sites and have neither the need nor inclination
to become industry experts just because they want a domain name).
And some models, including Afternic's proposal, wouldn't be affected at all,
and could even successfully pre-empt the WLS itself someday:

?         Competition for deleting names in .ORG;
?         Competition for deleting names in all other gTLDs and ccTLDs;
?         All domain name brokerage services, which can still go around the
WLS by selling a name before (or after!) its deletion-remember that WLS only
applies to names that are actually in the process of expiring/deleting.  All
other names can still be brokered or sold by their owners or through
middle-man business models.  In other words, every name on which a WLS
subscription is held can still be bought or sold at almost any moment;?
All auction services, for the same reason.
Fourth, as to equal access, the proposition that the current system allows
*registrars* equal access where the WLS would offer *subscription holders*
better access is simply incoherent.  Today it's only registrars, not
customers, who have equal access.  I repeat:  today, customers DO NOT have
equal access, and only WLS creates that access for them, by turning the Wild
West preferential access free-for-all in which registrars compete for
insider deals, into an orderly first-come, first-served system where all
customers are treated equally.  One other point on this "equal access"
issue:  it is an absolute mystery what the draf

Fifth, on transparency, if we have proof of these issues, let's put our
money where our mouths are and submit our claims or even sue, but we will
get exactly nowhere trying to use unsupported conspiracy theories to block a
service that the registry does not require our consensus to offer in the
first place.  It is also an entirely separate issue from the WLS product, as
evidenced by the fact that the same conspiracy fears could be used just as
easily to try to block anything whatsoever that VeriSign wants to do.  And
since that will never happen, we lose credibility by insisting on it.

In sum, the proposed draft will do nothing to further our reputation for
considered analysis and innovation.  I fear it will simply paint us as an
obstinate bunch who reflexively oppose anything new, and who manufacture
some pretty weak reasons for blocking progress.

Rick Zaniboni
DomainSite