Re: [registrars] Comments on Final Report of the Transfer Task Forceon the WLS proposal

[Ken Stubbs <kstubbs@digitel.net>]

i would echo bruce's request for a vote as well.

it is essential that your names council reps have a  clear  CURRENT "sense
of direction" on this proposal.

it has been roughly 4 1/2 months since the last constituancy  vote and there
have been some significant modifications & additional changes in the TF
recommendations as well as modified proposals from the registry.

it should be no problem to expedite this vote.  if it cannot be done
"formally" by votebot then we could request that the authorized constituancy
representative for each registrar e-mail bruce tonkin with an "acceptance"
or "rejection" of the current task force recommendation..

ken stubbs


----- Original Message -----
From: "Bruce Tonkin" <Bruce.Tonkin@melbourneit.com.au>
To: <registrars@dnso.org>
Sent: Wednesday, July 17, 2002 7:14 AM
Subject: [registrars] Comments on Final Report of the Transfer Task Force on
the WLS proposal


> Hello All,
>
> I have submitted the following comments on the Transfer Task Force
> recommendations on the WLS proposal.
>
> They are fairly long, but I have submitted them to the list in the hope it
> may spark some discussion.  I am sure many of you will disagree with me.
>
> I would like to see a formal vote taken by the constituency on the task
> force report, so that the names council reps can vote according to the
> wishes of whole constituency.  The vote should either accept or reject the
> current recommendations of the task force.
>
> If there is no vote by the constituency, I will abstain from voting on
this
> issue at the next Names Council.  I am happy to provide my proxy to either
> Ken Stubbs or Philip Grabensee if they choose to vote for or against the
> proposal.  I just feel personally that I do not know the wishes of the
> constituency.
>
> Regards,
> Bruce Tonkin
>
>
> -----Original Message-----
> From: Bruce Tonkin
> Sent: Wednesday, July 17, 2002 9:05 PM
> To: 'comments-deletes@dnso.org'
> Subject: Comments on Final Report of the Transfer Task Force on the WLS
> proposal
>
>
> Hello,
>
> Thanks you for the opportunity to comment on the Final report of the
> Transfer Task Force.
>
> My comments are on behalf of Melbourne IT, and do not represent the views
of
> the registrar constituency.
>
> Recommendation 1: To deny the WLS
> =================================
>
> I disagree with this recommendation.
> I believe that ICANN needs to be very careful not to stifle innovation at
> the registry level.  Any new service will have an affect on the market.
>
> I agree with the following comments in the Task Force's powerpoint
> presentation:
> "Competition should always be viewed as to the effect on the eventual
> consumer - this is the framework of consideration the TF has taken".
>
> "While individual registrars are acknowledged to have existing vested
> interests in the status quo - maintaining today's competition is NOT about
> protecting particular businesses, rather it is retaining an open market".
>
> I disagree with the conclusions of the next slide.
>
> The present market of registrars compete against each other to register
> names using the "add" domain command.  This competition can occur at the
> time when a name is first created (most prominent when a new registry
comes
> into business), and when a name first becomes available again for
> registration (e.g after the name is deleted from the registry).  This
> competition is meant to be on the basis of equal access to connections to
> the registry so that each registrar competes against each other fairly.
> Recently there has been a degree of market collusion where some registrars
> team together to combine their connections to the registry to gain an
> advantage in registering certain domains over other registrars, and there
> has also been instances where companies have become accredited registrars
> for the sole purpose of trading in the names that they register for their
> own use.
>
> I do not believe that the addition of the WLS service will significantly
> impact the competition in using the "add" command.  There will continue to
> be a range of business models in the use of this command.
>
> The WLS service in fact will have similar characteristics to the core
domain
> name service.
> There will be competition to add a WLS entry at the time when a WLS is
first
> created (we could see a similar effect here to when a new gtld domain name
> registry starts operation), and also when a WLS is removed from a name
(this
> will be similar to the current competition for deleted names).  A range of
> business models (including most of the existing models for the core domain
> name service) will also exist for WLS.  For example, different methods to
> determine the optimum time to place a WLS on a name to maximise the chance
> of obtaining the name in a deletion (based on knowledge of whether the
> domain name is likely to be deleted).
>
> I believe that WLS will not damage competition amongst registrars in
> servicing their customers, and it may in fact create more competitive
> opportunities in terms of new business models to take the best advantage
of
> WLS as a registry service.
>
> In terms of consumer acceptance of WLS, this will be a matter for the
market
> to determine.  I personally think it is an easy service to explain to
> consumers.  I think most of the issues surrounding WLS are in fact related
> to the processes for deletions.  Consumers do not want their names to be
> handed over to the holder of a WLS subscription accidentally.  Provided a
> consumer definitely decides not to renew a domain name, there should be no
> problem with an approach to take out a first option on the name when it
> becomes available.
>
> My main personal advice, is that I don't think there is a strong enough
case
> put forward from a regulatory point of view to deny the service.  I do not
> see how the consumer will be adversely affected from any changes in the
> competitive marketplace as a result of introducing the WLS.   It will
create
> a dangerous precedent that may either limit registry innovation, or
provide
> ammunition for organisations that would like to see the end of ICANN.  It
> could create an example of where ICANN has exceeded its authority, for no
> strong gain for the consumer.
>
>
> Recommendation 1A
> ==================
>
> "The ICANN board move with all haste to implement and actively enforce the
> proposed Redemptions Grace Period for Deleted Names policy and practice."
>
> I strongly agree with this recommendation.
>
>
> Recommendation 1B
> =================
>
> "The ICANN Board reject Verisign's request to amend its agreement to
enable
> it to introduce its proposed WLS."
>
> I strongly disagree with this recommendation.  See comments under 1 above.
>
> Recommendation 1C
> =================
>
> "The ICANN Board reject Verisign's request to trial the WLS for 12
months."
>
> I find Verisign's use of the term "trial" interesting.  A trial implies
that
> there is something measurable at the end of the period to decide on
whether
> to proceed.  I suspect that Verisign is talking about a normal commercial
> "market trial".  If the service makes money it will continue, if it loses
> money it will cease.  This is normal business practice, and is irrelevant
to
> ICANN.
>
> Another use of the term "trial" could be for ICANN to trial the
introduction
> of this new service and measure the effect on competition in the domain
name
> market.  In this sense I can support a trial from an ICANN point of view.
> The ICANN Board may set a condition that if the introduction of WLS
reduces
> the competition in the domain name market (measured in terms of number of
> registrars, or concentration of market power by registrars).
>
> So I reject the recommendation as it stands.  I have no interest in
> Verisign's market trial.
> I would advise the Board however to consider a measurement for the level
of
> competition before the introduction of the WLS, and after 12 months, and
use
> this as a condition for allowing WLS from ICANN's point of view to
continue.
> I expect that this is unnecessary for this service, but it may be an
> approach for conditional approval of future registry services.
>
>
> Recommendation II A
> ===================
>
> "The introduction of WLS is dependent on the implementation and proven
(for
> not less than three months) practice envisaged in the proposed Redemption
> Grace Period for Deleted Names policy and practice and the establishment
of
> a standard deletion period."
>
> I agree with this recommendation.  I think if the problem of deletes is
> solved first to the satisfaction of consumers, the resistance to WLS will
be
> minimal from a consumer perspective.
>
> The Redemption Grace Period is one step in this solution.
>
> A standard deletes process is still missing, and I would advise that ICANN
> consider setting up a similar if not the same group as for the Redemption
> Grace Period, to propose a solution to this problem.
>
>
> Recommendation IIB
> ==================
>
> "Verisign has proposed an interim Grace Period. The TF recommends that any
> interim Grace Period have all the characteristics and conditions of the
> Redemption Grace Period now in implementation."
>
> I strongly agree with this recommendation.
>
>
> Recommendation IIC
> ==================
>
> "Several Constituencies remain concerned that a standard deletion period
be
> established and implemented. Some TF members believe that this could be
> considered separately from WLS. "
>
> I recommend that the standard deletion period be established before the
> introduction of the WLS.  There is a significant potential for gaming of
the
> system.  A registrar may hold onto a domain name without deleting it,
until
> they can sell a WLS subscription for the name, or if the WLS already
exists
> on the name, they may hold onto a domain name to sell via a secondary
market
> or even to the holder of the WLS at a higher price.  The registrar must
not
> be able to hold onto a name beyond the normal deletion grace period,
unless
> the original registrant has requested that the name be renewed.  The
> registry should consider an auto-delete process to ensure uniformity.
>
>
> Recommendation IID
> ==================
>
> "The WLS include a requirement that notice be provided by the Registry
> (through the registrar) to the existing registrant of a domain name when a
> WLS option is taken out against that registrant's domain name."
>
> I don't think this is necessary to issue a notice to a registrant.   It is
> more likely to be confusing to the registrant.   However I do believe that
a
> registrant should be able to find out, via a publicly available service
such
> as WHOIS, whether a WLS exists on the domain name, and the name of the
> registrar that placed the WLS on the name.  I don't believe for privacy
> reasons that the name and address details of the WLS holder need to be
made
> public.
>
> The simplest solution would merely be a flag to indicate publicly that a
WLS
> exists on the name.
>
> Note that a registrar will always be able to find out for a registrant if
a
> WLS exists, by doing a check or attempting to add a WLS entry.
>
>
> Recommendation IIE
> ==================
>
> "The WLS include a requirement for full transparency as to who has placed
a
> WLS option on a domain name and the registrar that actions the option."
>
> Comments as for IID.  I don't think for privacy reasons that you need to
> display the details of an individual or company that has placed a WLS on
the
> name.  It would be sufficient to identify the name of the registrar.  This
> ensures that any gaming of the system by some registrars will become more
> obvious.
>
>
> Recommendation IIF
> ==================
>
> "Based on the above two points (notice and transparency), the price for
the
> WLS be set at the same amount as the current registry fee for a
registration
> - the cost of the WLS function being no more, an probably less, than a
> registration - plus any additional costs to "notice and transparency',
based
> on Verisign's provision of such validating information on such costs to
the
> Board/Staff."
>
> This is a tricky area.
>
> With regard to the arguments in the powerpoint presentation, I agree that:
> "Registrants are captive to the domain of their registration - the
switching
> cost is usually too high to contemplate changing domains"
> Thus the price to renew a ".com" name is definitely akin to a monopoly
> service.  The existing ".com" registrant has no choice.
>
> With regard to WLS, the argument is more complex.
> For a person without a domain name, the choices are:
> - create a new .com name
> - put a WLS order on a .com. name
> - choose a name in another gtld or cctld namespace
> At this level there is clearly choice and competition.  WLS could be
subject
> to market forces.
>
> For a person with a domain name, the question is:
> - will the existing ".com" registrant feel they must purchase a WLS on
their
> name for insurance purposes (ie to protect their name)?
> If the answer to this question is YES, then I think WLS is a monopoly
> service and should be subject to price control.  I would hope that the
> problems of deletes and the introduction of the redemption period, would
> reduce the need for an existing registrant to take out a WLS on their own
> name.
>
> On balance, I think that WLS should not be subject to price control
provided
> that the majority of registrants feel no need to place a WLS on their own
> name.
>
> If the Board thinks otherwise, then price control may be necessary.
> I see two approaches to price control:
> (a) based on cost plus a reasonable margin
> (b) based on the price of a similar service
>
> Given that Verisign has shown no inclination to provide cost details to
> ICANN or anyone else, I expect that (a) will be difficult to pursue.
>
> In regards to (b), the difficulty comes down to making an assessment of
the
> capital costs  and marginal costs, of WLS compared to a normal
registration
> service.  If WLS had a market demand of the level of a domain name
> registration in .biz, .info, etc - then this would help define the price
> level.  The problem for ICANN will be in determining in advance what the
> level of market demand there will be for WLS.
>
> If possible, it will be better if ICANN does not need to enter into price
> control approaches for registry services.  The aim should be to create an
> environment (e.g via fixing the deletes issues in advance) that negates
the
> need to provide price control.
>
> Where a new service is introduced where price control is necessary, it
maybe
> better to create an environment where competitive tendering is used to
> determine an appropriate price for the service.  This was effectively the
> approach used for determining the registry prices for domain names in
.biz,
> .info etc.  For example WLS could be operated by a third party to Verisign
> if necessary.
>
>
> I hope my comments will be of some assistance to the task force.  I urge
the
> task force to consider the precedents that may be set in this decision
> making process.
>
> Regards,
> Bruce Tonkin
>
>
>
>
>
>