[comments-deletes] Against WLS

[Don Brown <donbrown_l@inetconcepts.net>]

I am writing as a consumer and the owner of several domain names. I
have no interest in SnapNames, VeriSign or in any Registrar business
and I am not a reseller in the secondary market. Therefore, what I
have to gain or to lose by submitting the following comments are from
the standpoint of a consumer and domain name owner.

I am opposed to WLS for the following reasons:

1. Choice
I currently have a choice of various vendors/ultimate providers and
different types of service offerings. WLS will force me to accept one
type of service offering and to do business with one ultimate and
exclusive vendor.

Today, as a consumer, if I have a bad experience with Chevrolet, I can
take my business to Ford. The same is currently true for this market,
but with WLS, I'll only be able to change the dealer/Registrar, which
will not make an appreciable difference.

Restricting my choice of vendor and service only benefits the
sole-source provider, leaving me and other consumers with no choice
and no real benefit. Why would you restrict my choice of deciding who
I want to deal with and what type of service I want to receive?
Moreover, how could you possibly justify doing that?

2. Cost/Benefit
In today's market there are service models which only require me to
pay if I, indeed, get the value of the domain name. I can also
participate in an auction and only pay if I win the bid. With WLS, I
am forced to pay regardless of whether I receive any real value. That
really borders on extortion, particularly since consumers are being
"forced" to deal with a monopoly.

3. Price Justification
Today, the wholesale cost of a domain name is $6, but the proposed
wholesale cost of a WLS is $24, with domain name registration being
extra. How can it possibly be 4 times as expensive to merely capture a
deleted domain name? Particularly so, when I can now get a deleted
name for an equivalent or lessor RETAIL price?

I submit that the majority of the proposed cost is profit for
SnapNames and VeriSign. This seems well supported by SnapNames public
media announcement in which it indicated that its revenues will grow
$17 million (a 700% increase) in the first year of WLS, alone.

Since this is a going to be a monopoly service, the cost should be
based solely on the actual, verifiable costs to provide the service,
plus a reasonable and justifiable profit.  If that comes out to more
than $6, than I would strongly speculate that the costs have been
rigged or that someone is being less than truthful.

4. Not Guaranteed
There is no guaranty that I will be able to get a WLS on even my own
domain name, unless I get it simultaneously with its initial
registration. Could this be a ploy to return to those magical numbers
of $35 or $50 per domain year?

Some say that WLS is 100% bullet-proof and more efficient. How can
that possibly be when I have no more chance of success or failure than
with any of the other already available services. The only thing
really guaranteed about WLS is that my money will be in their bank
account, regardless of the ultimate success or failure of my WLS.
Frankly, that stinks and I could hardly call it pro-consumer.

5. No Elimination of Speculation
How can the average Joe consumer possibly hope to compete with the
domain name speculators and others who have both the luxury of a
budget and the time. Even if the retail WLS price was $70 or $170
those with the money will make the market, as they do now through
SnapNames and others. A very high price doesn't really matter, as far
as speculation is concerned. A very high price will only really matter
to (1) Consumers who will tend not to buy as the price increases; and,
(2) Those who pocket the revenue/profits. Speculators will adapt to
the change in market conditions and pass the increased cost onto the
consumer, just like any other business.

6. Monopoly and Competition
Today's market is filled with providers who have innovated and spent
their time, energy and money to compete. Frankly, the assets of some
of these firms would be lost as round-off errors on VeriSign's balance
sheet. However, healthy "competition" is what America is all about and
that's what drives our economy. Why then, would anyone want to create
a monopoly?

WLS will replace a competitive market served by many and damage those
businesses.  For that reason alone, WLS should be denied.

7. Test Period
Testing WLS will really be a test to see how many of the current
competitors in the secondary market survive. These Registrars have
innovated in order to bolster their revenues and they have invested
time, energy and money to do so. Stopping their offerings, in favor of
a test period, will damage these businesses and in some cases the
damage may well be devastating.

Moreover, no realistic and objective criteria has been proposed to
measure success or failure of the so-called test. The implication is
that if the registry makes money, then it will be considered
successful. Therefore, I think it is safe to say that the registry
will deem it to be a success and already knows that. That's
particularly so in view of SnapNames projection of a 700% increase in
revenue in the first year (the test year) of WLS. Consequently, there
is no real need for a test. Moreover, how could the registry not make
money at the proposed price?

In my view, the test is nothing more that a ploy to gain monopoly
control over an existing and thriving market and put all competitors
out of business.

WLS is calculated to be anti-competitive, in more ways than just the
so-called test. For that reason alone, WLS should be denied.

8. Trust and the Public Trust
Frankly, the proposed provider doesn't have the best reputation
in terms of customer service, ethics and scruples.  That remains true,
even after it has had to compete for a good period of time as opposed
to being a monopoly provider of domain registrations.

Indeed, this is the same corporation which is under at least two Court
imposed Restraining Orders, the last I checked, which is reportedly
being investigated by the U.S. Postal Service and which has been the
subject to legal proceeding by their own stock holders.

This is the same corporation which does not honor the standard
practice for domain transfers between Registrars. It's also the same
firm which is hoarding domain names which expired over a year ago.

The Chinese wall theory is ridiculous, in this instance. You can bet
that there is no separation of knowledge or direction in the board
room or in the executive offices, where everything starts and where
the buck stops, as well.

Under these circumstances, even if I were inclined to support WLS (and
I definitely am not), I'd still vote "no" when it came to considering
the monopoly provider.

9. Innovation
A free, open and competitive market promotes innovation, market
discrimination, service and generally always provides the consumer
with a better mouse trap for a lower price.

Under the WLS proposal there is no incentive for the monopoly provider
to innovate or offer good service.  Moreover, there's certainly no
incentive to reduce the price to the consumer.

Monopolies, even when regulated, have proven time and again to be
detrimental to consumers.  Have we forgotten the cost of a one minute
long distance call a few short years ago as compared to the cost
today?

10. Hoarding
The proposed provider is currently hoarding domain names which expired
over a year ago. Doesn't WLS give them a new incentive to continue
this behavior with even more zeal? Don't you think that crafting a
uniform deletion policy, which can and will be uniformly enforced, has
priority? The current circumstance of hoarded domain names, give the
monopoly provider yet another tool to thwart competition and otherwise
be to be detrimental to the consumer.

11. ICANN
I believe that ICANN's mission was to break up monopoly and promote
competition. The WLS contravenes that mission and, therefore, WLS
should be denied for that reason alone.

12 Conclusion
Even if WLS was sold at the wholesale rate of $0.50 and was 100%
guaranteed, it would still be anti-consumer and anti-competition on
its face.

The only real benefactors of WLS will be the monopoly provider and its
partner, but that will be at the expense of the consumer and those
already serving this market.

WLS should be denied for all of the reasons stated above.


Thank you,

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Don Brown - Dallas, Texas USA     Internet Concepts, Inc.
donbrown_l@inetconcepts.net         http://www.inetconcepts.net
PGP Key ID: 04C99A55              (972) 788-2364  Fax: (972) 788-5049
Providing Internet Solutions Worldwide - An eDataWeb Affiliate
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