[comments-deletes] Open letter to Bruce...

["J. Vogel" <jvogel@moranks.net>]

In response to Bruce Tonkin....

As a domain name registrant, admittedly on a fairly small scale
with less than 30 names registered for personal use, I would like
to comment on your (Bruce Tonkin's) remarks concerning the
"Final Report" referenced in the email partially reproduced below.
  In the interest of full disclosure, I will also state that I am a reseller
of domain names through Tucows/OpenSRS, but have primarily
used that relationship for my own registrations, along with several
names for valued clients,  with the total registrations to date through
my OpenSRS account being less than 50.

While I feel that my status qualifies me as an "end user", I also
believe that it also qualifies me as one with above average
knowledge (for end users) of the workings of the name registration
system.  Since Bruce's comments seem to indicate that he is
concerned with the effects of any proposed change such as the
WLS on the end user, referred to by him as "eventual consumer",
and yet he disagrees with the recommendation that ICANN deny
the WLS, which I see as being extremely detrimental to consumers
such as my clients and myself, I felt the need to respond.

 Please read through quoted text below for my comments.

John Vogel
"Eventual consumer"


BT>-----Original Message-----
BT>From: Bruce Tonkin
BT>Sent: Wednesday, July 17, 2002 9:05 PM
BT>To: 'comments-deletes@dnso.org'
BT>Subject: Comments on Final Report of the Transfer Task Force on the WLS
BT>proposal


BT>Hello,

BT>Thanks you for the opportunity to comment on the Final report of the
BT>Transfer Task Force.

BT>My comments are on behalf of Melbourne IT, and do not represent the views
of
BT>the registrar constituency.

BT>Recommendation 1: To deny the WLS
BT>=================================

BT>I disagree with this recommendation.
BT>I believe that ICANN needs to be very careful not to stifle innovation at
BT>the registry level.  Any new service will have an affect on the market.

I agree that ICANN needs to be very careful not to stifle innovation at the
registry level, but. as I think you would agree, I also think that ICANN
_should_ stifle any innovation at the registry level which is harmful to
"the eventual consumer".
For this reason, I think Recommendation 1. above is a good recommendation.

BT>I agree with the following comments in the Task Force's powerpoint
BT>presentation:
BT>"Competition should always be viewed as to the effect on the eventual
BT>consumer - this is the framework of consideration the TF has taken".

Your agreement with this point is why I don't understand your disagreement
with recommendation 1.

BT>"While individual registrars are acknowledged to have existing vested
BT>interests in the status quo - maintaining today's competition is NOT
about
BT>protecting particular businesses, rather it is retaining an open market".

In this case, (WLS) we are not so much talking about protecting a particular
business, but rather a whole "class" of businesses currently providing
services
in the secondary domain market. The choice is between a number of businesses
currently providing a service directly to the eventual consumer, or . one
business providing that service as a monopoly to certified resellers, who
must
then develop new business strategies to market the service now being
provided
by the monopoly (at higher cost) to the eventual consumer. In any case,
(at least for domain names most in demand) the "service" now available to
end users (to compete for a dropped name at the time of deletion) will no
longer be directly available to those end users.

BT>I disagree with the conclusions of the next slide.

BT>The present market of registrars compete against each other to register
BT>names using the "add" domain command.  This competition can occur at the
BT>time when a name is first created (most prominent when a new registry
comes
BT>into business), and when a name first becomes available again for
BT>registration (e.g after the name is deleted from the registry).  This
BT>competition is meant to be on the basis of equal access to connections to
BT>the registry so that each registrar competes against each other fairly.

Important point to note here: The competition referred to above occurs
only with names that are available. (Have not yet been registered or have
been
deleted. In either case, the name is "available")

BT>Recently there has been a degree of market collusion where some
registrars
BT>team together to combine their connections to the registry to gain an
BT>advantage in registering certain domains over other registrars, and there
BT>has also been instances where companies have become accredited registrars
BT>for the sole purpose of trading in the names that they register for their
BT>own use.

I won't dispute this point, but I fail to see how it points to a need for
the WLS.
If this has indeed happened in the current system, I will likely happen with
the
WLS system too, sice (as you point out below) the WLS will have
characteristics similar to the current system.

BT>I do not believe that the addition of the WLS service will significantly
BT>impact the competition in using the "add" command.  There will continue
to
BT>be a range of business models in the use of this command.

It is difficult to predict this. you may be correct. If the WLS is perceived
to
be of so little value that the eventual consumer (speculator or otherwise)
refuses to buy them in quantity, the current "add" storms may continue.
For names of "value" though, I that anybody who wants one will feel it is
necessary to purchase a WLS on it (if available) to keep their chances
alive.

BT>The WLS service in fact will have similar characteristics to the core
domain
BT>name service.
BT>There will be competition to add a WLS entry at the time when a WLS is
first
BT>created (we could see a similar effect here to when a new gtld domain
name
BT>registry starts operation), and also when a WLS is removed from a name
(this
BT>will be similar to the current competition for deleted names).

Similar except for two things. it will cost  > 400% more . and the
competition
will be for a name that may not become available in the lifetime of the WLS
subscription. It currently costs $6 + registrar mark-up to "grab" a name,
and it
will cost $24 + registrar mark-up under the WLS to "maybe grab" a name.
The eventual consumer is hurt on both points.

<BT
A range of
BT>business models (including most of the existing models for the core
domain
BT>name service) will also exist for WLS.  For example, different methods to
BT>determine the optimum time to place a WLS on a name to maximise the
chance
BT>of obtaining the name in a deletion (based on knowledge of whether the
BT>domain name is likely to be deleted).

Ahh. the consumer is not obligated to purchase the WLS until they "know"
the name will be deleted. but if someone else "knows" before they do and
purchases the WLS, the one who found out second loses. So, if the consumer
wants a particular name, his only option is to purchase the WLS now before
someone else does, even if that means he must purchase it beofre he "knows"
it will actually become available.
Again, the consumer is hurt. Under the current system, he still has a
chance.
even if he doesn't commit to the process until he can be reasonably certain
the
name will actually be dropped.

BT>I believe that WLS will not damage competition amongst registrars in
BT>servicing their customers, and it may in fact create more competitive
BT>opportunities in terms of new business models to take the best advantage
of
BT>WLS as a registry service.

Competition amongst registrars is not very important when what they are
selling
is of less quality and of a higher price than what they were selling before,
simply because a monopoly denied them the opportunity to market the previous
product.

BT>In terms of consumer acceptance of WLS, this will be a matter for the
market
BT>to determine.  I personally think it is an easy service to explain to
BT>consumers.  I think most of the issues surrounding WLS are in fact
related
BT>to the processes for deletions.

I agree that many of the issues that have been raised  to date can be
addressed
by fixing the deletion process, but fixing deletions would have no effect on
the
harm to consumers in the loss of  a currently available product.


BT> Consumers do not want their names to be
BT>handed over to the holder of a WLS subscription accidentally.  Provided a
BT>consumer definitely decides not to renew a domain name, there should be
no
BT>problem with an approach to take out a first option on the name when it
BT>becomes available.

I don't think that would be a viable choice for the consumer under the
currently
proposed WLS. Maybe if WLS subscriptions were not allowed until the name
actually enters the drop cycle.. But then what's the point?

BT>My main personal advice, is that I don't think there is a strong enough
case
BT>put forward from a regulatory point of view to deny the service.  I do
not
BT>see how the consumer will be adversely affected from any changes in the
BT>competitive marketplace as a result of introducing the WLS.   It will
create
BT>a dangerous precedent that may either limit registry innovation, or
provide
BT>ammunition for organisations that would like to see the end of ICANN.  It
BT>could create an example of where ICANN has exceeded its authority, for no
BT>strong gain for the consumer.

I think the consumer is greatly harmed when s/he is denied the opportunity
to
wait until there is a reasonable chance that a name will actually become
available
before s/he must commit the resources to obtaining it, instead being forced
(if they want the given name) to commit (more) money with no assurance at
all
that they will even have a chance, in the event that the current registrant
renews it.

I think we agree on most of your other points. and I have not included a
large part of your original email for that reason.

Thanks for your careful consideration.
John Vogel