[comments-deletes] An analysis of competition under the WLS

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

To: comments-deletes@dnso.org
Cc: Bruce Tonkin

Having been prompted by Bruce Tonkin's thoughtful
responses [off list] to my earlier comments, I would like to add the
following comments. Bruce has some good insights into the processes
affected. Thanks Bruce!

Under the current system, entities with access to the registry's
system (which would be registrars) can market a service they
alone have, which is to attempt to "grab" a name as it is deleted.
Only accredited registrars can market this service, since it requires
access to the registry to "add" names but there are sufficient numbers
of them to ensure fair competition. A number of  these registrars
have undertaken the marketing of this service in one form or another.

Under the proposed WLS service, registrars would still be able
to market the existing service as they had before, except that there
would be another service (available only to those with access to
the WLS system, which I presume would be primarily registrars)
which would have the ability to "trump" the service registrars
are now marketing on any given name, by ensuring that the name in
question does not enter the deletion process.

This would have several effects. One would be to de-value the
existing service being marketed some registrars, to the point of
it being basically a worthless service, since it could be "trumped"
at any time by a WLS subscription.

Another effect would be to shift the competition for names of
value out of the registrar/registry system altogether, opening
the market to anybody with access to valid registrant contact
information. This would happen because, although the WLS
can trump the current product, it is of dubious value itself, since
it can be trumped at any time prior to a names deletion by the
 transfer/renewal or just renewal of the name in question. The
WLS must also be committed to by the consumer before there
is any real knowledge that the name in question will enter the
deletion process during the time of the WLS subscription,
which dramatically decreases its value.

Since consumers (at least the ones who know how the system
works) would understand that the service now being marketed
by WLS providers is of lessor value than the service now being
offered by some registrars, (and available to all registrars for marketing)
I believe the focus of competition for pre-registered names will shift
to the world of online auctions, "names for sale sites", and other types
of methods currently being used for the marketing of already
registered names, primarily by speculators.

Since these types of services are already in existence and widely
available, the net effect the WLS will have is not to create new
markets/opportunities, but to remove a product
which currently has some value from the market (the chance to register
names as they become available from the registry), replacing it with
a product of higher wholesale cost and less value, thereby ensuring
that the registrars' exclusive access to the registry is of less value
in the secondary domain market. At the same time, the consumer
will be forced to acquire names through third-party processes or take their
chances on the inferior WLS product, at greater cost and risk to themselves
than what they currently encounter.

Registrars will be put at a disadvantage to where they are now, since their
existing product will be devalued (probably to nothing) and the replacement
supplied by WLS is of lesser value and higher cost. The WLS will also
benefit speculators, who, as it stands now, must pay cash out of their own
pocket to keep a name from entering the drop cycle (by registering it for
another year) and can instead benefit from some third-party's subscription
on the name to tell the world "this name won't enter the drop cycle for
x month's + 1 year" (WLS kicks in or the name is renewed) instead of
in x months when the name is currently set to expire, thus putting pressure
on any prospective registrants of that particular name to contact the
speculator
if they want the name anytime within the extended period..

So, in summary, Registrars (especially those currently marketing access
to the registry in the secondary name market) and consumers (who have
been purchasing that access) will be hurt by the WLS. Domain name
speculators, auction sites, "names for sale" sites etc. will benefit, as the
consumer is burned by the registrar/registry/WLS system, and turns to
them to attempt to get an actual name instead of a worthless subscription
on a waiting list. In any event, the service now being marketed by
registrars
will become (next to) worthless in the new market place, and consumers
will have lost a product of value that they currently can purchase.

Thanks for you consideration!
John Vogel
jvogel@moranks.net