RE: [wg-c] Re: IP/TM Concerns & New GTLDs

["Roeland M.J. Meyer" <rmeyer@mhsc.com>]

> Behalf Of Kent Crispin
> Sent: Monday, August 02, 1999 12:14 AM
>
> On Sun, Aug 01, 1999 at 11:17:43PM -0400, Milton Mueller wrote:
> > Kent:
> > 100 gTLDs does not necessarily mean 100 new registries, and
> it is the
> > number of registries, not the names as such, that matters
> most from a
> > regulatory standpoint.

> were multiple registries/registry operators.  What we disagree about
> is how quickly they need to be brought on line, and the business
> model for them.

All arguments are moot if this point isn't clarified. It's a
non-starter. Aside from the fact that it's non-enforcable, from a
free-market stand-point no one is going to tolerate the dictation of the
business model, not to mention the revenue model.This is the stance that
we are dead-locked on.

As far as speed of deployment, where will the CASH come from, the ICANN?
Even at five registries, we are talking about over $20MUS in costs. If
they have to be non-profit, with a dictated business model, they will
NEVER come into being.

In a prior message, I discussed costs of registry operations. I might
also point straight towards the ICANN, as an example, as well.
Non-profits can not get sufficiently funded in today's investment
market. Try it sometime and see how far you get. ICANN itself is having
trouble and may not be around, three months hence, due to simple lack of
funds..

> > And it's no good to say that you're only going to give it
> that monopoly
> > for a year or two. The advantage such a registry would have over its
> > rivals, given the pent up demand, would be significant.
>
> Only if you assume that the registry operator "owns" the TLD.  If it
> doesn't, and it is run as a non-profit, then TLDs can be re-assigned
> to new registries any time.  Recall that requiring the registry to be
> non-profit does not require the registry operator to be non-profit
> -- CORE is a non-profit, Emergent is a for profit.

and the ONLY successful registry, NSI, is a for-profit. The SRS simply
alters and simplifies their revenue model. Anyone who has setup a sales
organization can see that. The SRS is simply the channel market for the
registry. The only competition is between the channel vendors, the
channel operator is always the winner. If anything it removes the
channel operator's competition by subsuming would-be competitors into
the channel market..

> It's important to realize that there are essentially no economies of
> scale to worry about.  I could run a significant registry from my pc
> at home.  This is technical fact.  It isn't widely known, but one of
> the .com/.net/.org TLD servers actually is just a PC -- true, it's a
> multiheaded Pentium server with a Gig of memory and lots of fast disk
> and really good network connectivity.  But it's a PC.  And that's the
> DNS server, which gets ~2000 hits/sec.  The registry database, as has
> been mentioned before, gets orders of magnitude less traffic than the
> dns server.

Yes, and who is running it and what is the cost of that data center
context? What is the fully-burdened cost of that resource? You are
vastly understating that server. Yes, the whole thing could be run on
two or three racks. But the amount of infrastructure work is awesome,
especially for a proper service offering. The last estimate I put
together priced it out at $2.9M just for the development of the registry
software, not to mention on-going license fees and maintenance. Moore's
Law has dropped the cost of data processing such that hardware cost is
insignificant compared to operational and development cost. That one PC
is probably the processing equivalent of 25 VAX 11/780's (a mid-80's
mini-computer that cost about $100KUS, in it's day). BTW, Microsoft
leads one down the same erroneous garden-path, with their Total Cost of
Ownership pitch. It is the total cost of burdened asset that is
important. The time of trained professionals is not zero cost labor.

A sanitized version of that offering is available at
<http://download.dnso.net/dox/politicks/IDNRS.pdf>

> The registry part of the registration business (as opposed to the
> registrar part) is *insignificant*, relative to the registrar
> component.  There are over a thousand Nominet registrars feeding a
> single registry.

What sort of commission are they paying?

> > Five to seven registries operating three TLDs, gives you 15-21 as
the
> > baseline *minimum* that can be introduced if you want to have a
> > responsive, competitive environment. We just can't talk  about any
number
> > smaller than 15, and I'm not comfortable unless we're  talking about
at
> > least 20.
>
> You are vastly overestimating the value of competition at the
> registry level.

As I think that you are totaly mis-understanding how channel marketing
works. Channel marketing is not competition. Only registries are true
competition. Channel markets are only a means of leveraging the work of
others, for the benefit of the channel operator.

> > And that doesn't even take into account the many demands
> for non-English
> > gTLDs, many extant claims for chartered gTLDs, the possibility of
> > different business models (e.g., what if some of the
> registries want to
> > be proprietary?).
>
> Chartered TLDs are an interesting question, and in my opinion a
> great deal more consideration needs to be given to them.

Interesting that you should say this. IMHO, charterd TLDs are the only
answer to an ADR process. chartered TLDs do not need ADR. Especially if
part of the charter requires a trademarked name.

> > The smaller the number of gTLDs, the larger, more divisive and more
> > unfair will be the political process of assigning them.
>
> If the TLDs are proprietary, that is.  If we fix our sights firmly on
> the notion that gTLDs are *not* proprietary, then most of these
> issues disappear.  Almost all the real divisiveness centers on the
> notion of "ownership" of TLDs.

You may fix your sights there and you would miss. Especially where
chartered and trademarked TLDs are concerned. Granted that a US
trademark is not strictly ownership, it is holdership, the effective
difference is nil, from a business perspective. The trademark holder has
ownership control of the trademark, regardless of what it is, including
a TLD. It is enforcable with current US law, with or without ICANN
sanction or approval. ADR would not be required.