RE: [wg-c] breaking up (names) is hard to do

["Kevin J. Connolly" <CONNOLLK@rspab.com>]

I concur that the only model that has a prayer of gaining rough
consensus is one in which non-profit registries and for-profit
registries compete for registrars and, directly or indirectly, for
SLD name registrations.

The big problems are twofold:

First, in a steady-state system, in which TLD's are delegated and
subject to competitive redelegation, how will we level the playing 
field between non-profit and for-profit registries?

Second, during the rollout, how will we guard against the creation
of more NSIs (monopolists) if the creation of new TLDs/Registries 
stops short of the addition of <largenum>?

The third problem (how to prevent a registry from renewal gouging)
is actually a simple one:  insert a contractual mandate limiting the increase
of registry charges for SLD name renewals, based on some objective
metric.  And actually enforce the provision, expressly providing that
other prospective registry operators and SLD name registrants have
standing to challenge any failure to enforce forfeiture of the TLD for
renewal gouging.

Now for a trial balloon on BP#1 and BP#2

#1.  Level Playing Field.  "For-Profit" Registries will be required to rebid their
domains periodically.  The "best" bid is the one which produces the smallest
net revenue stream to the registry.  For example, if a registry proposes to
pay $1,000,000 for the right to register domains, and to charge $100 per annum
for those domains, and it is reasonably believed that there will be 100,000 
SLD delegations during that year of operation, the registry will derive $9,000,000
net revenue.  If a competing bidder offers $100,000 up front, the registry would 
derive $8,900,000.  Other things equal, the second registry would get the
TLD.  I.e., the selection of a registry is made in the interest of the Internet as
a whole, without ICANN exalting itself over individual name registrants.

A non-profit registry would not be subject to divestiture so long as objective
technical criteria were satisfied.

A registry which is both (x) a captive registry operated by for-profit registrars and
(y) charging an unreasonably-high fee for the qualification of new registrars, will
be treated as a for-profit registry.  Yes, this means CORE, unless and until it 
reforms its criteria for adding new registrars.  The price of an admission ticket to
CORE is currently so high as to present a significant barrier to entry.  (This is
not intended to preclude CORE from granting its existing registrars, at the time
it lowers the price of admission, a number of Registry Credit Units usable to
pay registry charges for new domain names, equal in value to the difference 
between the existing registrars' sunk costs and the price of admission for new
members; the objective is to promote competition, not to enable free riding.)

#2.  Monopoly Prevention.  I'm not an economist.  Is there anyone on the list, or do 
we have access to anyone who can answer this question:  will competitive re-bidding 
for TLD delegations prevent the capture of monopoly profits even if the rollout stops 
with <smallnum> of new TLDs/Registries?

KJC

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