Re: [wg-c] registry contracts

[Jonathan Weinberg <weinberg@mail.msen.com>]

At 11:10 AM 11/12/99 -0500, Kevin J. Connolly proposed that in selecting
among multiple registries seeking to operate a particular gTLD, ICANN
should seek to minimize 
>the price per SLD Name delegation X number of expected delegations - (fees 
>paid to ICANN + amount of surplus disposed of in the public interest).

	I gather that under this approach the prospective registry, whether
for-profit or non-profit, would have to declare its price and stick to it.
This would constrain business models and business flexibility, but the
"auction" involved in the selection process might effectively push registry
prices down to cost, and it would do so without forcing ICANN into the role
of a ratemaking body.  The model could address the flexibility issue
somewhat by making it clear that the price declared by each prospective
registry is a *ceiling*, which ICANN would use for selection purposes, but
that the registry would be free to price below it.

	It seems to me, though, that it would be a mistake to factor in payments
to ICANN.  It's a step in the right direction to have prospective
registries bidding against each other to see who can offer lower prices to
consumers.  But it wouldn't be helpful to have prospective registries
bidding against each other on the basis of who will pay a higher fee to
ICANN.  That would just mean that instead of having registries collecting
monopoly rents from consumers, effecting an unwarranted wealth transfer
from consumers to registries, we would have registries collecting monopoly
rents from consumers and then paying the money over to ICANN, effecting an
unwarranted wealth transfer from consumers to ICANN.  There's no benefit in
that.

	So here's a possible, adapted, plan for the testbed (drawing on the above,
plus the suggestions of several other folks):  Each would-be registry
submits a proposal to ICANN describing its technical and financial
qualifications, its proposed TLD string and charter, and whether it will
operate on a for-profit or a cost-recovery basis.  If it proposes to
operate on a for-profit basis, it must submit its "ceiling price" -- the
price for registry services that it will not exceed during the delegation
period.  ICANN considers those applications, on the understanding that it
will seek to authorize a mix of for-profit and non-profit registries; it
then grants the ones that seem to it best.  Registries are constrained by
the ceiling prices they declared.

	Thoughts?

Jon


Jonathan Weinberg
weinberg@msen.com