Re: SV: [wg-c] On reaching consensus, and the purpose of thetestbed

[Harold Feld <hfeld@mediaaccess.org>]

Hello.

"Martin B. Schwimmer" wrote:

> How about consensus on this:  can we pick two specific TLDs to propose to
> the NC by Jan 31 with answers to questions like:
>

Well, I'm happy to engage in discussion, although I rather hope
the consensus vote goes to "yes" on the 6-10, so this would be
"in addition to" the ongoing proposal rather than in place of.

As for what specific TLDs, I should like to see a TLD for
individuals (".nom" or ".per").  I also think at least one TLD
should be truly generic (such as .web) to provide competition
to .com and see how well the system handles a new generic
TLD.

> how do you apply to be the register for these two specific TLDs?
> how do you apply to be these two specific TLD registrars?
> who processes these applications?
> using what criteria?
>

I would assume a couple of basic goals for application:

1) The application process should be simple and straightforward;

2) Applications should be processed quickly;

3) There should be no artificial barriers to entry;

4) The application process should be transparent: i.e.,
we can see how decisions were made and why.
This requires that criteria be established in advance and
known.

5) The process should be constructed in such a way as to
minimize accusations of unfairness.

One simple way is to hold auctions.  Auction processes are easy to
administer and objectively fair, in that everyone can see who won
and why.  The downside of auctions is that it creates some barriers to
entry for small businesses (assuming those with greater resources also
value the resources as much.  IOD could not hope to outbid AOL for
.web, for example, but it is unclear that AOL would want to be the registry
for .web.  This is, of course, another advantage of auctions: they allow
people to pay what they value, and are more "efficient" in the economic sense
at pairing people who value a resource the most with the resource.)

An auction also raises the secondary problem of who gets the money so raised.
ICANN?  I suppose, although this potentially creates wrong incentives for
ICANN.  (In the FCC case, money raised by spectrum auctions kicks back to the
U.S. Treasury.  This, of course, matches the theory that the spectrum is a public
trust administered by the United States.
(I'll let Milton and Tony fight me on this one)

Another possibility is lottery.  The advantages of lottery are that they are
simple
to administer, objectively fair and transparent, and -- unlike auctions -- do not
favor larger recipients over smaller ones.  (Although administrative
safeguards need to be put in place to prevent lottery winners from reselling
their prize at market value).  The downside of lotteries is they are less
"efficient" in the economic sense discussed above, and they are arbitrary.
The arbitrary nature can be mitigated by having a prequalification, wherein
participants in the lottery must meet specified technical requirements.
[In the auction case, we presume that a party investing in a resource has
proper incentives to develop it, otherwise the investor cannot recoup
the investment. (the caveat would be the case where someone purchases
the TLD for anticompetitive reasons, i.e. to keep it off the market. )

Another popular way is adjudicatory hearings.  Adjudicatory hearings
can be the most efficient in mathcing a resource with those who will
develop it properly.  By their nature, however, adjudicatory hearings
are the least objective.  No matter how narrowly stated the criteria,
the fact that a human being (or panel of human beings) must chose
which applicant best meets that criteria introduces a level of subjectivity
not found in the methods described above.
In addition, adjudicatory hearings must balance the need for thoroughness
and fairness with a need for speed.  One of the reasons why comparative
hearings fell into disfavor at the FCC is because they became incredibly
time intensive and subject to numerous appeals.
Finally, adjudicatory hearings can be conducted in such a way as to minimize
barriers to entry.  OTOH, costs quickly mount if one party has the resources to
bring
in counsel, prompting other parties to do the same.

I suspect we will see a significnat number of applicants (more than two,
less than 100) for the limited number of TLDs that become available.
Given the highly politicized nature of these proceedings, I would strongly
urge rejection of an adjudicatory process.  Even if the process were
structured for maximum transparency and fairly administered, I
am confident that there will be accusations of manipulation and unfairness
from whoever loses.

As to the application process, I would hope that a panel of technical
experts would be appointed to examine the application to ensure that they
comply with technical criteria.  The technical criteria should be published in
advance.

Last, I think any holder of a TLD in the existing "A" root --whether
ccTLD or gTLD -- should be barred from holding a new TLD.  If the applicant
is a delegatee of an existing ccTLD who wants to run one of the new TLDs,
the applicant should agree to divest in the event the application is granted.
This will reduce anti-competitve incentive and allow new entrants to come into the

field.

Finally, I believe that registries should have the authority to select their own
registrars,
including the option not to select registrars at all.  Unlike the case of ".com,"
where an
argument existed for opening the registry and creating a registry/registrar
criteria,
no such argument exists here.

HArold