Re: [ga] New contracts

[DPF <david@farrar.com>]

On Tue, 6 Mar 2001 13:15:34 -0800, Kent Crispin wrote:
>On Tue, Mar 06, 2001 at 08:19:01PM +0100, Roberto Gaetano wrote:

>> This will simply mean that 
>> the operating cost of a registration in .org will be substancially higher 
>> than .com, because the registry (or the registrars) have to check the 
>> qualifications of the subscriber.
>
>Maybe, maybe not.  At this point I think that the discussion of
>potential .org policies is a red herring -- we have a year and a half to
>talk about it, and there are lots of potentially highly desirable
>outcomes to that -- .org could, as a result of a public process, be
>completely open.  It could explicitly support individuals.  A 
>registration in .com could prevent a registration of the same name by 
>the same entitiy in .org.  There are lots of possibilities, and we have 
>a long time to discuss it.

I agree that the *.org status is a red herring and not crucial to the
proposed contract.  The two major policy issues are:

a) Removing the requirement for Verisign to separate ownership of its
registry and registrar businesses.
b) Giving Verisign a "presumptive"right of renewal to *.com for ever.

>Here's the real choice, as I see it:
>
>Old:
>
>    NSI divests the registrar business, and keeps the registries for
>    .com/net/org until 2007; in 2007 there will be a rebid, but NSI has
>    a tremendous inside track on winning that bid *for all three
>    registries* (as I read the contract, it presumes that the three are
>    bid as a unit).  To simplify, this choice is that NSI keeps the 
>    three registries indefinitely, but can't run a registrar.

I think one should not overlook what pressures having to rebid for
*.com will bring on Verisign.  We are not just talking about whether
they keep it, but how much they will be charging to do it, and what
performance standards are required.

If one gives Verisign a presumptive right to renewal then you are
effectively waving goodbye to any possible fee reductions in future.

>> Well, this all shows, IMHO, that to rush a decision is probably not
>> the best thing to do.  I do expect a lively debate, and a lot of
>> comments, and personally I am in favour of providing enough time for 
>> it.  
>
>If the USG, NSI, and ICANN all agree to say a 2 month extension, as has
>been suggested, I agree that it would be a good thing.  

Same.  NSI/Verisign have already said that they would like an
extension.  I would be amazed if the USG disagreed is NSi and ICANN
agree to a 2 month extension.  So all that leaves is whether the ICANN
BoD will agree to ask for an 2 month extension.

I would hope that the DNSO Names Council will recommend to the BoD
that such an extension is desirable.

>But I don't
>think it can be counted on.  Moreover, a delay is good for NSI, and not
>so good for ICANN -- NSI has more time to find a good deal for the 
>registrar business, which weakens ICANN's negotiating position.

I think any weakening would be minor at most.  I think it would be
very bad for ICANN to agree to the proposed changes with less than
four weeks of consultation.  

>> We have lost already so many chances to count (see, for instance, the 
>> lukewarm support of some WG results without even proposing something else) 
>> that we cannot avod to take a position on this.
>> Otherwise people will start seriously questioning why at all we need a DNSO 
>> at all.
>
>On the contrary.  I think this discussion is exremely valuable to the 
>directors, some of whom are indeed following it very closely.

That is a pleasant surprise.  Does anyone know how many of the 19
Directors subscribe to this list?

>At this point it seems to me that the substance of the decision 
>revolves around two points:  1) the issue of registrar-registry 
>separation, and 2) two different competition models:

Yep.

>    a) competition between TLDs.  In this model TLDs are heavily 
>    marketed by the registries/registry operators, and in this model, 
>    it makes sense to give the registry operators long term contracts, 
>    because they are then motivated to invest the money in the 
>    marketing -- with a short term contract, there is no incentive to 
>    invest in a market that is going to be taken away from you in a 
>    rebid. 

I have some doubts about whether *.com registrations are very
influenced by marketing due to its position as default TLD almost.  I
am sure marketing will be important to the new TLDs but less so to
*.com.

>    b) competition between registry operators as service providers.  If
>    you presume that TLD competition doesn't work, because of customer
>    lockin and other effects, then the preffered model is one of
>    frequent rebids of registry contracts, and competition among the
>    various companies running registries.
>
>These are old questions, and we have been debating them for literally 
>years.  Personally, in an ideal world, I strongly prefer both a total 
>separation of registrar/registry and competition model (b).  But NSI's 
>totally dominant position in the market seriously distorts things -- it 
>is going to be very hard for any competitor to put a dent in their 
>position, and without a strong marketing push I don't expect .biz or 
>.info or any of the others (or even .web if it had been approved) to 
>have a significant impact on the dominant position of .com.  So 
>marketing, unfortunately, is very important if we ever want to get real 
>competition going.  
>
>Both the status quo and the proposed changed agreements are 
>disgustingly sweet deals for NSI.  I have resigned myself to that -- 
>they were given a gigantic gift by the USG, and they have milked it for 
>all it is worth, and now they are in a very strong position.  But we 
>have to make decisions based on reality, not fantasy.

Yes to some degree it grates with me that they almost got this billion
dollar business by accident.  They weren't entrepreneurs who invented
this stuff - they were just doing a routine registration job for NSF
which exploded volume wise beyond anyone's expectations.  I have not
yet come to a firm position on the proposed changes but my initial
reaction is they greatly favour NSI/Verisign.  I can live with this if
they also benefit the Internet community but I am still to be
convinced of this.

DPF
--
david@farrar.com
ICQ 29964527
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