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Re: [ga] Date: Wed, 9 Jan 2002 15:53:53 -0500

Everyone in this discussion should take a time out and read this one,
and then read it again.

Wednesday, Wednesday, January 09, 2002, 1:28:19 PM, Elliot Noss wrote:

> I wanted to take a bit of a "clean-sheet" approach to this discussion as the
> points I wish to communicate cut across a number of different threads on a
> number of different lists.

> There are really four topics I wish to raise as follows:

> - Who has the "right" to deal with expired/expiring names?
> - The mixing in this discussion of two seperate issues, registry load and
> the allocation of expired/expiring names;
> - The inefficiency that results from any flat-price solution;
> - A way forward.

> Who has the "right" to expired/expiring names?
> -----------------------------------------------
> This is an issue that creates an interesting sub-text to this entire
> discussion, yet has not been fully examined. There are three potential
> claimants for this right and three possible states for these names.
> Claimants include registrants, registry and registrars. States include
> unexpired, expired in the grace period and expired o/s the grace period.
> There are two things that are clear. First, that no one party is clearly
> entitled to stake a claim. Registrars are limited by the terms of 3.7.5 of
> the RAA which require that names be put back in the pool if not renewed. The
> registry is limited by its role as monopoly technical supplier and by the
> Registry agreement which entitles it to a fee for the services it is
> contracted to perform and confers upon it no property rights beyond that.
> Registrants are limited by a number of practical issues including their
> limited rights in a name and their diffuse nature.

> What is clear to me is that this IS NOT a function of a registrars terms of
> service, nor is it an inherent right contained in the registry agreement.

> At the same time we must keep our eye on the fact that the role of
> registrars and registry is, most purely, to efficiently administer the
> allocation and provisioning of domain names. This means that the best
> approach is the one that puts names into the hands of those who would put
> them to the most use. Names in the hands of those who most desire them will
> lead to a fuller utilization of the Internet, more value for users and more
> revenue for registrars and registries.

> This point should not be seen as at odds with an egalitarian (as opposed to
> equitable) view of domain names and first-come-first-served ("FCFS"), but I
> realize this is a point that would be the subject of much debate. What is
> interesting today is that we are at a unique time and place in the history
> of the DNS which makes this less contentious. We have one extremely mature
> namespace in .com/.net/.org. It is almost certain to be the largest
> namespace throughout the lifecycle of the current DNS. It also has a
> secondary market that is more evolved than any other will ever be. We also
> have the recent introduction of new gTLDs that provide a fresh supply of
> names. This means any solution effected can be tailored to the current
> circumstance.

> We must also remember that there are two groups of registrants that we must
> consider, current registrants and potential registrants. They have distinct
> interests. Current registrants have rights around their existing names, both
> in terms of security from losing a name through inadvertance and in excess
> economic value. Potential registrants benefit from being able to efficiently
> obtain names that are currently owned. With the introduction of new gTLDs
> potential registrants have, and will continue to have more and better
> alternatives. The maximum value in the secondary market exists right now,
> today.

> At the end of the day the competing claims of registries and registrars are
> likely subordinate to those of registrants. Accordingly, any solution should
> start with this underpinning.

> Registry load and the allocation of expired/expiring names
> -----------------------------------------------------------
> It has been noted by a number of people in this debate, and has been my
> position for many months, that the issues of registry load and the the
> allocation of expired/expiring names are being mixed together unnecessarily.

> I wish to add my voice to the chorus saying that these issues are related
> only remotely, almost accidentally. There have been a number of very good
> suggestions as to simple steps the registry could take to lessen the load.
> There are a couple additional points worth noting here. First, the current
> solution is no longer broken. While I am not a fan of the status quo, the
> registry has weathered the storm and there seems to currently be no
> appreciable impact on our day-to-day business (which was not the case a
> short time ago). An additional measure or two (a modified check command,
> additional, transparent compliance, all names dropping in real time and a
> published drop list are the easiest and most effective IMHO) would make this
> a non-issue.

> It is worth noting my personal dealings with the registry on the question of
> load have been positive and I was impressed with their genuine desire to
> solve the issues at hand.

> This last point leads me to feel comfortable that these issues are not being
> presented as being directly connected and can be dealt with seperately. I
> would, of course, love to hear Chuck confirm this.

> The Inefficiency of flat pricing
> ---------------------------------
> The current market for domain names is characterized by flat-priced supply
> and variable-priced demand. I do not take a politial position on this, I
> merely note it as observation. This market inefficiency (again observation
> not position) has lead to the existance of a robust secondary market. It has
> also lead to a significant amount of the current CNO namespace sitting
> unused.

> I have strong reservations about any solution geared at the expiring market
> that magnifies that inefficiency. By definition it leaves money on the table
> and leaves demand unfulfilled at the same time. The worst of both worlds.
> Ideally we could find a solution that was able to create a robust, efficient
> secondary market which would benefit registrars and the registry, but if
> done properly would most benefit registrants.

> A suggested way forward
> ------------------------
> Unfortunately, for me, the existing WLS proposal is not acceptable. The
> inefficiencies are large and the economics are miles away from either fair
> or realistic. With significantly re-worked economics it could be an
> acceptable interim step, but I am not sure we need an interim step,
> especially given the decoupling of the registry load issue.

> It seems to me there is a way forward that addresses all of the above
> issues. I would suggest two important modifications to the existing Peter
> Girard proposal. An unlimited bidding period and the bulk of the fees going
> to existing registrants rather than registrars.

> All names should be available to "bid" on at any time. A "bid" by a
> prospective registrant would require an administrative fee collected by a
> registrar, shared with registry and would be available for acceptance by the
> existing registrant at any time. A sucessful transaction would lead to a fee
> to both registry and registrars. An example:

> - Potential registrant places a bid of $150 on abcd.com and for doing so
> pays a non-refundable administrative fee to registrar x of $10 and in turn
> registrar pays registry $5;
> - Original registrant is made aware of his ability to "transfer" the name
> and any unexpired term to a potential registrant for $120;
> - If original registrant decides to accept he contacts the existing
> registrar of record and informs him of his desire;
> - If the registrars are different the $30 transaction fee is split 1/3 each,
> if the same than the split is equal between registrar and registry;
> - The fee would be a % of bid, capped at a relatively low number ($30?).

> To be clear, this is described in very brief terms and would need
> significant rounding out as well as a champion so please work the principals
> not the specifics.

> This solution would provide significant benefits to everyone involved in
> both an equitable and palatable fashion. It would also keep both registrars
> and registries in their role of market makers not market participants and
> would create a level of efficiency that would lead to increased revenues,
> increased registrant satisfaction and, perhaps most importantly, maximized
> use of the namespace.

> The original administrative fee would/should act so as to deter nearly all
> wasteful behaviour. Technically, it need be no more complicated than an
> interface between the SRS and EBay's open APIs (full credit here to Joyce
> Lin in Montevideo, if only we would have listened to you then!). It could be
> completely done by the registry, by the registry with technical partners,
> Peter could do it, or it could be put out to a completely new tender
> process. I know we would love to build it (but to be clear we are not
> throwing our hat in the ring whatsoever). I know perhaps fifty people
> reading this message would love to build it. That kind of excites me,
> thinking of all of the extremely capable people who could nail this
> technically. Innovation would abound if we let it.

> The single largest beneficiary would be the registry. Ok by me. The largest
> cumulative benefit would accrue to registrants. Again, that works for me. I
> think this would be an absolutely elegant outcome for everyone.

> Regards

> Elliot Noss
> Tucows inc.
> 416-538-5494

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Best regards,
William X Walsh <william@wxsoft.info>

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