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[ga] WLS reply


Just a few short hours or a few hours late, still we have not reacted in
full to the VGRS proposal which we should.

Don prepared this document and I had some input to, based upon all prior
discussion, without to much objections we propose to send this document
of asap (say tonight) to VGRS.

let us know.

abel wisman

This document represents the final feedback from the DNSO General
Assembly (GA) to VeriSign Global Registry Services (VGRS), with
respect to the VGRS proposed Domain Name Wait Listing Service (WLS).
More specifically, this document is responsive to, and consistent with
the Procedural Guidelines contained in, VGRS's revised WLS proposal,
dated January 28, 2002.

On December 30, 2001, VGRS submitted to the Registrar Constituency its
WLS proposal (http://www.icann-registrars.org/pdfs/VeriSign_wls.pdf).

On January 18, 2002, the Registrar Constituency submitted its timely
response to the VGRS proposal

On January 28, 2002, VGRS posted to the GA list, its revised WLS
proposal along with the "Justification for a Registry-based Wait
Listing Service" document
(http://www.dnso.org/clubpublic/ga/Arc09/msg00773.html). This proposal
requests questions from the GA by February 8, 2001 and final feedback
from the GA by March 1, 2002, pursuant to the "procedural guidelines"
presented in it.

On February 9, 2002, the DNSO General Assembly submitted questions to
VGRS regarding the WLS

On February 14, 2002, ICANN posted its "Discussion Paper: Redemption
Grace Periods for Deleted Names"
(http://www.icann.org/registrars/redemption-proposal-14feb02.htm) and
invited comments and questions. ICANN's document, will hereinafter be
referred to as "ICANN Redemption Grace," for the purpose of brevity.

On February 15, 2002, VGRS posted their responses "VeriSign GRS
Responses to Domain Name Wait Listing Service Questions"
(http://verisign-grs.com/wls_responses.pdf). VGRS's document, will
hereinafter be referred to as "VGRS Responses," for the purpose of

Additional background information is available at
http://www.byte.org/rc-deletes/ and

In considering the WLS proposal, various members of the GA made the
following observations:

1. Nothing in any of the various contracts specifically grants the
Registry or any Registrar the right to sell an option (or future) to
acquire a domain name, when that domain name is not available to the

        VGRS states that it is free to offer the WLS service under its
        existing contract with ICANN, (see VGRS Responses at B.7. and
        B.9.), although VGRS admits that to do so is subject to
        ICANN's approval, (see VGRS Response at B.20.).

        A current domain name registration may be sold by its current
        Registrant to another person or entity. The Registrant enjoys
        extended, post-expiration renewal rights (the length of which
        is currently at the discretion of the Registrar - See
        until the name is deleted and made available to the general

        The Registry and Registrars only have the expressed,
        contractual authority to register a name to the general public
        on a first come and first served basis. There is no expressed
        contractual authority to sell a future right to register a
        domain name, at the time when that domain name "may" expire
        and be deleted in the future. The spirit and intent of the
        contracts appears to assume that domain names will expire and
        be deleted and that those expired and deleted names will then,
        and only then, be available to the general public for

        Additional services can be, and have been, "invented" by the
        Registrars as part of their marketing strategies, but no
        Registrar has been, or should be given, any unique rights with
        respect to domain name registration or after-market services.
        The same should apply to the Registry, as well.

	In addition to that it can be stipulated that the next step for
 	the registry could be to "pre-register" all possible domains 
	in accordance with a WLS to get a better profit margin and hence
	raise prices more then considerable.

2. There is no explicit policy and procedure for the handling of
expired registrations, as referenced in 3.7.5 and 3.7.11 of the
Accreditation Agreement (RAA).

        It is clear, after reading the ICANN Redemption Grace
        document, that ICANN intends to modify the procedures
        surrounding expired and deleted domain names (possibly by
        adopting a policy and procedure as referenced in 3.7.5 and
        3.7.11 of the RAA) in order to reduce complaints from
        businesses and consumers. ICANN has called upon the Internet
        community for questions and comments during the time leading
        up to, and at, the meeting on March 10-14, 2002.

        The ICANN Redemption Grace document states, in paragraph 3
        under "Effects of Unintentional Deletions," that a
        "significant portion of the demand for registration of deleted
        domains involves domains that the former registrant did not
        intend to have deleted" and that "the registry operator
        involved is forced to cope with extraordinary re-registration
        demand from domain-name speculators for the rights to domains
        that were mistakenly or unintentionally deleted." Although
        VGRS has acknowledged the existence of the ICANN Redemption
        Grace document, it never-the-less wishes to push forward with
        implementation of WLS (See VeriSign Responses at A.3., B.8.,
        B.22.c. and D.12.).

        It seems to be generally accepted that all Registrars will
        drop/delete domain names within 45 days following expiration
        and it is recognized that Registrars have the latitude to
        delete a name the day following expiration, if they chose to
        do so. Maintaining the expired registration during the 45 day
        period is capital intensive and, therefore, expensive for the
        Registrar (see
        which actually encourages a Registrar to delete the domain
        name sooner than later.

        In addition to the foregoing, there is no authority in the
        current procedure for addressing potential abuses, i.e.
        nothing explicitly denies a Registrar the right to auction, or
        otherwise sell, an expired domain name during the grace
        period, to otherwise hoard expired domain names or to charge
        the Registrant more, simply because they renewed during the
        post-expiration grace period. In fact, there have been
        frequent complaints on the GA list about the hoarding of
        domain names by Registrars.
3. There is consumer demand for deleted domain names.

        According to Chuck Gomes,
        potential domain name holders have requested some sort of a
        wait list service since 1996.

        In fact, in the Spring of 2001, VGRS temporarily shut off
        Registrar' connections and temporarily closed the process of
        deleting expired names, to address the load problem on VGRS
        systems. This load problem was due to the demand for deleted
        names. Thereafter, VGRS implemented a solution of relegating
        batch requests for deleting names to one of three pools and
        rate limiting to prevent this high volume traffic from
        overloading its systems.

        Further, the concept of a VGRS/SnapNames system was introduced
        by VGRS, as a result of the increased load on VGRS systems, in
        Montevideo, Uruguay in September 2001. However, VGRS now
        states that WLS is not a solution (see VGRS Responses at

        Today, however, there are several entities providing some sort
        of deleted name registration service, including, but not
        limited to: SnapNames, eNom, NicGenie, IARegistry, AWRegistry,
        Signature Domains, INWW, OnlineNic, AddressCreation,
        AllDomains, EastCom, PayCenter, ExpireFish. Others may also
        offer competitive and differing services, in response to
        market demand, in the future.

        VGRS was specifically contracted by ICANN to maintain a
        registry free of commercial and possible monopolistic
        marketing and, as such, has no marketing tasks. The WLS would,
        in fact, replace the diversity of products which already serve
        this market leaving the consumer with no alternative choices.

	VGRS and Snapnames base their proposal now on "market demands" 
	however they do not bring any evidence that there is such a 
	thing as market demand, nor do they give any thesis upon which 
	this demand should be based.
	Pricing is determined by "what the market can bare", whilst any
	proof of cost for such a system is denied based upon 	confidentiality
of such data, yet in order to ascertain the 
	value of a product, cost-price is an important "given".
	To determine consensus on the new product without all relevant 
	data is impossible.

4. WLS and VGRS System Load Problem.

        The WLS proposal dated 12/30/2001 suggested that WLS would
        solve the VGRS system problems which were brought about by
        demand for deleted names. The revised WLS proposal also speaks
        to the VGRS system in section 7. However, according to Chuck
        (http://www.dnso.org/clubpublic/ga/Arc09/msg00301.html), WLS
        "could make" a positive impact, but it "won't solve" the
        problem. However, VGRS states that WLS is not a solution, at
        all (see VGRS Responses at B.1.).

        Furthermore, VGRS states they have implemented changes which
        solved the VGRS system load problem (see VGRS Responses at
        B.2., B.3. D.3.a. and D.3.b.), and that a long range solution
	may never be feasible (see VGRS Responses at D.3.b.).

5. It is one of ICANN's responsibilities, under its agreement with the
Department of Commerce (DOC), to ensure a competitive market.

        ICANN has promoted and created competing Registrars. ICANN has
        promoted and created additional Registries. The TLD .org is in
        the early process of divestiture.

6. The name space belongs to the public.

        Neither ICANN, the Registry or the Registrars have any right
        to any domain name, unless they have registered that name and
        paid the appropriate registration fee. This concept is equally
        applicable to expired domain names which have not yet been
        deleted and made available to the public for registration.

        VGRS seems to have a different position (see VGRS Responses at

	Remains whether a clear deletion of a name should not be that 
	what it pertains to be, a "deletion" :

	Pronunciation: di-'lEt, dE-
	Function: transitive verb
	Inflected Form(s): de·let·ed; de·let·ing
	Etymology: Latin deletus, past participle of delEre to wipe out,
	Date: circa 1605
	: to eliminate especially by blotting out, cutting out, or 	erasing

	Once something is erased, can it be sold again as "still 	existing" or
is it gone and can it only be sold as "new" hence 	upfront eliminating
the option of a WLS.

The GA has several concerns about the proposed WLS:

1. VGRS is the Sole Authority

        The metrics and the determination of the success or failure of
        the WLS test is in the exclusive control of VGRS and not
        consensus based (see VGRS Responses at B.14.d.).

2. SnapNames will Have an Advantage

        VGRS has devised a means to protect the existing business of
        its partner, SnapNames, but has not done the same for the
        other participants in the after-market (See VGRS Responses at

3. It is Not Just a 1 Year Test

        Subscriptions do not expire at the end of the test period (see
        VGRS Responses at B.23.) but continue until maturity.
        Consequently, a subscription taken on the last day of the 12
        month test period will not expire for another year. However,
        VGRS will not accept new subscriptions beyond the 12 month
        test (see VGRS Responses at D.4.).

4. No Consumer Choice

        Today, the potential registrants have a choice of several
        diverse service offerings, with differing price structures.
        Implementation of the WLS guarantees that there will be no
        additional and differentiated offerings to enter the market. In
        fact, it absolutely guarantees there will be only one service

        Price differentiation, if any is possible under the last
        proposed pricing structure, does not make a differentiated
        market. Even in the revised pricing structure, VGRS is clearly
        the benefactor.

5. No Innovation or Service Differentiation

        Today, Registrars compete on the basis of price and service
        differentiation. Under the proposal, the lion's share of the
        revenue goes to VGRS, leaving a thin margin for Registrars
        and, effectively, no margin for Resellers. Consequently, it
        limits the capability of the Registrars and Resellers to
        innovate and differentiate their offerings.

        Further, since VGRS is in full control of the entire delivery
        mechanism, there is little opportunity, if any, for the
        Registrars to innovate, irrespective of the already
        substantial cost structure.

6. Runs-Out/Kills the Current Participants

        The WLS will remove all competitors from an already thriving
        and growing market. WLS guarantees that there will be no
        competition and therefore, the consumers will have no
        competitive choice. This flies in the face of ICANN's
        responsibilities under its agreement with the DOC and
        contravenes the rudimentary principles of free enterprise and
        a competitive marketplace.

        Indeed, VGRS seems to have no concern for the already
        competitive market, to those entities already serving this
        market or to consumer choice (See VGRS Responses at B.14.a.,
        B.15., B.24. and D.2.).

7. Expanded Monopolistic Powers

        This proposal extends VGRS's registry status to that of an
        active market participant, taking the lion's share of the
        revenue, eliminating all current competition and completely
        controlling an already thriving market. Although we recognize,
        and agree with, VGRS's rebuttal that the Registrar is not
        contractually limited to fixing their own price, price is not
        the only consideration and certainly not the major concern.

        It is ICANN's charter and responsibility to break-up monopoly
        power - not add to it.

8. Consumers Pay, but May Not Receive Any Value

        The WLS requires payment, regardless of whether the consumer
        receives the value of actually being able to register the
        name. In contrast, the current market includes services which
        only require payment in the event the consumer actually gets
        to register the name.

        Some consumers may not mind taking the risk of paying for a
        WLS subscriptions, but other consumers are likely to take
        issue and seek out an alternative. Alas, however, WLS will be
        the "only game in town" and the consumer will have no

        Further, all of the financial risk, with respect to credit
        card charge-backs and similar disputes, is placed solely on
        the shoulders of the Registrars, with no indemnification from,
        or participation by, VGRS, although VGRS is clearly the
        benefactor of the lion's share of the revenue (See VGRS
        Responses at B.6., B.12..

9. No Solution to VGRS System Problems

        As cited above, the initial WLS proposal of 12/30/01 and the
        revised WLS proposal of 1/28/02 speak to the benefit of WLS to
        the VGRS system problems. However, as also cited above, WLS is
        not a solution to the VGRS problems in the short or long term.
        Furthermore, as also indicated above, VGRS now states that the
        problems are solved and that no other longer range solution
        may ever be feasible.

        However, it seems that WLS is intended to decrease demand, by
        narrowing the market to one service, one provider, one
        delivery mechanism and by increasing the price, in order to
        deal with the load problem, instead of dealing with it
        appropriately, at a technical level. The only obvious
        benefactors of this approach are VGRS and its partner,
        SnapNames. There is no merit in it for the rest of the

10. Increased Costs to Potential Registrants

        VGRS bases the pricing of WLS upon the concept of "what the
        market will bear" and not based upon cost (See VGRS Responses
        at B.11.). VGRS and SnapNames have presented several
        arguments, and unsubstantiated data, on the GA list in support
        this pricing model. Further, VGRS and SnapNames have argued
        that the system costs are substantial, but have not presented
        any credible facts to support these assertions. Although, the
        VGRS contract with ICANN is on the basis of "cost-related"
        pricing, VGRS now to seeks to introduce a very different price
        model and to obtain consensus for it.

        There is no denying the fact that the current participants in
        this market (including VGRS) need to make a profit, in order
        to survive and to flourish. Considering the high wholesale
        cost of this service to Registrars, as compared to a normal
        registration, we speculate (as does VGRS and SnapNames,
        speculate to the contrary in prior rebuttals), that the
        service is over-priced. Therefore, we conclude it is not
        reasonably calculated to benefit anyone except VGRS and its
        partner, SnapNames.

        The consumer's cost to register a deleted domain name will be
        roughly 500% more than registering a deleted domain name in
        the current market. We fail to see how this increased cost
        benefits the consumer. This is particularly troublesome when
        considering that some, maybe most, consumers will pay a high
        fee, but never actually receive the right to register a
        deleted domain name.

        Cost, however, is not the only major point of concern, when
        objectively evaluating WLS in light of domain name customers
        and potential Registrants.

The GA discussed many concerns with respect to the WLS proposal and
cited the major, but not all, concerns, above.

      Respectfully, and due to the major concerns cited above, the GA
      does not support or endorse the WLS proposal in any manner.

The GA's submits the following alternative ideas for consideration:

1. That we now turn our attention to the ICANN Redemption Grace
document and work with dispatch to achieve consensus which results in
a policy and procedure to be adopted for 3.7.5 and 3.7.11 of the RAA.
In particular, the policy and procedure should safeguard the rights of
Registrants during the post-expiration grace period and it should
contain specific language designed to prevent potential abuses by the
Registries and Registrars.

2. That ICANN should enforce the RAA with VeriSign Registrar and other
Registrars, as may be appropriate under the circumstances, with
respect to dropping all of the hoarded domain names and discontinuing
the practice of hoarding domain names.

                Respectfully submitted,
The DNSO General Assembly

Abel S.H. Wisman

Scottish Provident House 
76-80 College Road
Harrow Middlesex
HA1 1BQ 
+44 20 8424 2422
+44 78 1214 1916


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