[registrars] Alice's Registry Response to VGRS Registrar Wait List Proposal
Alice's Registry Response to VGRS Registrar Wait List Proposal
In reviewing several months of discussions about the processes
implemented in response to the overwhelming load on RRP services due
to speculation on domains during batch delete processes we find the
proposal lacking in several areas of consumer and intellectual
property protection. We offer a detailed discussion on requirements
and where the proposal lacks definition.
Since the VGRS announcement on July 16, 2001 concerning abuse of
system resources that prevented non-speculatory transactions for
most registrars from executing and preventing some registrars basic
connectivity to registry resources registrars have been requested
to provide comments to the registry on how to proceed with
replacing the temporary solution placed into production shortly after
Some time afterwards VGRS posted a second announcement where by
resources in the now termed "overflow pool" were becoming so
strained that again registrars were denied access because of
abusive use of system resources. The second announcement put
further limits on the bandwidth and number of connections used for
speculative purposes. Recently a third announcement further
restricted operational access to the overflow pools without any
over-site or public discussion.
Today the "overflow pools" are a place where registrars have a
virtual tug-of-war for system resources to acquire newly deleted
domains. With millions of domains being deleted (previous research
found the VeriSign Registrar with over 96% of the batch deleted domains)
during the past several months.
Tragedy of the Commons
In general, "the tragedy of the commons" is that all common
property resources tend to be overexploited and thus degraded,
unless their intensive use is restrained by legal, traditional, or
(perhaps) philanthropic institutions. The classical instance is
common pastures, on which, according to the theory, each farmer
will increase her herds until the pasture is overgrazed and all are
impoverished. Most of the applications have been in environmental
and resource issues. The recent collapse of RRP overflow pool seems
to be a clear instance of "the tragedy of the commons."
Speculation - A Non-Constant Sum Game
Most registrars and especially SnapNames won't use the word, but
what we are discussing is building more efficient ways to speculate
on domains that "may be valuable" to entities with interests in a
name for the purpose of resale. Yes, most of the parties in this
game are speculators that want an opportunity to grab a name that
could have intrinsic value.
There are several business models other than SnapNames that seem to
be running rather well and are offering the speculator alternative
means to access the valuable names that become available. We must
realize that the current proposal would squash Registrar
competition in this area.
In a mail to the icann-delete list Larry Erlich noted to me, "The
fact is, without speculators there would be no industry." Ok, my
questions is, "Now, do we need to sell every domain twice?"
Analysis of the Proposal
There has been a great deal of discussion about this proposal since
it was first aired in Montevideo in August. On the icann-delete
list we have discussed several proposals and even a straw-poll to
see if any proposal was favored by the group. The proposal by VGRS
isn't very different that what was proposed by SnapNames in
September on the icann-delete list and the straw-poll the SnapNames
proposal want the favorite then, I don't understand why VGRS hasn't
taken the other comments and incorporated them into a proposal. Oh
yes, price... in the other proposals the price was much lower.
In the following paragraphs we discuss various aspects of the
proposal and their impact on the Domain Name Industry
The proposed price is about what the current SnapNames retail price
is. I think it was very smart of VGRS to propose such a price, and
to their credit a well thought out plan.
Many have stated that the price should be high to discourage too
much speculation; however I suggest the proposed service is all
about speculation and as such, speculators make up the vast
majority of registrations these days. So, I see no reason why we should
discourage speculation about speculation by setting high wholesale
prices. Thus, the price should remain low such that VGRS can make a
reasonable profit and recover their costs.
In the off-line world we in the USA have a vast amount of
experience to draw upon when monopolies (such as a Registry) wish
to set price for a new product, this is a new product -- one for
speculators. When a power utility ( a monopoly ) decides to price
a new product the regulators, in the case of the power utility the
Public Utilities Commission understands the utilities costs
structure and allows them to recover their costs plus a healthy
profit; here we have no such over-site and no window into the VGRS
costs to provide this analysis.
To understand what margin VGRS should make we should understand the
costs of offering the service, the costs should be determined by an
Independent Third Party. Otherwise the price should be 25% less
than that of the current offering for the service of SLD
allocations. I picked 25% because there is less overhead in taking
a WLS request than a regular domain name because there is no zone
In the current proposal there is no means for, or requirement to
make available to registrant to determine if a WLS subscription has
been placed on their domain without attempting to place a WLS
Registrants MUST be able to determine if a subscription has been placed
on their own domain, I would go as far to require notification in
the Registry Whois as to the Registrar of record of a WLS subscription be
displayed for any domain, active or not. ICANN's mandate is stability
and non-publications creates instability.
To judge the market penetration I suggest a list of ALL domains
with a WLS subscription be made available on regular intervals such
that registrars, and registrants can determine the utility of this
service though its initial phase.
I am greatly concerned with the detrimental effect the WLS service
may have on registrants and Intellectual Property owners. This
service as described by VGRS and SnapNames could make tons of
revenue for both the Registry and Registrars. The reason it could
deliver such whopping revenues is the compulsory nature of the
service. Just as IPR owners have to register their trademarks in
.biz, and .info gTLD during their respective start up [sunrise]
phases, registrants and IPR owners would feel compelled to purchase
a WLS subscription on their own domains to protect their
interests. With such high prices VGRS, SnapNames and the Registrars
would be double-selling a large number of domains. This compulsory
effect could squeeze the results of analysis as one could not
easily determine if the WLS subscription was purchased by the
domains registrant to protect against predatory speculation or for
purely speculative purposes by someone else, unaffiliated with the
To aid in determining the true success of this proposal, if it were
to move forward, I would require a new RRP Status where by a
Registrant through their Registrar could tag their Registration so
that a WLS service could not be placed on the domain. Only with
this tag can we see the true merit of the service verses those who
are protecting their domains by preventing speculation on that
Also, the proposal limits consumer choice and registrar competition
in favor of taking the "cream of the crop" in domains names and
leveraging the domain's current registrants brand, web site traffic
and potential registrar negligence into a compelling reason for a
registrant to purchase their own WLS subscription.
Finally, if a monopoly ( the Registry ) uses the good-will and
traffic of a currently registered domain, holding registrants
hostage for their own service contracts, we call that a crime; one
that ICANN, the DNSO and Registrars cannot allow to happen.
For this proposal to become remotely acceptable the following would
o Set the wholesale price of a WLS subscription to $4.50. Setting
the price high to discourage speculation in a product that
encourages speculation makes no sense.
o Require the Registry to display the Registrar that places a
WLS subscription on a domain in the Registry whois.
o Enable an OPT-OUT policy to counter the compulsory nature of the
product by implementing a new RRP status that prevents a WLS
subscription on a domain.
o Fix the problem with the "overflow pools" by enforcing contracts.
In summary I do not find this proposal to meet the requirements set
out to alleviate the current issue. In short the VGRS WLS proposal
creates a new service for the benefit of the Registry and is
clearly detrimental to the Registrars and Registrants that use the
We started this discussion out about how to fix a system that is
being pounded by a hand full of registrars and its turned out to be
a new method to sell each domain name twice, which is counter the
philosophy of competition among Registrars and founding principals of
We need to refocus on the problem at hand, one that deals more with
fair allocation of resources and contractual enforcement not with
creating new products, with a compulsory effect, to create better
margins for Registrars and Registries.
CEO, Alice's Registry, Inc. (www.ar.com)
CTO, ICANN DNSO Registrars Constituency (www.icann-registrars.org)
 Equitable Allocation of Shared Registration System Resources
 Second Advisory Concerning Equitable Allocation of Shared
Registration System Resources