I slogged through it so you don't have to -- ICANN Vertical Integration WG for dummies
Eric Brunner-Williams
brunner at nic-naa.net
Mon Jul 26 14:33:10 UTC 2010
There are a few people who have some passing interest in ICANN so I
will inflict upon the list my few paragraph summary of things that
matter, see also my July 2nd post: I went so you don't have to --
ICANN Bruxelles pour les nuls.
The initial report of the 65 person VI WG is published. Registry
contracts executed in the 2001 and 2004 new gTLD rounds limited
Registry ownership of Registrars at 15%, an artifact of the VGRS/NSI
split up, with no limit on registrar ownership of registries, allowing
the formation of NeuLevel (.biz through Melbourne IT and NeuStar), and
the formation of Afilias (.info by several registries).
At the Nairobi ICANN meeting the ICANN Board established the
cross-ownership in either directions at 0%, and called for the GNSO to
originate some alternative to strict structural separation, if it
could arrive at such a policy be consensus. In DAGv4, publish just
before the Brussels meeting, ICANN Staff proposed a cross-ownership
cap of 2%.
That sets the stage.
The Initial Report is the first step towards policy concerning the
possibility of allowing vertical integration in the DNS
registry-registrar market.
There are three basic positions on the issues, and a fourth position.
The three basic positions are:
(a) stay at 15%, that makes compliance easy, and no one has really
gamed this restriction,
(b) allow full integration conditionally, with serious compliance, and
allow several exceptions (see also the fourth position)
(c) no restriction on integration, no harms will result so compliance
is not important, and exceptions are unnecessary (see also the fourth
position).
These policy positions are advocated by:
(a) Afilias, PIR, GoDaddy, several NomCom appointees and others,
including myself (for CORE), subject to some functional exceptions
relating to registry services provisioning and market share,
(b) NeuStar, Network Solutions, Verisign, Enom, and several others,
(c) Several smaller (than the top 4) registrars and some people from
the Business Constituency and some Free Market ideologues.
In terms of balance of forces, it is pretty much a three-way tie.
The fourth position is the Intellectual Property Constituency, which
seeks an exception for brand owners, and no others, from whatever
limits are proposed on cross-ownership. It has no support outside of
the IPC, but when all the inchoate "exceptions for X" are summed,
there is the appearance of strong support for what is called "single
registrant" type applications.
I recommend to those employed in the ISP industry the statement of the
ISPCP, at pages 90 and 91.
There are a lot of nuances, or tinfoil hat dress up opportunities.
If Verisign, Afilias, NeuStar, CORE and Midcounties Co-operative
Domains run almost all of the gTLDs, and are ineligible to provide
registry services to the new gTLD applicants, what existing operators
will be favored? What capitalization will start-up operators have to
secure to meet the SLA, DNSSEC, continuity instrument and other costs
in excess of the application fee and subsequent fees the new
applicants must capitalize?
Are the Free Trade Guys and ICANN's economists right, the market will
correct any abuses and competition authorities will be there when the
market doesn't correct an abuse?
Is "continuity" or "change" the better policy w.r.t. the registry
function and the registrar function?
I trust this will be at least as useful as the jrandom luser plaint
concerning what singular Animal, Mineral or Vegetable controls the
singular capital-I Internet and the IANA function sniping.
Oblig disclosure. The VI WG has been more than a quarter of my paid
time since it began. I'm in the "continuity" camp and my Statement of
Interests is linked to from the Initial Report. An outcome I'd like to
see avoided is registrars preferentially selling their own-or-partner
inventories, resulting in a by-registrar-affiliation partition of the
non-state DNS as a market not dependent upon state actors, resulting
in reduced competition with the legacy gTLD registry operators and
their properties. Yeah. I know. Nothing other than redelegation of
.org has created competition for Verisign.
Eric
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