Fwd: [council] .biz/info/org proposed contracts - pricing implications

[Mawaki Chango]

Long email below, but is certainly worth reading...


<snip>

> From: BC secretariat [mailto:secretariat at bizconst.org]
> Sent: Wednesday, August 23, 2006 3:15 PM
> To: BC List
> Subject: Vint Cerf/ICANN confirm my interpretation of .biz/info/org
> proposed contracts --
> tiered/differential domain pricing would not be forbidden
>
>
> From George Kirikos
>
> Hi folks,
>
> I finally got the "official" word from Vint Cerf of ICANN, "on the
> record",
> who confirmed that my interpretation is correct, that
> differential/tiered
> pricing on a domain-by-domain basis would not be forbidden under
> the
> .biz/info/org proposed contracts. This means that the registries
> could
> charge $100,000/yr for sex.biz, $25,000/yr for movies.org, etc. if
> they
> wanted to -- it would not be forbidden the way the proposed
> contracts are
> currently written. This would represent a powerful pricing weapon
> for
> registries, and a fundamental shift in possible domain name
> pricing, that
> could lead them to emulate .tv-style price schedules.
>
> One can read the proposed contracts at:
>
> http://www.icann.org/announcements/announcement-2-28jul06.htm
>
> Vint said it would be "suicide" for a registry to do it, because
> there'd be
> the 6-month notice period to raise prices and the ability for
> registrants
> to renew for up to 10 years at "old prices", that supposedly
> "protects"
> registrants. Personally, as a business, my time horizon is a lot
> longer
> than 10 years. I wonder if Vint felt introducing "SiteFinder" was
> suicide,
> too....history has shown registries will do whatever they can get
> away
> with, in order to maximize profits long-term and short-term.
>
> I don't think Vint understands the business at all, to think that a
> lag of
> 10 years will deter a profit-maximizing registry, esp. VeriSign
> should it
> try to match this contractual precedent in .com (and history shows
> VeriSign
> will always try to get "more", especially if "another registry" is
> able to
> do something -- they used that tactic in .com renegotiations,
> saying
> various terms were already in the .net contract, for instance).
>
> Just to show one possible future, if PIR feels pressure or has a
> desire to
> clean up porn from .org, it could announce that pussy.org (check
> its Alexa
> ranking) will have its renewal price be $1 billion/yr. If it takes
> 10 years
> to do it, many would wait, and it would not be considered "suicide"
> for
> PIR. Who will stand against that as "we're protecting the internet
> and
> children from porn", PIR might argue? Leaving this temptation in
> the
> contract will likely become a slippery slope, in my opinion,
> leading to
> profit-maximizing behaviour by registries to emulate .tv. Acting in
> the
> interests of their shareholders, registries are *compelled* to
> maximize
> profits.
>
>   It can be used as a political weapon, too. If a registry
> disagreed with
> the views or content of a website for which they were the registry,
> they
> could raise the renewal price to $100 billion/yr. 10 years later,
> that
> website would not exist at that address, and nothing in the
> contracts would
> forbid this pricing behaviour. More likely, it would be used for
> profit
> maximization (if Google.com is a $100 billion company, "certainly
> they are
> benefiting from their domain name, and can afford our $1 billion/yr
> renewal
> fee" one might say -- see the net neutrality debate and tiered
> pricing for
> websites that phone and cable companies are pushing....). How far
> away is
> tiered domain name pricing??
>
> ICANN would be opening up a Pandora's Box through this contractual
> loophole, to not forbid .tv style pricing. The mistake would not be
> able to
> be corrected, as the contracts explicitly say that Consensus
> Policies do
> not apply to pricing issues. Since presumptive renewal exists in
> these new
> deals, the contracts are essentially going to live with ICANN
> forever, if
> approved.
>
> If this pricing power eventually got extended to .com, nothing
> would
> prevent the renewal fee for Yahoo.com, GoDaddy.com, Google.com,
> Tucows.com,
> Business.com, Sex.com or any other domain in a registry with
> similar terms
> to reach $1 billion per year, or any other price that VeriSign or
> other
> registry operators wanted to maximize its profits (net-neutrality
> debate is
> similar, for bandwidth pricing to websites). You can imagine my
> VeriSignSucks.com won't last longer than 10 years, if VeriSign had
> the
> power to raise the renewal fee to $1 billion/year. :)
>
> I believe that it is very important that this loophole be closed,
> in order
> to not create the precedent that VeriSign could later exploit for
> .com, and
> to protect registrants of .biz/org/info. If it is "suicide", as
> Vint
> suggested, then surely a registry that would supposedly never use
> the power
> would agree to remove the temptation by adding an appropriate term
> to the
> contract. A registry not willing to add that term....well, you know
> what
> they might be tempted to do later. If your business horizon is the
> next
> quarter, this won't impact you. If it's beyond 10 years, it could
> impact
> you. Can you live with that uncertainty??
>
> Feel free to spread the word on the mailing lists or media, and
> contact
> Vint (vint at google.com) or John Jeffrey (jeffrey at icann.org) or other
> ICANN
> staffers if you want to confirm things and voice your concerns.
> Time is of
> the essence, as the public comment period ends next Monday.
> Registrants DO
> NOT know what is coming (the public comment board is almost empty),
> as it's
> the summer holidays! (typical ICANN tactic, introduce 500+ page
> contracts
> for public comment when everyone is on holiday)
>
> Public comments can be sent using the addresses at:
>
> http://www.icann.org/announcements/announcement-2-28jul06.htm
>
> (be sure to send to all 3 email addresses for all 3 contracts, and
> also
> click the link in the email ICANN will send you to authenticate
> your email
> address, otherwise your comment doesn't get received)
>
> There are a lot of other reasons to be opposed to the proposed
> contracts,
> such as the presumptive renewal, the ability to sell traffic data,
> the
> removal of price caps, etc. I will be writing a longer document
> soon, but
> wanted to give everyone a heads-up, so that you can take
> appropriate action
> on your own now, and corroborate things independently with Vint
> Cerf, John
> Jeffrey or other ICANN people.
>
> These are fundamentally flawed contracts, and should not be
> approved by
> ICANN. The precedents these contracts would create are ominous,
> even worse
> then the .com proposed settlement agreement (that the DoC has yet
> to
> approve). Why is ICANN even renegotiating these registry
> agreements, when
> the existing terms don't expire for several years in some cases,
> and the
> GNSO PDP process for registry services is ongoing??
>
> Sincerely,
>
> George
> 416-588-0269
>
>
>
>