brief report on NCSG Policy Discussion Wednesday 6 January

[Milton L Mueller]

Think I can clear something up here, it may lead to progress.

> -----Original Message-----
> In the first instance we have to decide where we are on
> the staff's claim.  Without wanting to put words in her mouth, she can
> correct me, Avri seemed to feel that new gTLD Rec. 19 on nondiscrimination
> and the attendant council discussions do point to a relevant
> policy/legislative intent that there should be no change; I wasn't on
> council then and don't know what the intersubjective understanding was.  I
> can see though how, just on the face of the agreed wording, staff can make
> the argument.)

Here is where I think both you and Avri are simply missing critical details of the cross-ownership/joint marketing controversy. Hope that doesn't sounds critical, it's not intended as such, it took me a long time to figure it out, which is why my position appeared to you to change. 

The weird thing about this controversy, as I've tried to make clear several times, is that there is no such thing as "no change" and no simple "status quo" that we can use as a benchmark. Both the registry position AND the registrar position could be characterized as an extension of the status quo or as a change. The terms of various contracts vary across registry contracts and over the years. There are loopholes in the policy that permit things that the registries don't like, and which they would like changed. 

So, Rec. 19 merely calls for separation of registries and registrars at the technical, contractual level and for equal access. The policies I proposed in the NCUC position statement maintain such separation and retain equal access, so there is no conflict with Rec. 19 whatsoever. The policies proposed by the registries, ALSO maintain separation and thus do not conflict with Rec. 19. 

So if BOTH sides in the controversy can legitimately claim that there are consistent with Rec. 19, why not adopt the position that seems to make it easier for new, smaller TLDs to enter the market, and more likelyt that they will be viable, and which allows for more intense competition to exist at the back-end registry level? That's the rationale behind the position paper. 

Hope this is clearer now. 

 
> Re: the link between policy change and a PDP, I'm not clear what you have
> in mind here.  Your draft says
> 
> "What has been proposed by the Registrar constituency and debated in Seoul
> is not full vertical integration of registries and registrars but an
> opportunity for businesses that own both a TLD registry and a registrar to
> use the owned registrar to sell names in the TLD. That is not vertical
> integration, because the contractual and functional separation of registry
> and registrar remains, and all registries would still be open to all
> ICANN-accredited registrars. As noted above, any contracts that permit
> true vertical integration could not be enacted as a staff-defined
> "implementation" measure in the impending round of gTLD additions, but
> would require a PDP and a comprehensive review of ICANN's economic
> regulations. The current debate is about registry-registrar cross-
> ownership and the ability of a cross-owned registrar to integrate
> marketing of names in the cross-owned TLD. We refer to this as "joint
> marketing." We believe that contracts that permit joint marketing by new
> TLDs do not require a PDP and do not constitute a change in
> policy...Drafting new gTLD contracts that permit joint marketing and
> promotion by cross-owned registries and registrars does not, in our
> opinion, constitute a significant deviation from the established policy
> described above. It is, rather, a change in the enforcement mechanisms
> meant to implement the policy."
> 
> So if what's currently proposed by staff is not true VI and does not
> require a PDP, which is what the Council's considering, which are the
> issues regarding registry-registrar separation that are not merely a
> change in the enforcement mechanisms and do require a PDP?  If the draft
> makes these clear, nobody seems to have picked up on it, so please
> indicate where they are addressed.
> 
> >
> > We discussed this at length at our teleconference back in December. It
> seems that in my absence you've moved backwards and muddied the waters.
> 
> I've done no such thing.  WE do not have a consensus on the pending motion,
> or on your draft.
> 
> > I know rthat the economic issues are complex, and the terminology
> somewhat detailed and technical, but let's not move backwards. The joint
> marketing issue for small, new TLDs really does not constitute a major
> change in policy. The one virtue of the staff report is that it makes that
> abundantly and irrefutably clear, simply by recounting all the instances
> in which it has already existed. And as a practical matter, it is true
> that if we want to actually affect how this turns out we do have to weigh
> in through the DAG "implementation" process already underway.
> 
> If you are suggesting that if people don't agree with your position it's
> because the issues are complex and hard to understand, I can only ask that
> those who've said they aren't persuaded respond.  As for me, I've not yet
> come to that conclusion or any other and am looking for more focused
> dialogue upon which to base a final view.
> >
> >> We also discussed the draft position paper Milton circulated in
> >> December suggesting, inter alia, that the issues in play concern joint
> >> marketing rather than VI per se; that joint marketing by new TLDs does
> not
> >> require a PDP or constitute a change in policy; and that only JM by
> >> registrars with at least a 45% market share should give rise to
> >> limitations.
> >
> > Not a bad summary, thanks. However, I am disappointed to see that still
> no progress has been made regarding Wendy's excellent suggestion to add
> something that is important to US (NCSG) to the whole discussion, by
> calling for lifetime registrations.
> 
> Right, we didn't discuss this on the call, but if we do agree a position
> statement it'd make sense to build that in.
> >
> >> In essence, participants agreed that a restrictive interpretation of
> the
> >> Council's role seems problematic and worth discussing with other SG's
> >> representatives on the Council.
> >
> > Agreed. But this issue applies broadly to ALL GNSO policy matters and
> should not be mixed up with the specific issue of registry-registrar
> relations.
> 
> Right
> >
> >> It was also noted that the Council's recs
> >> and attendant discussions on new gTLDs did provide some guidance to the
> >> effect that that separations should be preserved.
> >
> > Yes, but keep in mind that allowing cross ownership and joint marketing
> does not eliminate the separation of registries and registries - they
> remain functionally and contractually separate. It simply permits a
> practice that has in fact already been allowed under numerous prior
> contracts. And which is already allowed when back-end registries own
> registrars, or when registrars own registries.
> 
> How do you view the concept of functional separation in relation to joint
> marketing?
> >
> >> As to whether the DAG
> >> approach constitutes a change in policy that merits a PDP, some people
> >> felt the answer is clearly yes, while others were a bit more equivocal
> but
> >> had not yet been persuaded to the contrary.
> >
> > See my comments earlier. This statement is meaningless unless you
> specify what you mean by the "DAG approach." If you mean that allowing
> cross ownership and joint marketing for small new registries, I am sorry,
> but that does not constitute a change in policy. Even the registries have
> conceded that point - they are now forced to say that allowing JM is a
> change in "enforcement mechanisms".
> >
> > However, one could still favor a PDP (as I do) to deal with a host of
> broader changes. For example, what about those private-brand TLDs - do
> they have to use registrars? Should we pave the way for real vertical
> integration over the longer term as the market becomes more competitive?
> If so, what rules and restrictions would apply?
> 
> Aha.  But these issues are not in fact spelled out in your draft.  So how
> about proposing some language for a motion that addresses the bits you do
> think merit a PDP?  That would be helpful.
> >
> > The support for a small form of liberalization in the policy paper I
> drafted would allow the first round of new TLD applicants to enter the
> market on the favorable terms (i.e., allowing JM) - and it is clear that
> those favorable terms will have a huge impact on the viability of new
> entrants. Why are we stalling this?
> >
> > Among those putting the brakes on our position, I have not heard a
> single argument that relates their opposition or concerns to a pro-
> consumer, pro-registrant position. I have heard that they don't like staff
> procedure, I have heard that they are concerned about the way registries
> will react, but not a peep about the consumer/registrant.
> >
> > Let's get our priorities back on track. I know there's a tendency for
> people on the Council to get wrapped up in intra-GNSO politics but let's
> try to keep the big picture in mind.
> >
> >> In any event, there is
> >> presently no consensus for opposing a PDP when the Council votes on
> >> January 28, and a feeling that the issues should be explored further
> and
> >> could be clarified over the next year plus without delaying the new
> gTLD
> >> process.
> >
> > Last time I looked, the new gTLD process was already delayed another
> year. However, the only way to avoid delaying the new gTLD process even
> further by allowing cross ownership and JM by new TLD owners, as our
> position paper suggests. Anything else is just a fancy rationalization for
> keeping existing registries free of competition.
> 
> People on the NCSG and council calls did not appear to be convinced that a
> PDP on VI as others conceive it or JM per you would necessarily slow
> things further; hard to know for sure ex ante.
> 
> Anyway, this is useful, and hopefully we can start to hear from more
> people on such matters as
> 
> *The staff view on the role of the council
> *The contention that GNSO has provided no policy guidance from which the
> DAG VI/JM shifts would be deviation
> *Whether, even if the answer's no and we're just talking about a staff
> practice, a PDP on these would be merited, and if so why
> *Whether in addition or instead a PDP would be merited on the other
> dimensions, e.g. private brands
> 
> We're not going to progress with just a bilateral dialogue in which MM
> advocates a view and I report that others seem to be unconvinced or unsure.
> 
> Best,
> 
> Bill