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    Neustar seeks .org coup; will ICANN accede? | Log in/Create an Account | Top | 48 comments | Search Discussion
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    Re: Neustar seeks .org coup; will ICANN accede?
    by Anonymous on Sunday October 06 2002, @05:28AM (#9566)
    "ICANN's real problem is that it is weak...but that is because of the financial and legal weakness of ICANN..."

    This underlying train of thought is completely on the mark. It is the key to the card house ICANN has built. And, if one wants to beat it, they should simply join it. How? Easy...join Verisign's team. They are lobbying hard for removal of the wholesale price cap under the grounds this is 1) outside of ICANN's scope and qualifications to regulate and 2) since ICANN has proclaimed competition as an accomplishment, the need to price fix the market place no longer exists. ICANN's stance is that Verisign should simply live up to its contract (which is the same as saying that ICANN believes it has the right to centrally regulate the market place - you and me - via its few contracts).

    Two things are very clear in the ICANN House of Cards it calls a competitive market place: 1) The value of a .com domain remains artificially inflated and Verisign could easily double its wholesale price without suffering major attrition as a result of. ICANN itself says the average price of a domain is $10 or 67% higher than the current wholesale price. Verisign wants this and probably to the extent to where it can close the spread between what it charges for .com at the retail level and what it charges at the wholesale level. 2) If Verisign accomplishes this it will send shockwaves through ICANN's competitive - and completely artificial - registrar retail channel. Suddenly, all these cheap models just fall apart and the average price of a .com domain name shoots back up closer to $35 than $10. Why? because .com remains artificially inflated in the market place and Verisign knows this at a time its stockholders do not view their position too favorably. ICANN's definition of market place competition is regulation by contract...something it cannot defend.

    When the ridiculously invented registrar channel begins to have to pay the artificially inflated "value" of .com to its wholesaler is when the ICANN House of Cards will begin to come crashing down. Sure, this will help the publicly traded VRSN meet short term quarterly objectives (something it has a fiduciary responsibility to do for its stockholders).

    But the right questions will then get asked...the registrar channel will crumble to where it must demand new domains to sell in order to survive (anybody else find this noticeably missing from this "constituency"?) ICANN will be challenged to open the market place from the very parties it has contracts with...something that does not exist now and a position it cannot defend.

    If one wants to see the ICANN Card House exposed for what it is then simply join Verisign in its quest to remove ICANN from regulating the wholesale price cap....everything else will then follow. A system for entry will be demanded in true bottom-up fashion (the community) and in time the price of domains will drop, with greater choice, and improved service - which is what the "experiment" was supposed to be all about. None of these exist today (one party can renew business.com for $10 but a different party cannot acquire it for anywhere near this price...and this is part of the big charade ICANN calls "a competitive market place").

    Advocating removal of the .com wholesale price cap is the closest opportunity I have seen towards an environment where ICANN carries out its mission where "competition" is concerned as it was created to do. In today's landscape, this makes Verisign the first "stakeholder" that is a friend to the cause. And they are a big one.

    Ray Fassett


    [ Reply to This | Parent ]
    Re: Neustar seeks .org coup; will ICANN accede?
    by Hendrik on Sunday October 06 2002, @04:52PM (#9572)
    User #2856 Info

    Ray,

    When you do want to dismiss the registrar-registry split as ridiculously invented, you are required to explain first why this approach works quite well in a lot of ccTLD's and why it fails in its current setup for gTLD's. Then you might not dismiss it but propose to change the flaws that cause the problems.

    I cannot find convincing arguments to dismiss the registry-registrar model as such as I am quite able to provide the working counter-examples based on a comparative study of registries, in specific those of European ccTLD's.

    The registry-registrar institutional arrangement has worked quite well in the UK, Germany, the Netherlands and Denmark. It produced a higher number of domain names per capita for those countries than the US based companies and citizens have registered under the .us ccTLD's and the generic TLD's.

    Therefore it is better to define what outcomes in the domain name industry you consider as a succes and then assure yourself that the registry-registrar model is indeed bad performing to reach that goal.

    The main difference between European ccTLD's and the gTLD's as far as I am able to perceive is the far weaker position of the registry operator, who typically is a subcontractor to the not-for-profit registry. The non-profit registry is also heavily pushed by the registrar community to drive down registry prices per name as they are the registrars main input cost. As a consequence there is no serious need for regulatory style wholesale price-fixing.

    The large variety in type, size and approach of registrars and the low entrance barrier to become one (.uk and .nl have more than 1000 registrars each), has provided a registrar community that takes care quite well of their domain name registrants interests. E.g. there are for-profit and not-for-profit registrars that have themselves specialised in individual users and various non-commercial sectors of society (f.i. churches and religious organisations).
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