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

Mawaki Chango ki_chango at yahoo.com
Wed Aug 23 12:44:10 EDT 2006

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

> 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
> 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

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