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New TLD ownership rules punted to ICANN board

Kevin Murphy, August 16, 2010, 08:47:11 (UTC), Domain Policy

The ICANN board will be asked to untangle the policy mess that currently bans domain name registrars from applying for new top-level domains, after a GNSO working group failed to reach consensus.

The Vertical Integration WG was tasked with figuring out whether registrars should be allowed to own new TLD registries and vice versa, but only managed to reach deadlock.

The GNSO Council is now likely to punt the issue to the ICANN’s September 24-25 retreat, asking the board to consider the issues raised by the WG’s non-committal interim report.

It’s a dismaying case of pass-the-parcel that highlights both the trickiness of the VI problem and the limits of ICANN’s bottom-up policy-making process.

ICANN’s Draft Applicant Guidebook currently says that cross ownership between registrars and new TLD registries should be limited to 2% and that all new TLDs need to be offered to all accredited registrars.

This was in response to fears from some quarters that if a registrar also owned a new TLD registry, it would have an unfair advantage over other registrars, ultimately harming registrants.

The DAGv4 text was an overt, deliberately Draconian placeholder – it would ban all registrars and some registries, as well as making “.brand” TLDs unworkable – designed to force the GNSO find a better solution to the perceived problem.

The WG, which is ongoing, has so far failed to do so, and now seems set to pass the hot potato back from whence it came.

What all this means is that the ICANN board (and, let’s face it, staff) will be forced to assemble a workable VI policy for the first round of new TLD applications from the piecemeal suggestions of the WG; to do over two days or less what the WG failed to do over six months.

What the board will decide remains to be seen, but it could wind up governing the first round of new TLD applications, potentially making it a considerably smaller round.

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Comments (9)

  1. Jim Fleming says:

    Prior to ICANN anyone (with a clue) could be a “Registrar”.

    If ICANN is dissolved, that Registry model could return.

    As you are seeing with .CO, Registrars are becoming Resellers and claiming they are Registrars.

    ICANN could also **use** the lack of consensus as another reason to call Time-Out on new gTLDs.
    There is no financial incentive to “staff” to take on
    more tasks.

  2. gpmgroup says:

    The implementation of new gTLDs is a huge project and the effects will be far reaching. VI is just one issue of several issues that the original DAG quietly glossed over whilst proclaiming everything was virtually ready for launch.

    The problem for the wider community is the gains and more importantly the losses are not so immediate for many of the [would be] contracted parties, so getting valuable community discussion prior to implementation will be much more challenging.

  3. MS says:

    ICANN Needs to remember both IDN ccTLD’s and IDN gTLD’s need to be parallel.

    IDN ccTLD’s are now live.

    Some argue new gTLD’s are necessary, some argue they aren’t but there is no argument not everyone speaks english.
    IDN gTLD’s are a necessity and not a luxury and at minimum a limited amount of IDN gTLD’s needs to be added to the root just like IDN ccTLD’s.

    • Kevin Murphy says:

      Indeed.

      It also gets interesting when VeriSign applies for multiple IDN versions of .com/.net. Anybody applying for “company” or “network” type IDNs may find a formidable opponent.

  4. What I find quite interesting about Vertical Integration is that the discussions have deviated away from the real issues of how to help new entrants and how the launch of new gTLDs would “increase competition” and “stir innovation.”

    VI should be all about allowing new entrants to innovate and compete with the existing players in the market. Since ICANN’s new gTLD rounds have taken so long, there is a lot of catch up to do for new entrants who are primed to fail from the get-go by adding unnecessary limitations on ownership. Why can’t new entrants sell direct to consumer? That is the way of almost any business. The market will dictate price – supply and demand.

    The concept of widespread abuse of registry data to increase prices and make good names unavailable is a moot point to agree against Free Trade. The market dictates price (the premium .TV domains sold by eNOM for Verisign is a great example to highlight this). Also in regards to unavailability, does this mean new registries can not auction their premium names? I know, we as .MUSIC will not but I can bet that most new registries will. Is this considered abuse because it makes premium names unavailable due to the registry’s actions to profit from auctions? Is this considered registry abuse? Why not align reality from fiction here in regards to the excuses of registry abuse, which would result in high prices and unavailability of good domains. If you want to address the issue at its core, ICANN should not allow new registries to auction premium names. That would take care of high prices/unavailability. This has nothing to do with vertical integration. Look at .mobi and .asia. Didn’t they make money with this? And now that Afilias owns .mobi, does that mean Afilias can sell the rest of their existing thousands of premium .mobi names and make a profit from them?

    I think the lack of consensus was a direct result of the existing big players who came up with arbitrary numbers (eg 15% ownership and registration caps).

    I hope ICANN understands that the statu quo needs to be changed and new entrants should be given flexibility and the ability to compete and innovate. All the “consensus” talk is one big attempt of delaying things or to create another barrier to “success” for new entrants. The status quo or anything close to it is a success for the big players.

    I am disappointed that something so obvious is taking so long. Competition and innovation is all about capitalism and free trade. Why should ICANN be so different for new entrants?

    And why should new entrants be forced to accept all business partners (equal access to all registrars)? New entrants should be allowed to choose any partner or registrar they want to use based on the value proposition the partner brings. Isn’t this how business works? Show me how you will make my registry a success and we can do a business development deal that reflects it. This happens in any other business. Why can’t it apply to registry and registrar business? Why can’t we do business based on performance-based criteria and value creation as opposed to just be allowed free access because the rules say so?

    Does ICANN think that hundreds of new entrants can ever compete with Verisign? Collectively all new TLDs they might become 10% of what Verisign brings in, but on a one-to-one basis, reaching multi-millions in registrations will be quite impossible. So why not allow new entrants to compete and innovate?

    Constantine Roussos
    .music

    • Kevin Murphy says:

      I think you raise many really good points Constantine.

      As I’m sure you know, it appears that the VI WG currently has a renewed focus on “harms” and the compliance mechanisms necessary to tackle them.

      Perhaps that is a better way to look at the problem than a simple cross-ownership debate?

  5. .Music2 says:

    I also plan to possibly apply for .music, .berlin, .nyc, .casino and surely .gay 😉

    It’s nice several people “claim” tld’s based on how much they want them, how long they have been wanting them and how unrealistic is to believe anyone will get i.e .music because they do the above and have no more rights then anyone else reading this and surely no more rights then most who aren’t reading this but will wake up when time comes.

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