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Tiered / Variable Pricing By Domain Not Forbidden in New .BIZ/INFO/ORG contracts
Vint Cerf/ICANN confirm member's interpretation of new proposed contracts
GeorgeK




msg:3059494
 10:53 pm on Aug 24, 2006 (gmt 0)

Vint Cerf/ICANN confirm my interpretation of .biz/info/org proposed contracts -- tiered/differential domain pricing would not be forbidden

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:

[icann.org...]

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 <snip/sex domain>.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?

ICANN went even further than the .com proposed settlement with VeriSign, and gives these registries removal of price caps "following extensive consideration and discussion" (I don't recall any such public discussion or consultation with the ICANN community and stakeholders). However, take note of ICANN's statements in the CFIT litigation regarding pricing caps on May 26th:

[icann.org...]
[icann.org...]

"in a single supplier market, price caps are, if anything, procompetitive (Mot. at 13-14);" [page 1 of the document, line 13, page 6 of all 15]

"Nowhere does CFIT address the fact that, at this point in time, all that ICANN and VeriSign have done is propose future price **limits** for .COM domain names, which cannot be implemented until the DOC approves the .COM Extension. (Mot. at 20-22.) And, as ICANN explained in its opening brief, price caps in a single supplier market are considered pro-competitive. (Mot. at 13-14.)" [page 8 of the document, line 14, page 13 of all 15]

So, you have ICANN lawyers telling the court that price caps are pro-competitive in these single supplier markets (i.e. where registries are the single suppliers for each TLD). Indeed, it is part of ICANN's mission to promote competition.

Yet, we have ICANN removing all price caps entirely on .biz, .info and .org with these proposed new contracts. Something is amiss. Wouldn't that contradict everything their lawyers said to the court?

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:

[icann.org...]

(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

[edited by: Webwork at 1:49 am (utc) on Aug. 25, 2006]

 

ccDan




msg:3063499
 7:46 pm on Aug 28, 2006 (gmt 0)

If writing a letter, and you are a domain name registrant with a domain in the .BIZ, .INFO or .ORG gTLDs, it would likely be helpful if you mention that!

Webwork




msg:3063513
 8:01 pm on Aug 28, 2006 (gmt 0)

Expecting a registrar to publicly oppose the ICANN proposed agreements is a bit of a stretch. It would be like telling one's boss that she's a knucklehead. The act, itself - speaking one's truth to power - may not get you fired but a boss that is a bit high-and-mighty would likely look for future excuses to make your life difficult or to find fault to fire you. To some unfortunate degree the world, to its detriment, remains a "go along and we'll get along" place.

Even when that leads to wars, the Titantic sinking, spaceships exploding, . . .

That said sometimes we all just have to do the right thing if we are going to live with ourselves . . and living with ourselves is one of the few certainties of life.

I am less inclined to lose a night's sleep for the consequences that come from speaking honestly than I am to sleep poorly for the personal loss of self-respect that comes from not speaking truth to power. My wife, the penultimate power, agrees. ;)

There are other voices I would like to see added to the roster of public comments. 4 hours to go.

Where do you stand?

ccDan




msg:3063523
 8:10 pm on Aug 28, 2006 (gmt 0)

But, the registrar is the one that has to deal with the registry.

You would think the presumptive renewal would certainly be an issue for them.

In the case of variable pricing, if you're used to paying $8 a year for your domain, and you get a bill for $80,000, most likely you (or at least most domain name registrants) are going to be calling or eMailing the registrar, probably with a lot of cursing and ALL CAPS.

The registry gets the benefits; the registrar reaps the headaches.

Simsi




msg:3064191
 11:13 am on Aug 29, 2006 (gmt 0)

naive...

how can you not understand this...

wake up...

I'd be grateful if you didn't patronise me when making your points Leosghost. I'm perfectly entitled to my opinion that this will not be as bad as people make out, as you are yours. You may disagree, but please respect that.

[edited by: Simsi at 11:15 am (utc) on Aug. 29, 2006]

Leosghost




msg:3064210
 11:46 am on Aug 29, 2006 (gmt 0)

but please respect that.

I choose what and whom I respect very carefully ..it has to be merited .

Leosghost




msg:3064260
 12:34 pm on Aug 29, 2006 (gmt 0)

The registry gets the benefits; the registrar reaps the headaches.

Certain registrys are actually composed of registrars operating together ..sort of like the wolves standing on each others shoulders and putting on a coat and hat and pretending to be the shepherd..

ALIAS the .info registry is composed this way and they are essentially the outfit behind the PIR .org registry also Neulevel the .biz registry are made up registrars for other TLD's such as the .us and the .cn etc ..

cute ..huh ..

again ..can anyone say "conflict of interest"

I would recommend reading the comment posted on the ICANN pages by "Ameet Arurkar" at [forum.icann.org...]

when you add the real allegiance of the chairman of the ICANN board ( Google PR head ..self styled " google company evangalist" ) in ..and one or two other interesting examples of "wearing more than one hat" .
.you'll see that all chez the ICANN is not what it seems ..( with apologies to wolflover ) they are wolves in shepherds clothing ..

[edited by: Leosghost at 12:35 pm (utc) on Aug. 29, 2006]

Simsi




msg:3064423
 2:59 pm on Aug 29, 2006 (gmt 0)

It would not surprise me if VeriSign is salivating at the prospect of these contracts being approved, so that it creates a precedent for future .com/net renegotiations.

Too right. Like manna from heaven.

I choose what and whom I respect very carefully ..it has to be merited

Ah okay. I'm not as fussy :)

[edited by: Simsi at 3:00 pm (utc) on Aug. 29, 2006]

WolfLover




msg:3064844
 7:41 pm on Aug 29, 2006 (gmt 0)

when you add the real allegiance of the chairman of the ICANN board ( Google PR head ..self styled " google company evangalist" ) in ..and one or two other interesting examples of "wearing more than one hat" .
.you'll see that all chez the ICANN is not what it seems ..( with apologies to wolflover ) they are wolves in shepherds clothing ..

No apologies needed Leosghost! :-)

A wolf is what he is, acting on instinct and to survive. A person or "company" who acts as the wolf in sheeps clothing however, is to be scorned.

Leosghost




msg:3065602
 11:02 am on Aug 30, 2006 (gmt 0)

Well folks I think that makes it official that they have extended the delay for accepting comments ..( they are maybe just ashamed to say so? )..who knows ..anyway ..new comments are still showing up there ..

they are now showing latest update as 2006 Aug 30 09:13:27 (UTC) comments are are still being logged..

[forum.icann.org...]

3 more on August the 30 th taking the total to over 900 ..;-)

so keep the momentum and give make repeat follow up calls and emails to everyone you contacted already ... to ask if they did actually go comment ( especially your elected officials ) ..it appears like enough pressure on them and they start to bend ..now we just need to make them turn around..

If your comments didnt get posted ..send them again ..
using gmail or yahoo mail seems to be foolproof ..some other IP addys get through ..some dont ..watch your inboxes for the return mail with the link to the "confirm your mail" page .

note to admins ...I posted this again here for maximum eyeballs effect ..as this thread is on WebmasterWorld homepage

ccDan




msg:3066024
 4:11 pm on Aug 30, 2006 (gmt 0)

Leosghost writes:
Well folks I think that makes it official that they have extended the delay for accepting comments...

I hate to burst your bubble, but I bet its just a case that the software keeps posting messages as long as they come in. It looks like the same thing they use for other forums on the web site, so it probably doesn't have a timed shutoff.

So, barring an official announcement, I would bet they have not extended the period for public comment.

I would also bet that, when the staff compiles these into a report for the Board of Directors (or into whatever form they will present them to the Board), they will likely ignore anything that came in past the deadline.

That's just my guess. If you didn't get a comment in before, you might want to still submit it just in case.

RedCardinal




msg:3067839
 7:30 pm on Aug 31, 2006 (gmt 0)

Sorry GeorgeK, but it appears that Ken McCarthy deserves *cough* all the credit for highlighting this issue. At least he thinks so anyhow.

I posted a comment questioning his post but he deleted it.

[edited by: Webwork at 8:37 pm (utc) on Aug. 31, 2006]
[edit reason]
[1][edit reason] Blog links are linka non grata [/edit]
[/edit][/1]

Leosghost




msg:3067871
 7:48 pm on Aug 31, 2006 (gmt 0)

So now he can delete mine too ..thanks for the heads up ..the guy is trying to take credit for what GeorgeK ( in asking the questions and posting the answers ) did only fools those who dont know sleaze and hype when they see it ..

he claims it was since his input on monday ..

uptil then from him through july , august ..? SQUAT!..he must have been hiding under a rock til he got word via GeorgeK of what was happening ..

I never heard of his blog before Red cardinals post above mine ..nor of him "ken"..but I know that someone who tries to claim rights to the word "variable" is talking out of where he sits down ..

ccDan




msg:3067902
 8:11 pm on Aug 31, 2006 (gmt 0)

Well, at least that explains the source of all those people seemingly under the mistaken impression that "variable pricing" was an explicit part of the new agreements, rather than permissible through the elimination of all pricing controls.

The form letters that are recognizable from a *ahem* competing domain names forum and also the letters recognizable from WebmasterWorld members at least gave a better impression that they knew what they were talking about.

The "opposed to variable pricing" letters would, in my opinion, be the easiest for the ICANN staff and board to dismiss as people who "don't know what they are talking about."

No where in the agreements is "variable pricing" explicitly or expressly allowed. It is only due to the clause that allows registries to determine their own pricing without limitation that would allow registries to implement variable pricing. And GeorgeK is the one that confirmed that was true.

By getting people to write in opposing something that is not an explicit part of the new agreements, the blogger may have done a serious disservice to domain name owners. Much better are the ones that say they oppose the wording or language of the agreements that could lead to variable pricing, and so on.

Otherwise, by writing that you oppose the variable pricing scheme, you just sound misinformed.

So, if the ICANN board opts to approve these agreements, and the minutes of the meeting include statements that those in opposition didn't know what they were talking about, well, <sarcasm>we know to whom to send a big THANK YOU.</sarcasm>

Leosghost




msg:3067925
 8:23 pm on Aug 31, 2006 (gmt 0)

Be nice if you could post this part ..on his blog ..
The "opposed to variable pricing" letters would, in my opinion, be the easiest for the ICANN staff and board to dismiss as people who "don't know what they are talking about."

No where in the agreements is "variable pricing" explicitly or expressly allowed. It is only due to the clause that allows registries to determine their own pricing without limitation that would allow registries to implement variable pricing. And GeorgeK is the one that confirmed that was true.

By getting people to write in opposing something that is not an explicit part of the new agreements, the blogger may have done a serious disservice to domain name owners. Much better are the ones that say they oppose the wording or language of the agreements that could lead to variable pricing, and so on.

Otherwise, by writing that you oppose the variable pricing scheme, you just sound misinformed.

So, if the ICANN board opts to approve these agreements, and the minutes of the meeting include statements that those in opposition didn't know what they were talking about, well, <sarcasm>we know to whom to send a big THANK YOU.</sarcasm>

or allow me to post it with a credit to you?
( I am so 'kin ballistic over him trying to claim credit that I'm near incoherent and just burnt dinner typing in his blog )..

what do you say ccDan ..?

[edited by: Leosghost at 8:25 pm (utc) on Aug. 31, 2006]

Webwork




msg:3067966
 8:45 pm on Aug 31, 2006 (gmt 0)

Folks, this thread is getting a bit overripe, making it a candidate to go off track or a target to attract blog links, etc. Therefore, with respect and appreciation for everyone's contribution, I'm closing the thread and invite you all to initiate a follow on thread should you choose.

Thanks again to everyone who pitched in.

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