I believe that ICA took the position that the separation requirement could be relaxed for closed registries where DNs could not be obtained by the general public - e.g., .acmecorp where registry only open to employees, suppliers, etc. That could of course be combined with a numerical limit. The potential problem with just a numerical limit is that a registry operator for a premium generic could choose to cap registrations just under the limit to create artificial scarcity and then operate the registrar function at high annual fees. The purpose of separation for open gTLDs is to have registrar competition that keeps prices to registrants low. This is arguably one of ICANN's most successful policies. Relaxing it should be done with great caution. Philip S. Corwin Partner, Butera & Andrews 1301 Pennsylvania Ave., NW Suite 500 Washington, DC 20004 2026635347/Office 2022556172/Cell "Luck is the residue of design." -- Branch Rickey ________________________________ From: owner-bc-gnso@icann.org <owner-bc-gnso@icann.org> To: Michael D. Palage <michael@palage.com> Cc: 'BC gnso' <bc-gnso@icann.org> Sent: Fri Jul 31 14:01:02 2009 Subject: Re: [bc-gnso] RE: Important--Regsitry Registrar Separation issue <grin> if we presume that somebody is going to make a lot of money off of those premium generics, i'm not sure i care whether it's the registrar or the registry... m On Jul 31, 2009, at 12:55 PM, Michael D. Palage wrote: Mike, Not to sound like an attorney but please read the ICANN proposal "fine print". Under the current proposal a Registrar would be able to register up to 100,000 in a TLD in which they or an affiliate were the registry operator. Do you want to take a bet on what percentage of those 100,000 with be premium generics? "With a limited exception, a registrar should not sell domain services of an affiliated registry. This limit is set to a certain threshold, in this model, 100,000 domain names. (The registrar may continue to manage its existing base of registrations once the threshold is met)" See http://www.icann.org/en/topics/new-gtlds/regy-regr-separation-18feb09-en.pdf Best regards, Michael -----Original Message----- From: owner-bc-gnso@icann.org [mailto:owner-bc-gnso@icann.org] On Behalf Of Mike O'Connor Sent: Friday, July 31, 2009 1:22 PM To: BC gnso Subject: Re: [bc-gnso] RE: Important--Regsitry Registrar Separation issue hi all, i don't feel very strongly about this. times have changed from the days when there was one monopoly provider being broken up. now there are lots of strong/capable entities that have the income statement, technical expertise and customer-facing capabilities to run registrars and registries. so i'm not sure we need to throw our collective body on the tracks in the way of that train. especially when they're saying that a registrar can't be a registry for the same TLD. my 2 cents, m On Jul 30, 2009, at 3:43 PM, Mike Rodenbaugh wrote: I sent this around about five weeks ago, and other than George I do not believe anyone has commented. I have been asked if the BC has a view on this issue. It seems like a big issue with respect to new TLDs, and could be retroapplied to existing TLDs. Does anyone else care? My view is that the proponents of the change (abolishing the longstanding rule of separation) ought to have a fairly heavy burden to prove the need for the change. I have not seen a very good case for it, and think the www.registryregistrarseparation.org website presents a compelling case against it. I also am bothered that Staff seemed to unilaterally incorporate such a radical change into the Draft Applicant Guidebook, without any formal direction to do so. So I hope they change it back in the next iteration, due in September. If the BC is fairly unanimous on this issue, then I would like us to make comments to that effect very soon. Please let me know what you think. I summarized the factual situation in a recent blog post on NameSmash.com: NEW TLDs -- CONCERNS ABOUT REGISTRY-REGISTRAR SEPARATION ICANN was formed eleven years ago, when the .com 'monopoly' was broken apart. At that time, Network Solutions was the sole registry and registrar of gTLD domain names. ICANN created the system we have today, where registrants place orders with ICANN-accredited registrars, who in turn place the orders with ICANN-contracted TLD registries, many of which use the back-end services of third party registry operators. It was thought that this system would increase competition for the suppliers of domain names, and thus lower prices for registrants. It is hard to argue that this has not held true, insofar as the price of .com domain names has dropped dramatically in that time (but is now allowed to rise again by 7% almost every year, under the 2006 agreement between ICANN and VeriSign). To ensure this structure held, ICANN restricted registries from acquiring directly or indirectly a substantial percentage of any registrar, so VeriSign cannot buy a controlling interest in GoDaddy, for example. Some of the largest registrars have become registry operators which also register those TLD names to the public. For example GoDaddy provides the registry for country-code .me (so Montenegro makes the rules, not ICANN). Other large registrars, such as Network Solutions and eNom, now are pressing ICANN to eliminate the restrictions on registry-registrar cross ownership of gTLD registries, so that those registrars can compete as registry businesses, sell new gTLD domains directly to the public, and sell them to all other ICANN accredited registrars as well. Existing registry operators, such as NeuStar (.biz), Public Interest Registry (.org) and others, are in support of any entity becoming a registry or registry operator, so long as that entity does not distribute domain names in the same TLD that they operate as a registry. They are fighting this new proposal on the basis that registrars have a substantial head start in marketing domain names to the public, and thus can offer prime distribution opportunities to new registries. These registries and registry operators argue that allowing cross ownership would put them at a competitive disadvantage in convincing new TLD operators to use their back-end services. On the other hand, some large registrars argue that no registrar or registry business -- other than VeriSign with .com and .net -- has any 'market power' which can be exploited for anti-competitive purposes, and thus they ought not be regulated by cross-ownership restrictions. They note that, absent proven 'market power', it is in consumers' interests to allow cross-ownership because it will bring operational efficiencies and lower prices to the marketplace. The registries counter that a number registrars do in fact have market power in deciding which TLDs to promote, and how. They argue that a registrar that owns a registry will choose to promote its own cross-owned TLDs over any non-affiliated TLD, thereby actually reducing competition. A public comment forum concerning antitrust experts' reports on this issue has recently closed, http://forum.icann.org/lists/competition-pricing-final/, and ICANN staff is expected to make recommendations which then will be subject to further public debate and comment before the next iteration of the new TLD Applicant Guidebook, expected in late September. Mike Rodenbaugh Rodenbaugh Law 548 Market Street San Francisco, CA 94104 +1.415.738.8087 www.rodenbaugh.com -----Original Message----- From: Mike Rodenbaugh [mailto:mike@rodenbaugh.com] Sent: Saturday, June 20, 2009 12:39 AM To: bc-gnso@icann.org Subject: FW: Important--Regsitry Registrar Separation issue FYI the site at www.registryregistrarseparation.org. I know this issue is of serious concern to many members. Adam Palmer and Jeff Neuman have agree to present briefly and take questions at our BC meeting on Tuesday. All comments welcome, and it would be wonderful if a member or two wanted to lead the BC thinking and engagement on this issue. Thanks, Mike Mike Rodenbaugh Rodenbaugh Law 548 Market Street San Francisco, CA 94104 +1.415.738.8087 www.rodenbaugh.com -----Original Message----- From: Adam Palmer [mailto:APalmer@pir.org] Sent: Friday, June 19, 2009 5:51 PM To: Adam Palmer Subject: Important--Regsitry Registrar Separation issue All, Please see the below site on registry/registrar cross ownership. ICANN will also be having a panel on this on Monday. Strong vocal support is welcome both on the website and at the ICANN Monday panel meeting. Please forward this site link to anyone else that might support our concerns on this issue. Let me know if any questions. Thanks, Adam Palmer Link: http://www.registryregistrarseparation.org/supporters - - - - - - - - - phone 651-647-6109 fax 866-280-2356 web www.haven2.com handle OConnorStP (ID for public places like Twitter, Facebook, Google, etc.) - - - - - - - - - phone 651-647-6109 fax 866-280-2356 web www.haven2.com<http://www.haven2.com> handle OConnorStP (ID for public places like Twitter, Facebook, Google, etc.)