I tend to agree with Jon's comments below. For sure, registration caps should not be required for internal registrations. In relation to Case #1, I feel confident we will see strong consensus develop from the VI WG on single-registrant TLDs. WRT to Jon's point on cases 2 & 3, Registrations to third parties not only can open the door to gaming, but IMO also begin to impede fair competition. For example, in case #3 Facebook offers a free or super cheap 2nd level domain (berrycobb.facebook) to it's customer that would have otherwise purchased a 2nd level domain (berrycobb.social) from the dot_social TLD at the going market rate. Would this not threaten the dot_social's business model? My example may not be the best here, but I invite CBUC members to review VI responses from Richard Tindal about threats to competition. He has some good insight in to this issue. Another variation to consider will be the not-for-profit organizations. The NCUC has mentioned several examples where business models will supply 2nd level domains as a value added service. Will this have potential to threat competition. As an FYI, I do believe the CBUC will need to set aside specific conference calls to build our consensus position. This will be a very complex topic to bring everyone up to speed on the concepts and issues in addition to any consensus that comes from the VI WG. Berry Cobb Infinity Portals LLC berrycobb@infinityportals.com http://www.infinityportals.com 866.921.8891 -----Original Message----- From: owner-bc-gnso@icann.org [mailto:owner-bc-gnso@icann.org] On Behalf Of Jon Nevett Sent: Friday, May 14, 2010 10:56 AM To: Steve DelBianco Cc: berrycobb@infinityportals.com; bc-gnso@icann.org Subject: Re: [bc-gnso] BC Position Statement on Vertical Integration (VI) -- single registrant TLDs Steve: I support you on Case 1, but not Case 2 or Case 3. Once you start distributing the names to third parties outside of the company, it should follow the applicable restrictions. In case 2, why just bank customers, why not telecom customers or retail customers, etc.? It's a slippery slope. Similarly, in case 3, could a registry set up as a social media site and get around restrictions that we set-up. The thing about all exceptions is that they are subject to gaming. If the exception is limited to just that entity -- no third parties -- it would be cleaner, implementable, and more likely to be approved. It's not like Facebook wouldn't be able to give away names to its subscribers, it would just have to be done with whatever restrictions/protections that ICANN sets up. Thanks. Jon On May 14, 2010, at 1:19 PM, Steve DelBianco wrote:

Thanks to Berry and the other BC members on the VI working group for keeping us apprised of your work there.

As we form our constituency position on the proposed VI models, I wanted to focus briefly on one issue: single registrant TLDs.

Most of the 9 proposed VI models mentions single registrant TLDs and most would allow the TLD to manage its registrations -- but with caps of 30,000 or 50,000. Let me offer a few examples that show how companies (even some BC members) would want more control over their own TLD registrations:

Case 1: employees of a company. This is the example cited most often, as in, IBM might want to create 2nd level registrations for all its employees, for HR functions, scheduling, or even "mail@steve.delbianco.ibm". If a company were to do this, they would rightfully insist upon total control over 2nd level registrations, and would not want to let all registrars have equal access to sell names. The employer might create its own accredited registrar, in which case 100% cross ownership and self-distribution would need to be allowed under the new VI policy. For this case, there is no justification to impose an arbitrary cap of 50,000 on the number of registrations that could be done before opening it up to all registrars. IBM, for instance, has 400,000 worldwide employees, according to its 2009 Annual Report. Case 2: bank customers. A global consumer bank might pursue its own TLD, hoping to give each of its customers their own 2nd level registration to enable secure access to a DNSSEC-signed online banking page. An arbitrary limit of 50,000 registrations would not be sufficient for even medium-sized regional banks. When a bank reaches the registration cap, it will not want to be forced to compensate and cooperate with all ICANN registrars to enroll, authenticate, or remove banking customer registrations.

Case 3: social network services. A global social network platform might want to operate its own TLD in order to give each of its users their own 2nd level web address. (e.g. SteveDelbianco.facebook ) Even sites like Flickr, dropBox, and Twitter might want to offer this service to enrolled customers. An arbitrary limit of 50,000 registrations would be too low a threshold, and no service would want to lose total control over the privacy and security of its users' data. These services would not want to be forced to compensate and cooperate with all ICANN registrars to enroll, authenticate, or remove their users. --

I am not aware of any BC member (or NetChoice member) who's planning to apply for their own TLD, but I doubt any would want to operate their own TLD if arbitrary caps were placed on self-managed registrations.

I believe the BC is in the best position to argue for potential needs of single registrant TLDs like those described in these examples.

Let's acknowledge that single-registrant TLDs would need to conform with ICANN's contract and consensus policies. It's also acceptable to require the use of a single accredited registrar, as long as this registrar can be wholly-owned and controlled by the single registrant company. But let's argue against arbitrary registration caps that would force single-registrant TLDs to use all ICANN registrars once those caps were reached.

Thoughts?

-- Steve DelBianco Executive Director NetChoice http://www.NetChoice.org and http://blog.netchoice.org +1.202.420.7482 <berrycobb@infinityportals.com> wrote:

...

VI WG,

Attached is the CBUC position statement from Aug 2009 regarding the issue of Vertical Integration. While several CBUC members participate on the VI WG, no substantial change has occurred requiring modification to our consensus. The CBUC reserves a change to our consensus position, if any, when the VI WG creates its final report and opens the final community comment period.

In summary, Our present consensus position basically aligns to the ICANN board resolution in Nairobi and we are pleased with the substantial and adequate discussion with respect to VI/CO & also Single Registrant TLDs. The CBUC looks forward to the analysis of proposals by the VI WG and we are optimistic a solution will be created to match the expansion of gTLDs.

Any specific questions to the CBUC can be filed through Berry Cobb.

Thank you.

Berry Cobb Infinity Portals LLC berrycobb@infinityportals.com http://www.infinityportals.com 866.921.8891