Hi, I believe this discussion openes up to a most important and fundamental issue for ICANN and the DNS industry. We all know the famous theory about the "invisible hand". That is, the market's invisible hand always wins over the govenrment's visible control. The ICANN's structure and way of controling domain names' pricing often reminds me of the land sale policy, because they have so many similarities: Each individual ones are unique and irreplacible. However, just like pieces of land, each domain name obviously have different values. Thus, their market prices cannot, and should not, be the same. Thus, although ICANN sets price-caps for registries, but cannot control their market values and prices via registrars or "scalpers". If this is the case, why should ICANN bother to set price-caps at the first place? Furthermore, as I understand, the reason that the DNS industry is seperated into "registry" and "registrar" is to prevent registries to monopolize their TLDs. This is also supposed to protect registrants and end-users. However, for the same reason, this does not seem to be working. Just like an acre of land at New York's Time Square cannot be worth the same as one acre in the desert, "premium domain names" cannot possibly be worth the same as most others. Again, the market's invisible hand wins. As we already see many registries also play the role as registrars by directly selling domain names to registrants, I wonder what is the reason to maintain this two-layer system. I believe it does not do much except adding a middle-man in between (and costing more to registrants). The bottom line is, who owns domain names after all? I believe, just like land is God's gift to all mankind, domain names belong to all netizens as well. ICANN, as well as all the registries and registrars, only manage them to keep them in order, including their uniqueness, stability, etc. Thus, the reason that ICANN and its registries, registrars are entitled to get fees for their management service, not because any one of them owns domain names. If all the above are true, then there is nothing wrong with domain name "scalpers". All the unintended consequences come from ICANN and the DNS industry's wrong structure or wrong doing. In particular, the main reason of land prices getting too high is more than often because of governments trying to limit its supply, thus creating an artificial scarecity. Thus, the best way to protect consumers' interest is not to limit its supply and allow its free trade. I believe the same applies to domain names as well. Kaili ----- Original Message ----- From: Evan Leibovitch To: Alan Greenberg Cc: Jonathan Zuck ; greg@isoc-ny.org ; CPWG Sent: Saturday, November 03, 2018 12:19 PM Subject: Re: [CPWG] [GTLD-WG] [registration-issues-wg] Verisign DissingDomainers? On one hand, I am delighted to see such an acknowledgement of reality. The use of the term "scalpers", while incendiary to some, is revealing in its candor and maybe its intent. However I agree that such an opinion is not made lightly, and is unlikely for pure public-service reasons. So... why? Recently, a CBC investigation of Ticketmaster revealed that the company encourages the hoarding and scalping of tickets to popular events, and itself profits from the activity by getting revenue from the scalped tickets well over and above the original selling prices. I see one of two possible related scenarios, both of which are plausible though could be wildly incorrect: 1.. Verisign is setting the stage to get a piece of the scalpers' action. It has watched as other TLDs roll out "premium" domains and wants to itself profit from domain sales that are inflated well past original value. It wants what Ticketmaster can do. While a scalper's revenue is a one-time sale per domain, premium domains may be perceived as a sustained-revenue path that allows Verisign to exploit a dominance in TLD space that really hasn't been challenged by the swarms of now registries. 2.. Verisign may suspect that regulatory reaction (of the governmental kind) against Ticketmaster may bleed into TLD space. There are so many, many similarities between ticket scalping and domaining which is why its use of the term in the blog is so apt. This might be a move to forestall state intervention by indicating that Verisign will be proactive in reducing scalping on its own. The revenue hit may be offset by the good PR and reduced threat of governmental interference. Cheers, Evan On Fri, 2 Nov 2018 at 21:46, Alan Greenberg <alan.greenberg@mcgill.ca> wrote: The RAA has always had a provision allowing ICANN to have a Consensus Policy prohibiting reistrars from warehousing or speculation. We have never taken action on this and I cannot see the GNSO ever doing so. The Verisign blog is interesting. Rare that a large company publicly disses its largest customers. Alan At 02/11/2018 03:43 PM, Greg Shatan wrote: This post is actually taking aim primarily at REGISTRARS who buy huge numbers of .com domains at wholesale ($7.85 per domain) and then hold them, in order to try and sell them later for a premium price. That’s not really dissing domainers in the general sense, just these registrar-domainers. The writing is a bit sloppy on this point, and the blog pivots to ICA toward the end, but even there, the focus is on the registrar-domainers, not on the general domaining public. Look again at the post, and you will see references to “speculators†who buy at a “regulated price.†That’s the Verisign price they are talking about. Regular registrants don’t have that opportunity — onlly registrars. The “Domainer Name Wire†article largely misses this point — partly because the post is vague and partly becausse of a tendency to “rush to judgment†in the domaining press. As Jonathan notes, ICA argues it’s protecting the little guy, when they are actually providing loads of protection for some very “big guy†registrar-domainers. While this is not “insider trading,†it is really a form of diversion based on insider access — the registrars abuse their privileged position to bbuy cheap and to buy before any “regular†registrant (even a domainer) can, and then they hold this portfolio and charge secondary-market prices for domains that are not really in the secondary market. Registrars’ unique ability to buy domain names directly from the registries was never meant to produce this result. This is a bug, not a feature. The end user domainers should really be pissed off at the registrar-domainers, not at Verisign. (Of course, they are permanently pissed off at Verisign, especially with a price increase in their “commodity.†) Maybe registrars should be prohibited from buying for their own account for investment purposes. GoDaddy apparently has 2.5 billion reasons to oppose that idea. I don’t know if I would call them scalpers (though it’s a fair comparison). I see domainers more like the folks in Boston who get up in the morning, sit down in a lawn chair in a prime parking spot near the Fenway Park baseball stadium, and then sit there until game time approaches. Then they charge you $20 or more to get out of the way so you can park there. This is not entirely accurate either since this is a lot more work than a domainer would put in (at least for a single domain name. Greg On Fri, Nov 2, 2018 at 3:10 PM Jonathan Zuck < JZuck@innovatorsnetwork.org> wrote: We'll, it's not particularly easy to take them back. Blog raises some good points about where the money goes. The ICA rhetoric about small business is pretty silly. Jonathan Zuck Executive Director Innovators Network Foundation www.Innovatorsnetwork.org ------------------------------------------------------------------------ From: GTLD-WG < gtld-wg-bounces@atlarge-lists.icann.org> on behalf of Carlton Samuels < carlton.samuels@gmail.com> Sent: Friday, November 2, 2018 2:59:12 PM To: cpwg@icann.org; lac-discuss-en@atlarge-lists.icann.org Subject: [GTLD-WG] [CPWG] Verisign Dissing Domainers? Um,.......hmmmm, a flag up the pole to see who salute you think? Assuming the posting it is sanctioned as official view, what is the end game here? Afterall, they are gifted ownership of every name, known and hitherto unknown, in the .com space! The domainers merely 'rent' them! Hmmm....we have a saying in my corner of empire, 'one hand alone can't clap'. Gotta follow the money. https://domainnamewire.com/2018/11/02/holy-sht-verisign-just-called-out-doma... ============================== Carlton A Samuels Mobile: 876-818-1799 Strategy, Process, Governance, Assessment & Turnaround ============================= _______________________________________________ CPWG mailing list CPWG@icann.org https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ registration-issues-wg mailing list registration-issues-wg@atlarge-lists.icann.org https://mm.icann.org/mailman/listinfo/registration-issues-wg _______________________________________________ CPWG mailing list CPWG@icann.org https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ registration-issues-wg mailing list registration-issues-wg@atlarge-lists.icann.org https://mm.icann.org/mailman/listinfo/registration-issues-wg _______________________________________________ CPWG mailing list CPWG@icann.org https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ GTLD-WG mailing list GTLD-WG@atlarge-lists.icann.org https://atlarge-lists.icann.org/mailman/listinfo/gtld-wg Working Group direct URL: https://community.icann.org/display/atlarge/New+GTLDs -- Evan Leibovitch, Toronto Canada @evanleibovitch or @el56 ------------------------------------------------------------------------------ _______________________________________________ CPWG mailing list CPWG@icann.org https://mm.icann.org/mailman/listinfo/cpwg

Hi, Evan, Thanks for your reply. Regarding the infinity of domains, I do not believe it contradicts the land analogy. During the Great Discovery and the Wild West eras, land was infinite to mankind as well. Thus, the rule was "finders, keepers". This could well apply to the DNS as well. However, land owners always have to pay property taxes, no matter you have buildings on it or not. To say the least, this is to enable the governments to keep records of ownership, as well as other functions to keeps the city in order (environment, schools, public security, etc.). Thus, if you do not pay property tax, you lose the land, which is exactly the same as domain names. Thus, ICANN and the DNS industry are not owners of domain names, they are merely city managers. New TLDs are exactly as the wild west, whoever takes it owns it. We all know the western land was free-to-all initially. However, the city's land assessor would reassess the value of each piece of land periodically and charge property tax according to the current land value. The easiest way to get the "true" value of each piece of land is the price paid when it changes hand. The same could be done to domain names. The initial price could be set very low (or even free), while ICANN and the registry, registrars take very little fees for magagement. However, whenever it changes hands or be reassessed, the fee should go up according to its market value. This way will not only create a most efficient domain name distribution system, but will also ensure continuous revenue stream into the DNS industry, including ICANN itself. Looking forward to further discussions. Kaili ----- Original Message ----- From: Evan Leibovitch To: Kan Kaili Cc: Alan Greenberg ; CPWG Sent: Sunday, November 04, 2018 1:44 PM Subject: Re: [GTLD-WG] [CPWG] [registration-issues-wg] Verisign DissingDomainers? On Sat, 3 Nov 2018 at 06:49, Kan Kaili <kankaili@gmail.com> wrote: We all know the famous theory about the "invisible hand". That is, the market's invisible hand always wins over the govenrment's visible control. We know of it. That knowledge neither makes this theory correct nor does it indicate benefit to end-users (which is, I remind, is the singular Board-mandated perspective of ALAC -- the industry has plenty of its own channels to assert its voice within ICANN and does not need our defence). The ICANN's structure and way of controling domain names' pricing often reminds me of the land sale policy, because they have so many similarities: Each individual ones are unique and irreplacible. So, let's dig deeper into the land analogy. Mark Twain was famously quoted as saying "Buy land, they're not making it anymore". But that's not at all the case here. Each TLD is a source of nearly infinite domains (especially if you consider third level) and the domain industry is intent in realizing the potential of infinite numbers of TLDs. So the land analogy is not at all applicable, supply is unrestrained. HOWEVER, what kind of property acquisition is a registrant's getting a domain? It's not a purchase, since if you don't pay the annual dues you lose the domain. So to carry the land analogy to its reasonable conclusion, registrants are tenants, registrars are rental agents, registries are lease-holding landlords, and ICANN (and the ccTLDs) create and own the land . It is not without reason that many jurisdictions have legislation or regulation either asserting tenant rights or offering various protections, and some even have price controls. This tends to flow from demonstrated cases of tenant abuse or unreasonably inflated rents which are seen to impede the public good. The level of protections varies wildly but most states recognize this as a particular commercial environment in which the "invisible hand" usually needs a glove. However, just like pieces of land, each domain name obviously have different values. Thus, their market prices cannot, and should not, be the same. Thus, although ICANN sets price-caps for registries, but cannot control their market values and prices via registrars or "scalpers". If this is the case, why should ICANN bother to set price-caps at the first place? I have always said that domains were undervalued, and that ICANN's fee should be significantly higher than it is now. The currently artificially low price encourages speculation and provides a financial incentive for "domainers" to lock away domains that should very well be in use now. The artificially low price also means that ICANN has to starve its own public-interest activities such as contract compliance, abuse prevention and ALAC support -- and this happens because the industry controls ICANN and has a direct and obvious interest in keeping such activities underfunded. (Proper pricing may also have prevented the current environment of austerity.) Were we to truly care about a market system we would allow -- maybe even force -- domains to be sold at market rate. That is, require unused domains to be sold at auction to determine their true value. But again, this won't happen because the industry thrives on its speculators who buy domains that never get used, so the industry uses its substantial clout to coerce ICANN into seeding and fertilizing such an environment (and my my there is plenty of fertilizer to go around...) Cheers, - Evan

Hi, Evan, Thank you for replying again. I agree with you not to make judgements about the "Wild West", and also agree with you that ICANN's role depends on the consensus of governments. However, I must say that the land analogy is exactly the point for ICANN and the DNS industry. For years, we have been discussing issues "within the box". That is, we have been trying to find solutions within the current structure and its concepts of domain name ownership, etc. However, just like so many cases in the world history, there are often no solutions "within the box". Only by finding the fundamental defects of it, solutions would be so easy and apparent. In this sense, my land analogy tells exactly what is wrong with the current ICANN structure and its concepts. If we cannot find any solution within it, why don't we look outside? To say the least, although ICANN claims that it, together with registries, "owns" domain names, is that recognized by any governments or guaranteed by any international treaties? I guess not. :) Thank you again, and looking forward to further discussions. Kaili ----- Original Message ----- From: Evan Leibovitch To: Kan Kaili Cc: CPWG ; Alan Greenberg Sent: Tuesday, November 06, 2018 12:55 PM Subject: Re: [GTLD-WG] [CPWG] [registration-issues-wg] Verisign DissingDomainers? Hi Kan, I still don't fully agree with your land analogy, but I don't want to dwell on it because it's not really the point. Closer to the issue at hand is this: New TLDs are exactly as the wild west, whoever takes it owns it. True, but this is not a point of admiration. "The wild west" is at best a point of nostalgia and at worst a point of embarrassment. There is a valid reason that most of the most prosperous countries have regulations in place that smooth the rough edges of completely free enterprise. I also remind that there is no international treaty mandating that countries honor the actions and decisions of ICANN, it is only through goodwill and trust that its policies are followed by the states of the world. ___________________ Evan Leibovitch, Toronto @evanleibovitch/@el56

Always a thinking fella, Evan. Grist for the mill. CAS On Fri, 2 Nov 2018, 11:20 pm Evan Leibovitch <evan@telly.org wrote:

On one hand, I am delighted to see such an acknowledgement of reality. The use of the term "scalpers", while incendiary to some, is revealing in its candor and maybe its intent. However I agree that such an opinion is not made lightly, and is unlikely for pure public-service reasons.

So... why?

Recently, a CBC investigation of Ticketmaster <https://www.npr.org/2018/09/20/649666928/ticketmaster-has-its-own-secret-sca...> revealed that the company encourages the hoarding and scalping of tickets to popular events, and itself profits from the activity by getting revenue from the scalped tickets well over and above the original selling prices.

I see one of two possible related scenarios, both of which are plausible though could be wildly incorrect:

1. Verisign is setting the stage to get a piece of the scalpers' action. It has watched as other TLDs roll out "premium" domains and wants to itself profit from domain sales that are inflated well past original value. It wants what Ticketmaster can do. While a scalper's revenue is a one-time sale per domain, premium domains may be perceived as a sustained-revenue path that allows Verisign to exploit a dominance in TLD space that really hasn't been challenged by the swarms of now registries.

2. Verisign may suspect that regulatory reaction (of the governmental kind) against Ticketmaster may bleed into TLD space. There are so many, many similarities between ticket scalping and domaining which is why its use of the term in the blog is so apt. This might be a move to forestall state intervention by indicating that Verisign will be proactive in reducing scalping on its own. The revenue hit may be offset by the good PR and reduced threat of governmental interference.

Cheers, Evan

On Fri, 2 Nov 2018 at 21:46, Alan Greenberg <alan.greenberg@mcgill.ca> wrote:

...

The RAA has always had a provision allowing ICANN to have a Consensus Policy prohibiting reistrars from warehousing or speculation. We have never taken action on this and I cannot see the GNSO ever doing so.

The Verisign blog is interesting. Rare that a large company publicly disses its largest customers.

Alan

At 02/11/2018 03:43 PM, Greg Shatan wrote:

This post is actually taking aim primarily at REGISTRARS who buy huge numbers of .com domains at wholesale ($7.85 per domain) and then hold them, in order to try and sell them later for a premium price. That’s not really dissing domainers in the general sense, just these registrar-domainers.

The writing is a bit sloppy on this point, and the blog pivots to ICA toward the end, but even there, the focus is on the registrar-domainers, not on the general domaining public. Look again at the post, and you will see references to “speculators†who buy at a “regulated price.†That’s the Verisign price they are talking about. Regular registrants don’t have that opportunity — onlly registrars. The “Domainer Name Wire†article largely misses this point — partly because the post is vague and partly becausse of a tendency to “rush to judgment†in the domaining press.

As Jonathan notes, ICA argues it’s protecting the little guy, when they are actually providing loads of protection for some very “big guy†registrar-domainers.

While this is not “insider trading,†it is really a form of diversion based on insider access — the registrars abuse their privileged position to bbuy cheap and to buy before any “regular†registrant (even a domainer) can, and then they hold this portfolio and charge secondary-market prices for domains that are not really in the secondary market. Registrars’ unique ability to buy domain names directly from the registries was never meant to produce this result. This is a bug, not a feature. The end user domainers should really be pissed off at the registrar-domainers, not at Verisign. (Of course, they are permanently pissed off at Verisign, especially with a price increase in their “commodity.†)

Maybe registrars should be prohibited from buying for their own account for investment purposes. GoDaddy apparently has 2.5 billion reasons to oppose that idea.

I don’t know if I would call them scalpers (though it’s a fair comparison). I see domainers more like the folks in Boston who get up in the morning, sit down in a lawn chair in a prime parking spot near the Fenway Park baseball stadium, and then sit there until game time approaches. Then they charge you $20 or more to get out of the way so you can park there. This is not entirely accurate either since this is a lot more work than a domainer would put in (at least for a single domain name.

Greg

On Fri, Nov 2, 2018 at 3:10 PM Jonathan Zuck < JZuck@innovatorsnetwork.org> wrote: We'll, it's not particularly easy to take them back. Blog raises some good points about where the money goes. The ICA rhetoric about small business is pretty silly. Jonathan Zuck Executive Director Innovators Network Foundation www.Innovatorsnetwork.org ------------------------------ From: GTLD-WG < gtld-wg-bounces@atlarge-lists.icann.org> on behalf of Carlton Samuels < carlton.samuels@gmail.com> Sent: Friday, November 2, 2018 2:59:12 PM To: cpwg@icann.org; lac-discuss-en@atlarge-lists.icann.org Subject: [GTLD-WG] [CPWG] Verisign Dissing Domainers? Um,.......hmmmm, a flag up the pole to see who salute you think? Assuming the posting it is sanctioned as official view, what is the end game here? Afterall, they are gifted ownership of every name, known and hitherto unknown, in the .com space! The domainers merely 'rent' them!

Hmmm....we have a saying in my corner of empire, 'one hand alone can't clap'. Gotta follow the money.

https://domainnamewire.com/2018/11/02/holy-sht-verisign-just-called-out-doma...

============================== Carlton A Samuels Mobile: 876-818-1799 Strategy, Process, Governance, Assessment & Turnaround ============================= _______________________________________________ CPWG mailing list CPWG@icann.org https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ registration-issues-wg mailing list registration-issues-wg@atlarge-lists.icann.org https://mm.icann.org/mailman/listinfo/registration-issues-wg

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-- Evan Leibovitch, Toronto Canada @evanleibovitch or @el56 _______________________________________________ CPWG mailing list CPWG@icann.org https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ registration-issues-wg mailing list registration-issues-wg@atlarge-lists.icann.org https://mm.icann.org/mailman/listinfo/registration-issues-wg