Comments regarding: General Counsel's
Analysis of VGRS's Request for Amendment to Registry Agreement
Prepared by: Chuck Gomes, VP, Policy & Compliance,
VeriSign Global Registry Services (VGRS)
21 April 2002
The purpose of this document is to provide additional context for the
ICANN Board of Directors as it considers the recommendations made in the
above named analysis with regard to the possible implementation of a new
registry service, Wait Listing Service (WLS), for the .com and .net top
level domains.
General Information
- The idea for the WLS offering came out of discussions that were initiated
with registrars in the ICANN Montevideo meetings in September 2001 regarding
problems associated with registrations of just-deleted domain names.
(Note: VGRS proposed the WLS as a service that would have strong value
for many consumers; it was not proposed as a solution to the deleted
names problem even though it may contribute positively to that problem.)
- VGRS worked with ICANN staff during the past seven months while soliciting
comments from registrars and other interested parties including the
members of the DNSO. During this process, two specific recommendations
from ICANN staff were added to the proposed offering: (1) the service
was proposed as a 12-month trial instead of an offering extending indefinitely;
(2) a 30-day redemption period was added before WLS subscribed names
would be registered on behalf of subscribers. The latter would be incorporated
into the WLS offering if and when the general 30-day redemption period
is added for all deleted names, a proposal that is currently being worked
through ICANN processes.
WLS Fees
- The cost to consumers will be established by registrars themselves.
- If registrars adequately try to educate consumers regarding what they
will be purchasing, the wholesale price of $35 paid by registrars for
WLS subscriptions will be reduced to an effective price level of $28
initially and later to $24 per WLS subscription through a sequence of
rebates paid by VGRS directly to registrars. The rebate level increases
once an industry-wide threshold of 250,000 WLS subscriptions is reached.
Consumer Issues
- If the WLS is offered, the probability of a consumer getting a name
that is deleted goes from a less than sure chance to 100%.
- It is believed that the consumer experience could be significantly
improved by centralizing the wait listing service at the registry level.
Migration of existing
SnapBack Customers
- The WLS as currently proposed excludes names currently back-ordered
via a registrar offered back order service offered via SnapNames. This
was done to minimize the possibility of interfering with existing contracts
between registrars and back order holders that would in essence be voided
by the introduction of the wait listing service at the registry level.
- This approach was chosen as a means of trying to maintain the existing
'balance of power' between the SnapNames offering and competing deleted
names services, with regard to those specific names in the exclusion
list.
- Regarding the possible exclusions of names associated with other deleted
name registration services, VGRS only proposed excluding SnapNames names
because VGRS is not aware of any other paid-up contracts on specific,
identifiable names providing for reasonable customer expectations and
thereby opening up the door to potential lawsuits.
Registrar Response to
WLS Offering
- Because the WLS offering would be offered through registrars, from
the beginning of talks about offering the WLS, VGRS felt it was particularly
important to ensure that a reasonable number of registrars would be
interested in offering the service prior to formally providing it.
- There was an overwhelmingly negative reaction to the WLS in response
to the initial idea of the WLS as a solution to the deleted names problem
prior to the ICANN Marina del Rey meetings in November 2001. Because
of that reaction, VGRS did not proceed further with the WLS idea at
that time. At those meetings the Registrars Constituency made a decision
to request a formal proposal from VGRS.
- The initial proposal was given to the Registrars Constituency on 30
December 2001. Comments received regarding that proposal were reviewed
and changes were made resulting in a revised proposal dated 28 January
2002. That proposal proposed a specific timeline for questions, answers
to questions and final feedback.
- Clear measurable data was presented in the VGRS analysis that objectively
demonstrated that there was not an 'overwhelmingly negative' response
from the Registrars Constituency. With regard to the resolution adopted
by the DNSO Registrars Constituency on 10 March 2002 opposing implementation
of the WLS:
- Only 33 of 176 ICANN-accredited registrars [19%] participated.
- 42.4% voted in favor.
- 57.6% opposed the WLS.
- If the number of registrations represented by the registrars is
considered: registrars representing 57.5% of registrations supported
the WLS; registrars representing 17.8% of registrations opposed
it; and registrars representing 24.7% did not vote or abstained.
- In a separate action, 14 unique registrars submitted a statement supporting
implementation of the WLS; as pointed out in the General Counsel's analysis,
"18 registrars were listed as signatories of this statement, but
the support of some of these registrars has been disputed." In
the VGRS analysis (completed prior to the General Counsel's analysis),
the disputed registrars were removed, leaving an undisputed total of
14 registrars supporting the statement.
DNSO Involvement
- The General Counsel's analysis refers to the WLS being considered
by the Names Council Transfer Task Force. VGRS does not believe that
the terms of reference of the NC Transfer Task Force have anything to
do with the WLS nor was the WLS ever discussed by this task force.
- The DNSO is supposed to deal with substantive policy as related to
the DNS. Even if the WLS involved substantive policy (VGRS believes
it does not), an argument could be made that the Names Council has failed
to fulfill its role of managing the consensus process but has rather
tried to become the consensus making body itself. Moreover, if substantial
decisions are going to be based on NC recommendations, and if that is
done because the NC is supposed to be representative of most affected
stakeholders, then there should be an effort to validate whether or
not the DNSO constituencies actually do represent the constituencies
they claim to represent. If they do not, then it becomes a very flawed
approach to let the NC significantly influence decisions, policy or
otherwise.
- The WLS was discussed in the GA meeting in Accra and an opportunity
for questions was provided to the audience. No questions were asked.
Impact on Competition
- The WLS as proposed would be provided competitively by all registrars
who opt to participate in the offering under equivalent access requirements
already in force.
- In the General Counsel's analysis, there is reference to other wait-listing
services provided by registrars. VGRS is not aware of any other wait-listing
services provided by registrars unless the term is being used to refer
to other services being used in large part by speculators to go after
just deleted names.
New Registry Service
Approval Process
- Because ICANN staff has been involved in the six-month long process
that led to the request for adding the WLS as a registry service and
because of the considerable opportunities for community feedback provided
to date, VGRS believes that it would have been much more appropriate
to suggest further procedures much earlier than at this late stage.
If such steps had been communicated, they could have been completed
in concurrence with other activities that have already been done, instead
of adding additional time to an already long process. Moreover, there
is strong reason to believe that additional comment time is unlikely
to produce any new information.
- If introducing a new registry service that does not conflict with
any existing consensus based policies requires such inordinate time
and resources, then innovation with regard to registry services will
be avoided and instead investment and creativity will be diverted to
other areas.
- The competition that may be reduced if the WLS is implemented is from
services that appear to be less reliable for consumers and from services
that are extremely inefficient in their use of the VGRS shared registration
system (SRS); during one 17-day period early in 2002, the ratio of total
SRS transactions submitted by registrars attempting to register just-deleted
domain names to the actual number of successful new domain name registrations
added was 500,000 to 1. This ratio is typical of the type of inefficiency
that VGRS has had to support since August 2001.
- The proposed WLS would not be forced on registrars or consumers; it
would be strictly optional for both and would be offered to registrars
on equivalent terms as required under current registry agreements. If
the WLS provides a valuable service for consumers, then it is anticipated
that the proposed 12-month trial will provide real market evidence of
its value. If it does not, then the 12-month trial will show that it
is not worth the investment and should not be continued. The 12-month
trial will also provide useful data that will help the registrars and
the registry evaluate whether or not the initial prices they charge
are sufficient to cover investment costs and risks as well as to meet
the value proposition of consumers.
- The General Counsel's analysis claims that, by diverting "deleted
names from being returned to the available pool, it would "trump"
all of the competitive registrar-level services." VGRS does not
believe that there is any evidence that all of these services would
be trumped. It seems reasonable to expect that there would be an impact
on at least some of these services because the registry centered service
would be preferable for consumers.
- Currently, a subset of accredited registrars offer a registrar-based
domain name back order service. The competition among registrars that
opt to offer the WLS would continue and in fact would likely expand
because of the improvement of the service value to consumers.
- VGRS contends that in both the ICANN Bylaws and in the .com and .net
registry agreements, consensus is a requirement that was intended for
policy development, not for the introduction of new registry services.
Article VI, Section 2.(b) of the ICANN Bylaws says, "The Supporting
Organizations shall serve as advisory bodies to the Board, with the
primary responsibility for developing and recommending substantive policies
regarding those matters falling within their specific responsibilities,
as described in this Article VI (including VI-A, VI-B and VI-C)."
What is the 'substantive policy' in this case? VGRS is not aware of
a substantive policy that would be violated if the WLS is offered. Nor
is there any evidence of any proposed substantive policy related to
the issues involved with the WLS.
- The General Counsel recommends a 30-day comment period. Even if there
was justification for an additional comment period, why was it not requested
earlier in the process? On what basis is a public comment period needed
for the introduction of a new service for which there are no substantive
policy issues? Public commentary has been occurring since September
8, 2001 in Montevideo, Uruguay through a variety of forums.
Conclusion
In the absence of well-defined processes and procedures for dealing with
the introduction of new registry services, VGRS tried to fill the void
by outlining specific processes and procedures for obtaining market feedback
from potential stakeholders. Participation in those processes and procedures
was fully open to all potential stakeholders. In particular, a great deal
of interaction occurred with registrars because they are VGRS' direct
customers and they are the ones who would offer the WLS to consumers.
The full DNSO was also invited to participate in the process. The results
of the process are well documented.
The purpose was not to determine consensus but rather to determine whether
or not there was enough interest in the WLS. VGRS believes that there
is sufficient interest to warrant investment in a 12-month trial. The
WLS is not a service that will add value to everyone, but from VGRS' point
of view there is ample evidence that it will meet the needs of certain
consumers and do so in a way that is better than what is available today.
Some consumers' needs may be better met by using other secondary market
offerings such as auctions and name reselling services. The WLS will in
no way limit the offering of these other services.
VGRS is prepared to communicate a specific implementation schedule as
soon as possible and has been receiving repeated inquiries from registrars
and consumers asking when the WLS will be available. After grappling with
the issues for seven months and giving all significant stakeholders plenty
of time for comment, it would be unfortunate to delay the implementation
further especially for processes that would quite likely duplicate what
has already happened.
ICANN directors are encouraged to review the full documentation provided
at the VGRS web site regarding the processes followed regarding the WLS
offering and the ensuing results:
http://www.verisign-grs.com/wls.html.
Please refer any questions or requests for additional information to:
Chuck Gomes
Vice President, Policy and Compliance
VeriSign Global Registry Services
cgomes@verisign.com
Telephone: 703 948-3290
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Page Updated
19-May-2002
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