Letter from Paul Stahura to Dan Halloran
enom.com domain name registration and services
May 31, 2003
Mr. Dan Halloran
Chief Registrar Liaison
Internet Corporation for Assigned Names and Numbers
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292
Re: Letter from Verisign, dated May 28, 2003, re. WLS Offering from VeriSign
The purpose of this letter is to respond to the claims made by Charles A. Gomes of Verisign Global Registry Services in his letter to you, dated May 28, 2003, regarding the letter to you by Mr. Robert Parson of GoDaddy Software dated May 8, 2003 re: the WLS Offering from VeriSign, Inc. I submit this letter with due respect to Mr. Parsons and Mr. Gomes, recognizing, as Mr Gomes said, "that you are already fully aware of the information I provide below."
Mr. Gomes' first claim is that "there are a few registrars who compete for deleted domain name registrations". In actuality there are not a few, but many. Analyzing the zone file for .com and .net, on a random day this month, there were 63 registrars participating in re-registering deleted names (registering names that became available that day), out of 103 registrars who registered any names at all on that day (please refer to the attached lists). This shows a large majority of active registrars currently competing to re-register deleted names. As a representative of the registry, I'm sure Mr. Gomes has access to the same data.
Additionally, due to the chill the future prospect of WLS has had on the industry for the past year; additional competitive registrars have a disincentive to entering the competition for deleted domain name registrations. They do not want to devote resources to entering because a later WLS introduction would wipe out their development investment.
Mr. Gomes' second claim is that "If the WLS is implemented, all registrars will be provided the opportunity to compete on equivalent terms in this market niche, including those who currently offer registrar-based services." WLS removes the competition that currently exists, and the various models offered to the public to re-register deleted names, including pay-on-success models, and replaces it with a "competition" (if you can call it that) to sell one model: WLS subscriptions, where the public pays regardless of success in actually registering the name.
Mr. Gomes third claim "it seems to me that competition will be expanded" is therefore false. The choice is: robust competition to re-register deleted names via one of a majority of active registrars, all with different, innovative models at different price points, verses, one model offered by one company at a cost of at least five times more than what it costs to re-register a deleted name today, with a good chance that your money will be wasted because no name will ever be registered. With 63 registrars already competing, it seems to me that competition will be reduced with a WLS future, not expanded, as Mr. Gomes claims.
Mr. Gomes forth claim is "Moreover, the end-user benefit will be improved because only a registry-based service can guarantee 100% fulfillment when registrations are deleted." Not really Mr. Gomes, because it is offset by a guaranteed 0% fulfillment when registrations are not deleted, which you failed to mention. Due to this offsetting benefit, the overall WLS end-user benefit will be decreased, and at best, not improved. Additionally, WLS forces the purchase decision to be made earlier than the competitive system in place today, causing another decrease in end-user benefit. And the costs increase the longer in advance it is. At $24+$6=$30, WLS is five times more expensive if you order a WLS one year in advance, if you must wait two years then it is ten times more expensive, and that's if you are actually successful at registering the name after that wait.
Mr. Gomes fifth claim is "various registrars [send] extraordinarily high numbers of robotic domain name registration requests to the VeriSign Com Net Registry that currently costs VeriSign significant unreimbursed expense to process." And he says "all other domain names [those without a WLS] would be available for other backorder services by registrars". This means that if WLS is implemented, some names (those without a WLS on them) will be deleted as they are today. Registrars who are currently using their existing automated technology in competition to re-register names will use 100% of that capacity to acquire fewer names, thereby not reducing the load that the registry currently experiences. Since the cost to query the registry is already paid for by the registrars (since they have already built their systems), any quantity or quality of names deleting will meet with 100% of the querying capacity of the registrars. This fact was brought up numerous times during the consensus gathering process: Introduction of WLS will not reduce the load on the registry at all.
Mr. Gomes, with his access to the registry data over the past year or more, can easily verify the fact that WLS will not reduce registry load by examining current registrars' registration request activity. I can only speak about my own company, eNom, but eNom, for one, executes the same number of registration attempts on a day where a large number of names are deleted as on a day where a small number of names are deleted. And we re-register about the same percentage of names on each of those days, showing that the other 63 registrars are doing the same thing.
Mr. Gomes sixth claim is "VeriSign has implemented a temporary system to support such activity since August 2001 and has continued to support it without charge since that time." Each time eNom and the other 62 registrars re-register a deleted name; we reimburse the expenses incurred by the registry by $6, and have been doing so for years now. You'd think that the costs associated with building the entire registry (including any "temporary" parts of it) would have been covered many times over already by the sum of these registry fees.
Mr. Gomes seventh claim is "[WLS will essentially eliminate all alternate forms of back ordering currently in the market] would only happen in cases of second-level domain names for which WLS subscriptions are made." I agree with Mr. Gomes on this point. WLS will eliminate competition for re-registering names that have WLS. Since about 12% of deleted names are re-registered on the first day when they become available, and since those names represent a significant percentage of the total names that are registered on any particular day, WLS represents a significant percent of the registration market where competition will cease to exist.
Mr. Gomes eighth claim is ". . . that most end-users would be more attracted to the WLS because of its 100% efficacy . . ." If WLS is implemented, end-users would have only one choice to make: WLS or no WLS. Obviously end-users would be "attracted" to a monopoly product no matter what the quality is. The fact is that recently deleted names are efficiently distributed to the end-users today, and, due to competition, for a lower cost than the proposed WLS. Competition is working to lower the cost even further while simultaneously increasing innovations.
The end-user who attempts to re-register an available name today is 100% guaranteed to register that name if that end-user is first to do so. Best-case, WLS is no better than that, and in fact, with WLS, that end-user has no chance to re-register that name because the WLS (the wait list squatter) preempted him and was able to essentially register it before it became available. And WLS has 0% efficacy to register the name if it is not deleted, even though the end-user paid money, which is not true with the current system. Assuming that the name gets deleted, the current system already has 100% efficacy because someone is 100% guaranteed to get the name via the existing competitive system, and due to competition, can pay no cost if the name is not deleted.
Finally Mr. Gomes says, "I fail to understand how VeriSign would be acting as a registrar". It would be acting as a registrar because it will be monopolizing and offering a service (a system to re-register deleted names) that competitive registrars already effectively perform. Implementation of WLS would then preference one competitor, VeriSign, above the other registrars, with infinitely more fees paid by the public if a name is not deleted ($24 is infinitely greater than $0), and five times more if it is ($30 is five times greater than $6).
For all these reasons and more, eNom supports the letter of Mr. Parsons of Go Daddy Software. We strongly encourage ICANN to reconsider its approval of the WLS.
Thank you for this opportunity to respond to Mr. Gomes' letter. If you have any questions, please feel free to contact me.
These 63 companies are the ICANN accredited registrars who have re-registered deleted names the same day as the name became available. The data gathered was for a day (picked at random) in May 2003
123 REGISTRATION, INC.
A TECHNOLOGY COMPANY, INC. D/B/A NAMESYSTEM.COM
ABACUS AMERICA, INC. DBA NAMES4EVER
ACTIVE ISP ASA
ALL WEST COMMUNICATIONS, INC. D/B/A AW REGISTRY
ARSYS INTERNET, S.L. D/B/A NICLINE.COM
ATCOM TECHNOLOGY LLC
COMPUTER SERVICES LANGENBACH GMBH DBA JOKER.COM
CORE INTERNET COUNCIL OF REGISTRARS
CRONON AG BERLIN, NIEDERLASSUNG REGENSBURG
DIRECT INFORMATION PVT. LTD., DBA DIRECTI.COM
DOMAIN BANK, INC.
EMARKMONITOR INC. DBA MARKMONITOR
EPAG ENTER-PRICE MULTIMEDIA AG
FABULOUS.COM PTY LTD.
GLOBAL MEDIA ONLINE, INC
GO DADDY SOFTWARE, INC.
HANGANG SYSTEMS, INC. D/B/A DOREGI.COM
IHOLDINGS.COM, INC. D/B/A DOTREGISTRAR.COM
INNERWISE, INC. D/B/A ITSYOURDOMAIN.COM
INTERCOSMOS MEDIA GROUP, INC. D/B/A DIRECTNIC.COM
MELBOURNE IT, LTD. D/B/A INTERNET NAMES WORLDWIDE
NETWORK SOLUTIONS, INC.
Nominalia Internet S.L.
OMNIS NETWORK, LLC
PARAVA NETWORKS INC DBA REGISTRATEYA.COM NAAME.COM
PRIMUS TELCO PTY LTD DBA PRIMUSDOMAIN/PLANETDOMAIN
R&K GLOBALBUSINESSSERVICES,INC. DBA 000DOMAINS.COM
REGISTRATION TECHNOLOGIES, INC.
SPOT DOMAIN LLC DBA DOMAINSITE.COM
THE NAME IT CORPORATION DBA AITDOMAINS.COM
TLDS, INC. DBA SRSPLUS
TODAY AND TOMORROW CO. LTD.
WILD WEST DOMAINS, INC.
These are the 103 registrars that registered at least one name on that same day.
#1 Domain Names
1 eName Co.
123 Registration Inc.
Arctic Names, Inc.
BB Online UK
Domain Bank Inc.
Domain People, Inc.
Domain the net
Eastern Comm. ltd
Gal Comm. Ltd.
Global Media Online Inc
INAMES Corp. (Korea)
Moniker Online Services
R Lee Chambers
Registration Tech, Inc.
Today & Tomorrow co. ltd.
Universal Reg. Services
Wild West Domains