Ron asked me to pass this on to the Registrars list for the benefit of those that aren't subscribed to the ICANN-Delete list. I've taken the liberty of posting this additionally to GA and discuss-list - apologies to those that receive all four copies.
Thanks, -rwr ----- Original Message ----- From: "Ron Wiener" <[EMAIL PROTECTED]> To: "'Peter Girard'" <[EMAIL PROTECTED]>; <[EMAIL PROTECTED]> Sent: Monday, January 07, 2002 9:08 PM Subject: RE: [icann-delete] Proposal: Registry Re-circulation System > Peter, > > I enjoyed reading your proposal, and have admired the way you continue to > carry the flag for a variable-priced auction mechanism. If you please, I > have a couple of questions followed by a few general comments: > > 1. If you are requiring the permission of the former registrant in > order for the auction to "close"... > > > a. ...are you not then in effect alerting him or her to the fact that > their name may have some value, and encouraging them to renew rather than > allow the name to expire? This may be a brilliant scheme for goosing up > renewal rates, but how does it help registrars and registries gain any > upside that they would presumably only enjoy if the name actually changed > hands? > > > b. Correct me if I'm mistaken, but the reason you NEED the current > registrant's permission is that in order to circumvent the registry, you > want to be able to use the XFER command instead of actually deleting the > name. I suspect the IP constituency might have some serious heartburn over > this as it creates all sorts of liability problems when the creation date of > a domain name record is not reset upon a new registrant receiving the name. > Using the XFER command in this way exposes the new registrant to potential > litigation from the prior registrant who may claim the registrar did a lousy > job of tracking him down with a renewal notice "because they'd make a lot > more money auctioning off my name than letting me renew it." The original > transfer date matching his filed invoices could imply that the name is still > his since apparently it was never deleted. > > > c. It's also not clear to me that registrars Terms & Conditions extend > the current registrant's rights to the domain name past the actual > expiration date and into the grace period. If this is the case that the > current registrant's rights have already ended then the registrar would > essentially be warehousing and speculating with this name during the grace > period. Perhaps someone from ICANN or VGRS can clarify this for us. Dan or > Chuck? > > > 2. It seems to me that there is a distinction between the WLS (as > proposed) and the RRS (as proposed), in that the WLS allows registrars to > capture "backup demand" for any name throughout the entire year. The RRS > only allows the capture of demand during a portion of the 45-day grace > period window, which inherently means it would be primarily of interest to, > and accessible to, speculators, not mainstream consumers. > > Mainstream customers are unlikely to happen to discover a need for a domain > name during any particular 45-day period, learn how to search for it from > about 1.5M names that would presumably be up for auction during such period, > learn how the bidding mechanism works, dig in their pockets for a credit > card to pay a $2 fee (smacks a bit too much of $2 .biz lottery fees - yikes > - bad memories!), and sit around to monitor the whole thing. Odds are 9:1 > that the discovered need for a name would happen sometime other than that > 45-day window. (I'm simplifying this by assuming the average registration > is about one year in term anyway.) The RRS proposal states that consumers > would have "open, fair access to deleting domain names in an environment > free from high-tech gaming and first-mover advantage" but the method > described doesn't seem to meet this definition. > > > Consumers are not likely to want to participate in an auction process which > can easily be gamed, much like eBay auctions often are, with shill bids. > Witness the thick file at the FTC and the number of lawsuits that were > generated. In fact, a savvy speculator could whip up a robotic algorithm to > outbid others milliseconds before auction close, or to pump fraudulent bids > into the system using stolen credit card numbers - a problem already > plaguing too many registrars and secondary name sites. > > Consumers are also not likely to wait anywhere from 1 to 344 days to then > have to monitor an auction process, and then be prepared to spend an > undefined amount of money to get the name. I can see speculators being > willing to do this all day long - they're good at it - but mainstream > consumers? For them I believe this type of mechanism would be deemed yet > another "game of chance" with $2 betting fees, and could become a lightning > rod for litigation against registrars, ICANN, VeriSign, et al. Speculators > may be just fine with the game of change (some seem to even thrive on it) > but mainstream customers would be anything but enamored by the prospect of > it. > > Further, while I fundamentally agree that variable-pricing makes a lot of > sense in the long run, it's extraordinarily tricky getting it right when it > comes to domain names, and now doesn't seem the right time to implement such > an advanced marketplace concept. Witness the number of different models > that have been tried and abandoned by some of the ccTLDs - a perfect one is > yet to be found. One concern from an FTC standpoint is that uninitiated > domain name buyers might be goaded into paying unwarranted prices for domain > names because of the heated action of an auction. This is where sites like > NameWinner are actually safer, because everyone there is at least a > quasi-professional speculator and knows how to appraise the value of a name. > If unwitting consumers are successfully drawn into an active bidding event > for domain names, they could potentially be misled into paying exorbitant > prices. One benefit of the flat pricing of the WLS structure is that it > eliminates the possibility of this sort of complex and problematic consumer > experience. Again, you might ask the FTC how many such complaints they've > received from eBay customers over this sort of thing. > > Finally, putting on my Wall Street hat for a moment, the RRS lacks two > especially nice financial features of the WLS which is that it provides no > forward visibility on certain revenues (i.e. if 60% of my registrants do not > renew next year I know that x% of the names in question would automatically > go to a wait listed customer) and no growth in deferred revenue, a key > valuation driver. For public companies (there are currently six > publicly-held registrars) this is particularly important, as it is for the > valuation of any registrar that hopes to be acquired someday. > > Cheers, > Ron > > > Ron Wiener, Chairman and CEO > SnapNames.com, Inc. > 115 NW First Avenue, Third Floor > Portland, OR 97209 > tel: 503-219-9990 x222 > cell: 503-502-5016 > fax: 503-274-9749 > <mailto:[EMAIL PROTECTED]> mailto:[EMAIL PROTECTED] > <http://www.SnapNames.com> http://www.SnapNames.com > > > > > -----Original Message----- > From: Peter Girard [mailto:[EMAIL PROTECTED]] > Sent: Monday, January 07, 2002 11:27 AM > To: [EMAIL PROTECTED] > Subject: [icann-delete] Proposal: Registry Re-circulation System > > With the help of several members of the registrar community, we have > migrated our dynamically priced delete proposal to a registry-level service > in which the bulk of the revenue opportunity goes to the registrars. This > system would be cheaper, fairer, more transparent, and better for Internet > growth than earlier proposals. Perhaps most important, it would reward the > sector of this industry (registrars) that faces market risks and creates > value. > I have attached a Word document. If this is problematic, I will happily > provide an alternative format. > Peter Girard, Afternic.com > > _____ > > Do You Yahoo!? > Send FREE video > <http://rd.yahoo.com/mail_us/tag/?http://promo.yahoo.com/videomail/> emails > in Yahoo! <http://rd.yahoo.com/mail_us/tag/?http://mail.yahoo.com/> Mail. >
