[At-Large] The Case for Regulatory Capture at ICANN | Review Signal Blog

Wed Jun 26 09:05:20 UTC 2019

Dear Karl,

you raise a very valid point. The very ALAC Statement that is under
scrutiny actually has a paragraph that supports the raising of per
domain registry fees, currently standing at an incredibly low price,
when one sees the huge mark-up that registries and registrars charge end
users for registering these domain names.
Whenever the ALAC has suggested price caps to the sale of domain names,
we have been told that ICANN does not have a remit in setting price
caps. In fact, to my knowledge, none of the latest round of new gTLDs
have any price caps.

I agree with you that the price of domain names for end users to
register is too high.
But I also believe that there is also a floor level to the price of
domain names as we've seen that the $1 or $0.50 bulk price of domain
names has only been taken advantage of by spammers and malware
originators that look for throwaway domains they can use and ditch at a
fast pace.

What should be a just price for a domain name? Well, it would be good if
consumers answered this question. Perhaps this is a task we should be
taking upon ourselves.
But then, you have the significance of domain name after-market
re-selling, which is the bread and butter of domainers. Do you want to
outlaw/regulate this? This takes place at another level. I find it
ironic that one would enforce a price cap on a Registry and let
Registrars and their resellers practice open pricing of a free market
economy.
In fact, ICANN can only enforce anything in its contracts. Already it
has very little or no power to oversee or regulate resellers. No power
to oversee or regulate domainers.

In short - the whole system is skewed and has become a ground open to
abuse. For a change to take place, the system needs:
a. the GNSO to agree on policy changes to give ICANN the power to assume
powers for regulating the market. Likelihood of this to happen: 0%
b. if by miracle, (a) gets approved, it needs Board approval. Likelihood
for this to happen is probably quite good (50%+).
c. the changes need to be brought into contracts with Registrars and
Registries, with negotiations taking place behind closed doors, with no
independent oversight from anyone, not even the ability to have ONE
at-large observer in the room --- because we are told that these are
business contract negotiations that a confidential. Probability of the
changes to ICANN's powers to regulate being accepted in the negotiations: 0%

With two of the above three, in the path of contractual changes, being
0%, the probability for the market abuse to be addressed by ICANN is 0%.

And that's how, eventually, markets will be regulated on a national
basis by sovereign countries being asked by consumer groups to clean up
the market nationally. IMHO it will be a triple catastrophe:

1. it will show a failure of the private sector led multi-stakeholder
model to address consumer issues
2. because of (1) it will make the regulatory environment of domain name
sales a lot more complicated than it currently is, and will reinforce
calls for national appropriation of "critical Internet resources" -
expanding into IP addresses, DNS, the Root etc. We can effectively kiss
goodbye to our dreams of a multi-stakeholder future
3. because of (2) it will make ICANN irrelevant - which will go down as
the one and only multi-stakeholder administration of public resources
that ended up as a resounding failure.

I would hate (3) to happen, because that brings us to the slippery slope
of a dim future with a government run Internet, working bilaterally with
the global multinational industrial complex to run an Internet devoid of
human rights, freedom of speech and all of the core values which the
Internet has thrived on.

That's why, whilst I share the frustration about ICANN's systemic
failures, I keep on thinking that our only option is to continue the
fight and make it work.
Kindest regards,

Olivier

On 26/06/2019 01:19, Karl Auerbach wrote:
> I find it interesting that the notion of 'removing the price cap" is
> being read to suggest an increase in registry fee amounts.
>
> But why?  Any back-of-the-envelope calculation for TLDs such as .com
> or .org strongly suggests that the existing registry fee levels are
> dramatically too high - and cumulate well past a $billion a year in
> monopoly rents far in excess of actual costs.
>
> Running a registry is largely a back room operation - some database
> transaction servers and a cloud of actual DNS name servers.
>
> Since ICANN was formed the cost of those things has fallen and fallen
> and fallen.  And the cost of much of the infrastructure - such as
> Verisign's fortress data center(s) have been amortized years ago.
>
> As far as I know there has never been an audit, much less a serious
> audit that distinguishes between real operational costs and Potemkin
> Village corporate image fluff costs, of actual costs of providing
> legacy TLD registry services.
>
> One would think that an audit - published to the public - would be
> warranted before any consideration of unleashing unbounded upwards
> prices onto captive legacy TLD users?
>
>     --karl--
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