From: Kent Crispin <kent@songbird.com>
To: NTIADC40.NTIAHQ40(dns)
Date: 2/9/98 3:20am
Subject: Comments on support of monopolies in the Green Paper

Perhaps the most serious problem with the Green Paper (GP) is the
continued support for monopolies. This support is disguised by the
claim that there will be multiple registries "competing" against each
other, but in fact the arguments presented are deeply flawed. I
quote from the GP:

"Some have made a strong case for establishing a market-driven
registry system. Competition among registries would allow
registrants to choose among TLDs rather than face a single option."

This statement is completely meaningless. In *both* scenarios
registrants are allowed to choose among TLDs. Furthermore, according
to the rest of the GP, in both scenarios the registrants actually go
through independent registrars -- in the vast majority of the cases
the registrants won't distinguish between registries at all.

"Competing TLDs would seek to heighten their efficiency, lower their
prices, and provide additional value-added services."

In fact, there isn't much efficiency that can be gained. Registries
by themselves are very simple operations -- they merely maintain names
in databases. The registry operation at NSI is a very small part of
its business.

And any efficiency that would be gained would be far offset by the
fact that the registrars (which would be far more numerous than
registries) would all have to be dealing with different interfaces.
The CORE model is far more efficient at reducing prices -- in that
case the registrars collectively run a registry on a cost-recovery
basis. So they have strong incentive to keep costs low, and at the
same time keep consistent interfaces and policies for all registrars.

Finally, TLDs are not interchangeable goods. One merely has to look
at the names .com, .nom, .arts, .net, .rec, .org, and .info to
realize that these all refer to very different areas, and in fact do
not meaningfully compete with each other -- people will clearly chose
names more appropriate to their activity even with significant variations
in price.

"Investments in registries could be recouped through branding and
marketing."

This is an utter waste for consumers. Consumers can easily make
their own choices about names without a marketing blitz telling them
what to think.

"The efficiency, convenience, and service levels associated with the
assignment of names could ultimately differ from one TLD registry to
another."

Once again, in a system where registrars share access to all
registries any such differences that do occur will be masked by the
fact that the customer deals with a registrar, not a registry. This
kind of competition is really only meaningful at the registrar level,
not the registry level.

This is not theory; this is already proven in practice: there already
are many TLD registries, with vastly different service levels, and
companies have been formed to register names in all of them.

"Without these types of market pressures, they argue, registries
will have very little incentive to innovate."

They make this argument because they are confusing registries and
registrars. Registries are back-office database operations, not
retail outlets. Registries will be almost totally insulated from
market pressures.

Others feel strongly, however, that if multiple registries are to
exist, they should be undertaken on a not-for-profit basis. They
argue that lack of portability among registries (that is, the fact
that users cannot change registries without adjusting at least part
of their domain name string) could create lock-in problems and harm
consumers. For example, a registry could induce users to register
in a top-level domain by charging very low prices initially and then
raise prices dramatically, knowing that name holders will be
reluctant to risk established business by moving to a different
top-level domain.

You *vastly* understate the problem. A company's domain name *IS*
it's identity on the net. A net based business like Amazon.com has a
huge investment in it's domain name -- the name "amazon.com" is stored
in search engines, and bookmarked by probably hundreds of thousands of
consumers. The company has spent a fortune marketing the name
"amazon.com", and it simply cannot change it without an enormous
amount of effort and expense. Amazon is an extreme case, but even a
very tiny Internet business like mine is essentially locked into .com.

In fact, what the "lock-in" problem will do is create a constant
upward pressure in domain name prices, since the equilibrium point for
prices is no longer based on something slightly above the cost of
maintaining the registry. Instead, prices will *rise* to an
equilibrium point determined by some function of the average cost for
a consumer to move. This monopoly pricing, not competitive pricing.

Perhaps even more important than the concern with predatory pricing,
however, is the risk of capricious policy changes.

"We concede that switching costs and lock-in could produce the
scenario described above. On the other hand, we believe that market
mechanisms may well discourage this type of behavior. On balance,
we believe that consumers will benefit from competition among market
oriented registries, and we thus support limited experimentation
with competing registries during the transition to private sector
administration of the domain name system."

As indicated above, you confuse competition between registries and
competition between registrars. Registries are intrinsically
back-office operations, and will be insulated from the end consumers,
so very little meaningful competition will take place between them.

On the other hand, you drastically understate the impact of the
"lock-in" phenomenon.

In summary, the Green Paper in its present form is mandating creation
of a set of protected and unregulated monopolies. This is pure bad
government at its worst.

Kent Crispin
Songbird

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From: Bill Teeters <bill@modeleasy.com>
To: NTIADC40.NTIAHQ40(dns)
Date: 2/9/98 2:38pm
Subject: Internet Proposal

The paper, A Proposal to Improve Technical Management of Internet Names and
Addresses (Discussion Draft 1/30/98), is generally well written. However,
there are some points that must be publicly addressed before any plan is
implemented: Trademark problems, international politics, small business
issues, and the future.

Trademark and Copyright Protection

Under the current proposal, anyone will be able to establish a top-level
domain (TLD) by becoming a registrar and then selling domain name services.
If this is done by a country that does not respect international trademark
or copyright laws, such as the People*s Republic of China, there will be no
protection whatsoever for trademarks.

Under the current proposed guidelines, the PRC and others, will have no
incentive to conform to international trademark and copyright standards.
Only the largest corporations, such as Microsoft and McDonald*s, will have
the financial resources to negotiate with such countries for protection.

We propose that a strong mechanism in place to assure that all
participating countries abide by the internationally-established trademark
and copyright standards. If a country registrar, or indeed any registrar,
does not agree to adhere to these practices, then the gTLD of that
registrar should be dropped from the Internet. These mechanisms should
include:

· The establishment of a central registry where an association between a
domain name and a trademark is established;

· That no domain name be issued to a gTLD if there is a conflict between
that domain name and a trademark in this registry; and

· A mandate that all conflicts should be adjudicated in the country of the
trademark holder and not the country of the registrar of the gTLD.

Politics - Or Human Interaction Issues

The proposal stated that officials of governments or intergovernmental
organizations should not serve on the Board of Directors. This is a
laudable attempt to avoid introducing international politics into the
Internet. However, the very act of dispersing power to Directors from a
variety of nations will introduce politics. Even though a Director is not
associated with a government, that Director is a person who carries the
beliefs of the culture in which he or she matured. To expect Directors from
the Ukraine, Australia, South Africa, and Japan to have identical
viewpoints - on even technical matters - is naïve. Extensive compromise and
negotiation will be required to accommodate the greatly varying viewpoints.
That is politics.

The proposed Board is frighteningly similar to the United Nations, which
seldom reaches a decision that allows it to function as a unit. As long as
the membership of the Board is allowed to have members from countries other
than the U.S., the destabilization of the Internet is inevitable. Political
matters will take precedence over technical matters - and that will
inevitably lead to destabilization.

Small Business Issues

The proposal suggests an initial allocation of seats on the Board of
Directors of 5 of the 14 seats to large commercial entities. These
commercial interests could use their vast financial resources to sway the
domain and national voters of the Board. This creates a voting bloc which
would overwhelm other groups. Large commercial interests could implement
policies favorable to themselves and detrimental to smaller competitors.
This allocation would effectively create international monopolies.

(In fact, the proposal seems to be generally prejudiced against small
businesses. In "The Trademark Dilemma" section, " * some mechanism for
clearing trademarks, especially famous marks, across a range of gTLD*s, "
is mentioned. Small companies do not have "famous marks"; they merely have
"marks" which were not considered.)

To balance the Board more fairly, we propose:

· The allocation of three of the five commercial seats to businesses with
gross annual profits of no more than 5% of those of the largest commercial
seat;

· No corporation of any size be allowed to serve more than two
non-consecutive terms out of five terms; and

· The establishment of a standing committee of the Board of Directors of
the new corporation that addresses small business issues.

The Future

We believe that the Internet will increasingly become a major vehicle for
international business, education, and other human endeavors. The proposal
appears to assume this. If this is so:

1. What happens if the Internet ceases to function? Does the responsibility
revert to the previous "owner" who ran it so well? Or do individual
countries develop their own Internets?

2. Will service, as well as money, be a consideration for issuing or
renewing TLD*s and lower-level entities?

Summary

The Internet has served as a creative springboard for commercial and
non-commercial endeavors, all participants should believe they are being
treated fairly and have an equal chance to succeed. Trademark and copyright
integrity should be strictly monitored and regulated. Giving advantages to
large national and commercial interests should be avoided.

Restructuring may be necessary for the Internet to remain functional, but
it should avoid international politics and retain the current stability in
order to continue to nurture business and other creative human endeavors.

For the Internet to survive, its future must be carefully planned and not
thrown to the winds.

###

From: "Daniel F. Bednarski" <dbednarski@geocities.com>
To: NTIADC40.NTIAHQ40(dns)
Date: 2/9/98 10:19pm
Subject: domain name system

To whom it may concern,

I would like to commend the government for transferring the DNS and naming system into the private sector; however I do have several comments.

I especially commend the author(s) on their inclusion of the "trademark dilemma" section. Although I feel that prior to announcing a final plan, the governement needs to introduce a set of procedures which would be made available and which the trademark owner(s) may protect the trademarks which they hold. The CORE plan included detailed policies regarding trademark/service mark protection. Basically, they referred to the WIPO http://www.wipo.org intellectual property mediation and arbitration procedures:

http://www.wipo.org/eng/internet/domains/index.htm

WIPO, as you know is an agency attached to the United Nations, and which looks out
for the common good.

Here are my suggestions for a policy to deter trademark disputes:

1) An individual, group of individuals, company or organization should be allowed to
include their registration number and the service mark in the domain registration or profile update processes. When someone attempts to register a domain with the service mark within a domain a flag is raised and the trademark holder is notified, allowing them 30 days to file a dispute

2) If a trademark dispute is filed within 30 days of registration, the domain may be suspended indefinitely pending WIPO or similar mediation or resolution between the conflicting parties (dependant upon the policy chosen by the registry).

If the registrant does not contact the complaintent within 30 days, then the domain is offered for registration by the complaintent.

3) There should be no time limit placed on the registries as to when a resolution should take place. There should, however, be placed a mandatory acceptance of the WIPO mediation/arbitration outcome by the registries, or similar plans.

4) I agree with the policy that:

"At the time of registration, registrants could agree that, in the event of a trademark dispute involving the name registered, jurisdiction would lie where the registry is domiciled, where the registry database is maintained, or where the "A" root server is maintained."

I think that we may also want to think of creating a trademark database attached to all DNS servers for companies which hold a branded trademark on the Internet (ie. Yahoo, GeoCities, Infoseek, etc.). This may also be an additional revenue stream for the NPC placed in charge of DNS, because they could charge a large fee for such a registration fee. Possibly allow trademark holders to register their domain in every gTLD and country level TLD at the same time. This may be possible through a large database which a company registers their trademark, including listing their registration number, and in what countries it currently holds those trademarks.

The increase in the use of the Internet by the residents of the world and the decrease in size of the globe through its use will also increase the need for a centralized trademark/service mark registration system, allowing the protection of registered trademarks used on the Internet. It should be recommended that the U.S. Government investigate future world centralized trademark registries.

As a last note, I would like to be included in any mailing lists regarding this matter, and possibly be included in the future plotting of the Internet's course through membership in the the private DNS-governance organization.

Thank you,

Dan Bednarski

**** my thoughts are just that, my thoughts, and do not reflect those of my employer or any group I may belong to *****

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