Though some of these examples are extreme, they are viable under this draft. Unlike the gTLD-MOU, whose trademark dispute process has gone through a number of revisions, and is applicable to ALL domains that are registered through CORE. The gTLD-MOU process has such features as on-line dispute mechanisms, to accelerate the dispute resolution process. This draft opens a whole new can of worms. A dispute policy for one domain may be ridiculous, another may require a costly, lengthy battle in court, still another may require a costly, lengthy battle in a court in some faraway country, while a fourth dispute policy may be almost as speedy and cost-effective as the one suggested by the gTLD-MOU and run by the World Intellectual Property Organization.

II. Favoritism to Network Solutions Inc. (Commonly referred to as InterNIC)

The GP has been structured in such a way as to actually favor Network Solutions, rather than dilute their current monopoly.

A recent article (http://www.yahoo.com/headlines/980202/tech/stories/names_1.html) , titled "Network Solutions Sees No Harm In Clinton Plan" clearly states the company has been unaffected by the U.S. Government’s moves.

"Network Solutions may lose its monopoly to register popular Internet addresses under a

proposal from the Clinton administration, but the company expects its business to continue growing, CEO Gabe Battista said."

If you were a monopoly faced with moving into competition, there would be no question that your business would be harmed. Why doesn’t the Green Paper, which so emphatically states that the domain name market will be moved into privatization and competition, pose a threat to Network Solutions? Because in reality, the GP not only discourages competition, but supports monopoly practices.

While no recognition whatsoever has been given to the gTLD-MOU (CORE) plan, a special address was made specifically to Network Solutions, outlining how the company will split their registry and registrar functions apart. This is yet another shortfall of the plan, does the U.S. Government truly believe that an accounting split between the Registry and Registrar functions at Network Solutions will make them a fair player in a new competitive marketplace? The potential for cross-subsidization is too great. Furthermore, an outside body would need to be created in order to effectively regulate this behavior. This creates more regulation where it is not needed and where enforcement is not likely to be successful until it fails to matter (witness the government’s failed anti-trust case against IBM). Moreover, why is NSI entitled to be the registry for multiple domains? Is this the government’s idea of a level playing field? Rewarding an entrenched monopoly, with a huge customer base, a further advantage over it’s competitors who must start from scratch?

III. The Establishment of New Monopolies:

Appendix One of the GP states that "Each top-level domain database will be maintained by only one registry, and at least initially, each new registry can host only one TLD."

At first glance, the reasoning behind this appears to be to inject competition into the registry business. Contrary to this first impression, this plan actually introduces 5 new monopolies, granted to the 5 new Registries. If one Registry were to maintain one TLD, and that TLD were not available through any other Registry, the Registry would be able to charge exorbitant prices to the Registrars. These high prices would then be transferred to the end-users when applying for domain names using that specific TLD. This is only the starting point for potentially even worse scenarios.

To illustrate, let us say Widgets Inc. registers the domain name widgets.web through the .web TLD Registry, pays the initial registration fee of $50, then launches a $1,000,000 marketing campaign to promote their company and web site. Two years later, the .web TLD Registry suddenly increases their maintenance fee to $1000 per year, which Widgets Inc, having invested so much time and money in their web site promotional campaign, is forced to pay. The consumer is at the mercy of the registry, they are locked in. Is this the situation the government is trying to create?

The draft states that: "… we believe that market mechanisms may well discourage this type of behavior…" and "Investments in registries could be recouped through branding and marketing." This statement somehow overlooks the name in the term "domain name. That is, the value of a domain is in large part, in its name. The registry of a .web tld will have to do infinitely less marketing than the registry of a .tlv domain. Which sounds better to you? Widgets.web or Widgets.tlv?

We feel the government has misread the economics of this situation. "Market mechanisms" do not always lead to lower prices and value added services for the consumer. Indeed, in this "competitive registry" model, market mechanisms will keep prices artificially high, and give virtually no incentive for a registry to improve it’s service.

We do not see the sense in creating multiple registries, when one shared registry that can handle multiple domains is available. Having one shared registry will lower costs for the registrars, and more importantly, the consumer. The CORE shared registry contract is set up in such a way that the database of domains can be handed over to another contractor to run the registry at year end should the registry try to extract an undue amount of profit from CORE and consumers. The shared registry system gives the end user access to: lower costs, uniform dispute policies, low switching costs, and immunity to the lock-in syndrome.

It puzzled us at first why the draft would suggest the multiple registry route, but then it became all too clear. Who has the most to gain from a multiple registry system? Network Solutions. Instead of real competition, a party of fellow monopolists will join them with no incentive to lower their prices, while retaining their own monopoly on the existing domains.

IV. Authority of the US Government over the Internet.

The Internet is international. If the government of France issued a paper stating how it thought the Internet should be governed, would they have the right to enforce it? No. The U.S government should be no different.

The U.S. government claims authority over the Internet based on the premise that they have been providing funding for various agencies such as IANA, the authority behind both IP addresses and domain names on the Internet. IANA’s authority is not based on any contract with any government. It is instead based on the cooperation of the Internet Community. The funding of IANA does not equate to authority over the Internet, nor the domain name system.

Any attempt by the U.S. government to assert authority it does not have over the international Internet is surely a mistake.

V. Meddling with the Internet by the U.S. government

The purpose of the GP is in part to extract the U.S. government from governing the Internet. Interestingly enough, the U.S government never attempted to govern the Internet until the GP.

The reason why the Internet has exploded is because of the hard work of the Internet Community, and recently, the innovation of private businesses. NOT because of government funding, or government "direction." (This is not to belittle the role of the US Government in funding the Internet, but to make clear our opinion that there is a clear difference between funding something and governing it).

We feel that it is remiss of the US Government to assert it’s authority now, when a plan that has been proposed and organized by the stakeholders of the Internet community is near completion. This plan is the gTLD-MOU.

On top of this, this direct intervention into the affairs of the Internet Community by the US Government sets the stage for the Internet to become a political arena that is fought over by national governments. This is a horrible precedent to set.

VI. Vagueness

The GP is already months late. The Internet is expected to double in size by the year 2000. As more and more businesses go online, the difficulty in obtaining a suitable domain name will increase. The GP puts off the implementation of new TLDs by not defining a timeline for their implementation. Moreover, the delays in setting up standards for new registries, and the new non-profit organization, will further delay this implementation. This structure has already been established with the gTLD-MOU. It took over two years to get to the point where it is now, let’s not take another two years and risk choking the growth of the Internet.

Who loses in the US Green Paper?
Consumers, Businesses and the other stakeholders in the Internet Community who had:

• hoped for relief from the scarcity of available domains.
• looked for better service, more competitive prices, and the innovations that can only come in the absence of a monopoly.
• hoped for a fast, efficient, unified trademark dispute system.

Who wins from the US Green Paper?

• The four monopoly registries that will be created, who are in a position to gain new monopoly rents, and continue gouging internet stakeholders.
• Network Solutions, whose monopoly continues, and whose tireless lobbying will continue to delay real progress in the domain name marketplace.