Milton,

Thanks for your expanded comments of the situation confronting possible gTLD applicants from developing regions. I am probably 98% in agreement and the differences are minor. These discussions should sharpen NCSG’s questions for the board.

My main point was to argue that applicants need to get into the game (come to the table with commercial partners from wherever (domestic or foreign, developed or developing regions)) with greater knowledge, so that they strike a more informed and better deal. We should not just focus on access to greater financial resources where there is a risk that they are simply captured by clever commercial partners. As for your suggestions about insisting on reasonable application fees, expedited handling, simplification and elimination ICANN policy requirements, and blocking/curbing ex ante demands from governments, I mainly agree, especially about getting ICANN out of the middle, but here are a couple of reservations.

A registry will operate within a jurisdiction, like any other business, and should there be government regulation or public policy issues there let the applicant and the government sort those out like any other national business issue. At most ICANN could play an “amicus curiae” role (neutral friend of the process) and submit a brief to the two parties. Should other governments have a position, the too, individually or via something like GAC, could play an “amicus curiae” role.
Another area that concerns me comes from the dotCity experience. When there are competing applicants for a gTLD there is transparency as to who applicants are and they can negotiate with each other. The can partner, or they can hold a private auction where the winner gets the gTLD and the losers share the auction proceeds. If they cannot agree to either of those, ICANN holds the auction and keeps the proceeds.

In the case of the .nyc gTLD there were multiple applicants for second level strings like mentalhealth.nyc and applicants did not have the rights extended to gTLD applicants. The mental health string was auctioned off in a blind auction. After much consternation and thanks to mobilization by the stakeholder community, it was awarded on a ten dollar ($10) bid to a public interest winner.

Had that stakeholder mobilization not happened a community constituency, the mental health agencies, would have had to spend donor funds, and probably tax payer dollars, to secure the domain name in competition with unknown parties. Here is a situation where ICANN could play a proactive simple role. In its registry contracts it could insist, as part of its public interest commitment, that multiple applicants for dotCity domain names have the information necessary for them to negotiate among themselves.

Lastly, to level the playing field for developing country registrars ICANN should consult with registrars to determine their concerns and review the financial and insurance conditions it places on contracts between registries and registrars.

Sam

On 30/09/2015 11:30 AM, Mueller, Milton L wrote:

Good points, Sam! But I think we all may be missing the forest for the trees. The complexity, 600-page contracts, high costs are all direct products of ICANN's policies and regulations. And these requirements and complexities in turn are not so much ICANN's fault but are produced by developed-world politics and policy priorities - mostly regarding trademark protection, law enforcement surveillance, and claims by governments that they need to "protect" consumers. Just try to imagine the administrative, legal and financial burdens of navigating a TLD application in ICANN's process, when so many arcane policies must be built into your registration process, so many last-minute politics are injected into the process by the GAC and the US congress. New TLD applicants were strung along for something like 4 YEARS, and all along the way the policies and applicant guidebook were changing in complex ways. No small-scale, small market domain name registry could survive that crap. If these kinds of entry barriers had been thrown up in 1995 or 96, none of the ccTL! Ds that have gotten a foothold in their local markets would ever have made it. Heck, Verisign would never have made it. Many people seem to be reacting to this by proposing to pile on additional burdens, policies and regulations that will allegedly "help" the developing world. While well-intentioned, these ideas simply compound the underlying problem. For example, instead of waiving the ridiculous $185,000 application fee, people started proposing additional taxes and costs to subsidize applications. Which creates a new set of distortions and games. The only beneficiaries of such an approach will be a tiny number of officially designated "developing world representatives" who have connections within and know how to work the ICANN process. I think the ideal objective for developing-world applicants for new TLDs would be for them to be able to respond to real demand (not fake demand created by an ICANN subsidy) with service proposals subject to extremely lightweight policies and application processes. Let the local governments regulate any abuses and problems, not ICANN. ICANN should facilitate market entry not block it. A very large portion of its policies are in fact designed to prevent entry not facilitate it. There could be problems of gaming caused by asymmetric policies, I admit, but policies could be designed to minimize it. The idea that you can insulate developing world start-ups from foreign capital because this is some kind of "colonialism" is also crazy and misguided. Reducing entry barriers radically will reduce dependency on established market players, but the fact remains that a lot of the capital and expertise is centered in the developed economies and cutting start-ups off from that is not going to help. Although ratios are gradually changing, a very large portion of Chinese, Indian, MENA and African computer scientists and business people will be educated in the U.S. or Europe. No underdeveloped world economy has developed without foreign direct investment, ever. Look at where China was before they opened up in 1978-9. Look at where Brazil was before it stopped its autarky policies in the 1980s. People who want to open up the market to new, developing economies need to insist on the following things: - Incremental cost based application fees. I mean something like $25, not $250,000. - Simplification and elimination of most policy requirements - expedited handling of their applications by a set deadline (we will say "yes" or "no" in a fixed, reasonable time frame like 4 months) - elimination of arbitrary demands from governments for ex ante forms of regulation (e.g., reserved names, PICs, etc.) As long as ICANN constitutes an enormous entry barrier the disparity between the existing industry and start ups will get worse.

-----Original Message----- Part of the power and knowledge imbalance between the new-gTLD "incumbent crowd", sitting like vultures (or hawks) on the sidelines and the "newbie crews" in Latin American, Asia and Africa will require more than just a re-balancing of access to resources to get into the game. It will also require greater knowledge and capacity to deal with that "incumbent crowd" when it shows up with offers to manage the submission process and registry services. That New York City willingly signed on to a 600 page contract with minimal stakeholder consultation, a contract that brought on a multitude of problems, should be a warning here. There needs to be a focused outreach effort to address questions and issues, so that applicants operate from a position of strength above and beyond just financial support. Sam Lanfranco On 29/09/2015 12:31 AM, Avri Doria wrote:

Hi, I would like to support the topics suggested by Niels and Remmy, but I would take Remmy's point in a slightly different direction. Nielsen's report confirms that Latin America, Asia and Africa will likely be the great drivers of new gTLD acceptance and use, while most registries are still based in developed regions. There is a net transference of resources taking place from the developing to the developed world in the DNS industry. The problems that developing regions face have been extensively explained. What is the perception of the board? In the opinion of board members, which concrete measures could be put in place? Why not even suggestions from the JAS report have been implemented yet? Would the board commit to a clear plan to address the current imbalances before a new round of applications is launched? My two cents. Best, Marília

------------------------------------------------ "It is a disgrace to be rich and honoured in an unjust state" -Confucius ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus & Senior Scholar) Econ, York U., Toronto, Ontario, CANADA - M3J 1P3 email: [log in to unmask] Skype: slanfranco blog: http://samlanfranco.blogspot.com Phone: +1 613-476-0429 cell: +1 416-816-2852

-- ------------------------------------------------ "It is a disgrace to be rich and honoured in an unjust state" -Confucius ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus & Senior Scholar) Econ, York U., Toronto, Ontario, CANADA - M3J 1P3 email: [log in to unmask] Skype: slanfranco blog: http://samlanfranco.blogspot.com Phone: +1 613-476-0429 cell: +1 416-816-2852