Eliminating Registry-Registrar separation within the TLD would:

  • Negate 10 years of successful competition
  • Create unfair pricing
  • Enable unfair access to competitive data

We support a new TLD process

where registrars can own a new TLD registry and/or provide technical back-end registry services, as long as they do not act as a registrar with respect to their own TLD.

Registrar Survey Indicates Opposition to Vertical Integration

A recent survey of small to mid-sized registrars indicates significant opposition to and concern about ICANN’s proposed vertical integration of registries and registrars. Concerns centered on the ability of an integrated registry and registrar to cross-subsidize, provide preferential access for affiliated registrars and mis-use of confidential information. The survey sample was comprised of smaller, independent registrars across the globe who do not have the resources of larger registrars and hence are not typically heard on this issue.

Vertical Integration: A View from the Bottom Up

Authored by Afilias, Neustar and Public Interest Registry

An interesting thing happened on the way to ICANN's new Affirmation of Commitments. ICANN staff has consistently recommended a reversal of its longstanding policy that prohibits a registry from acting as a registrar in its own top level domain ("TLD"). We see two good reasons why this anti-consumer proposal is unacceptable.

First: ICANN's proposal will open the door to consumer abuse and harmful practices

Registry/Registrar Vertical Integration: The Registrant Pays the Check

In a joint document, Afilias, NeuStar, and PIR discuss the salient issues facing the ICANN Board regarding a proposal for registry/registrar vertical integration in the newTLD round. The paper identifies some of the risks associated with the ICANN Staff proposal while at the same time proposing a path forward that does not jeopardize any further delay in the new gTLD launch process. A summary of the points raised includes:

Gandi Registrar Report

True Registry-Registrar Separation

The Internet Corporation for Assigned Names and Numbers (ICANN) is preparing to launch a new round of top-level domains (TLDs) in early 2010. According to ICANN’s latest draft of the applicant guidebook, they intend to reverse nearly a decade of successful policy regarding the separation of registry (wholesale) and registrar (retail) functions in the domain name marketplace. If ICANN permits cross-ownership of registries and registrars, they will in fact undermine healthy competition and potentially place the security and stability of the Internet at risk.

INTA highlights separation issues to NTIA

In its comments submitted to the National Telecommunications and Information Administration concerning the expiry of ICANN's JPA, the International Trademark Administration (INTA) noted that removal of Registry-Registrar separation would create priviledged access, inhibiting competition, and could lead to increased problems with domain monetization.

PIR-Afilias-NeuStar Letter to ICANN

In a letter to ICANN, Alexa Raad, CEO of .ORG, the Public Interest Registry outlines the combined comments of PIR, Afilias and NeuStar on the issues of Registry-Registrar Separation. Ms. Raad's letter calls on ICANN not to abolish the current successful separation policiy and highlights five scenarios that illustrate the result this change is likely to have on the industry.

RyC Supermajority Opinion in Favor of Separation

The gTLD Registry Constituency submitted a Supermajority opinion to ICANN on April 13, 2009 calling for a new section 2.8 in the new gTLD Agreement contained within the Second Version of the Draft Applicant Guidebook.

RyC Minority Opinions on Separation Issue

VeriSign and RegistryPro submitted minority opinions on the gTLD Registry Constituency Supermajority opinion to ICANN on April 13, 2009 regarding Registry-Registrar Separation.

The minority opinions favors Registry-Registrar Separation and reads, in part:

"We believe that in order to promote a competitive marketplace between TLDs, the Registry/Registrar Cross-Ownership rule must be applied in a uniform manner. This requires that the current rules be refined to eliminate existing loopholes by (i) adopting a clear definition of “affiliates”; and (ii) imposing consistency in the ownership restrictions faced by registries in owning registrars by applying the same restriction to registrars owning registries. Limiting Registry/Registrar cross-ownership promotes a level playing field."

.EU Confirmation of Registry Registrar Separation

The European Parliament Committee on Petitions published the attached petition concerning the registration of .eu domain names in 2006.

On page 2 of the document, the petitioner notes that:

"As concerns the registry/registrar model, it also constitutes a common approach adopted by most Top Level Domain managers. This approach which is contained in Article 3(4) of Regulation 733/2002 of the European Parliament and the Council was already announced in section 2.2 of the Communication from the Commission to the European Parliament and the Council of 05.07.20002, and was not contested by any party during the consultations and discussions that lead to the adoption of the .eu Regulations. The main advantage of this model is that by avoiding any commercial relation between registrants and the Registry, the independence of the latter as relates to the allocation of domain names is guaranteed."

Names Council resolution on the proposed revision to the ICANN/Verisign (NSI) agreement

The Registrar Constituency responds to the request by the ICANN Board for input regarding the proposed 2001 agreements between ICANN and VeriSign supports Registry-Registrar Separation.

On page 8 of the attached response to ICANN, the Registrar Constituency highlighted how a vertically integrated VeriSign would create unfair pricing:

"VeriSign, unlike competitor registrars, will continue to bear essentially zero wholesale cost. The registry fee is the principal cost of selling a registration. VeriSign’s registry fee is simply a payment from one VeriSign division to another, which nets out on the corporate income statement and balance sheet. For other registrars this is a real cost. This position allows the VeriSign registrar to offer aggressive and sometimes free promotions to customers that its competitors cannot meet or sustain. Today, VeriSign remains the largest global registrar by far, and the continuation of this unfair advantage would help perpetuate its position. Over time, VeriSign’s predatory tactics will be used to drive competition out of the registrar business, thereby undoing the initial progress made by ICANN to date in the industry."