At-Large Phase II Assessment of the Competitive Effects Associated with the New gTLD Program Workspace
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FINAL VERSION TO BE SUBMITTED IF RATIFIED
The final version to be submitted, if the draft is ratified, will be placed here by upon completion of the vote.
FINAL DRAFT VERSION TO BE VOTED UPON BY THE ALAC
The final draft version to be voted upon by the ALAC will be placed here before the vote is to begin.
FIRST DRAFT SUBMITTED
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Comments
Comment from @holly.raiche
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Thanks Carlton - absolutely agree - and it’s one of the points made - the pricing information that they have is prices that are capped. What they don’t have is retail pricing- which is why they admit they don’t have the information they need to make judgments
Comment for @holly.raiche to consider
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Regarding the assessment itself, it includes the findings by AG, showing
· Average and median retail prices for registrations of legacy and new gTLDs have declined.
· Retail mark-ups over wholesale prices have generally declined.
Where these "findings" come from is unknown, as AG's own data show the opposite.
Also, the assessments states that "The overall wholesale price level of legacy gTLDs is lower than that of new gTLDs". This expression seems to be misleading as an assessment of the new gTLD program. The correct statement should be "The overall wholesale price level of new gTLDs are HIGHER than that of legacy gTLDs."
Furthermore, it is a disappointment that the large-scale parking of domain names are not included as an issue of this assessment (2/3 of new registrations), while showing a large growth of new registrations. This is again misleading. Writing on this issue today for CCT-RT's discussion as well as some literature on this issue are attached FYI.
Comment for @holly.raiche to consider
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First of all, I agree with your conclusion: "until clear evidence of increased choice and consumer trust can be established as arising from the introduction of new gTLDs, the case for introducing more new gTLDs has not been established." (maybe somewhere add "and out-weighing the drawbacks of it")
However, in addition to what is already pointed out, I wonder if we may add a few draw-backs of the new gTLD program, including the effect of large scale of domain parking, and the protection of brand names. From ALAC's end-user point of view, both of these effects are negative, which is to be carefully weighed against the positives, i.e., increased choices. However, I am sure that different AC/SOs, or even different constituencies within the same SO, e.g., GNSO, will have different opinions.
Furthermore, I wonder if we would want to de-emphasize the importance of competition. Strictly speaking, only goods which are substitutable may be considered competing against each other in the same market. As gTLDs can hardly substitute each other, after some heated debate, CCT-RT has avoided using the word "competition", but only talked about market concentration. Another reason is, as I expressed in my last email to you, the cost of domain name registration is negligible in mast cases, making the market itself being price insensitive. On the other hand, no non-price competition could be observed to change much either, leaving the meaning of the gTLD string itself the most important non-price factor. However, with over a thousand new gTLDs, it is now increasingly hard to find more meaningful new strings for the "next round". This gives us another reason to hold it for the time being.
I do not know what this document is for and what could/should be covered. However, if it is an official advise of ALAC to the Board, I wonder if we should/could add something about brand name protection. The new gTLD program obviously amplifies the drawbacks on this issue. Thus, maybe we could suggest ICANN further study on this issue, including suggestions to study the feasibility of the "next round" to focus on brand-name TLDs as well as on large scale domain parking. I believe these will make ICANN's further study on them more likely to happen, and further enhance ALAC's position on safeguarding end-users' interests overall.
Comment from @Carlton Samuels
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I like the fact we lifted that quote on effects from the Assessment but in my view the ALAC should apply sharper language and label the competitive intent of new gTLD as meretricious, at best. The big question: how do we measure competition against the legacy market when that market is price-capped at the wholesale level?
IMHO, the measure of competition was always going to be fanciful with the fact of a wholesale price cap on .com and .net names. I also believe this was deliberate. How do you measure competition or seek comparability with the market constraints in place? And even if we were going to use the price-capped wholesale price in evidence, the lack of reporting requirements for wholesale pricing in the new gTLD registries is a prima facie handicap to assessment.
Kaili is the economist so he can suggest the technical language - and I strongly suggest use of the technical language to describe this.