Department of Justice recommends disallowing integration on certain existing top level domain names.
The U.S. Department of Justice’s Antitrust Division has advised ICANN that it should halt its plans to allow some existing top level domain name registries to own registrars.
National Telecommunications and Information Administration (NTIA) Administrator Lawrence Strickling had asked the Department of Justice to review ICANN’s decision to allow registry-registrar integration on existing top level domain names.
The Department of Justice believes (pdf) that allowing cross-ownership on existing top level domain names that have price caps could be harmful. It recommends ICANN not allow this unless it determines that price caps no longer constrain the exercise of market power. It believes the removal of the ownership restriction would lead to substantial price increases for .com, .net, and .org, and may lead to price increases for .biz and .info.
New top level domain names are less likely to obtain market power, the DOJ says. So it does not believe cross ownership will be a significant issue with new top level domain names.
The DOJ’s analysis may put a crimp on plans by existing registries to integrate. Neustar has been vocal about plans to integrate.
Interestingly, integrating may actually remove practical price caps altogether. There’s been talk of registries adopting the new TLD registry agreement if they want to integrate. The new TLD agreement has lax controls on pricing.
gpmgroup says
A very welcome and much needed letter hopefully it will be sufficient to get ICANN to start acting in the public interest rather than its own, its contracted and would be contracted parties interests.
Even before new gTLDs are launched ICANN’s behavior is doing significant damage to the the governance of the DNS.
RKB says
ICANN is a DISGRACE and should be abolished.
ICANN did an unpardonable sin by letting VRSN increase COM prices to ridiculous level which in my opinion is an illegal and immoral act.
World will be better withOUT ICANN.
.COM prices should e $1/domain not $8/domain.
enoss says
this is really more of a buttressing of the status quo than anything else.
it was HIGHLY unlikely that there would have been a move to VI in com/net/org, especially > than the 15% already allowed.
also, I would be surprised if this limits neustar in any plans that they may or may not have as I would be surprised if .biz was seen to have ANY market power.
interesting, but not impactful.
Andrew Allemann says
@ enoss – I don’t think VeriSign would have even broached the subject. It’s not worth the risk given how much money they make running the .com registry.
George Kirikos says
It’s helpful, because it demonstrates once again that the ICANN Staff and Board are utterly incompetent. They have not been weighing the economic costs and benefits of their decisions. The DOJ is rightly looking down at ICANN, as some parent looking at a teenager, shaking their head in disbelief.
Even .biz has market power over *exisiting* registrants, if the registry operator is able to engage in tiered/differential pricing, charging a different renewal rate for sex.biz or games.biz vs. gkjshkjghjkhs.biz.
gpmgroup says
I would be surprised if .biz was seen to have ANY market power.
Buying a domain is not like buying soap.
The overwhelming majority of market power is obtained not through the registries’ branding or the registrars work of promotion, but rather as an unearned and consequential result of the registrant’s own endeavours.
It’s the registrants own endeavours which perversely make the registrant more vulnerable to price gouging etc. Why? Not because the service being offered has more benefit but because the branding of the “domain+tld” becomes more and more intrinsic to the registrant’s own business.
As a result the cost to move to an alternative is far greater than the cost of delivery of the domain for the ICANN contracted parties.
Andrew Allemann says
I agree that there is a difference between market power over new registrants vs. market power for existing registrants.
The switching costs of changing domain names is very high. Just ask Overstock.com.
gpmgroup says
It’s helpful, because it demonstrates once again that the ICANN Staff and Board are utterly incompetent. They have not been weighing the economic costs and benefits of their decisions
It could be even worse. A person very close to the new gTLDs gave out some of the fundamental thinking underpinning new gTLDs the other day… Now either they were out of their depth and misunderstood what they had been told or much of the thinking behind new gTLDs is based on a flawed statistics. Statistics which beyond doubt do not show what was claimed and as such if ICANN has based their internal justifications for the whole new gTLD program on them there will be big trouble ahead.
3 Pound Hammer says
ICANN has NO interest in protecting the public or creating a competitive marketplace for domains.
ICANN is all about dirty backdoor business and secret deals, IMO.
Louise says
Lawrence Strickling, DOJ: thank God somebody came to work today!
@ gpmgroup said: “The overwhelming majority of market power is obtained not through the registries’ branding or the registrars work of promotion, but rather as an unearned and consequential result of the registrant’s own endeavours.”
Well said! May I include quote in my next missive to government agencies?
@ Andrew Alleman said: “@ enoss – I don’t think VeriSign would have even broached the subject. It’s not worth the risk given how much money they make running the .com registry.”
Verisign, Icann, and the major Registrars think they can get away with anything! Verisign’s thieving ways boggle the minds of even the government . . .
@ RKB said: “World will be better withOUT ICANN,” and @3 Pound Hammer said:
“ICANN has NO interest in protecting the public or creating a competitive marketplace for domains . . . ICANN is all about dirty backdoor business and secret deals, IMO.”
So, is everyone okay with it if the National Guard storms ICANN to collect the pcs in DOJ and NTIA’s behalf?
Louise says
Don’t you LOVE that ICANN posts an image pdf, so the text doesn’t get indexed by Google?
gpmgroup says
@Louise, Thanks for your kind words; if you think any of our comments are worth repeating please do governments really need to hear from as many people as possible who understand the domain markets to try counter all the comments from ex-parte lawyers, lobbyists and contracted parties.
Just a quick thought on the market power comment to make it more robust – Market power is derived not only from an individual registrant endeavours but there is also an element from cumulative registrants’ endeavours. (Like a nice neighbourhood where everyone contributes and as result others want to live)