RCRP Meeting - 24 August 2004
Maddocks
Level 7, 140 William St
Melbourne
Present: Simon Delzoppo, Tony Hill, Jo Lim, Bruce Tonkin, David Thompson
Teleconference: Philip Argy, Bruce Arnold, Robert Sandali, Mark Suter, Liz Williams
Apologies: Heidi Angove, Terry Blenkinsop, Alan Davidson, Troy Trewin
Actions:
- JL to draft minutes.
- DT and JL to issue redraft of public consultation report, for discussion and finalisation on the Panel mail list.
- DT and SD to summarise current registry revenue model and issues.
Discussion:
1. Draft First Public Consultation Report
The Panel reviewed the draft report and made a number of minor wording and formatting amendments.
The following substantive issues were discussed:
New 2LDs
Panel members favour an initial EOI process
for provision of new 2LD registry services before proceeding to one of the
other options (refer to attached decision tree). The purpose of the EOI
would be to determine market interest and help to refine requirements for
the next stage. It was noted that a public EOI would help auDA to maintain
openness and transparency. To reduce cost and administrative overhead on
auDA, it was suggested that the EOI could be a fairly lightweight process,
with a short deadline for response and limited advertising.
Objectives of Competition
The Panel agreed that the
main objective of competition is economic efficiency. If this is achieved,
then it should lead to improvements in customer service, performance,
reliability, security and innovation. It was noted that innovation may occur
in the provision of DNS services for existing Internet based applications,
and in the use of DNS services to support other Internet-based applications.
Multiple 2LD Registries
The Panel confirmed its view
that the competition model should continue to allow for multiple registries.
The following reasons and benefits were noted:
- less dependence on a single operator for continuous service provision
- back-up in case of registry failure/disaster
- wider pool of operational experience
- environment of constant competition (similar to the registrar market)
- registrars can choose to offer different 2LD services based on performance of the registry operator
- no negative impact on registrars and end-users, provided protocols and data formats are the same across registries.
Multiple registries would require auDA and registrars to enter into multiple contractual and billing relationships. However, the Panel believes that, in the long-run, the overall market benefits of multiple 2LD registries are likely to outweigh any administrative disadvantages.
In essence, the Panel believes that in the absence of any compelling rationale, confining the competition model to a single registry would add an unnecessary constraint on the market.
Synchronisation of Registry Licence Terms
The Panel
expressed a preference for synchronised registry licence terms, having
regard to the current market environment and the administrative overhead and
costs of running frequent tender processes.
Rather than imposing a licence term, the Panel suggested that the EOI process for new 2LD registry operations could invite respondents to submit pricing models for both the shorter and the longer licence term. auDA would then make a decision based on the best value proposition. In order to give auDA greater choice and flexibility, the EOI may also invite respondents to suggest an alternative licence term.
The Panel noted that registry tenders for the .com, .net and .org gTLDs are not synchronised, and there is probably no need for synchronisation because each TLD is of sufficient scale and viability to support its own tender process. It is possible that the .au domain may reach this point in future, in which case the Panel believes that it may no longer be necessary or desirable to synchronise 2LD registry licence terms. It was suggested that once a certain threshold of domain names (eg. 200,000) has been reached in a 2LD other than com.au, then the 2LDs could be unbundled (or re-bundled) and tendered out at staggered intervals to test the market more often.
Registry Pricing
The Panel noted criticisms that the
current registry licence agreement does not necessarily support the greatest
level of economic efficiency. It was suggested that these criticisms may be
based on a lack of understanding and/or transparency of the current model.
Under the current registry licence agreement AusRegistry charges a per domain name fee to registrars which varies according to 2LD (eg. $45 for com.au, $25 for id.au). Fees for com.au and net.au are set on a sliding scale based on cumulative number of domain names within those 2LDs. AusRegistry pays an annual licence fee to auDA, calculated on the number of domain names registered in each 2LD.
The Panel identified the following alternatives to the current pricing model:
- fixed price outsource model (eg. .nz)
- profit share between auDA and the registry operator
- other models for calculating price instead of the standard per domain name fee.
The licence agreement requires AusRegistry to have a marketing plan and budget, which necessarily impacts on the registry pricing model. Some Panel members queried whether marketing should be included in the selection criteria for the next registry tender (or whether it should be accorded the same weight as it was in 2001).
The Panel noted that there is distinction between the revenue model for the registry and the funding model for auDA; the Panel's terms of reference include consideration of the former, not the latter.
2. Next Steps
The Panel will continue to discuss and finalise the report on the mail list. The aim is to release the report by 1 September 2004 for a 3 week consultation period.
The Panel will meet again after the public consultation period has ended, details tbc.
