RE: [DNS] Response to Larry Bloch's comments on ".au.com"

RE: [DNS] Response to Larry Bloch's comments on ".au.com"

From: Bruce Tonkin <Bruce.Tonkin§melbourneit.com.au>
Date: Tue, 18 Sep 2001 18:16:51 +1000
Hello Saliya,

> 
> not meaning to nitpick (okay, meaning to nitpick :) but the 
> original SLA
> was I think 10 days std/2 days express.
> 

Thanks for pointing that out.  I was working from memory, as I was not with
Melbourne IT at the time.

I have since found out that:
When Melbourne IT first took over com.au in November 1996 the turn around
time was ten days for standard/ 3 days for premium and 24 hours for top. It
was later probably in 1998 that this was cut down to 2 days standard and 2
hours for express.

I stand corrected, and apologise to Larry Bloch and the DNS list for getting
that wrong.  If the actions of NetRegistry resulted in this change, then
that is competition at work, and it indeed did provide a benefit to the
industry.

> > With regard to a monopoly, the operation of a domain name 
> "registry" is a
> > natural monopoly.
> 
> Wrong. Even though Melbourne IT might like the rest of us to 
> believe that,
> it's simply not the case. Observe the number of gTLD 
> registrars, and see
> the prices people can buy TLDs for. 

I stand by my statement.  I think you confuse registry and registrar
functions.  The registrar functions are certainly available for competition.
In ".com" the monopoly operator for the "registry" is Verisign
(http://www.verisign-grs.com), and there is competition amongst ICANN
accredited registrars.   Verisign also operates a major ICANN accredited
registrar, called Network Solutions (http://www.networksolutions.com).
This is the same situation we have now in Australia.  Melbourne IT maintains
the equivalent DNS registry for ".com.au", which contains the domain names
and their corresponding nameservers.  Melbourne IT produces the zone file
from this DNS registry which is sent to the authoritative nameserver for
".com.au" at The University of Melbourne (munnari.oz.au) and other
nameservers for ".com.au".  auDA is responsible for AUNIC which contains the
domain name registrant and contact details for ".com.au" domain names (as
well as data for some other second level domains within ".au" such as
".org.au") - accessible via WHOIS (for ".com" there is no central WHOIS
registry - each registrar maintains the WHOIS information for the domains
that they register).  There is competition amongst domain name retailers (in
fact over 500 retailers) that pay the same wholesale registry fee.  Like
Verisign, Melbourne IT also operates a retail operation
(http://www.inww.com).

There can of course be competition amongst multiple registry operators
within ".au" as discussed in the competition panel report (see section
2.3.2) for each of the second level domains e.g .com.au, net.au.  In fact
again this is the current situation.  
There is also competition at the international level between the operators
of ".com", ".au.com", ".biz", ".info", ".tv", ".cc".  

The issue of price does not directly relate to whether or not the registry
is a monopoly.  The retail price of a domain name is made up of the
wholesale price at the registry, plus the cost of providing the registrar
functionality.  Domain name retailers are free now to sell below the retail
price of Melbourne IT.  Some choose to sell at over double the retail price
of Melbourne IT, and it is a sign that consumer education is not strong in
this area.  Of course the lowest price that a retailer can offer profitably
is limited by the wholesale price from Melbourne IT.  It is this wholesale
price that is perhaps what most companies in the industry are objecting to.
However you cannot directly compare the registry price of ".com" names, with
that for ".com.au" names, as there is an onerous policy in place for
".com.au".  The new policy proposed by the names panel and agreed by the
auDA Board is likely to substantially lower the costs of administering this
policy, which could lead to a substantial reduction in wholesale prices.
Rather than working with Melbourne IT to reduce the wholesale price of the
registry services (as the Dept of Commerce and ICANN did with Verisign),
auDA has chosen on the recommendations of the competition panel to put the
monopoly registry functions within all of ".au" out for tender, with the
expectation that the wholesale prices from the registry will be reduced more
than by negotiating with Melbourne IT alone.  auDA has chosen to wait until
after the tender process is completed to introduce the new names policy.  

The competition panel report also recommended that there be clear and
effective separation of the business operations of a company providing both
registry and registrar services (see section 2.3.30 of
http://www.auda.org.au/panel/competition/papers/finalreport.html).  The lack
of clear separation between the registry and registrar functions of
Melbourne IT for ".com.au" has given rise to much of the confusion and
misconceptions in Australia.

The future changes in prices will not come so much from additional domain
name retailers (although there is likely to be an increase in participation
by international registrars that may have large advertising budgets if auDA
chooses to follow international practices with the registry), but from two
major changes:
- tendering out all the registry services in ".au"
- simplifying the names policy within ".au"

Regards,
Bruce Tonkin

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Received on Thu Sep 20 2001 - 06:32:00 UTC

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