Exclusive License

["Leo Smith" <barter@ntplx.net>]

Some general observations on the need to award exclusive licenses to
Registries, and how CORE can share gTLD's under a sublicensing agreement:

Establishing and operating a registry requires capital investment,
sufficient technological skills, and a significant expenditure of human
resources. If the establishment of new registries is approached using the
concept of "free market" capitalism, then the awarding of a license to
establish a new registry must offer sufficient return to warrant the
investment. The requisite investment makes good business sense only if IAHC
(licensor) grants an exclusive license to the new Registry (licensee), with
the stipulation that as a condition of the license, the licensee must offer
sublicensing agreements to all other CORE members. In a free market
environment, the licensee will determine which gTLD's it desires to license
(having IAHC determine the makeup of the 7 new gTLD's offers no benefit. If
a market demand exists for the 7 gTLD's that IAHC would have selected, then
eventually those gTDL's will surface...if not during the initial 7, then
certainly soon thereafter. Absent a legal problem, such as the use of trade
names, why not leave the composition of all gTDL's as a business decision
for the licensee to make.)

The exlusive licensing agreement should stipulate the licensee's retail
price, as
set by the licensee, for the registration a SLD under the license. The
licensing agreement needs to also specify that, as a condition of the
license, the Licensee must grant sublicenses to all CORE members, with
wholesale price that the licensee will charge to the sublicensee. Under
this system, IAHC would award, for example, an exclusive License to a
Registry for the gTLD of .law. The Licensee could set a retail price of
$500 per year, with a $250 wholesale, for each SLD registered under .law.
As sublicensees, all other CORE members could also market SLD's under the
gTDL of .law, with a $250 wholesale fee paid to the Licensee for each SLD
registered by the sublicensee. Law Firms or other businesses in the legal
profession would have the choice of selecting their gTLD based on price and
availability. They could choose .law for $500 from the licensee, or .law
from a sublicensee for whatever they sublicensee wished to charge, or .com
for $100, or .legal for another price from another Registry.

Royalties to IAHC or CORE would be due on all wholesale and retail fees
collected,
less any wholesale payments made for SLD registration to other IAHC
Licensees.

In the draft, under Registry Operation, IAHC states a policy position when
it says:
"...Internet top level domain space is regarded as a public resource and
subject to the public trust." and requires that it be operated "in the
interests and service of the public". The same is true for the public
airwaves. Yet the public license granted by the Federal Communications
Commission for the particular radio frequency is exclusive to the licensee.
 

Why not let capitalism and free market forces determine which prices are
too high, which are too low, or which are in line?