More on the Sad State of Canadian Broadband

enoss_bnnTucows President and CEO, Elliot Noss appeared on Business News Network’s (BNN) “After Hours” program here in Canada yesterday to followup on his comments made recently on the Tucows Inc. website.

In that post, Elliot called out Canadian broadband providers as lagging behind much of the rest of the world when it comes to providing affordable, fast, and reliable broadband Internet access.

He follows up on his comments in a discussion with BNN’s Andrew Bell. Click here to view the clip at the BNN website.

Bringing More Efficiency To The Secondary Domain Market

Some experiences in the last couple weeks have me thinking about the need for registrars to rethink their approach to the secondary market for domain names and how we deal with each other when high-value domain names are hijacked. In this post I would like to briefly examine this and make a specific suggestion that I believe will help in credibility and therefore efficiency.

There is no question that the secondary market for domain names has become much more efficient. The number of transactions involving high-value domain names has greatly increased which can be seen simply by looking at the weekly results from Buy Domains and Sedo (for the purposes of this post I am thinking about transactions greater than $500). We can also see greater efficiency with the maturing of the various listing services (DDN, DLS, MLS) and with greater integration by registrars of secondary market domain names in their domain name search results.

The last few years have seen a huge increase in the importance of the secondary market for domain registration relative to the whole domain name economy. While many of the major players are the same, there are also important differences and those differences require some fresh thinking about how to make the secondary market more efficient and more effective.

Of course as this market becomes more lucrative it attracts more “bad guys”. Anecdotally, all the large registrars are seeing increases in the number of hijacking attempts. When aimed at registrars themselves, these seem to be well dealt with, but when these hijackings stem from a hack aimed at third-party email services there is little that registrars can do at a system security level.

We have been involved in two situations recently, one where we were in receipt of a domain name that was thought to be obtained illegally and one where a registrant of ours had a third-party email address compromised. In the first, we worked with the losing registrar and, with the proper protections, returned the domain name to them. In the other, the gaining registrar felt their obligation was to their customer who claimed to have obtained the allegedly stolen domain name from a third-party. They would not help us at first instance. I expect this latter situation to be worked out but it did have me thinking.

With the secondary market the players are different. There is essentially no registry involvement and, probably more importantly, there is no formal role for ICANN to play other than as it relates to its contracts. As well there are additional players, specifically owners of high-value names and the various secondary market marketplaces.

These secondary market transactions are of a much higher dollar value than those in the primary market. They warrant a different approach.

Of course there are best practices and additional security measures and services that all owners of valuable domain names should avail themselves of. I expect these services to greatly increase in both scope and sophistication in the coming year. And of course their adoption will not be universal.

I believe that registrars should develop a more standardized approach as to how they deal with these situations. We should set out appropriate practices. Of course there will be exceptions and of course any guidelines cannot be too proscriptive. BUT if we are effective in doing this we will accomplish two things. First, we will make the market safer for those customers who own high-value domain names. Second, we will make things much more difficult for those who attempt to steal the property of those rightful owners AND for those who provide liquidity for the hijackers by buying the stolen property, often with little repercussions.

While in Korea this week for the ICANN meeting I will have the opportunity to meet with representatives of most of the major registrars. We all have an interest in making the market cleaner and more efficient. It is still early days and I have no doubt that this will be warmly received as would any input from other interested parties.

On “The Affirmation of Commitments”

There was big news in the ICANN world today with the announcement of the “Affirmation of Commitments”. This is the document which will now govern the relationship between ICANN and the US government (”USG”) as well as the rest of the world (”ROW”).

This is an important step in ICANN’s evolution in two respects. It signifies a significant move away from formal USG control of ICANN and it further solidifies ICANN’s role in governing the Internet and that governance being global in nature, NOT controlled by the national governments of the world.

Remember that ICANN was created in 1999 and has had three different types of documents governing its relationship with the USG. We have gone from a “Memorandum of Understanding” to a “Joint Project Agreement” to now an “Affirmation of Commitments” (AoC). To quote Bret Fausett, in this ever lightening chain of commitments, what is the next step? Facebook Friends?

Seriously, this removes a serious problem for ICANN. Since its inception ROW has been troubled by the exclusive oversight that the USG had over ICANN. The Internet is global, so should the oversight be. This has led from time to time for calls for the UN, the ITU or some other quango to take over from the USG. The AoC addresses this and gives the ROW a large say in appointing the group that provides oversight to ICANN. This is a HUGE step forward.

Notice I did not say that the ROW has a say in oversight, just in appointing the group that provides oversight. This is equally important. The terms of this oversight are laid out in the AoC and what happens if ICANN does not abide by these terms is also spelled out, the AoC fails and we are back to where we were to try again. This is a fantastic way to allow ICANN to flourish independently and to keep ICANN a global, not international organization. Think of this as a trust and those appointed as trustees. They will determine whether the terms of the trust have been abided by. If there have not been complied with then ICANN reverts to its previous state of USG control and we start again.

In its day to day operations this will not make a lot of difference. There were VERY few circumstances where the USG had a heavy hand. The dis-allowance of .xxx and the occasional burst of input when big IP interests would complain about domain names and copyright are the few exceptions. The USG deserves a thanks for its role to date.

It is also very important that we (and by “we” I mean “we the Internet”) have avoided the UN or the ITU. Either would have been disastrous for ICANN in my view.

All in all a good day and another positive development in the young regime of Rod Beckstrom as ICANN CEO. Now let’s see if he can thread a needle on new gTLDs!

Copyright’s Creative Disincentive

Tucows is participating in the ongoing Canadian copyright consultation. We will be making a formal submission and I will be appearing at the final round table tomorrow (Tuesday, September 1, 2009) in Peterborough, Ontario, Canada.

We are big fans of government embracing the Internet in order to better get input from its citizens to help with the legislative process. While the methods have evolved, the submissions tend to be very formalistic. By lawyers for lawyers. To try and evolve that we have commissioned an original piece by the brilliant David Weinberger discussing the fundamental misconception in linking copyright to creativity. This piece will form the bulk of our submission and follows.

In addition we urge Canadians to contribute to the process. A fantastic resource on how to do so is here. We all owe a big thanks to Michael Geist for his hard work in this process.

My oral comments tomorrow in Peterborough will focus on the role of service providers and how they are being miscast in this dialogue.

Tucows’ views can be summarized as follows:

  1. We believe any legislation should be technologically neutral. A DMCA-like approach that considers a technology or a non-infringing use of a technology illegal per se is a huge brake on innovation.
  2. We believe that fair dealing should be expanded to provide greater innovation and creator opportunities. Culture builds on culture and in order to derive the full benefit of the magic of the Internet we need to recognize that the Internet has sped up the dissemination of culture which naturally creates greater opportunities for sharing and extending. This is inherently a feature not a bug.
  3. We believe that service providers should be neither policemen nor tax collectors for the existing rights holders. Service providers should be focused on helping ordinary Canadians use the Internet more easily and more effectively.

Please speak out and please enjoy the work that follows:

Copyright’s Creative Disincentive

The argument seems simple: (a) If every time you put apples out on your fruit stand, they’re immediately stolen, pretty quickly you’ll stop putting out apples. (b) What’s true of your physical property is also true of your “intellectual property.” (c) Therefore, without a system of strong copyright, creators will have no incentive to create.

The nice thing about that argument is that it makes a factual claim: Weaken copyright and you decrease innovation. That the facts so resoundingly, enthusiastically, thumpingly dispute that conclusion tells us that the syllogism is wrong. Indeed, the facts say the syllogism has it backwards. Current copyright laws are holding back the innovation they were intended to spur.

The argument gets one crucial point exactly right: Copyright grants creators temporary monopolistic control over the publishing of their works in order to serve a larger social goal: to maximize cultural innovation, production, and sharing. But the syllogism is wrong because it misunderstands the role of incentives, and it misunderstands them so blatantly that it seems unlikely to be accidental.

Creators often do have financial incentives. Just like everyone else. Some artists want to make enough to quit their day job. Some want to get rich. Some want to make enough to pay for the materials they need. Some want to prove to themselves that their work is appreciated. Some want to prove it to their parents. The amount of money they need in order to keep creating varies as widely as the role and meaning of that money.

Even within any one class of incentive, the effect of money on creativity is rarely a straight line. Mordechai Richler would not have written four times as many books if his advances had been four times larger. The Guess Who might be tempted to release more recycled compilations if you pay them enough money, but their songs would not have gotten 1% better for every 1% their revenues went up. Thus, while copyright may provide a financial incentive that enables many creators to create, stronger copyright that results in more money does not necessarily result in more creativity.

In fact, how long would it take you to list the bands that have gotten worse as they’ve gotten richer?

For the most important creative cultural works, money is an enabler but not the reason the person is putting pen to paper, chisel to stone, or camcorder to eye socket. There are so many other reasons people create — from G-d whispering to them, to a neurological itch that can’t otherwise be scratched, to wanting to get laid. Copyright could do its job — facilitate an innovative, sustainable culture — if it aimed merely at enabling creators to create, rather than thinking that the creativity-to-financial-reward curve is a straight line angled at 45 degrees.

Now, there would be no problem with setting up a system of laws that overemphasizes the financial incentives for creators if that system had no other effects. But it does, especially now that culture and economics have slipped the bonds of the old physics. Even if we devised a copyright law that provided the absolutely right amount of incentive for every creator to keep on creating, it takes more than motivated creators to build a creative, innovative culture.

It takes culture. It takes culture to build culture.

Whether it’s Walt Disney recycling the Brothers Grimm, Stephen King doing variations on a theme of Bram Stoker, or James Joyce mashing Homer up with, well, everything, there’s no innovation that isn’t a reworking of what’s already there. An innovative work without cultural roots would be literally unintelligible. So, incentives that require overly-strict restrictions on our use of cultural works directly diminish the innovativeness of that culture.

The facts are in front of us, in overwhelming abundance. The signature works of our new age are direct slaps in the face of our old assumptions about incentives. Wikipedia was created by unpaid volunteers, some of whom put in so much time that their marriages suffer. Flickr has more beautiful photos than you could look at it in a lifetime. Every sixty seconds, people upload twenty hours (72,000 seconds) of video to YouTube — the equivalent of 86,000 full-length Hollywood movies being released every week. For free. The entire Bible has been translated into LOLcat (”Oh hai. In teh beginnin Ceiling Cat maded teh skiez An da Urfs, but he did not eated dem.”) by anonymous, unpaid contributors, and while that might not be your cup of tea — it is mine — it is without dispute a remarkably creative undertaking.

And it’s not just these large, collaborative projects. There are sites that every day aggregate the quirky, the awe-inspiring, the beautiful, the maddening…so many that there are sites that aggregate the sites that aggregate the sites that aggregate the works. All for free.

If you look at the works that are being produced — the facts on the ground, so to speak — you can get a glimpse of what is actually driving this creativity. It’s sure not the money. At site after site, amateurs — those who create for the love of it — produce and post works that are responses to other works. Sometimes they are responses to other amateurs. Sometimes they are responses — often mocking — to what the mainstream, paid culture has produced. For example, Auto-Tune the News turns mainstream news footage into politically astute, satiric music videos. In either case the incentive is clear: It is culture itself.

Culture is culture’s incentive. Works are the spur for creating more works. The greatest prompter of creativity is other creativity. Money is sometimes an enabler. But that has nothing to do with copyright laws that protect works for 70 years after the artist is dead. If enabling a culture of innovation is our aim, then cranking up the copyright protection dial to eleven is exactly the wrong way to go. Increasing the volume doesn’t make the music better. Access to more music makes the music better. The connections among people spurs the creativity that creates more connections that create more creativity.

In fact, excessive copyright protection, like a virus, seems to sicken innovation in every field it touches. Indeed, the industries currently trying to survive the digital upheaval by holding onto strict copyright enforcement laws are the ones that have been least innovative in coming up with new business models. Copyright is making them blind to the present and fatally uncreative about the future.

They should learn a lesson from what’s going on around them. After fifteen years of the Web making it easier to spread a work than contain it, and far easier to distribute it than to delete the existing copies, we now know some things for sure: People will create more than we can ever take in, without regard for financial recompense. Creators are carried forward by the creative swell around them. Culture enables more culture. And innovation overall is damaged by protectionism at the individual level.

The cultural opportunity before us is truly epochal. Yet, from the comedy of pretending that we’re looking out for the rights of little-known poets and singer-songwriters, we’re pushing ahead into the tragedy of willfully choosing to keep the cultural dimmer set on low. If our aim is to extract as much financial gain as we can from our culture, then let’s just say so. Far better an honest turning away from the vibrancy of culture than a high-minded pretense backed by patently false syllogisms.

Creative Commons License
Copyright’s Creative Disincentive by David Weinberger and Tucows Inc. is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Canada License.

Elliot Noss on the Proposed U.S. National Broadband Plan

Tucows’ CEO Elliot Noss explains the initiative proposed by David Isenberg to focus the upcoming National Broadband Plan on “faster, more affordable, more ubiquitous, more reliable connections to the Internet.”

As a signatory to the initiative, Noss believes it’s essential not to confuse “broadband” with access to the Internet. It needs to be spelled out explicitly to make sure that the plan meets the needs of ordinary citizens.

More information here: http://www.itstheinternetstupid.com/

Some Thoughts on ICANN’s Next CEO

Now that the search has officially commenced, I thought it might be useful to make some public statements as to what I would like to see from the next ICANN CEO. My comments are driven by what I see as the deficiencies over the last number of years and, most importantly, by a deep desire to see the ICANN experiment in global governance succeed. The Internet is the greatest agent for positive change the world has ever seen and a healthy ICANN strengthens its ability to foster positive change.

For me there are three essential qualities required and they are tough to order because I would like to see them all. They are as follows:

  • a deep love and understanding of the Internet;
  • the ability to “run a business” responsibly; and
  • the ability to lead with vision.

First, a deep love and understanding of the Internet.

“Choose a job you love, and you will never have to work a day in your life.” ~ Confucius

For me, Mike Roberts was the best ICANN CEO to date and the reason is that he was the one who most loved and understood the Internet. ICANN is responsible for names and numbers, which are about finding and using resources on the Internet. Appreciating what that means and why it is important is central to being the ICANN CEO. Too much of the last few years have been about ICANN as an institution for the institution’s sake, not for having ICANN live in service to the Internet. A great CEO will create and lead an ICANN that lives in service to an open Internet and to the role of names and numbers inside of that.

Second, the ability to run a business responsibly. ICANN as an institution has ballooned over the last few years, seeing its budget grow by massive amounts. I am in favor of a healthy ICANN that is not begging its constituents for money and that is able to provide necessary staff support for policy creation and management. However, the money should be spent like it was their own! There is much too much wasted on very expensive consultants, staff duplication and on unnecessary efforts. There is a good core of credible and productive staff who I believe will respond to this so positively.

The next CEO should be comfortable learning about an issue and making a decision. Rather than pay BCG, McKinsey or some other exorbitantly priced consultant to call me, and a dozen others, to ask for our opinion on an issue, the CEO himself will research a topic and then come to a decision. Yes, ICANN is a consensus-driven, bottom up organization, but that need not apply to every issue. To be clear, I am talking here about day-to-day issues like a new RAA, transfers or whois.

The next CEO should be comfortable making decisions, leading the team and spending money responsibly. They should be a doer. The do/say ratio in ICANN needs to increase immeasurably.

Lastly, the next ICANN CEO needs to be able to lead with vision. So much of what ICANN deals with concerns the future, not the past or the present. The next ICANN CEO needs to possess enough imagination to create a broad vision for the organization and lead staff and the various constituents in that direction. This does not mean they should drive the policy-making process, nor that they should substitute their judgment for the community, but that they should have a big picture view of what the organization looks like when it is functioning well and how the organization exists in service to the Internet.

The organization should not lurch from issue to issue like it does now, constantly fending off imagined existential threats. It should move in a clear direction toward a bright future.

Yes, I know I am looking for a lot in one person, but I really believe that at this point in the Internet’s history, ICANN demands more than a CEO. It needs a passionate visionary.

Thoughts on ICANN’s ‘Open’ Domain Namespace

I recently did a brief interview with Tom Sullivan of Fox Business News on the topic of ICANN’s recent move to open up the namespace and create a large number of new top-level domains. I’ve been somewhat distracted by personal endeavours for the past month, so the interview gave me the opportunity to really think hard about what ICANN’s decision means for the industry and where it might leads us in the next three to five years or so.

icann.jpgNew TLDs mean new competition:

New competition is a “really good thing” in this market. For too long the registry management space has been dominated by a very small number of players. Lack of choice hampers innovation. Worse, it has lead to increasing prices for what is otherwise, a commodity product. It may not happen immediately, but I believe that increasing the number of competing TLDs will keep rising prices in check, and possibly even lower them over the longer-term. Further to this, not a lot of innovation is coming out of the existing players. .MOBI, for instance, has done some interesting things, but no one is really going out on a limb and doing exciting things with a TLD. Give everyone the capability to get a TLD and I guarantee you, interesting things will start to happen.

The namespace will finally internationalize and personalize:

Since the origins of the Internet, domain names were limited to ASCII strings. This restriction will quickly evaporate as IDN TLDs come into existence and we will see massive growth in non-English, non-ASCII, top-level domains serving various communities. This is huge by itself! Making it even bigger is that the additional choice will make it even easier for regular people like you and me to get a meaningful domain name that relates to our personal identity. When .INFO opened up, the first thing I did was register rader.info because I had missed out on rader.com, net, org and ca. The mass market represents a huge growth opportunity, but I don’t think that .com, .net, .org, and the others have enough upside left to adequately capitalize on the demand it represents. New TLDs and innovative use of existing TLDs will make it easier to tap into these opportunities.

New TLDs are great for trademark holders:

They just don’t know it yet. Right now, rights holders are rabidly opposed to new TLDs because they believe it will create a nightmare for them in terms of protecting against trademark abuse in all of these new TLDs. On its face, the argument looks valid. After all, it’s tough to protect Tucows’ trademarks and copyrights in a small handful of top-level domains. Creating hundreds, or even thousands, of new top-level domains makes it almost impossible for us to protect ourselves, right? Sort of. The UDRP will still be in place to deal with any inevitable abuse, but there is a real opportunity here for rightsholders that I don’t think has been properly recognized yet.

This announcement clears the way for big brands to create their own top level domains and build trust mechanisms into those domains that will go a long way towards getting the upper hand in the rights battles that are occupying so much of their time. What I mean is, Chase Bank will find it a lot easier to create a trusted online service relationship with their clients if they do it within the context of a .chase top-level domain. It won’t eliminate phishing, but it will raise the bar. Over time, I believe internet users will start finding meaning in top-level domains that doesn’t exist today. The same way an average computer user recognizes the difference between .jpg, .xls and .pdf files, they will also recognize the difference between a .com, .fox and .nike domain extension.

New TLDs will force software developers to deal with security issues:

I don’t necessarily think that new top level domains are going to make it easier for phishers to phish, spammers to spam and scammers to scam. But I think there are enough people that are worried about this that it will force the issue to some sort of a resolution. The first step lies with the browser and email client vendors. Implementing URL authentication and verification tools will take some time and trial and error, but I think it will be a great development for overall consumer satisfaction and safety.

ICANN should, and will, get out of the way:

The Internet is a decentralized, unregulated space. Domain names aren’t. ICANN needs to get out of the way as much as possible and allow the namespace to develop its own characteristics along the same lines as the rest of the Internet. ICANN has been a centralized chokepoint for far too long, mostly at the behest of telco interests. This move clears the way for ICANN to do more coordination and less regulation. Strangely, this development comes at a time when most are calling for ICANN to regulate even more. I don’t think that this is either practical or desirable and will have strong negative effects on the viability of the DNS over the long term if they go this route.

This isn’t really news for .com domainers:

Domain names are a little bit like real estate. Quality domain names will always be quality domain names. Short, memorable, easy to spell – all hallmarks of a great name. Great names with great extensions, like fox.com will always be great. But, for specific purposes, perhaps fox.news is a better name? It all depends on what you want to use the name for and how strong your existing brand is. I don’t think that this necessarily leads to any sort of real negative impact on .com name valuations, but it will create new opportunities for buyers and sellers.

Overall, I don’t think that anyone actually recognizes the true size of the opportunity that is facing the Internet. I’m quite excited at the prospects hinted at by this announcement and look forward to capitalizing on as much of it as possible.

Tucows continues fight for domain name portability

After a long wait, ICANN has issued a much needed clarification describing how it interprets its domain name portability policy.

icann.jpgTucows has been an advocate of strong domain name portability policy since the early days of ICANN. We believe that consumer choice is a fundamental element of a healthy market. Without strong domain name portability policies the domain market will never be as strong as it should be.

The debate dates back to the early days of ICANN. Network Solutions, still owned by Verisign, had 100% market share. They were also the only registrar. By the end of the first full year of domain name competition, their market share was almost cut in half, falling to just 52.9% market share. At this time, fewer than 1 in 5 customers were choosing to do business with Network Solutions.

The former monopoly had serious problems to address.

The primary driver of this massive loss of market share was the substantial drop in domain name prices that Tucows introduced into the market in January, 2000. At the time domain, the early competitive registrars and Network Solutions, were selling domain names for $30-$35 each. We sold our first name as an accredited registrar on January 16, 2000 for $10 making us the first competitive registrar to seriously compete with NSI for real market share. NSI has since reduced their prices to closer match the market but they are still viewed by many as a high-price provider.

When faced with these prospects, most business owners react with a competitive response – new pricing, special promotions, enhancing features, etc. Network Solutions reacted by making it as difficult as possible for domain registrants to transfer their business to one of the newly created registrars. Instead of working harder to keep their customers, they were going to make it impossible for their customers to leave.

Tucows advocacy resulted in ICANN adopting a set of domain name portability policies entitled “Inter-Registrar Domain Name Transfer Policy”. In its earliest form, draft versions of this policy proposal were actually modeled on Tucows transfer practices which continued to be viewed as a benchmark for the industry. While the new portability policy had widespread support amongst the community, Network Solutions, Go Daddy and Register.com strongly opposed its adoption.

Network Solutions and GoDaddy reacted by implementing more obstacles for customers who wanted to leave and try a new provider. They claimed these restrictions would enhance “consumer protection” and “security” but the net result was simply that it became a lot harder for registrants to transfer their domain names away to new providers.

These customer hostile policy abuses continue into the present day.

This is why Tucows especially welcomes this clarification from ICANN. This advisory specifically addresses many of these policy abuses and provides greater recourse for our staff to help our customers in resolving domain transfer related issues. Provided that ICANN backs up this advisory with clear enforcement against those ignoring its advice, it should become easier for duly authorized registrants to safely and securely transfer their service to a new provider.

Verisign announces fee increases for .com/.net

According to a press release from Verisign, effective October 1, 2008, the registry fee for .com domain names will rise from $6.42 to $6.86 and the registry fee for .net domain names will increase from $3.85 to $4.23.

This should come as no surprise to those who follow what’s been happening in the domain name industry over the last few years. Just this past October, a similar price increase went into effect, raising the registry fee for a .com from $6.00 to $6.42. Other registries followed suit raising prices across the board for generic top-level domains.

Elliot Noss, Tucows CEO and President called it “a dark day in Internet history.” At the same time, he predicted perfectly what would happen in 2008, saying, “Worse, this now signals a near-annual event that will take place in all major gTLDs. It is simply wrong.” You can read the full text here.

If history is any indication, we can expect other registries to announce similar fee increases.

Live from ICANN

icann_meeting_logo.pngThe Internet co-operated this morning and I was able to get a Skype call going between Toronto and New Delhi, India where Adam Eisner, our Product Manager, Domains, has been participating in the 31st ICANN General Meeting. Adam and I had a brief chat about what’s been going on at the meeting this week including a bit about the experience of being in New Delhi.

Adam has promised a more extensive report on what happened at ICANN once he gets back. Expect that sometime next week.

To listen, either use the embedded player, or you can download an MP3 version.

Click the play button to listen.