Re: [ga] Secondary market - criteria?

[William X Walsh <william@wxsoft.info>]

Thomas,

Very well articulated position.  I find myself agreeing with most
every point you make.  I hope others take the time to read it with an
open mind as well.

Sunday, Sunday, January 13, 2002, 5:15:48 AM, Thomas Roessler wrote:

> Rick Wesson has asked this GA for criteria any proposal for handling 
> the deleted domains market has to fulfill.  Even though many who are 
> writing here (with the notable exception of Bret Fausett) seem to be 
> blantantly opposed to the WLS proposal, this topic is generally 
> worth discussing.

> Verisign wants input from the registrars constituency on the WLS 
> proposal by January 18 (that's next Friday).  This indicates that we 
> don't have a whole lot of time.  For this reason, I'd strongly 
> suggest that we don't bother debating whether or not we need a 
> working group, what mailing list should be used by that working 
> group, who should chair it, and whether the Pope needs a 
> representative.  Eric's anonymous "friend" is quite right that it's 
> that kind of stuff which has ruined the GA in the past.

> Instead, let's try to understand the problems on this very list.

> In fact, I think that the requirements posted by Bret in 
> <http://www.dnso.org/clubpublic/ga/Arc09/msg00194.html> are mostly a 
> good starting point for such a debate.


> But one of them is particularly interesting: "the current registrant 
> should make his or her decision to renew blind to the value placed 
> on that domain name by prospective registrants".

> It's interesting because it's just the opposite of the suggestion 
> posted by Elliot Noss.  In fact, what Bret suggests is deliberately 
> adding more inefficiency to the domain market by trying to make sure 
> that current registrants of a domain will release it to the pool of 
> available domains as soon as it's not used.  The philosophy seems to 
> be:  You lease a domain at USD such-and-such year, use it, and 
> return it to the pool for the next one to use it.

> The problem with this approach is, of course, that domains are worth 
> more to some than they are to others, and that they cost still less. 
> Now, as Noss describes in his message, when you combine this with 
> traditional domain pricing, you end up with a price gap which can be 
> exploited by speculators - or by those registrars who offer 
> back-snapping services for domains, or by the registry.

> HOW precisely the money is really distributed is irrelevant from the 
> point of view of those domain name owners who actually want to use 
> their domain (and don't just want to trade them).

>  From this point of view, RRS (afternic), WLS, and the current system 
> are all equally bad, and prize-driving.  In fact, figure A of the 
> Afternic proposal gives some nice insight in what happens: RRS 
> maximizes registrar earning (thus, it's really just a 
> make-some-registrars-quite-rich scheme), the WLS scheme splits most 
> of the money from the gap between the registry and speculators 
> (while making some ways to speculate considerably more expensive at 
> the same time), and the current system has the interesting feature 
> that the back-order services work best and cheapest when there is 
> few competition, but inevitably become expensive as soon as more 
> competition arrives, and the chance that any particular player gets 
> a domain decreases.  But still, the current approach will shove a 
> lot of money into a lot of registrars' pockets.  It's just not good 
> for the non-speculating registrants...


> Now, what happens when you follow Elliot Noss and drop Bret's 
> postulate that current registrants shouldn't know about the value of 
> their domain?  First of all, there would be an incentive to keep all 
> domains but the most worthless ones - the latter ones being returned 
> to the pool of available domains.  This may generate predictable 
> revenue for registrars and the registry. It may also put those out 
> of business (or at least make business more difficult for them) who 
> are currently hunting for deleted domains.  It would, finally, make 
> life more difficult (though not impossible) for speculators.

> It would, of course, also put some of the money into registrants' 
> pockets which ends up with registrars, the registry, or professional 
> speculators according to the other proposals, and with the current 
> state of affairs, where selling a domain name does not seem to be 
> something mainstream registrants do, and where many registrants just 
> may not know that their domain has a value.


> Quite frankly, the more I think about this, the more I like the idea 
> of letting registrants know about their domains' value, and the more 
> I dislike ideas like the ones from RRS, or like Bret's postulate, 
> which both just make sure that the money does _not_ end up with 
> average registrants.

> Now, what about WLS?  It would, ultimately, be put out of business,

> but it would, on the other hand, probably not do much damage to the 
> development of a healthy market.





-- 
Best regards,
William X Walsh <william@wxsoft.info>
--

"There is no better way to exercise the imagination than the study of
the law. No artist ever interpreted nature as freely as a lawyer
interprets the truth."
-- Jean Giradoux

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