Re: Re[4]: [wg-c] Re: IP/TM Concerns & New GTLDs

[Kent Crispin <kent@songbird.com>]

On Tue, Aug 03, 1999 at 11:47:43AM -0700, Roeland M.J. Meyer wrote:
> IMHO, we have misunderstandings all around. We are getting down to
> finger-pointing here. The bottom-line is that the IP community doesn't
> seem to want ANY new gTLDs.

Self-interest is a perfectly valid motive -- it is the basis of
capitalism, after all.  And it seems fairly clear that large TM
holders do not view the addition of new gTLDs as in their 
self-interest. 

Other interests would like to see an indefinitely large number.  So
the compromise being proposed is to add around half a dozen now, see
how that goes, and then work on adding more later.  Furthermore, I 
think that chartered TLDs would be accepted fairly readily, and they 
would have the desirable potential of adding competition with much less 
impact on TM owners.

> That scenario plays right into NSI's hand.
> NSI's policys are part of the reason for the IP community's
> recalcitrance. They are not anxious for a repeat, times 100. I can
> actually understand that.
>
> However, the IP community ALSO fails to understand that not having a
> ceiling on gTLD registries does NOT immediately deploy new registries.

But *you* understand it, and believe it, so *you* shouldn't care 
whether there is a numeric limit or not.

> The market is just not yet big enough for that to happen. That was the
> main point about all my business discussion. whether you agreee to the
> fine details or not.
> 
> We are all, also, confusing new gTLDs with new registries. I am as
> guilty of that as the rest of us. My figures were about deploying new
> registries. Once a registry is deployed, it is trivial to impliment any
> number of additional gTLDs. The large problem is that the existing gTLD
> registry (NSI), is very adequately positioned to do exactly this, with
> an existing gTLD registry. The only thing stopping them from doing so is
> the existing moratorium on adding new TLDs in the roots. That and lack
> of competitive need to do so.
> 
> A nacent registry would have a very difficult time competeing with NSI
> on any sort of equal footing. In fact, they wouldn't be. The numbers
> that I have published here are actually an estimate of what it would
> take to build a registry capable of competeing with NSI. Yes, it could
> be done cheaper, but it would not be market viable, IMHO. Those who
> criticize the cost estimates are clearly doing so without this
> understanding. The objective isn't to build a minimal, low-buck,
> registry, rather it is to build a competitive gTLD registry. Anything
> less and NSI would flatten it, make road pizza out of 'em. Any investor,
> in such a project, would require this level of competitiveness or they
> would not waste their money.

The CORE registry was designed to compete with NSI.  It cost, in
*very* round numbers, about $1M.  On the other hand, Nominet is a
completely successful effort, built originally for much less than
$1M, and it does fine.  That's because REGISTRIES ARE NATURAL
MONOPOLIES.  It isn't necessary to be the size of NSI to make a
comfortable iving for the rest of your life.  Small registries are
perfectly viable as businesses.  Most of the chartered TLDs I
mentioned in my earlier post could never hope to compete with NSI,
because they have limited appeal.  But they are natural monopolies,
and can do just fine completely independent of NSI.  Owning such a
registry would be *wonderful* -- it would be like having your own
little private goldmine.  I completely understand why people would
get so attached to the idea -- I certainly wouldn't mind owning a
nice, benevolent little monopoly, all my own. 

However, I actually agree with you -- the numbers are a quibble, and
the real value of your point is the competition argument.

In my comments to the White Paper I discussed this issue -- adding a
dozen new registries is simply not enough to guarantee competition,
not because they are not viable, but because they *will* be viable,
and NSI will simply buy them up.  Adding new proprietary registries
is a recipe for consolidation, not competition.  Unfortunately, there
is no easy way to bring competition into a field with one totally
dominant monopoly player. 

> To Ken Stubbs:
> If you think that you could build a gTLD registry that could compete
> with NSI, for under $2MUS then good luck to you, but not a single
> investor would agree with you and they vote with $cash$. The marketing
> costs alone would run you into bankruptcy court, in less than 3 months
> of operation.

The CORE registrars all invested $cash$ in a gTLD registry on exactly
that basis, over a year ago, and they are still here.  Furthermore,
they aren't going away.  Another case of bumblebees not being able 
to fly, it seems to me.

-- 
Kent Crispin                               "Do good, and you'll be
kent@songbird.com                           lonesome." -- Mark Twain