RE: [wg-c] breaking up (names) is hard to do

["Kevin J. Connolly" <CONNOLLK@rspab.com>]

The US Department of Justice has been known to compute the
ratio of market price to Average Variable Cost (as an approximation
of marginal cost) when identifying markets and economic units 
suitable for antitrust investigation.  Under "perfect competition,"
of course, the ratio is 1.0.  Case law indicates that ratios of 5 or more,
when properly explained by an expert witness, are admissable to show
monopolization, in violation of Section 1of the Sherman Act.

I have been told that the NTIA has asked the DOJ to withhold action
pending the consensual resolution of the NSI monopoly.  There is a 
certain amount of anticipation that the opening of the Shared Rehistration 
System may reduce the size of the ratio, but there are those who suspect that
NSI has erected barriers to entry which are so substantial that the
monopoly pricing will continue unabated.

KJC

>>> "Roeland M.J. Meyer" <rmeyer@mhsc.com> 08/25/99 05:25AM >>>

> Although they are new as a business category, registries and
> registrars
> entail marketing, sales, technical and operations aspects
> that are not.  It
> is a business that is quite similar to a number of other,
> well-established
> lines of business, albeit rather simpler than those other.  As such,
> determining reasonable business costs isn't all that tough.

As I said Dave, any two-bit book-keeper can back-track cost data for an
established business. The fallacy is believing that this should be the
market price. It is why the idea of price controls died at the Federal
level.


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