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

[Jonathan Weinberg <weinberg@mail.msen.com>]

	I think Ross's response to my post is well-taken.  Price regulation of any
sort is always messy and costly.  Nor, I think, is it really sufficient to
require that folks operate on a strict cost-recovery basis (that is, that
they charge prices not in excess of cost -- really a different version of
price control).  That approach too would rule out most of the scenarios
Ross suggests.  In the end, the best answer is to try and make sure that
folks don't have monopoly power (and thus the ability, absent regulation,
to extract monopoly rents) in the first place.

	But -- controversial as this may be -- I think the only way to do that is
via free entry into the TLD namespace.  If I can switch easily from .sports
to .athletics, then .sports can exercise little market power.  If it's easy
to establish .athletics, then, when the .sports registry starts to gouge,
someone will in fact start .athletics (and Milton's proposal should address
the problem of lock-in and switching costs).  But if there *is* no
.athletics, or anything else like it, and there's no easy way to create it,
then .sports has market power corresponding to the degree that it's a
better TLD for certain registrants than any other, and it can use that
power to extract inefficient rents.

Jon


Jonatghan Weinberg
weinberg@msen.com


At 10:41 AM 8/29/99 -0400, Ross Wm. Rader wrote:
>> Kent's formulation suggests that -- just maybe -- many of us might agree
>>on a system in which a registry might or might not be operated on a
>>strictly cost-recovery basis, but *all* registries would be subject to
>some
>>sort of meaningful limitation on their ability to raise prices.
>>(Obviously, formulating such a limitation isn't straightforward, and some
>>folks have suggested to the list that it can't be done.  Yet I wonder.)
>>What do people think?
>
>
>While I don't disagree with the intent of your proposal (let's make sure
>that sld holders don't get screwed by a money grubbing registry) - I have
>serious reservations about the application of such a policy.
>
>Several scenarios immediately ran through my head would be "against the
>rules" in a price increased controlled situation...
>
>- new TLD comes online, registry offers free addresses for a fix period of
>time to increase adoption, followed by a price increase to a reasonable
>level sometime later....
>
>- registry finds that initial price determination was not realistic and a
>price increase is necessary to ensure minimal profitability on the
>registries behalf.
>
>- registry decides that his/her TLD is not a price sensitive commodity, but
>rather a value based service that commands a premium dollar
>
>- registry notices seasonal demand fluctuates and implements a market
>demand based price system that charges less during slow periods and more
>during busy periods
>
>- registry possesses an extremely unique TLD that holds very limited
>interested to the larger market, but an unusually high level of interest
>for a specific portion of the market and decides to implement an auction
>based process that allows the market to actually determine the price of
>sale...
>
>All of these fall outside of the typical pricing models that we have
>encountered thus far (x$ for y time period, plus renewals) and would like
>become foregone avenues of pursuit under your proposal...
>
>Obviously, this isn't a binary decision, but gven the option of fix-price
>vs. registry determined price, I would have to back a registry determined
>price and let the market sort out the dead models.
>
>-RWR
>
>
>