Re: [wg-c] Switching costs: a proposal

[Kent Crispin <kent@songbird.com>]

On Sun, Aug 29, 1999 at 03:48:09PM -0400, Milton Mueller wrote:
[...]
> 
>It occurred
>to me that the "switching costs" faced by businesses in regard to real estate
>rental are equal to if not greater than those in domain names. The rental
>property proprietor has about as much "lock-in" power as any domain name
>registry, if not more. Think of the costs of moving merchandise, temporarily
>closing the business, advertising the change of address and phone number,
>altering business cards, notifying suppliers, etc., etc. Yet local businesses
>do change locations, and there is no clamour for transforming all business
>property into rate-controlled, non-profit ownership.

This analogy was discussed some time ago, I don't remember where...
1) The actual measure of "lockin" is the *ratio* of switching cost to price
of item.  Real Estate is priced at thousands of dollars per year; a domain 
name costs tens of dollars per year.  

2) Even without rent control there are very elaborate special legal 
structures for real estate.  Tenants rights are ensconsed in law; 
there are no such guarantees in regard to domain names.

3) In the cyber realm the lockin problem is much worse, since the
very nature of the "cyber estate" is that is defined through links in
cyberspace.  When

> Now for the proposal:
> 
>In the domain name arena, the problem of switching costs is better addressed by
>contractual obligations that establish a code of conduct for how transfers of
>clients from one registry to another might be handled.
> 
>E.g., (just off the top of my head) there might be a specification that once a
>customer notified a registry of its intention to switch, the registry is
>obligated to maintain its existing rate for at least one year, and perform
>certain relay functions adequately.

1) One of the things that is clear, both from history, and from the 
present example of NSI, is that monopolists are endlessly creative 
in evading rules.  I am very skeptical that you can come up with a 
code of conduct that is both effective and enforcable.

2) Even if you could, we don't want ICANN to have the bloated
regulatory infrastructure necessary to enforce such codes of conduct 
-- one of the major concerns of everybody is that ICANN will become 
a giant regulator in the center of the Internet, and giving it 
complex enforcement tasks is the way to ensure that.

Behind every regulatory scheme is an enforcement cost.  Complicated 
contractural controls are very expensive because they are subject to 
interpretation, and hence will be 1) tested in court many times; and 
2) will potentially require a bureaucracy.

One of the prime advantages of the simple requirement of non-profit
registries is that it gets to the heart of most of the feared abuses,
but is very simple and cheap to implement. 

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