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

["Roeland M.J. Meyer" <rmeyer@mhsc.com>]

> Behalf Of Kent Crispin: Sunday, August 29, 1999 6:11 PM
>
> 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.

Where did you get this? Of course I disagree. This type of response is
also one of the main reasons I don't like analogies. The price of the
item has nothing to do with it. It is the simple ability to switch and
someplace to switch to. The only relation cost has to do with it is if
the cost of switching becomes greater than some revenue fraction. This
indicates the degree of "pain" felt as a result of the switch. Typical
costs that are less than 1% of revenue are not felt much, when they
become greater than 10% they are noticed and anything above 25% of
revenue generally can't get approved without going to the BoD/Owners.
The fact that 1% may be 10,000 times the price of a new domain is
irrelevant.

> 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.

You ought to try living outside of California (an extremely consumer
friendly state), like Texas or Colorado, sometime. Besides, business law
covers domain names. A contract is a contract, unless it violates the
law.