[wg-c] registry contracts

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

	Milton raises the question: What, exactly, are the dangers that for-profit
registries pose?  My take is this: Any TLD registry has the potential to
wield significant market power, to the extent that the TLD it controls is
more attractive, to some subset of users, than are the alternatives.
That's an especially powerful concern so long as there are only a
relatively small number of TLDs.  A for-profit registry is more likely than
a nonprofit registry, especially one set up along the Nominet model, to
take advantage of that market power by jacking up prices -- setting prices
at economically inefficient levels, and collecting monopoly rents.  (In
general, entities with built-in market power have other problems — they
have leeway to skimp on service, and they become fat and lazy.  But there's
no strong reason to think that for-profits are more susceptible to those
problems than are nonprofits.)

	The price issue is, I think, a legitimate concern in connection with
for-profit registries.  Yet it's hardly obvious that the proper response to
that concern is to require that all registries be nonprofit.  Typically, at
least in the US, when we think that some actors in a market will
necessarily wield monopoly power (the venerable theory of the "natural
monopoly"), we don't require that they be constructed as nonprofit user
cooperatives; we impose price controls.  Price controls aren't a perfect
solution; they have all sorts of problems of their own.  My larger point,
though, is that there are likely more nuanced, and less sweeping, responses
to our concerns about the ways in which for-profit registries may exploit
their monopoly power than simply banning them.

	It seems to me, in other words, that we can go far towards consensus if we
can manage to agree that:

	[1] The folks on this list who have problems with for-profit registries
raise legitimate concerns; 

	[2] Those legitimate concerns can be addressed in the registry contract,
through means less sweeping than a requirement that all registries be
non-profit.

	If we can agree on those two points, the challenge is simply one of
figuring out what registry contract provisions we need.  (No, this isn't a
new point — it was made on the list some months ago.  But I think it's time
to raise it again.)

Jon


Jonathan Weinberg
weinberg@msen.com