Re: [wg-c] registry contracts

[Kent Crispin <kent@songbird.com>]

On Mon, Nov 15, 1999 at 01:57:30PM -0800, William X. Walsh wrote:
> 
> On 15-Nov-99 Kent Crispin wrote:
>> On Mon, Nov 15, 1999 at 01:58:08PM -0800, William X. Walsh wrote:
>>> 
>>> On 15-Nov-99 Eric Brunner wrote:
>>> > Caroline,
>>> > 
>>> > 
>>> > One issue with the for-profit model is the probability of consolidation.
>>> > 
>>> 
>>> Contractual regulation #1
>>> "No organization shall have direct or indirect control via acquisitions,
>>> subsidiaries, etc, over more than xx TLD registries."
>>> 
>>> Next issue?
>> 
>> Define "indirect control".
>> 
> 
> Subsidiary, acquisition, own more than xx% of stock in, etc.  How would you define
> it?  This was just meant to be a framework.  

My wife is the controller for a venture capital firm.  Before that
she worked for an investment banking firm.  On occasion I have been
entertained by descriptions of incredible cascading webs of
corporations, S-corporations, partnerships, general partnerships, and
so on -- in the investment banking firm in particular I got the
impression that they create entities like this the way you and I
create lines of code.  That is, it is my strong impression that it
isn't an easy problem to define "indirect control". 

But more important, I think you missed Eric's point.  His point was 
not that consolidation is bad, just that it is a natural consequence 
of the arrangement being discussed.  

From a consumer point of view, there is a real advantage to
consolidation, because it essentially costs no more for a registry to
manage two TLDs than it does for it to manage one TLD. 

For example, Ambler and Fenello could pool resources and run .web and
.per in one data center just as effectively as if they were run
separately, and for essentially half the total cost.  If their prices
were based on competition, then the prices they charge to customers
should drop as a result of their cost savings.

In fact, you could run a registry for 100 TLDs on the same
infrastructure it would take to run a registry for 1 TLD, with no
additional cost except to scale by volume.  From a consumer point of
view, the costs of marketing those different TLDs are a pure waste of
money -- the marketing that would distinguish between these 100 TLDs
provides *no* value to the customer.

[To put it another way, Ambler might spend $1,000,000 to convince me
that I should register in .web instead of .tld.  But that $1000000 is
a pure waste, because there is absolutely no functional difference
between .web and .tld, and I am perfectly capable of making that
decision on my own.  And it is I, the end consumer, who ends up
paying for that $1000000 in advertising cost.]

Sorry -- got sidetracked.  Anyway, there are very good, sound,
economic reasons that registries, for or non profit, would
consolidate, and in fact it is almost inevitable, if there are many
new TLDs. 

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