RE: [wg-c] lock-in

["William X. Walsh" <william@dso.net>]

On 22-Nov-99 Kent Crispin wrote:
> The FTC also failed to consider the vast disparity between value and
> cost -- maintaining a domain name record is, for practical purposes,
> costs very close to zero, while the value to the company may be in
> the millions of dollars.  That leaves a lot of room for price
> increases that are well below the threshold of visibility. 
> Concretely, the cost of a domain name could be increased by a factor
> of ten, and still not equal the cost of having a legal professional
> do even a cursory review of the situation.

First of all, Kent, this situation WOULD NOT OCCUR.  Even in a total
non-controlled free for all, as the FTC report indicates, it would be
highly unlikely.  It would give the registry perhaps a short time gain,
but the fact is that they would lose business in the log run because of
the negative stigma attached to such a practice.  You have yet to
illustrate a SINGLE example of where this indeed HAS occured, and why you
think it would be likely.  On the internet, image is a very important
thing, and it can make or break any business.  A registry would never
survive acting the way you are trying to scare people into thinking they
would act.

Lastly, all it takes to eliminate this issue, which would occur with both
models, is to include contractual obligations with regard to price
increases.  It really is that simple.

What I find interesting in your little report is this:

> In fact it appears that the economists involved in th FTC paper were
> hurried, were not familiar with the Internet, and simply quoted
> general studies on the subject of lock-in.  They devoted very little
> time indeed to consideration of the concrete situation with domain
> names.  (***)

And this:

> (***) Incidentally, the FTC report also addressed the issue of
> non-profit vs for-profit registries, and committed the same sin --
> they failed to analyze the reality of the "non-profit" scenarios
> proposed, and, once again punted to general academic studies on the
> subject.  In particular, they failed to consider the dynamics that
> obtain when registrars have significant control over registry policy. 
> The FTC paper also fails to consider the following: 1) most of the
> improvements claimed for for profit registries also come with a
> scheme that allows for profit registry *operators*, and non-profit
> registries, with all other functions delegated to competitive
> registrars; 2) the registry function in the "non-profit" models is a
> fairly narrow one; 3) "competitive registries" is a meaningless term
> unless you allow for the possibility of registry failure.  Registry
> failure is not conducive to the "stability of the Internet", the
> primary constraint on ICANN (both from the White Paper, and from
> later expressions of the ICANN board.)
> 

Sorry, Kent, but I dispute that the FTC does not know about the Internet. 
They have been intimately involved in numerous matters with regard to the
internet over the last several years.  They report was not rushed, in fact
it took them several months.  

I find your criticism above to come down to "Their study is flawed because
it didn't support my position, and they didn't give my arguments
sufficient weight in my opinion."


--
William X. Walsh - DSo Internet Services
Email: william@dso.net  Fax:(209) 671-7934