Re: [wg-c] lock-in

[John Charles Broomfield <jbroom@manta.outremer.com>]

> 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.

Of course it does happen, and of course it WOULD happen. Most ccTLDs can
just about impose any price they see fit, and it's not the PRICE that stops
the locals from registering in those TLDs (bar very few examples). Generally
what makes or breaks the amount of registrations is the hassle or lack of it
when accepting registrations. Apart from that, you will find more names
registered (wrt region inhabitants) where the computing level is higher than
where it is lower (factoring of course the "hassle-level" of the registry).
Spain went from free to charging. ".com" went from free to $70. Same with
most registries I know of. It's not the price, it's how badly the entity
wants that particular combination of letters because of their specific
meaning (sorry, no added or substracted value is given by the entity that
runs the registry unfortunately). And in any case, if you're running a
registry on a very fine margin, your profits per domain are low. Once you
get past a certain threshold, you can decide to multiply your yearly charges
by -say- 10, effectively kill off the newcomers, and start milking those you
already have. Just sit back and happily collect your yearly rent... Great
life! A sizeable amount of your existing customers would stay just because
of that cost of migration. (And you'll continue to get the big names just
because their scared stiff of losing their trademarks).

> 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 actually eliminates that danger even more is making a competitive bid
for the running & maintenance of the registry and repeating it regularly
(say every 3-5 years). It's the difference between a competitively bid
registry and a non-competitively bid one (this last could be called a
perpetual grant in fact).

Yours, John Broomfield.