RE: [wg-c] Two Para D&I Summary (PPE)

["Kevin J. Connolly" <CONNOLLK@rspab.com>]

Price-fixing is illegal when it is an aspect of a combination in 
restraint of trade.  Antitrust laws prohibit monopolization, not 
competitive schemae.  The test is whether the price has been 
fixed at a level greater than would obtain under free 
competition.  Since free competition results in the market 
price becoming equal to the marginal cost of producing the 
object of commerce, an agreement which fixes the price of 
an object at the zero-profit level would not, under most antitrust 
analyses, be open to objection.  Of course, there could be other 
ways in which the schema could come under attack.  For 
example, if another good or service were tied to the zero-profit 
item (we make $0 profit on domain name registrations so long 
as you use Evil ISP to host your virtual domain at a price of 
$100/month + traffic and storage surcharges, and to make 
sure you don't make an end run around us, our people are 
the technical and zone contacts and we secure the zone file 
with Guardian) then I daresay the business model is illegal.

Moreover, an agreement to operate registry services on a 
strict cost-recovery basis does not fix the price of registrations 
to the consumer.  In fact, it doesn't even fix the price to the 
registrar, since a registry that operates more efficiently than 
others will, presumably, lower its prices (otherwise how would 
it still be operating on a cost recovery basis?).

Kevin J. Connolly
The opinions expressed are those of the author, not of Robinson 
Silverman Pearce Aronsohn & Berman LLP
This note is not legal advice.  If it were, it would come with an invoice.
As usual, please disregard the trailer which follows.

>>> "Christopher Ambler" <cambler@iodesign.com> 04/10/00 04:03AM >>>
That's nice, Dave, but you didn't answer the question.

-- 
Christopher Ambler
chris@the.web 


-----Original Message-----
From: owner-wg-c@dnso.org [mailto:owner-wg-c@dnso.org]On Behalf Of Dave
Crocker
Sent: Monday, April 10, 2000 12:06 AM
To: Simon Higgs
Cc: wg-c@dnso.org 
Subject: Re: [wg-c] Two Para D&I Summary (PPE)


At 11:48 PM 4/9/00 -0700, Simon Higgs wrote:
>How does cost-recovery not become price-fixing (illegal in the most 
>countries including the US)?

(here we go again.)

constraints on pricing are often entirely legal.

there is no such thing as a completely free market system, in the real 
world.  not even hong kong.

d/

=-=-=-=-=
Dave Crocker  <dcrocker@brandenburg.com>
Brandenburg Consulting  <www.brandenburg.com>
Tel: +1.408.246.8253,  Fax: +1.408.273.6464
675 Spruce Drive,  Sunnyvale, CA 94086 USA

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