Re: Monopoly/Oligopoly

[Carl Oppedahl <carl@oppedahl.com>]

At 12:15 PM 12/25/96 -0500, Alan Sullivan wrote:

>It is all a matter of perspective I suppose. I do not see an inherent
>contradiction.  The current situation is that the are no other registries
>competing with NSI (hence NSI has a monopoly).  The exclusive custody of
>a gTLD (exclusive use) by a registry does by itself mean there is a
>monopoly.  MY point is that if other registries existed that had
>exclusive use of a gTLD as NSI now enjoys, then there would be
>competition between those registries.

It is difficult for me to believe that anyone would think that adding one
or more new TLDs could possibly bring about "competition between ...
registries".  Is no one paying attention here?  

First:  there are already some 180 registries!  Anybody who doesn't want to
pay NSI's fees can simply register with one of the 180 or so other
registries.  Increasing the number to 181 or 188 does not meaningfully
increase "competition".

Second:  for any established business, changing domain names is pretty much
impossible.  If I have invested several years of my life in some COM
domain, it is of less than no interest that there have always been some 180
other registries I could have registered in.  And it is of less than no
interest that some new TLD might be permitted to come into existence and
that a person could register with the registry or registries affiliated
with that TLD.  Stated in economic terms, the cross-elasticity of domain
names in two different TLDs is quite small, indeed probably zero.  What
follows from this is that there is next to no competition simply due to the
existence of different TLDs.  Stated in blunt terms, NSI could raise its
annual fees to $500 and most companies would be incapable of changing their
domain names due to the existing goodwill (and browser bookmarks and email
user directories).

And of course the NSI monopoly problem harms the Internet community in two
ways:

1.  NSI, with its captive audience, feels it can treat domain name owners
poorly because they are stuck.  In particular it can enact terrible domain
name trademark policies that leave domain name owners at never-ending risk
of loss of their domain names for no good reason.  (See
<http://www.patents.com/nsi.sht>.)

2.  NSI, with its captive audience, feels it can charge fees far in excess
of costs.

The only possible steps that relieves the Internet community from the NSI
monopoly are:

1.  When NSI's five-year contract ends, do not renew it.

2.  Set up COM to have a shared database and multiple retailers, rather
like the way 800 numbers are administered in the North American Numbering
Plan.  You can contact any of several long-distance companies and any of
them can assign you an available number in the pool of 800 numbers.