Re: 60 day waiting period

[Carl Oppedahl <carl@oppedahl.com>]

At 11:16 AM 01/12/97 -0500, Leo Smith wrote:

>Jerry Harder wrote

>> >The model can certainly be refined by adding additional costs and
>>> benefits. One benefit identified for the policy in previous messages is
>URL
>>> stability. What would be an appropriate monetary figure for that social
>> >benefit?

>To which Carl Oppedahl responds..

>> Yes, URL stability is quite important.  I have suggested that it is more
>> important than the interests of any one impatient domain name applicant.

>Carl...While your suggestion that URL stability is more important than the
>interests of any one impatient domain name applicant may be reasonable,
>you're conclusion offers no insight on the issue at hand. The issue is not
>"the impatience of one URL applicant". Instead it is about the impatience
>of 796,000 collective URL applicants who, if they had been able to register
>with no wait, would still have encountered no trademark challenge. Even
>without the wait, these 796,000 URLs (representing 99.95% of the entire
>.com Internet URLs), would have enjoyed the stability you advocate. 

Again, you are committing the fallacy of 100% hindsight.  The 796,000
domain name owners don't know, until years later, that they didn't
encounter a trademark challenge.  It's like the people who buy fire
insurance for their house, and twenty years later they find out that their
house didn't burn down.  Does this mean they gained no benefit from having
paid the insurance premiums?

>Below are projections, using Jerry's suggested formula:
>
>Number of domain names to issued over the relevant period of time: Roughly
>800,000 .com URLs, registered over a 3 year time period.
>
>Proportion of domain assignments that result in law suits or expenditures
>on the part of domain name applicants and trademark holders: 3,600 using
>the following breakdown: less that 150 lawsuits filed in courts, plus 350
>NSI formal proceedings, plus 3,100 cease and desist letters (estimate) sent
>by trademark holders to URL registrants.
>
>Proportion of law suits and challenges that can be prevented with the
>policy under consideration (60 day wait): Rough guess= One third
>prevented=1,200, with 2,400 lawsuits/challenges continuing to exist under
>the 60 day wait model.
>
>Average benefit of an avoided lawsuit or challenge: $2,500, representing
>the savings from not having to reprint stationery, business cards, etc,
>etc.
>
>Total Value of Benefit: $3,000,000 ($2,500 times 1,200 prevented
>lawsuits/challenges)

That's the benefit to the 1,200 who turn out to have encountered
challenges.  You are skipping over the benefit to the 796,000 who had
domain names that were less vulnerable to loss.  That amounts to 796,000
times some number.  Is it worth $10 to have a domain name that is less
susceptible to loss?  Then you have omitted $7,960,000 of Benefit.  Is it
worth $100?  Then you have omitted $79,600,000 of benefit.

>Cost to domain name applicant of 60 day wait policy: This figure becomes
>very interesting, because it deals with the value placed by the user in
>having no delay. The true value of the delay would best be measured by
>estimating how much money a .com user would have had to have been offered
>before the .com user would voluntarily agree to forego the official use of
>the .com URL for 60 days.

>Most . com users would probably agree to forego the official use for 60
>days in exchange for $100,000,  and would probably decline an offer of $50.
>Out of the blue, I'm going to estimate that the majority of .com
>registrants would not have volunteered to forego use of the .com URL unless
>the amount offered was $100. 

Keeping in mind that close substitutes such as third- and fourth-level
domains are instantly available ...

>Total Cost of Benefit: $80,000,000 ($100 times 800,000 registrants)
>Total Value of Benefit:  $3,000,000 ($2,500 times 1,200 prevented
>challenges)

Yes, except that you left out 796,000 times some dollar amount, on the
benefit side.