Re: Public Resource vs Private Ownership

[Jeff Williams <jwkckid1@ix.netcom.com>]

Kent, Patrick and all,

Kent Crispin wrote:

> On Mon, Feb 16, 1998 at 03:35:38PM -0800, Patrick Greenwell wrote:
> > On Fri, 13 Feb 1998, Kent Crispin wrote:
> >
> > > > And Jay, like many others feels otherwise. Given the inability to
> > > > reach any real consensus on this issue despite claims to the
> > > > contrary, isn't the reasonable compromise in this situation to allow for
> > > > both models?
> > >
> > > Not really -- for profit registries are fundamentally impractical:
> >
> > In your opinion.
>
> That goes without saying, of course.

  Yes, just a opinion. Certianly not a fact!  However it was stated as such.

>
>
> > And judging by NSI's success in this area, an erroneous
> > one.
>
> Eh? NSI is currently being run as a shielded monopoly as a contractor
> to the US Government.

  Exactly.  But this may or may not have anything to do with NSI's or any other
registries ability to be fundementaly practical, now does it Kent.  I am glad that

Patrick has ask these questions again.  In that they have been ask many times
befor and met with the same BS answers that are again just an opinion, no
FACT involved.

  This type of answer from supporters of the MoU an previously of the IAHC
perposal.  Just plain BS answers, baised on strictly opinion, not FACT.

>
>
> > Would you also address the "impracticality" of other registries such
> > as .nu, .cc, .to, .tm all of which are operated on a for-profit basis?
>
> First of all, none of them have been in business longer than a year,
> so they really convey no information about practicality or
> inpracticality.

  And here we go again, just another opinion, not a FACT.  For instance,
.TO is doing quite well fundementaly.

>
>
> Second, they have the luxury of being controlled by sovereign
> entities, and therefore have legal characteristics that are different
> from the commercial monopoly registries we are discussing.

  I suppose that Kent is implying that the "commercial monopoly registries",
he means NSI and I don't know whom else.  However what other registries
are doing such as as .nu, .cc, .to, and .tm are exactly what the MoU would be
doing
if this plan comes to pass.  So this seems to be a negtive argument in a circle,
and sour grapes on Kents part.  Watch carefully Patrick, you will see this
argument approach from the supporters of the MoU time and time again.

>
>
> Third, their names were delegated to them through a process
> that seems very unlikely to involve any lawsuits.

  This remains to be seen as well.  Just another NON-Processional opinion
from Kent whom has little understanding of the law in the US, none the less
international law.  This he himself has self professed.

>
>
> > I imagine the companies behind this registries would have a vastly
> > differing opinion on the subject.
>
> Perhaps.  But Bill Semich, who is behind the .nu registry, is a
> signatory to the MoU, as is Netnames, the company behind the .tm
> registry.  Furthermore, I believe (though I could be wrong) that the
> .nu registry is being run on an essentially cost-recovery basis.
>
> > Perhaps you would like to clarify your statement?
>
> See below.
>
> > > It is quite clear that IANA's authority derives from community
> > > consensus,and nothing else -- IANA has absolutely no way to force all
> > > the nameservers in the world to point to the root zone it defines;
> > > anyone else at all can set up root servers with minimal expense and
> > > effort.  If other governments, for example, feel that IANA is playing
> > > favorites with the USG, then they will indeed start their own root
> > > servers.
> >
> > Which is why it is important to achieve a true consensus, something which
> > despite claims to the contrary, the gTLD-MOU supporters have utterly
> > failed in doing. If there was any sort of real consensus, there would have
> > been no impetus for the USG to get involved.
>
> As far as I can see the US government is involved ONLY to 1) protect
> the interests of a very large defense contractor (NSI is a totally
> controlled subsidiary of SAIC, a privately held multibillion company),
> and 2) to deal with internal US political issues.  I am inferring
> point 1 from the content of the Green Paper; I have been told that
> number 2 has been stated by Magaziner.  There is no other reason for
> the USG to get involved -- despite the fact that the MoU has been
> controversial, it created a real, private sector developed solution
> that was clearly about to work.
>
> And I disagree that the MoU utterly failed to gain consensus -- in
> fact it has gained far more support than any competing alternative,
> including the Green Paper.

  This is of course true at this moment.  But the GP has only been out for
about a week.  Verses a much greated time for the MoU.  And yet the MoU
has less than .01% support of the stake holders and ISP's within the
Internet community, not to mention the users.

>
>
> [...]
>
> > > Given the monetary value of an exclusive franchise on part of the
> > > DNS, there is absolutely no way that that IANA could give out
> > > such exclusive franchises without serious legal exposure -- unless...
> > > ...the USG steps in and indemnifies IANA.  This would require special
> > > laws regarding IANA.
> > > Such a move would rightly be seen by foreign governments as an attempt
> > > to take control of the DNS.
> >
> > Not if they were involved in the process.
>
> It's pretty clear they were not.  In fact, it is pretty clear that
> the process was motivated purely by concerns internal to the US.

  If you really believe this than you have not been following th process
closely at all.  Recent postings have already discarded this assertion
as strictly hog wash.

>
>
> > This is an important
> > constituent in the long term success of any organization charged with such
> > a task whatever model is followed.
>
> Indeed.  I believe this will be clearly demonstrated by the critical
> comments that various foreign governments and organizations will file.
>
> > > Contrast this with a model where all TLD registries are either 1)
> > > delegated to a sovereign entity or 2) required to be run on a
> > > cost-recover non-profit basis.
> > >
> > > In this later case the possibility of any kind of lawsuit is
> > > drastically reduced -- there is a uniform, consistent policy,
> > > and registries are not high profit monopolies.
> >
> > Competition in the marketplace is a significant factor in determining
> > price. At this time we are only beginning to see such competition as with
> > the ISO-3166 registries such as .nu which is charging $25 a year for
> > registration. I do not feel that you have the basis to substantiate such
> > claims.
> >
> > While it would be correct to state that a company may have a monopoly on a
> > TLD, they would *not* have a monopoly in the marketplace, which is far
> > more important in leveling such charges.
>
> If domain names were simple commodities for sale, what you say would
> be true.  But they are not.  There are actually several arguments
> -- I will present a couple.
>
> First -- you actually have to analyze things in a little more depth --
> you have to think long term, about what levels prices will tend to
> equilibriate.
>
> There are actually two different modes where registries interact with
> customers -- first, in the initial "sale" of a domain name; and
> second, in the recurring "rental" of a domain name.

  Sale and rental of a Domain name are really issues that need clarification.
Domain Names are Intelectual property of the Domain name holder.  The regisrty
and registrar are mearly custodians of that Doamin Name withing and as part
of the DNS system itself.

>
>
> Indeed we can expect that multiple for-profit registries *would*
> compete for initial price, especially when they first start business
> and are looking for market share.  Indeed, we could expect to see
> "Special Prices!" and "Introductory Offers!" from these registries,
> designed to get get customers as quickly as possible.

  If this were strictly true, Microsoft could easly grab 70% of the buisness
in a very short perion of time by offering free domain names on MSN.

>
>
> However, the real revenue stream of a registry is not its new
> customers, but rather its long-term customers -- its "rental" income.
> Here the forces affecting prices are totally different -- the point
> at which prices equilibriate is the point at which customers leave a
> registry for another registry.  In other words, the prices will RAISE
> to the point where customers will leave.  This is absolutely basic
> economic theory, and obvious psychologically, as well -- a registry
> has absolutely no incentive to keep prices lower than that point, and
> there is always incentive to raise prices.

  Correct logicly.

>
>
> Now, it is clear that the cost to customers to move domains is orders
> of magnitude more than the cost of a registry to maintain the domain
> -- amazon.com has a huge investment in it's domain; the name is loaded
> in hundreds of search engines, and hundreds of thousands of bookmarks;
> not to mention advertising, and the very large but intangible "good
> will" that well-known names bring to a business.  NSI could easily
> charge amazon $1000 a year for their domain without any fear of amazon
> moving.

  Correct they could do this.  BUt they would be facing a serious legal
problem of unfai pricing if they did.  I doubt that they would take this stance
anytime soon.

>
>
> Amazon is an extreme example, of course, but even to a very tiny
> company like mine (songbird) it would be a royal pain to move
> domains.

  I tcan indeed be a pain.  But rather a little pain that pay through the nose,
eh Kent?

>
>
> This kind of locked in situation is precisely the sign of a monopoly.

  It is not a lock in at all at least not by the registry, but by the domain name
holder
in this argument.

>
>
> You might argue that this is precisely the model for the rental real
> estate market.  But in fact it is not -- in the real estate market
> landlords are actually offering different levels of service, and
> different goods.  But registries are *not* offering significantly
> different levels of service, nor, I would argue, are they really
> offering different goods: It is the registrARS that offer different
> levels of service -- all registrIES are simply back-end database
> operations that the customers never see.  And, at the registry level,
> the "good" being offered is in all cases essentially the same -- a
> string of letters.
>
> I grant you that these are not *pure* monopolies.  But it certainly is
> not the free competition you are claiming exists -- registries *are*
> getting the benefit of monopoly pricing effects.
>
> Second argument: Competition requires that the goods be substitutable
> -- salt doesn't compete with shoes in the marketplace.  Likewise, TLDs
> are not "substitute goods" -- a name in .arts is not the same as a
> name in .nom, for example.  And when you look at the suggested TLDs,
> they are really quite different -- .com is not the same as .shop, and
> neither is the same as .firm.  .arts, .nom, .info, .rec, .web, .net,
> .org etc -- these are all really *quite* different.  People,
> businesses, and organizations will pick names that suit their purpose,
> and will *not* treat them as interchangable goods.  Thus, these
> registries don't compete in any meaningful way.

  To a point true.  But if these registries offer Domains in any of the gTLD's
that
the MoU requests, than you have an argument in a circle again.

>
>
> Furthermore, in order for competition to be meaningful there should be
> many players.  The Green Paper, therefore, is simply incoherent --
> even if competition were meaningful at the registry level (which it is
> not), the Green Paper approach of restricting the number of registries
> would operate against any such competition to begin with.
>
> Well, I've got to go now.  There are several other arguments against
> the proposition that registries compete.  Most people who argue for
> it are actually still thinking of a model where a registry is also a
> registrar, IMO.  But if you think through the issue and remember that
> registrars are the entities that actually sell to the public, then
> the situation is quite different.
>
> And these arguments don't even get to the other big issue -- the
> regulatory complexity of for profit monopolies.
>
> --
> Kent Crispin, PAB Chair                 "No reason to get excited",
> kent@songbird.com                       the thief he kindly spoke...
> PGP fingerprint:   B1 8B 72 ED 55 21 5E 44  61 F4 58 0F 72 10 65 55
> http://songbird.com/kent/pgp_key.html


Regards,
--
Jeffrey A. Williams
DIR. Internet Network Eng/SR. Java/CORBA Development Eng.
Information Network Eng. Group. INEG. INC.
E-Mail jwkckid1@ix.netcom.com