Re: [atlarge-discuss] Legitimacy Re: Fw: [atlarge-discuss] ALOC Draft3.0

[Lawrence Solum <Lawrence.Solum@lls.edu>]

Thank you Judyth for your thoughtful comments.

This message addresses only pricing, and snips a small excerpt from 
Judyth's longer message.  The excerpt begins with a quote of my 
earlier message >>and then quotes Judyth's text +

----- Original Message -----
From: <espresso@e-scape.net>
To: <atlarge-discuss@lists.fitug.de>
Sent: Tuesday, July 30, 2002 9:23 PM
Subject: [atlarge-discuss] Legitimacy Re: Fw: [atlarge-discuss] ALOC 
Draft
3.0
LBS wrote:
>> [...] If ICANN does not provide a public good in the
>> economists sense, then the question is how to regulate ICANN so that
>> it charges efficient prices.  This regulation should be external not
>> internal for obvious reasons of institutional economics.

+I'm not sure whether the "external not internal" means that prices 
+are to be set by market forces (in +which case anyone outside the 
+more affluent classes in the developed world will find themselves at 
+a permanentd isadvantage) or whether it means an external oversight 
+body of some kind would be +responsible for approving ICANN's 
+operating budgets to prevent the kind of personal empire-building 
+which occurs when administrators are allowed to write their own 
+paycheques. Either way, I am somewhat conflicted over this since on 
+one hand I believe firmly in setting prices in relation to real 
+costs, and on the other hand in recognizing that it's not a level
+playing field if you charge the same $1 +to the people with millions 
+as to people for whom that's a household's daily budget. Not being an 
+economist (let alone a supply-sider), I tend to favour economic 
+equity over economic equality.

Don't the networking externalities of root service suggest that ICANN 
is a monopolist?  (There are alternative roots, but I believe that 
they have a miniscule market share.)  If so, then there is a large 
body of economic literature and practical experience to draw on.  
ICANN is not currently extracting anything close to the full monopoly 
rent for root service.  Even the monopoly rent would not be as high as 
one might first think, because a monopoly based on networking 
externalities is vulnerable to competition if the price is too high.  
There are two models that might be adopted: (1) rate regulation--the 
model followed for years in electricity, gas, telephone service, etc., 
or (2) antitrust regulation--the model applied to IBM & Microsoft, for 
example.  Given ICANN's institutional history, there is no real need 
for rate regulation--ICANN is not extracting an exorbidant rent.
Why not antitrust?

Judyth also raises questions of "equity" or distributive justice.  
Distributive justice is very important, but I don't think it is 
connected to the IANA services.  The price charged for the IANA 
services is so low on a per user basis that it has almost nothing to 
do with the digital divide.  (The only exception would be the charge 
to the ccTLDs of very small, very poor countries, and this would be 
entirely allieviated by per domain name registration metering of the 
charge of IANA service.)



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