Re: [icann-eu] Domain Name Economics

[Marc Schneiders <marc@schneiders.org>]

On Wed, 6 Jun 2001, at 11:19 [=GMT+0200], Thomas Roessler wrote:
> On 2001-06-06 00:57:50 +0200, Marc Schneiders wrote:

> >>Also, it should be noted that only such a root monopoly would 
> >>enable smaller players to participate in the TLD market: It 
> >>protects these small players from larger players who may try to 
> >>squash them using conflicting TLDs with - at least - a great 
> >>destructive potential. It also makes global visibility cheap.
> 
> >This would be true, if there was a way for small players to get in 
> >with ICANN. There isn't.
> 
> I wouldn't say that everyone who wants to get a new TLD with ICANN 
> must be of the scale of Verisign. 

The application fee made it impossible for many organizations,
businesses and non-profits, to apply. If you are small, you will not
get in. Maybe not Verisign size is what was demanded, but in any case
a few sizes too big in my view.

> However, look at the 
> alternatives: Leah's .biz is going to be squashed precisely because 
> it is too small and too invisible to pose any serious danger to the 
> ICANN-sponsored one.

I fail to see what you mean in this context. Too small is bad luck? My
point was, that it would be great if an organization like ICANN could
help avoid smaller organizations to be crushed only and only if these
same organizations had a (better) chance within the ICANN process.
Since they haven't they lose either way: they are crushed or kept out.

> >>The perception of the regulatory regime as benign by the large 
> >>majority of domain name holders also means that they won't pay 
> >>the costs it would take to buy services from a monopoly-breaking 
> >>registrar which offers a better regulatory regime.
> 
> >You can get domains for free with me. Regulation is very benign. 
> >So is the regulation with .BIZ (the pre-ICANN one). No UDRP. 
> 
> But can you guarantee me that the pre-ICANN .biz is robust enough to 
> survive when a large competitor (the ICANN .biz) tries to squash it?

Of course not, but so what? Can ICANN guarentee all TLDs' survival?
 
> Can you guarantee me that domains you are selling to me have this 
> kind of robustness?

As I said, they are free :-) 

> In order to be able to give such guarantees, you'd have to invest a 
> lot of money into global visibility.

A nameserver? A lot of money? 

> You'd have to make sure you 
> have a nuclear arsenal to be used against competitors.
> 
> Now, ICANN sells (or rents, or whatever) this arsenal at retail 
> prices, while you (and Leah, and new.net) have to develop the atomic 
> bomb yourself, which is certainly more expensive.
> 
> Thus, in order to offer similar stability to an ICANN-blessed TLD, 
> you'd have to spend more money, that is, you'd either have to be 
> _extremely_ attractive to the market (so you can sell huge numbers 
> of domains), or you'd have to be more expensive.

I am afraid I do not see the DNS (merely) as something to make money
from. If we have a regulatory body that claims to be authoritative for
a *single* unique root (which ICANN seems to be doing), and which
claims to represent all interests including ours, we can judge it as
such. Also we can tell the world that it fails at certain points, or
that it is not representative of us at all, despite its fine words.
That we do not trust it. That we want something else, or some reform
of it. We may not have bombs, we do have bullets.

> >The regulatory character of ICANN's monopoly is keeping out too 
> >many competitors in the market and avoiding costly litigation by 
> >appeasing lobbies like TM/IP. There is indeed no customer 
> >protection whatsoever.
> 
> Indeed, if you mean "Internet user" by "customer".  

I meant domain name owners.

> >In any case, I think the UDRP is not so much a problem vis-a-vis 
> >consumer rights as well as legitimacy. There are free speech 
> >issues involved (sometimes, not always, there are real 
> >cybersquatting cases). Where does the right to impose UDRP come 
> >from? Contracts... This would imply we can go elsewhere for the 
> >services. Can we really? Does ICANN's insistance on a single root 
> >not suggest otherwise, even in its own vision?
> 
> First of all, the UDRP is the prime example of an ICANN policy with 
> direct impact on domain name holders. 

Absolutely.

> Second, as I've been arguing 
> at length in my previous post, it seems unlikely that there will be 
> competition on the "regulatory market".  

Then we must interfere in this market. ICANN already does to protect
IP rights. Why could it not also protect other rights, if we want
that? There is no reason whatsoever that there cannot be difference in
TM-rights in different TLDs. The 'new' ORG might get interesting,
though I doubt it will.

> Thus, domain name holder interests need to be represented within 
> (maybe forced upon) the ICANN framework.  But domain name holder and 
> end user interests will only be extremely badly represented within 
> the SO framework where various other interests can easily overrule 
> them. 
> 
> You see where this argument leads to? ;-)

No. All I see is that for economical reasons it will be impossible to
get things right through mere market forces (partly because we are
talking about a regulated and restricted market!). Let's act upon that
then.

> >>- ccTLDs.  Since the more powerful ccTLDs can be assumed to be 
> >>   among the TLDs which are unlikely to be attacked during a root 
> >>   split, they are among those players on the market which are 
> >>   most probably least interested in the monopoly, and possibly 
> >>   most interested in destabilizing it.
> >> 
> >>   Breaking the root zone monopoly and destabilizing the gTLDs 
> >>   would in fact help the ccTLDs to squash a lot of competition.
> 
> >Users would not accept a root that did not carry com/net/org,
> >really. This will only work in China, and not because users want it
> >there either.
> 
> Right.  com/net/org seem to be kind of invulnerable right now, which 
> makes them the last resort for domain name holders in the case of a 
> battle about some other gTLD.  (I used this in my MAD argument.)

That is another matter.

> But how about .info, .biz, .museum?

I do not dare to predict if these will fly. But is this relevant?

> (Of course, "the gTLDs" was a bit too simple - replace it by "not 
> entirely established gTLDs".)

Still, this does not address my point: the ccTLDs cannot set up
another root without gTLDs. No serious ISP would point its nameservers
to that root. If the ccTLDs set up a root that included less than the
ICANN root, why would you use it? I have said this before (maybe
not here): the ccTLDs cannot forbid ICANN to include them in its
root. They can merely refuse to pay ICANN. 

> >>    In particular, the ccTLDs don't seem to have a natural interest in 
> >>    helping to better adopt the monopoly's regulations to users 
> >>    wishes.  Just the opposite is, in fact, the case.
> >> 
> >>    (A similar argument could be applied to the operators of other 
> >>    well-recognized TLDs.)
> 
> [...]
> 
> >Finally, though your approach from economic consideration does clarify
> >things that are happening, 
> 
> That was the goal I had.

So let us move on then, if all is clear. 

> >and how they could be changed, I really miss the 'public' resource 
> >character of the internet in your break down. Sure the Net is a 
> >cooperation of private networks. But like all economic activities 
> >these need regulation. Either by national governments, which would 
> >be rather unpractical, or some sort of publicly accountable 
> >worldwide body.

marc@dot.low