[At-Large] ICANN Announcement on Domain Tasting

Fri Aug 14 06:27:36 CDT 2009

Karl,

On domain market pricing.

The market of Times 1000 companies could bear £1m plus pricing
The market of shoe shiners in Boston hotels probably balk at paying $5  
or $10 and prefer to be found as you walk past.
The market for the millions in developing country shanty town probably  
falls far far below this.

By your own analysis (the value to you of a domain becomes higher over  
time) the bearable price for those with longterm usage of a domain is  
going to be much higher than those who are new registrants.

If you except one class (long term registrants) from market pricing  
why not others? Do they not all need protection?

Policy that has the impact of favouring incumbents and prejudicing new  
entrants is, well, prejudiced.

As an aside I would also observe that if you are a Times 1000 company  
you might view .com today as a shabby down at heel zone and would  
prefer either to have your own TLD which at $500,000 or under is  
pretty cheap for you and or join a community of business users under  
an exclusive prestige community TLD restricted to just the favoured few.

Why share your branding with all sorts when you can dump them and move  
on?  The migration cost is easily managed by keeping your old .com but  
over a few years build links exclusively to your shiny new prestige  
address and before long the commercial value you inadvertently  
invested in the .com will have dissipated.

Of course if you are not in a financial position to buy in to such  
high cost domains then that is 'market forces'.

I would hope this analysis would suggest that ICANN needs to limit its  
interest to the technical issues of cost plus pricing to guide and  
fund technical robust policies for registry operations whilst market  
pricing for domains must fall within a competition jurisdiction in the  
resident territory of the registry concerned subject to any relevant  
international treaty.

So speculatively if you have a gtld called .beijing with registry  
resident in China then the regulation of market pricing for that zone  
is a matter for the Chinese authorities potentially subject to WTO  
obligations, but not ICANN.

best wishes

Christian
Christian de Larrinaga

On 13 Aug 2009, at 11:31, Karl Auerbach wrote:

> On 08/12/2009 11:39 PM, Patrick Vande Walle wrote:
>
>>> $6.86 for .COM and $4.98 for .NET.
>>
>> Allow me to be the devil's advocate here.
>>
>> In a capitalist environment, market prices are based on supply and
>> demand. As long as customers are willing to pay the price being
>> asked, there is no reason why VRSN would lower its prices. That is
>> what a VRSN shareholder expects the company to do.
>
> I have long held a position similar to the one you suggest - that
> registries can charge what the market will bear - but only on certain
> limited conditions:
>
> - That such rates not be imposed on those already locked in and only
> be imposed on those who are coming anew into the TLD.
>
> - That customers be able to lock-in their initial terms for very long
> periods of time, i.e. have a right to renew at the lesser of the  
> current
> contract fee schedule or the rate being offered to new customers.
>
> I would suggest that we examine your premise, i.e. of a free  
> marketplace
> in which customers have a choice.
>
> You are assuming that TLDs are fungible - that .com and .biz are
> equivalent in the eyes of our customers - and that the costs of  
> making a
> change are negligible.
>
> Yet neither is true.
>
> TLDs are not fungible. In the eyes of many consumers, companies
> (particularly ones, such as mine with three-letter names) in .com are
> perceived as having more substance than those in TLDs such as .biz or
> .bz. So for us to move out of .com would mean a reduction in our
> perceived business reputation.
>
> Changing TLDs is not something for the feint of heart - for many
> businesses it would be effective suicide. In my case changing to a new
> TLD would require me to abandon all of the recognition - including all
> of the search engine material and all of the URL's that currently  
> point
> to me.
>
> As a US appellate court recently found, the space within a TLD is  
> not a
> marketplace subject to competitive pressures. Customers are locked in.
> Absent an enormous burden neither IBM nor Cavebear (or AT&T or
> Microsoft or Google or ... the list goes on and on) is going to leave
> .com - we have all built internet presence and reputation and the loss
> of accumulated "goodwill" and the cost of changing far exceeds the  
> fiat
> registry fee.
>
> In other words, voting with our feet is not a realistic answer for  
> those
> millions upon millions of people who are already made their TLD  
> choice.
>
> The name of the most commonly used DNS software is "BIND" - and that
> reflects what happens at the instant one selects a TLD and begins to
> build an internet presence: One becomes bound to that TLD and change
> becomes increasingly expensive.
>
> Suppose your state's utility commission should say that you now are
> required to pay $50/month surcharge - would your answer be that you  
> can
> vote with your feet and live off the electrical grid? Or suppose you
> are sitting on a ship half way to Hawaii and the captain comes on and
> says "We are pleased to announce that all passengers are now subject  
> to
> a $1000 docking fee." You could vote with your feet and jump off and
> swim 2000km to shore. Few people would take that option. And few would
> consider that they had a realistic choice.
>
> The simple fact is that while there is a valid argument that  
> *before* a
> consumer chooses a TLD there is a competitive situation. But once the
> choice is made the consumer is stuck.
>
> I know for a fact that I have never had a choice about the registry
> component of the price for my names in .com - the registry fee  
> component
> was simply dictated by ICANN unto me and I had a blunt choice: pay or
> abandon my names in .com.
>
> 		--karl--
>
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