My comments on the monopoly-supporting characterists of the Green Paper:


Perhaps the most serious problem with the Green Paper (GP) is the
continued support for monopolies.  This support is disguised by the 
claim that there will be multiple registries "competing" against each 
other, but in fact the arguments presented are deeply flawed.  I 
quote from the GP:

  "Some have made a strong case for establishing a market-driven
  registry system.  Competition among registries would allow
  registrants to choose among TLDs rather than face a single option."

This statement is completely meaningless.  In *both* scenarios
registrants are allowed to choose among TLDs.  Furthermore, according
to the rest of the GP, in both scenarios the registrants actually go
through independent registrars -- in the vast majority of the cases
the registrants won't distinguish between registries at all. 

  "Competing TLDs would seek to heighten their efficiency, lower their
  prices, and provide additional value-added services."

In fact, there isn't much efficiency that can be gained.  Registries
by themselves are very simple operations -- they merely maintain names
in databases.  The registry operation at NSI is a very small part of
its business. 

And any efficiency that would be gained would be far offset by the
fact that the registrars (which would be far more numerous than
registries) would all have to be dealing with different interfaces. 
The CORE model is far more efficient at reducing prices -- in that
case the registrars collectively run a registry on a cost-recovery
basis.  So they have strong incentive to keep costs low, and at the
same time keep consistent interfaces and policies for all registrars.

Finally, TLDs are not interchangeable goods.  One merely has to look at
the names .com, .nom, .arts, .net, .rec, .org, and .info to realize
that these all refer to very different areas, and in fact do not
meaningfully compete with each other -- people will clearly chose
names more appropriate to their activity even in the face of
significant price variations. 

  "Investments in registries could be recouped through branding and
  marketing."

This is an utter waste for consumers.  Consumers can easily make 
their own choices about names without a marketing blitz telling them 
what to think.

  "The efficiency, convenience, and service levels associated with the
  assignment of names could ultimately differ from one TLD registry to
  another."

Once again, in a system where registrars share access to all
registries any such differences that do occur will be masked by the
fact that the customer deals with a registrar, not a registry.  This
kind of competition is really only meaningful at the registrar level,
not the registry level. 

This is not theory; this is already proven in practice: there already
are many TLD registries, with vastly different service levels, and
companies have been formed to register names in all of them. 

  "Without these types of market pressures, they argue, registries
  will have very little incentive to innovate."

They make this argument because they are confusing registries and 
registrars.  Registries are back-office database operations, not 
retail outlets.  Registries will be almost totally insulated from 
market pressures.

  Others feel strongly, however, that if multiple registries are to
  exist, they should be undertaken on a not-for-profit basis.  They
  argue that lack of portability among registries (that is, the fact
  that users cannot change registries without adjusting at least part
  of their domain name string) could create lock-in problems and harm
  consumers.  For example, a registry could induce users to register
  in a top-level domain by charging very low prices initially and then
  raise prices dramatically, knowing that name holders will be
  reluctant to risk established business by moving to a different
  top-level domain. 

You *vastly* understate the problem.  A company's domain name *IS*
it's identity on the net.  A net based business like Amazon.com has a
huge investment in it's domain name -- the name "amazon.com" is stored
in search engines, and bookmarked by probably hundreds of thousands of
consumers.  The company has spent a fortune marketing the name 
"amazon.com", and it simply cannot change it without an enormous 
amount of effort and expense.  Amazon is an extreme case, but even a 
very tiny internet business would be impacted by having to change 
identities. 

In fact, what the "lock-in" problem will do is create a constant
upward pressure in domain name prices, since the equilibrium point for
prices is no longer based on something slightly above the cost of
maintaining the registry.  Instead, prices will *rise* to an
equilibrium point determined by some function of the average cost for 
a consumer to move.  This monopoly pricing, not competitive pricing.

Perhaps even more important than the concern with predatory pricing, 
however, is the risk of capricious policy changes.

  "We concede that switching costs and lock-in could produce the
  scenario described above.  On the other hand, we believe that market
  mechanisms may well discourage this type of behavior.  On balance,
  we believe that consumers will benefit from competition among market
  oriented registries, and we thus support limited experimentation
  with competing registries during the transition to private sector
  administration of the domain name system."

As indicated above, you confuse competition between registries and 
competition between registrars.  Registries are intrinsically 
back-office operations, and will be insulated from the end consumers, 
so very little meaningful competition will take place between them.

On the other hand, you drastically understate the impact of the 
"lock-in" phenomenon.

In summary, the Green Paper in its present form is mandating creation
of a set of protected and unregulated monopolies.  This is pure bad 
government at its worst.


Kent Crispin
Songbird