Re: PAB The Green Paper and competing registries

Kent Crispin (kent@songbird.com)
Sun, 22 Feb 1998 11:40:32 -0800

On Sun, Feb 22, 1998 at 04:55:47PM +0000, Jim Dixon wrote:
> On Sun, 22 Feb 1998, Javier SOLA wrote:
>
> > These might be extreme cases, but in general, companies who have developed
> > a high visibility in the Internet would be forced to pay ANYTHING they were
> > asked in order to keep their domains.
> >
> > This means that we are in a very clear "lock-in" position if the company
> > that distributes TLDs can do it for-profit and set its own rules.
> > COMPETITION BETWEEN TLDS CANNOT EFFECTIVELY EXIST.
>
> Yes, and BUMBLEBEES CAN'T FLY.
>
> Like most ISPs, we register domain names as an incidental part of our
> business. We operate mostly in the UK.
>
> A couple of years ago, before Nominet was set up, those wishing to
> register in .UK went through a ridiculous process whereby all names had to
> be approved by "the Naming Committee". The members of this small and
> widely disliked group frequently delayed and blocked registrations for
> petty and personal reasons. At that time most of our customers
> registered in .COM/NET/ORG.
>
> When Nominet took over and began charging for registratrations in
> .UK, our customers immediately shifted to registering with Nominet.
> At this time nearly all of our registrations are in .UK.
>
> Why? The Naming Committee's policies were silly. Nominet's policies
> were much better, and in fact are better than those at the
> InterNIC/Network Solutions.
>
> Competition between TLDs is alive and very well. There is weak
> competition between the nTLDs, and reasonably strong competition
> between the individual nTLDs and .COM/NET/ORG. This competition is
> good for all concerned.

It appears to be the case, however, that registry prices in general,
and on average, have been pegged near or above the $50/year that
InterNIC sets for a relatively long time, despite the fact that their
"production costs" are certainly far lower than $50, and they could
easily set prices lower. So this "alive and well" competition is
actually moving prices *up* from "production costs".

In fact, I think an unbiased examination would reveal that the
"registry industry" (to use Jim Flemings term) is so complexly
regulated that to say that competition is "alive and well" is absurd.

Also, neither your example nor Javier's analysis go far enough:

Registries actually compete on two fronts -- to gain new customers
(market share), and to keep the customers they already have (revenue).
We may see examples of competition in the former, but experience with
the latter is limited. In fact, I am perfectly willing to concede that
registries can compete in the search for new customers, and, in fact,
I expect that new registries will compete briskly for market share.

But all the non-competitive practices at issue concern
re-registrations. In a "competitive registry" environment the obvious
evolution is to a pricing structure where the longer you have been a
customer, the more you pay. Initial registrations will be nearly free
-- we would be inundated with enticing "new domain owner specials!"
while long term prices would steadily rise as registries take
advantage of lock in effects. Of course, these changes will not be
drastic -- they will be gradual, and spread as each registry sees what
other registries can get away with.

Note that Nominet's competition with .com is a fool's paradise right
now. If NSI maintains it's monopoly, and is freed of regulation,
.com registrations will mushroom in the UK. NSI can certainly afford
to undercut even Nominet's prices in that tiny restricted area, gain
substantial market share, and relegate Nominet to an unimportant
backwater of the domain name space.

-- 
Kent Crispin, PAB Chair			"No reason to get excited",
kent@songbird.com			the thief he kindly spoke...
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