[ncdnhc-discuss] Names Council agenda item request: discussion of wholesale price for names

[Dave Crocker]

At 06:39 PM 8/22/2002 +0900, Adam Peake wrote:
>If the current price is high (some ORG bids seem to indicate it is, and I 
>think an analysis of operational/technical factors could help establish 
>this, not rate setting per se, but attempting to understand the costs 
>involved), then waiting for new TLDs and competition to take effect would 
>be very nice for VeriSign, but not so nice for consumers who would 
>continue to pay artificially high prices (and subsidize VeriSign) for as 
>long as it takes to get new TLDs and their knock-on effect in place (being 
>generous, lets say 5 years at the current pace.)


Back during the IAHC and initial ICANN debates -- 1997 timeframe --  there 
were a number of discussions among operations folks, with the requisite 
business and registration service background, about the reasonable 
operations cost for a DNS registry service.  A pretty consistent result was 
that the range of cost was calculated to be US$0.25 - US$ 2.00.  Since this 
is only the core operations cost, it needs to be multiplied by a factor of 
3-5, to make it pay for a complete business.

The problem with claiming that this sort of question is simply resolved by 
"competition" is that it ignores post-purchase lock-in.  (And, by the way, 
trying to class this as merely a matter of finding the threshold cost of 
"switching" ignores how impractical it is to switch domain names, in many 
situations.  What is the switching cost of getting a new telephone number 
for 1-800-FLOWERS?)

d/

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Dave Crocker  <mailto:dcrocker at brandenburg.com>
Brandenburg InternetWorking  <http://www.brandenburg.com>
tel +1.408.246.8253;  fax +1.408.850.1850