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

[Harold J. Feld]

_sigh_

Any half-way competent economist can tell you the answer (or at least, 
an answer).  For some domains it will be high (e.g., "Amazon.com" has 
tremendous brand recognition and the cost of switching to "Amazon.store" 
or "XDFE at .random" or even "somethingelse.com" would be very high.).  For 
  others it will be lower.  Competent economists will work their models 
for general costs and come up with a range of answers depending on who 
is paying their bill.

"Lock in" is not unique to DNS.  And there are various ways to try to 
solve it.  Folks in the U.S. telecom world may be familiar with "number 
portability."  We are now dealing with this in U.S. mass media policy in 
DTV and fights over channel placement.

Whether introduction of new TLDs creates sufficient competition to 
resolve the switching cost issue is actually subject to economic 
analysis.  I'd love to know if anyone has actually studied it or applied 
anything more than SWAG analysis.

Harold

Dave Crocker wrote:

> 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/
> 
> ----------
> Dave Crocker  <mailto:dcrocker at brandenburg.com>
> Brandenburg InternetWorking  <http://www.brandenburg.com>
> tel +1.408.246.8253;  fax +1.408.850.1850
> 
> _______________________________________________
> Discuss mailing list
> Discuss at icann-ncc.org
> http://www.icann-ncc.org/mailman/listinfo/discuss
> 
>