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    New gTLDs Auerbach Weighs in for gTLD Lotteries
    posted by michael on Saturday April 05 2003, @06:34PM

    Lawrence Solum writes "Karl Auerbach has a new post on his blog entitled Why Lotteries Are Better Than Auctions When Distributing New TLD Slots. I mostly agree in a post on my Legal Theory Blog."



    Here is the core of Auerbach's argument:
      Auctions are a means that guarantees the prize to the qualified applicant willing to pay the most money. In practical terms this means that the wealthy will inherit the Internet, or at least the DNS top level domains. For many, that is an acceptable outcome. However, I feel that there are social values other than cubic money. And those who live by those other values ought to have a chance to obtain TLD slots. This is why I feel that allocation ought to be by a lottery system. Everybody who buys a "ticket" has a chance. The wealthy can, by buying more tickets, improve their chances to an arbitrary degree. But no matter how many they buy, there is still is a chance that the small guy might win. If we have lotteries for a non-trivial number of slots we can expect that at least a few will be won by the less well healed applicants.
    Here is an excerpt from my reply:
      But a pure lottery system may not be the best way to solve this problems. The FCC experience with spectrum lotteries was dismal. In fact, the lotteries turned into an inefficient form of lottery as secondary market developed for the auctioned licenses; the lottery resulted in windfall profits for lottery winners and higher transaction costs as the secondary market got the spectrum to its highest and best use.
    "

     
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    This discussion has been archived. No new comments can be posted.
    Auerbach Weighs in for gTLD Lotteries | Log in/Create an Account | Top | 49 comments | Search Discussion
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    This is a non-problem
    by Mueller ({mueller} {at} {syr.edu}) on Sunday April 06 2003, @09:39AM (#11426)
    User #2901 Info | http://istweb.syr.edu/~mueller/

    Our proposed TLD addition procedure [syr.edu] solves this problem completely, I wonder whether people have read it when they make comments like this.

    First, it requires only commercial applicants to win TLDs through auctions, setting aside 10 per year for noncommercial or LDC applicants. Segregating those two categories raises some issues, but not insoluble ones. Second, it doesn't require ANY auction or lottery at all when there are fewer applicants than the fixed annual number of slots.

    Hey, folks, can we agree to adopt a basic convention that applies to all discourse on this topic? Let's agree that the statements of the form:

    Auctions for X (you name the resource) means that only "the wealthy" will get X"

    are impermissibly stupid. Sorry to put it so bluntly, but such statements are really lacking touch with reality. Market economies can be characterized as a series of "auctions" for any available resource at any given moment. If you want someone to paint your house, you pay the prevailing market price for it. If you want food, you pay a market price for it. Market allocation doesn't mean that "only the wealthy" eat or are housed; on the contrary, the more efficient allocation that results often means that the resource is more widely available than it would be otherwise.

    The price of obtaining a TLD in an ICANN auction is likely to be significantly less than the price of acquiring the computer hardware and the expert personnel required to operate the registry. Does Karl want to allocate computer experts' labor by means of lottery tickets?
    Why is the TLD allocation supposed to be suddenly exempt from the market economy? Let's get real about this.
    [ Reply to This | Parent ]
    Unlimited TLDs
    by PeterBarron (pebarron@hotmail.com) on Sunday April 06 2003, @09:02PM (#11444)
    User #3240 Info | http://www.icannwatch.org/
    Nobody ever said that there would be unlimited TLDs. If you take as an axiom that in order to be a registry, you must meet certain technical and financial criteria, and those criteria are fair and realistic, you will have drastically less than 10,000 applicants, ever.

    Probably less than 1,000, ever.

    If it costs upwards of 300,000 US dollars to field a reasonable registry (and my employers have done the math, as they say), you will find that there just aren't that many applicants.

    At that point, perpetuating the artificial scarcity makes no sense at all. Auctioning spots, or allocating them by lottery, makes even less sense, when you realize that there will be fewer applicants than available slots.

    At that point, it's simply a question of the order of admission.

    ICANN maintains an artificially constrained market to the benefit of the incumbants. Nothing more, and nothing less.

    ++Peter
    [ Reply to This | Parent ]
    Less market, more community
    by vbertola on Monday April 07 2003, @12:46AM (#11450)
    User #3435 Info | http://bertola.eu.org/
    I agree with Karl - the pure market approach does not satisfy me at all. In fact, I think that one of the problems we have now is that almost all gTLDs operate on a commercial basis, while I feel that there should be the space for small- and mid-sized communities to loosely self-organize and put up their own no-profit sTLD, and that could be one of the most interesting developments that the DNS could have. I don't think that there's really any true need for another unsponsored mass TLD such as .web or .site (but of course, if anyone wants to try, should be free to do it) but I think that there's demand for *non-commercial* (though not necessarily free) TLD services if you focus on existing online communities.

    Couple this with the fact that, in my opinion, you should not have any practical limitation (other than "a limited number" :-) ) on the number of new sTLDs. You could debate whether limitation on new unsponsored gTLDs is necessary - I don't think so, but I can see some reasons for it. But I can't understand why you need to have a corporation and to invest 300'000$ to put up a registry. You could buy registry services for 5$ a domain from the existing registries, or you could build your own registry on a few smartly administered co-located Linux boxes... In fact, most of the cost to put up a small scale sTLD is going to be ICANN's application fee :-(

    --vb. (Vittorio Bertola)

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