Auerbach Weighs in for gTLD Lotteries

If you refer to the chain supersmarkets and leave out the mom and pop corner market or farmers market, open air market, that's one thing. At least in the marketplace, there is room for the little market, which has a chance to grow into the supermarket. With an ICANN lottery, only the supermarket chains would have a chance. There would be no room for the entrepreneur and we continue with the status quo.IDG provides no basis, in economic theory or empirical study for this statement. As a matter of theory, there are really only two possibilities.
First, because of economies scale, large-scale enterprises really do have a cost advantage in managing TLDs. If this is the case, then the fact that lotteries would allocate TLDs to such enterprises is an economic advantage and not a disadvantage. There is no good reason to put TLDs in the hands of inefficient operators.
Second, small enterprises can efficiently compete for the operation of TLDs. If this is the case, then small enterprises will prevail in gTLD auctions. It might be the case that in the very early rounds of an auction, the largest enterprises will take all the slots. (This would assume unproven inefficiencies in finance markets, but who knows?) But as time goes on, the price of TLDs will drop and smaller firms will be able to enter the market.
This is serious stuff. Many of the comments on this issue reveal a surpising lack of seriousness. Economics is not a matter of chatroom opinion. There are well-confirmed theories with abundant emprical support. The debate will be far more productive if research and analysis is offered in support of opinion.Lawrence Solum

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