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    Auerbach Weighs in for gTLD Lotteries | Log in/Create an Account | Top | 49 comments | Search Discussion
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    Re:A question re less market, more community
    by lsolum on Wednesday April 09 2003, @05:57AM (#11471)
    User #3416 Info | http://lsolum.blogspot.com/
    Vittoria, This is a possibility. I have several quick reactions:
      --First, this would be much better than the status quo. Any system of allocating the root resource is better than simply wasting it.

      --Second, in the commercial sector, experience with spectrum suggests that a secondary market would develop. That is, the market will operate but the proceeds will go to the firms that are lucky enough or skillful enough to get their applications in first and/or win the lottery. Auctions have an advantage, because they get the commercial slot or string to the highest and best use initially, without the transaction costs associated with secondary markets.

      --Third, I doubt that supply will exceed demand, especially in the early years of root expansion. This is true for several reasons:

        1. In both the commercial and nocommercial area, there will be demand for closed or sponsored TLDs. On the commercial, side large multinationals will want proprietary TLDs. We have already seen a similar phenomenon with .health, .museum, etc.

        2. The cost of a new TLD will drop dramatically over time. Karl Auerbach's posts above explain why a closed TLD can be operated very economically. Once the root is opened, the application fee will drop dramatically. As cost goes down to a nominal level, demand will go up dramatically.

        3. A big bang is not a good way to allocate the resource. (By "big bang," I mean opening the root all at once.) This is because there seems to be a consensus that once a TLD is up, it should not be shut down if it is unsuccessful. If ICANN commits to keeping TLDs operating as a consumer protection measure, then once a TLD is allocated, the resource is committed. It would be shame if the root became crowded with unsuccessful TLDs. The remedy is gradual introduction of new slots, perhaps 50 per year. This will give the market information about what are successful uses and unsucessful uses of the root resource.

      Thank you for the very thoughtful comments and questions
    Lawrence Solum
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