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OECD supports TLD auctions
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CircleID had also published a three part article based on a paper discussing competitive bidding of gTLDs:
An Economic Analysis of Domain Name Policy - Part III [circleid.com]
"Competitive Bidding for new gTLDs" is the focus of part three of a three-part series based on a study prepared by Karl M. Manheim, Professor of Law at Loyola Law School and Lawrence B. Solum, Professor of Law at University of San Diego. Special thanks and credit to Hastings Communications and Entertainment Law Journal, Vol. 25, p. 317, 2004."
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[ Reply to This | Parent
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The authors of the report are working against consumer's interests, and I totally reject their position.
They should be advocating a TENDER process, whereby the prospective registry operators compete on the basis of who will deliver a FIXED set of services for the LOWEST prices (subject to minimum performance guarantees). This ensures that the "surplus" is captured by consumers, not the registry operator.
Under an auction scenario, where prospective registry operators bid against each other, with the highest bidder getting to run the registry willy-nilly, the incentives will be for the registries to jack up prices for consumers, in order to maximize the registry operator's profits. This is fundamentally against the interests of consumers (and registrars, by the way). A registry in this scheme would want to introduce "services" like Sitefinder, etc., to maximize its income. There will also be incentives for discriminatory pricing, to further maximize income -- for example, the owner of sex.com could be charged $3 million per year, whereas the owner of gskjdhglkjfhgflds.com could be charged $1 per year.
To see the effect of auction-based pricing, we need not look any further than the existing example of .tv, which is run by VeriSign. The island of Tuvalu essentially allows the highest bidder (in this case VeriSign, although there had been prior registry operators) to run the registry any way they choose. Of course, VeriSign wildcards this TLD, see www.glskgkjlhgkjhglgjhf.tv [glskgkjlhgkjhglgjhf.tv], and price discriminates (the above domain is $50/yr, whereas Games.tv is available for $100,000 per year.
The case of .net is NOT the perfect economic case for an auction, as there has already been allocations of .net domains. This would be like auctioning off the land in Manhattan, and allowing the "winners" to subsequently rent the land to anyone who already has a building on that land, and seizing the building if they didn't cough up the cash. We don't need it to be turned into another .tv, where suddenly Games.net or Music.net costs $100,000/yr. It would be a disaster for consumers.
If ICANN's Board made the mistake of going down the auction route for existing TLDs, they might as well pack their bags and head to Tuvalu, as the uproar would be even worse than that experienced over Sitefinder, with massive consensus against auctions. Breaking it down by constituency:
a) Registrars would oppose it (discriminatory pricing would eliminate registrar profits, making registrars redundant, esp. as the registry adds "services");
b) Commercial and Business Constituency would oppose it, as it would mean higher registration costs (e.g. att.net might suddenly cost $1 million/yr to renew);
c) ISPs are for lower prices, so they'd oppose it;
d) Non-commercial are for lower prices, so would also oppose it;
e) Intellectual Property folks would oppose it vehemently, as they wouldn't want IBM.net and Pepsi.net to suddenly cost more than gksjhgkjshgskjhsg.net to renew; and
f) Registries would love it, since they'd be making massive profits out of the scheme (although, they'd be splitting it with ICANN, via the tender price paid).
Thus, in conclusion, TENDERS are the optimal scheme, whoever can run the FIXED set of services at the least price for consumers (with set performance standards). AUCTIONS would eliminate the consumer surplus, and shift it instead to the Registry operator (and to the ICANN entity itself, who would squander the dough on travel junkets).
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[ Reply to This | Parent
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Opening Bid for .NET - $1 U.S. Dollar
Do we hear $2 ?
Going once, twice
Hold On - Message from Verisign and Microsoft
"They have decided not to sell .NET"
So sorry.
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[ Reply to This | Parent
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If one takes all of the companies that own
BOTH the .COM and .NET names for their brand
then you have the list of converged TLDs.
That list is smaller than 29,000,000 (the
current size of .COM) and likely smaller
than 5,000,000 (the current size of .NET).
Estimates show it is about 5,000 major "brands".
Those are the strong Trademarks for planet Earth.
Those 5,000 lucky "auction" winners are not
likely to want their TLDs auctioned.
As one example, .SUN paid the Internet Society
a lot of money to make sure their TLD was not
part of any process.
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[ Reply to This | Parent
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ICANN has made it clear that the "number" of
new TLDs was based on the workload of their
star attorney, Joe Sims (and his side-kick
Louis).
ICANN said they could not negotiate very many
contracts, so the number of new TLDs would be
small. The .COM and .NET trademark owners, like
ATT.COM, IBM.COM and SUN.COM are very happy.
Now that ICANN (i.e. Joe Sims) is filling their
play with 2-letter TLD contracts, there will be
no resources for other new TLDs. This is like
the U.S. courts where the case-load for a judge
determines how fast things move.
Once .NET is retained by Verisign, ICANN will
be able to spend the next few years working
the ccTLD queue. That will get Paul Tooney
thru his contract and on to his next gig.
Eventually, ICANN will be absorbed by the ITU
and/or WIPO and fade away.
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[ Reply to This | Parent
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[ Reply to This | Parent
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Esther's Army is Now Wearing WSIS Uniforms
The WSIS Workshop Planning Group:
Vittorio Bertola, At-Large Advisory Committee
Izumi Aizu, At-Large Advisory Committee
Marilyn Cade, Business Constituency
David Fares, BusinessConstituency/USCIB
Tony Holmes, Internet Service & Connectivity Providers
Elana Broitman, Registrars
Jeff Neuman, Registries
Peter Dengate Thrush, InternetNZ
Theresa Swinehart, ICANN
Denise Michel, ICANN
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http://www.iana.org/procedures/delegation-data.htm l
[iana.org]
"If the number of name servers or IP addresses in the delegation exceeds eight (8), the size of responses to reasonable queries with the intended delegation will be checked to ensure that such responses fit into a 512 byte UDP packet. This is the standard size limitation for UDP response packets for most resolving name server software on the Internet today.
In one year the IANA staff will undertake a re-evaluation of the 512 byte limit."
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