[ga] Re: Auctions
While we have heard the arguments in favor of auctions (Manheim, Solum, Mueller, yourself, etc.), we have frankly not yet considered the opposing points of view... in part because those privately-held views haven't been made public. For the sake of parity, I am therefore posting the Cross-Constituency view (BC-IPC-ISPCP) that opposes auctions ... For something purported from "business" interests what they said is amazing naive. "5. The problem with an auction model for new domain names Not so market-driven. An auction model may rely on a third party to dream up the names to auction. Who will that be? ICANN? Who says these will be the right names?
The winner gets to stick whatever character sequence into the slot that it wants, as long as it isn't used by someone else. The only question in my mind is whether the winner could subsequently change the character string, i.e. "rename" its slot. I'm thinking that it should have that ability. Introduces bias. A work-around would be to allow the names to be proposed by the first prospective registry and then allow others to bid. But in such a case the latter bidders would always be at a disadvantage with respect to preparedness and their ability to assess the upper limit on a viable auction bid. Again, nonesense. ICANN merely auctions slots, not names. Nobody "proposes" anything. Still no added value. Without the principles of differentiation, certainty and good faith, an auction model has no inherent ability to add value in the public interest. Amazing nonesense. Who cares whether there is differentiation or good faith or even overt "public interest". We're talking about opening up the marketplace here to any and all who want to try their hand at having and running a TLD. Market distortion from market hype. As the global bids for third generation mobile telephony have shown, even experienced companies may be tempted to grossly overbid in an auction model. The Internet has had its share of hype and will continue to do so. The prospect of the ¡§winner¡¦s curse¡¨ is real. Who cares if someone "overbids"? They bid the price they thought it was worth to them. We are not here to protect enterpraneurs from shooting themselves in the foot. Moreover if the auctions are for a realistic number of "slots" rather than ICANN's notion of one slot/name per millenium, then prices ought to drop to levels that reflect the general consensus of feelings about prices rather than the mental aberations of one super-bidder. Potential to be anti-competitive. An auction model has the potential to favour the existing dominant players. Given the current failure of competition at the registry level (84% market share by one company) this is not the model to use today. Sounds like Orwell is writing - they are saying that we can't have a marketplace in domain name slots because of some unexplicated hypothetical possibility that it might be anti-competitive. The business constituency claim here is simply that of a child who is afraid of the dark. Summary In short, any supposed benefit from an auction model for new domain names has a disproportionate cost due to the increased likelihood of market distortions. Nonesense. That is the result of naive speculation based on a pile of false premises. The business interests simply don't want more TLDs because change scares the kind of business people who attend these meetings. Such an approach is contrary to the public interest and therefore contrary to ICANN¡¦s core values." Since when does the business comunity care about "public interest"? Does it even know what public interest is, particularly when the "public" is banned from ICANN? And ICANN's "core values" are simply a can of public image whitewash brewed up by certain now gone ICANN staff. I propose that the business interests that accepted their position go to their own boards of directors and demand that their own enterprises and the markets they are in be run according the the constraints they apply to new TLDs. Way back in internet times Marshall Rose divided the tech community into "Goers" and "Doers". The former went to meetings and generally have not a entrapreneural or imaginative gene in their bodies. The latter actually invented, developed, and did useful things. The people who attend the business constituency, I suggest, are largely "Goers", not "Doers", so I would not expect them to do anything except protect the status quo. --karl--
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