[ga] Secondary market - criteria?

[Thomas Roessler <roessler@does-not-exist.org>]

Rick Wesson has asked this GA for criteria any proposal for handling 
the deleted domains market has to fulfill.  Even though many who are 
writing here (with the notable exception of Bret Fausett) seem to be 
blantantly opposed to the WLS proposal, this topic is generally 
worth discussing.

Verisign wants input from the registrars constituency on the WLS 
proposal by January 18 (that's next Friday).  This indicates that we 
don't have a whole lot of time.  For this reason, I'd strongly 
suggest that we don't bother debating whether or not we need a 
working group, what mailing list should be used by that working 
group, who should chair it, and whether the Pope needs a 
representative.  Eric's anonymous "friend" is quite right that it's 
that kind of stuff which has ruined the GA in the past.

Instead, let's try to understand the problems on this very list.

In fact, I think that the requirements posted by Bret in 
<http://www.dnso.org/clubpublic/ga/Arc09/msg00194.html> are mostly a 
good starting point for such a debate.


But one of them is particularly interesting: "the current registrant 
should make his or her decision to renew blind to the value placed 
on that domain name by prospective registrants".

It's interesting because it's just the opposite of the suggestion 
posted by Elliot Noss.  In fact, what Bret suggests is deliberately 
adding more inefficiency to the domain market by trying to make sure 
that current registrants of a domain will release it to the pool of 
available domains as soon as it's not used.  The philosophy seems to 
be:  You lease a domain at USD such-and-such year, use it, and 
return it to the pool for the next one to use it.

The problem with this approach is, of course, that domains are worth 
more to some than they are to others, and that they cost still less. 
Now, as Noss describes in his message, when you combine this with 
traditional domain pricing, you end up with a price gap which can be 
exploited by speculators - or by those registrars who offer 
back-snapping services for domains, or by the registry.

HOW precisely the money is really distributed is irrelevant from the 
point of view of those domain name owners who actually want to use 
their domain (and don't just want to trade them).

 From this point of view, RRS (afternic), WLS, and the current system 
are all equally bad, and prize-driving.  In fact, figure A of the 
Afternic proposal gives some nice insight in what happens: RRS 
maximizes registrar earning (thus, it's really just a 
make-some-registrars-quite-rich scheme), the WLS scheme splits most 
of the money from the gap between the registry and speculators 
(while making some ways to speculate considerably more expensive at 
the same time), and the current system has the interesting feature 
that the back-order services work best and cheapest when there is 
few competition, but inevitably become expensive as soon as more 
competition arrives, and the chance that any particular player gets 
a domain decreases.  But still, the current approach will shove a 
lot of money into a lot of registrars' pockets.  It's just not good 
for the non-speculating registrants...


Now, what happens when you follow Elliot Noss and drop Bret's 
postulate that current registrants shouldn't know about the value of 
their domain?  First of all, there would be an incentive to keep all 
domains but the most worthless ones - the latter ones being returned 
to the pool of available domains.  This may generate predictable 
revenue for registrars and the registry. It may also put those out 
of business (or at least make business more difficult for them) who 
are currently hunting for deleted domains.  It would, finally, make 
life more difficult (though not impossible) for speculators.

It would, of course, also put some of the money into registrants' 
pockets which ends up with registrars, the registry, or professional 
speculators according to the other proposals, and with the current 
state of affairs, where selling a domain name does not seem to be 
something mainstream registrants do, and where many registrants just 
may not know that their domain has a value.


Quite frankly, the more I think about this, the more I like the idea 
of letting registrants know about their domains' value, and the more 
I dislike ideas like the ones from RRS, or like Bret's postulate, 
which both just make sure that the money does _not_ end up with 
average registrants.

Now, what about WLS?  It would, ultimately, be put out of business,

but it would, on the other hand, probably not do much damage to the 
development of a healthy market.

-- 
Thomas Roessler                        http://log.does-not-exist.org/
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