Re: [wg-c] Switching costs: a proposal

[Dave Crocker <dcrocker@brandenburg.com>]

At 11:55 AM 8/30/99 , Milton Mueller wrote:
>The FTC report debunks the arguments for non-profit registries and puts the
>"lock-in" arguiment in proper perspective. The report notes that the problem

Language like "debunk" is nicely disrespectful of seriously held and 
pursued positions.

In any event, the report does attempt to refute some concerns.

It fails:

>"The economic analysis of markets with switching costs has identified a number
>of factors that, in appropriate circumstances, can diminish the ability and
>the incentive of a supplier to act opportunistically with respect to its

and of course in the wrong balance, those things can INCREASE the incentives...

>"[N]either economic theory nor available empirical evidence establishes a
>presumption that not-for-profit entities would forbear exploiting locked-in

Without independent oversight, this is true.  Being non-profit reduces the 
incentive to create profit, but it does automatically not guarantee low 
prices or good service.

>customers, assuming that it would be profitable to do so. Theoretical analyses
>have yielded ambiguous predictions as to whether not-for-profit firms are less

So after a nice academic discussion, rather than "debunking" the report 
waffles on taking a position about reality.

>claim to find that not-for-profit entities leave market power unexploited,(22)

"market power"?  Interesting term.  What does that mean?  It's not a 
precise and standard term.  Sounds like the ability to get more money from 
customers; failing to exploit that power is not an automatic negative.

>[Here's my personal favorite--MM:]
>...forestall welfare-enhancing innovation.(26) In the context of the RFC, 
>several
>types of conduct could raise antitrust concerns. These include discriminatory
>allocation of number blocks; exclusionary conduct against companies desiring
>to provide registry or registrar services; and adoption of technical protocols
>that anticompetitively disadvantage competitors of board members."

Interesting it's a favorite, since it strongly suggests a pretty basic lack 
of understanding about the underlying technologies and their administrative 
requirements.

>These crisp, theoretically informed and empirically tested propositions from

The only reference to empirical work acknowledged inconclusive results.

>professional economists make for a great contrast with the homespun wisdom of
>the would-be economists and policy analysts of the POC.

When you can't win discredit their content, try to discredit the opponents.

How professional.

d/


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