Lowest price is NOT highest benefit

[Werner Staub <werner@xxxxxxxx>]

A number of comments point to the choice of the tie breaker in
case of contention. One suggestion, proposed by the US GAC
representative, is to replace "auction to the highest bidder" by
"selection of lowest price to consumer".

While it is true that auctioning a TLD to the highest bidder is
highly problematic, it is also necessary to caution against using
price as the determinant criterion.

A lower price will attract more speculative domain registrations
(unless there are strong validation mechanisms). For a real domain
name user, the lower the price, the likelier the need to buy a
domain on the secondary market, at a much higher price. Therefore,
a *lower price can actually imply a higher cost* to real users.

The lower the price, the more difficult it becomes for the
registry to operate reasonable validation mechanisms to protect
brands, names of public importance and the chartered purpose of
the TLD. For instance, in a "first-come-first-served" registration
process, charter validation is impossible at USD 6 per domain or
below. Bulk squatters fund large-scale holdings through
pay-per-click advertising, deceiving both users and advertisers.
As a result, *a lower price can increase external costs* (cost of
defensive registrations, cost of litigation, damage by
large-scale/small-impact cybersquatting and typo-squatting).

Instead of relying on highest bid or lowest price, it is better to
use comparative evaluation even for contention between
non-community-based TLDs. The panel must measure, based on the
respective business plans and respective proposed registration and
validation processes:

1) the likely external costs
2) the likely final cost to registrants
3) the likely gain in value, choice and diversity

The modes of measurement or scoring need not be identical for all
TLD applications in the same round. They only need to be the same
for all applications in a given contention set. The evaluators
must be required to document their measurements and objectively
explain their conclusion.


Werner Staub