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Re: [alac] verisign-settlement

  • To: alac@xxxxxxxxx
  • Subject: Re: [alac] verisign-settlement
  • From: "Roberto Gaetano" <alac_liaison@xxxxxxxxxxx>
  • Date: Wed, 14 Dec 2005 15:34:35 +0000

Bret Fausett wrote:

I also have concerns about the accuracy of the report. For example, look at this statement:

   "Regarding registrants, there was some expression that there might
   be some negative effects due to the potential price increases, but,
   the majority across constituencies expressed that the increase in
   cost was negligible when compared to the value of a domain name

ICANN Staff appears to be saying that a majority of registrants believe that the price increase is negligible. That certainly was not the statement of the ALAC, and I would be surprised if a "majority" would agree with this.

First of all, I am also unhappy with the report, and I agree with Vittorio's and John's statements (and probably others) that we need to file "comments on comments".

However, I think we need to be careful on what we complain about. The statement above seems to me fairly accurate, or at least reasonable: the key issue here is the cost *compared with the value*.
In simple words, I, as a registrant, by and large do not care if the price is $6 or $6.42 (after 7% increase), probably even if the price is $10. (of course, the perspective might be completely different for registrants in countries that do have different cost of living). Moreover, if I do run a business, even a small one, for which I am using the domain name, this is even more like that. Let's face it: the price of a domain name, in a developed economy, in a society with a high cost of living, is peanuts *compared to the use value*. And the implication of this is that people will continue to buy .com domain names even if the price would double. This is the *real* problem, IMHO: Verisign will have no whatsoever reason for *not* increasing the price, because the demand will remain by and large unaffected. And the key issue is that in a quasi-monopoly, the monopolist will be able to ask for prices that, although reasonable if *compared to the use value* of the goods or services offered, are unfair when *compared to the cost* of the goods or services offered.
In short, the unfairness of the cost raise lies, INMO, not in the perceived value by the customer, but in the unjustified claimed raise in cost. The point on which we should concentrate is that there is no evidence for justifying a cost raise in terms of raised costs by the producer, quite the contrary, with the economy of scale Verisign is achieving the cost should be even lower.

It is extremely dangerous to shift the comparison from the production cost (which is going down) to the use value (which is at least stable, if not increasing), because on that turf we might be losers.

ICANN BoD Liaison

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