Re: [alac] verisign-settlement
> 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. Agreed. This is why the economic analysis is important. In any economic transaction there is the concept of consumer surplus, which is the difference between what someone would be willing to pay (the value) and what one actually pays (the price). If someone would pay $30 for a domain name but it only costs $10, that $20 difference is the consumer surplus, a measure of how much benefit buyers get from the transacion. In a competitive environment, sellers' prices are pushed down close to their costs, which maxizes consumer surplus. In a monopoly, the seller raises prices to the maximum that buyers will pay, capturing the consumer surplus for itself. That's the basic rationale for regulating monopolies, to give the buyers back the consumer surplus they'd have if there were competition, and that's why it's important to understand to what extent .COM functions as a monopoly. We all know that domain buyers think that domains are worth more than they pay for them. That's not under debate, since if they didn't, the buyers wouldn't buy them. The question is whether and why it would be in the community's interest to transfer part of the surplus from every buyer to Verisign. Here's a straw man that may help evaluate scenarios. If buyers consider domains so valuable, why not raise the price from $6 to $50 or $100? I bought a few domains back when they cost $50 (and $50 then is $65 today), so it clearly wouldn't be a problem. Or would it? Regards, John Levine, johnl@xxxxxxxx, Primary Perpetrator of "The Internet for Dummies", Information Superhighwayman wanna-be, http://www.johnlevine.com, Mayor "I shook hands with Senators Dole and Inouye," said Tom, disarmingly.