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The assumptions in this paper are all wrong

  • To: auction-consultation@xxxxxxxxx
  • Subject: The assumptions in this paper are all wrong
  • From: Vittorio Bertola <vb@xxxxxxxxxx>
  • Date: Sat, 09 Aug 2008 19:14:10 +0200


I must say that I am confused by this paper.

Apparently, ICANN asked whether an auction could be a useful instrument to adopt, to a company that makes its leaving out of designing auctions. In no way they could reply differently than with a long sales pitch that promotes their services. But you wouldn't ask a car dealer whether buying a car to go to work is better than using public transportation, would you? Or at least you would already know the answer.

In any case, their main point that auctions "put scarce resources into the hands of those who value them the most" is plainly wrong. Even if you accepted that the only dimension of "value" that you have to keep into account is money, this would be true only if everyone had the same amount of money to spend in their pockets. In the real world, that string can be worth a lot to you, but you don't have that amount of money in your bank account so you can't put it on the table. Or you can be a wealthy billionaire that wants that string just for vanity, and can afford outbidding a community effort that is striving to raise money to compete. Maybe that community values the string a lot more than the billionaire, but a $1'000'000 bid is too much for the community and nuts for the billionaire, because their scales and their pockets are different.

There seem to be several wrong hidden assumptions in this paper. One is that a bid that benefits many people is also a bid that will have many registrations, i.e. that will work on a business model where second level domains are sold and money is made from that, so plenty of relevance = plenty of money. But one could imagine bids where no registrations are sold - domains are given away for free; or the TLD is only used for the registry to set up a few public services to be used freely by millions of people - still having broad community relevance.

Another wrong assumption is that monetary value is the only quantity that counts. In fact, personally I think that the "value" of a TLD is mostly connected to other factors. For example, one is how many final users of the Internet will ever use services located inside that TLD; another one is how strongly these people will feel attached to that TLD, i.e. whether the TLD contributes to build any kind of "community identity" for an online group of people that presently does not have it; a third one is whether the new TLD will spawn innovative uses of the DNS or enable innovative services. None of these is directly connected to monetary value, and it is quite disturbing to me that an organization like ICANN, which is meant to steward scarce global public resources in the interest of the entire community of the Internet, still seems to have such a partial and narrow view of where the value of the Internet itself lies.

P.S. By the way, the argument that you can't have comparative evaluations because in that case the ICANN Board would easily be corrupted by applicants is plainly offensive.

vb.                   Vittorio Bertola - vb [a] bertola.eu   <--------
-------->  finally with a new website at http://bertola.eu/  <--------

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