Expand the measurement of Competition to include impacts on innovation

[Paul Twomey <paul.twomey@xxxxxxxxxxxxxxx>]

I congratulate the Consumer Trust Working Group on their important work.

I wish to make one observation, related particularly to the benefits and 
measurement of competition.
While I think the definition of competition offered by the Working Group 
is adequate, the measures that are then offered fail to reflect fully 
the benefits of competition.
The measures outlined on page 11 of the Draft Report focus on market 
share and price impacts.
But the economic literature on the benefits of competition also stresses 
its role in driving innovation and the emergence of improved or new 
products and services.
The US Federal Communications Commission outlines this economic analysis 
pithily:
"Free and open competition benefits individual consumers and the global 
community by ensuring lower prices, new and better products and 
services, and greater consumer choice than occurs under monopoly 
conditions. In an open market, producers compete to win customers by 
lowering prices, developing new services that best meet the needs of 
customers. A competitive market promotes innovation by rewarding 
producers that invent, develop, and introduce new and innovative 
products and production processes. By doing so, the wealth of the 
society as a whole is increased."
/( Connecting the Globe: V. Competition in Telecommunications/   
www.fcc.gov/connectglobe/sec5.html )
I strongly recommend that the Working Group develop some measures which 
focus on innovation and on new products or services.
In my mind, one example of the innovation benefits of the previous 
rounds of introducing new gTLDs is the new use of the DNS by .tel 
(although I recognize it was not initially welcomed by all members of 
the technical community).
While the TLD is controversial for other reasons, the representation and 
warranty provisions of registration under .xxx ( relating to 
invalidation if for use or promotion of certain "illegal purposes" ) may 
also be another example.
Limiting registration to ensure authoritative expression of identity, as 
is the case in .cat, is another.
These are benefits which may benefit various and smaller segments of the 
user base.  This is a valid outcome of competition.  Indeed, one of the 
positive outcomes of open, competitive markets is the focus of producers 
on the needs of more specific segments of the broader consumer base.  
Monopoly markets tend to talk of users; competitive markets tend to talk 
of market segments.  The measurement of competition should also seek to 
capture that development.
I look forward to the Working Group considering this comment, and 
developing further measures of competition.
Your sincerely,

Paul

--
Dr Paul Twomey
Managing Director
Argo P@cific