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Username: DomeBase
Date/Time: Thu, August 30, 2001 at 5:28 PM GMT
Browser: Netscape Communicator V4.7 using Windows NT
Subject: registrar reserves -- very tough issue -- some ramblings


        Dear IA and Paul, concerning closed registrar lists,

The issue of registrar submission of names and closed lists is a
really tough issue -- ethically, technically, and politically. 
I have given this some thought, but probably just scratched
the surface. Some of you might not like some of what I say, but I
am trying to be balanced and practical and ethical.  I am also
open to counter-point and changing my views based on good


From one perspective, this could be viewed as an issue of
consumer surplus, value added, and profit. "Consumer surplus" is
the difference between the value of something and what a consumer
pays for it.  Suppose that a commodity is made from raw materials
by firm A, these raw materials are assemble into a product by
firm B, these products are sold by retailer C, and bought by
customer D.  Who gets what portion of the value added between the
raw material and the end consumer?  There may be answers to this
depending on market conditions in the supply chain between raw
materials to consumer.  On the face of it, it does not appear to
be an ethical issue whether, say, firm A gets 15% of the value
and firm C gets 60%, or the other way around.  Few people would
say that it would be unethical for the consumer to pay anything
more than the sum of the costs of firms A, B and C -- for the
consumer to get the entire value added as consumer surplus.

The analogy to .INFO and .BIZ is -- who gets the added value for
more valuable names -- the registry? the registrar? the consumer?
or some combination thereof?  The registry can get most of the
added value, and most of the consumer surplus, by having a lottery
or an auction.  It looks to me like .BIZ works this way.  To
their credit, Afilias did not take this route.  Registrars can
get most of the added value by accepting multiple applications or
having auctions (bids) for places in their line.  Some registrars
have gone this route.  Consumers get the bulk for the consumer
surplus for the "good names" when registrars charge the same for
good names as for not-so-good ones in a single submission per
name, randomized process.  From this perspective, although
different parties benefit in different ways from these
approaches, at this point they do not look to me like one is
immoral vs. the other.

Now moving to registrars reserving good names. There is no
question that this is a case of registrars taking some of the
consumer surplus for some names. When the registrars sell them,
they will sell them for actual consumer value, and pocket the
difference.  Is this wrong?  In the above perspective, if all
parties are informed of how things work, one could argue that it
is not wrong.  However, if consumers do not know about this, then
it probably is wrong.  If consumers are bidding on names that
registrars reserve, particularly if those names are beyond those
publicized in some list somewhere as to be reserved, then this is
probably wrong.  There analogies to insider trading.  The issue
is generally one of whether consumers are informed about what is
going on when they make economic decisions.  I would also note
that there have been decades of development and definition of
what "insider trading" is and complex mechanisms to enforce the
rules.  This bring me to technical considerations in the next


Even if you decided that submission of closed lists or too many
registrar reserved names is unethical, and even if you gained
political support to try to implement this, how would you work
out the technical definition and enforcement of this?   What does
it mean to have a list that is open to the public?  A period of
time?  A percentage of registrations?  How is inside vs. public
distinguished? Employee of registrar?  Family of employee?
Friend of employee?  Person who made agreement with employee of
registrar?  As I mentioned early, we have had decades to develop
the complex rules concerning insider trading and the mechanisms
to enforce them... and there are still problems.  I am open to
suggestions, but would be very surprised if one could resolve
these technical issues in two weeks, or even two years?
Nonetheless, I am open to suggestion if you have a shot at how
this would work.


I have had a tough time selling a solution that would be
consistent with the original intent of the sunrise period and
would benefit pretty much all parties involved except sunrise
squatters.  If THAT has been a tough sell, how much luck do you
think I would have with a proposal that takes away something that
registrars were probably given in the original agreements.  I
guess if one really resolved the ethical and technical issues,
one might argue that whatever the agreements, they should be
undone for the public good, but sometimes seeking everything you
wind up with nothing.  I am focusing on the sunrise squatters, an
issue for which the ethics are really clear (once you adjust for
innocent folks who can cancel their regs) and which is clearly in
violation of the contracts and agreements on the books.   If you
are game for pursuing bigger things, then please start working up
the technical specifics and your game plan for how to get it
done.  Hopefully this does not make me a moral wimp. 

I am not fully happy with what I have written above. It is not as clean and logical and ethically-clear as I believe the issue of sunrise squatters to be.  It is my best shot at this time and I welcome reasons to change my mind.



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