Re: [alac] verisign-settlement

["Roberto Gaetano" <alac_liaison@xxxxxxxxxxx>]

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
>    registration."
>
> 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.

Regards,
Roberto GAETANO
ALAC
ICANN BoD Liaison

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