DNS: Trading domain names

DNS: Trading domain names

From: Glen Turner <glen.turner§itd.adelaide.edu.au>
Date: Mon, 30 Dec 1996 17:10:11 +1030
Brett Caird wrote:

> Take a look at http://www.pizza.com to see what allowing these sorts of
> names can do.  One argument for allowing generic words (where that word is
> not the company name) is that poor saps like the owner of this page will sit
> there waiting for an offer for ever.  But the other side of the coin is that
> some hotshot Pizza marketing Manager is going to get the hit rate on the
> site and run some calculations over it and work out how much the domain is
> worth to them and start making offers.

A few people have suggested that tradeability in domain names
is a Good Thing.

This is not so.  The benefits of trading a domain name
accure to the owner and former owner of the domain, but
the costs fall on the net community as a whole.

Imagine if these `social costs' could be charged to the

 - AltaVista, etc would charge for the re-indexing of
   both domains.

 - Web proxy operators would charge for the additional
   traffic to re-cache pages.

 - Publishers would charge for updating URLs in written

 - You and me would charge for the repair of all the
   broken links on pages in our sites and in our

All these little costs spread over thousands of people are
a significant cost to the net community.  Just because those
involved in the transaction do not see the full costs is no
reason to ignore those costs (this condition is technically
called `market failure').

The ability to trade in domain names increases the rate of
change in domain names, thus increasing these social costs.

Allowing speculation in domain names, advocated by some, has
additional social costs, and profits none but the speculator.

There are two means to make the transactors consider the
social cost:

 - levy a charge equivalent to the social cost (traditionally
   called `taxation')

 - discourage it to a level where the social benefit equals the
   social cost (traditionally called `regulation').

If a policy of allowing domain name trading is to occur,
it would be wise to use one of the above mechanisms to limit
its impact on the network community.


PS: I see little social benefit in allowing the trading of
    domain names.  If someone has the `wrong' domain name name,
    such as www.delta.com, they will eventually give it to
    Delta Airlines to avoid paying for all the missed hits
    increasing their server load.

glen.turner&#167;itd.adelaide.edu.au     Network Support Specialist
Tel: (08) 8303 3936            Information Technology Division
Fax: (08) 8303 4400             University of Adelaide SA 5005
---. -.- ..... --. -.. --  http://www.adelaide.edu.au/~gturner
There are two major products that came out of Berkeley:
LSD and UNIX.  This is no coincidence.
Received on Mon Dec 30 1996 - 18:25:24 UTC

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