Hello Jo.  I don't want to perpetuate this as a legal or procedural
argument, nor do I expect a definitive answer.  Nevertheless I'm grappling
with the entire issue from a business and commercial standpoint, not from
having confused "value" and "property".  Let me illustrate:

If I invest time and money into an building up an asset (even if
intangible), I expect some protection, or at least some security of tenure
beyond the continuing good will of a registrar or auDA.  Thus, if over time
I develop my business to the point where my ordinarily registered domain
name is worth a great deal, I'd like to be able to have the option of
selling it; of using it as collateral; showing it on my balance sheet; using
it as an asset to increase the selling price of my business; indeed,
whatever I may want to do to leverage off any other asset I may have.

The present risks of losing the use of the name mean that despite its value,
it's really worthless.

Now to the auction scenario.  If I pay (say) $100 000 for a generic domain
name, I have an asset worth what?  $250 000 because I can increase its value
in the market place?  Or $NIL, because I can't sell it?  $NIL because my
"ownership" (albeit via a licence) is insecure?

And what of the tax position in both cases.  In the first instance, have I
increased the name's capital value and exposed my business to a tax
liability?  And in the second instance, do I claim the name's cost as a tax
deduction, because I've incurred a cost instead of acquiring an asset?

At the moment if I attach a domain name to my trademark my protection is
nominally enhanced.  Nevertheless, my fundamental risks remain.  And so does
the conundrum of having an identical commodity worthless in one
circumstance, and worth auctioning in another.

I still think that the present policies can have punitive consequences that
were not intended.


Ron Stark
Business Park Pty Ltd
mail: ronstark§businesspark.com.au
tel: +61 (0)3 9592 6895   fax: +61 (0)3 9591 0729
mob: +61 (0)41 812 9922


-----Original Message-----
From: Jo Lim [mailto:jo.lim§auda.org.au]
Sent: Tuesday, 18 December 2001 2:53 PM
To: dns§lists.auda.org.au
Subject: RE: [DNS] Notional value of a domain name


Ron, I think you are confusing "value" with "property". To quote from your
post, the right of auDA to "confiscate" a domain name is based on the
well-accepted notion that there are no proprietary rights in the DNS. A
registrant does not "own" their domain name, but rather has a licence to use
the name under certain terms and conditions. If the terms and conditions
change, or the registrant's ability to meet the terms and conditions
changes, then it is possible that the registrant will lose their licence.

This has nothing to do with auDA's decision to auction domain names, which
acknowledges the belief (possibly unfounded) in the marketplace that generic
domain names have intrinsic value.

See the Name Policy Advisory Panel report at
http://www.auda.org.au/docs/auda-name-eligibility-final.html#ATTB for an
analysis of the best methods of allocating valuable resources such as
generic domain names.

Regards

Jo Lim
Chief Policy Officer
.au Domain Administration Ltd
ph 03 9349 4711 mob 0410 553 233
http://www.auda.org.au


-----Original Message-----
From: Ron Stark [mailto:ronstark§businesspark.com.au]
Sent: Tuesday, 18 December 2001 1:52 PM
To: 'dns§lists.auda.org.au'
Subject: RE: [DNS] Notional value of a domain name

Chris, thanks.  My point still is that an auction process, during which the
domain name applicant pays a (possibly substantial) sum of money - certainly
well in excess of a simple registration fee - immediately bestows a value on
that name.

In one of my earlier posts I raised the issue of the potential that a
registrant may inadvertently or as a result of policy change be penalised,
by losing use of a domain name that has acquired a value in the market
place.

In general terms the response was that a domain name as such has no value.

My difficulty remains.  Apparently to support the right of auDA to
"confiscate" a domain name, it is deemed to have no intrinsic value.  Yet on
the other hand, to support auDA's right to auction a name to the highest
bidder, it is deemed instead to have a value.

Ron Stark

-----Original Message-----
From: Chris Disspain [mailto:ceo§auda.org.au]
Sent: Tuesday, 18 December 2001 1:45 PM
To: dns§lists.auda.org.au
Subject: RE: [DNS] Notional value of a domain name


It is a fundamental tenet of domain name policy world wide that registrants
only obtain a licence to use the domain name and do not 'own' the name.
Licence periods vary from country to country. In almost all cases, renewal
of the licence is 'automatic' provided that the renewing registrant still
complies with the policy. At the gtld level there is no 'policy' to speak of
but registrants still need to renew the name at the end of the licence
period otherwise the name is available to others to register.

In Australia there are various eligibility rules that apply to second level
domain names. It is only in the event that a registrant is no longer
eligible that they would be unable to re-licence the name. This has always
been the case.

Regards,

Chris Disspain
CEO - auDA
ceo§auda.org.au
+61-3-9349-4711
www.auda.org.au


-----Original Message-----
From: Neale Banks [mailto:neale§lowendale.com.au]
Sent: Tuesday, 18 December 2001 13:11
To: dns§lists.auda.org.au
Subject: Re: [DNS] Notional value of a domain name

On Tue, 18 Dec 2001, Ron Stark wrote:

> This is an open question, because I don't have an answer.
>
> If a domain name has no intrinsic value as it's merely a temporary license
> for use, how then can names be auctioned to the highest bidder, on the
> premise that they indeed have value?
>
> I have trouble reconciling these opposing positions.

"IANAL" - but I'd be tempted to guess that it's not the name which is
being auctioned but rather the "temporary license for use" (or whatever
you'd like to call it).

So the (likely) tenure of the license would presumably be a significant
influence on the price.

Regards,
Neale.


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