Alain Durand <[EMAIL PROTECTED]> wrote:
|On Feb 8, 2004, at 3:02 PM, Dan Lanciani wrote:
|>
|> In the past we were unable to come up with a value for ``long enough''
|> which
|> is in any meaningful way different from ``forever.''
|
|There is a simple business model to solve this problem:
|long enough == as long as you pay for it.
There is a much simpler model that does not create an artificial profit stream:
long enough = forever.
|This is the same as any other utility. You get gaz, water & electricity
|as long as you pay for it.
And if the address allocation entity were to send me fresh new addresses to
add to my collection each month I might want to pay them on that basis. But
they aren't sending me anything. You are trying desperately to create an
ongoing revenue stream out of the ether. Certainly this has been done before,
but at least there were technical excuses to make it seem more legitimate.
This time it's purely economic.
|> You are making the standard fallacious assumption that the allocation
|> service/
|> ISP/whatever is infallible and philanthropic. What happens when the
|> service
|> goes bankrupt? Don't imagine that the bankruptcy court is going to
|> ignore that
|> subscription income and just let the customers keep their addresses.
|> What
|> happens when the service gets greedy and (after enough people are
|> dependent)
|> raises the rates? You think that can be avoided by contract? That
|> brings us
|> back to the question of how long a contract is ''long enough?''
|
|This is the exact reason why we should not create a monopoly but foster
|healthy
|competition.
Previously you argued that a registry might need recurring fees in order to
recover its costs of operation. Now you are talking about competition.
Cost-recovery operation and competition are not particularly compatible.
Competition typically requires profit since there is little incentive in
competing if you don't get anything by being better. I'll assume that when
you said, ``recover the costs of operation'' you really meant to say, ``make
a profit''.
Now, let's assume that we have created this environment of healthy competition
that you espouse. Who gets to decide who is allowed to compete by being a
registry? It can't be a free-for-all because then anyone could bypass the fees
of existing registries by declaring herself a registry and allocating addresses
for free. I'll bet your answer is that the registries should themselves pay
recurring fees to a higher authority for the privilege of being in this
profitable business that we have created. That also conveniently locks out
anyone who might want to offer addresses for a small one-time fee (or perhaps
for no fee at all) and maintains the MLM status quo.
|If you're not happy with network solution for your DNS name
|danlan.com, you can switch to another one. We can have the same model
|here.
And how exactly do you know to switch right before the bankruptcy? What's the
cost of your time tracking such events? For DNS names there is a technical
excuse for ongoing maintenance because the owner has to interact with the
registry and the registry has to interact with the root name servers. (These
interactions--"updates"--were exactly what the initial domain name fees were
alleged to cover. That was before folks had been acclimated to the idea that
there should be recurring fees for all manner of things and that they were not
owners but renters.) Those excuses do not apply in the case of the addresses
under discussion. Your analogy, while not quite as bad as your previous
comparison to a pyramid scheme, is still flawed.
|> In any case, the actual cost of
|> maintaining an individual address would be swamped by the costs of
|> billing the
|> renter for that address.
|
|Billing & recurrent fees is a way to guaranty that the database will be
|maintainable.
Nonsense. Recurring fees are a way to guarantee that someone can make (more)
money. They guarantee nothing about the database. The maintainers can
squander the recurring fees just as well as they can squander the one-time fee.
The way to guarantee the maintainability of the database is to make it largely
independent of the allocator. Allocations could be self-proving and held by
the owners. This could be achieved with public key crypto, for example.
|With permanent allocation, the day you get close to exhausting the pool
|of new subscribers, the rate of new subscription may not be enough to
|recover the
|cost of maintaining the database.
This is just your broken pyramid scheme analogy again, based on the assumption
that only ongoing user fees can pay for ongoing costs. Did it ever occur to
you that the allocator could invest most of the one-time fee and use the return
on that investment to pay ongoing costs? Now, you may say, with the example of
Enron and friends we can assume that they won't do that but will instead take
the fee out in executive compensation and such. This may well be true, but the
solution is not to throw even more money (in the form of recurring fees) at
them. If they appropriate the one-time fee they will appropriate the recurring
fees as well. All the recurring fee model does is give them the opportunity
to go back to the well over and over again, increasing fees as they squander
more and more money.
|> But even the premise behind your analogy is wrong. A one-time payment
|> does
|> not in any way imply that ``new comers'' are paying to support previous
|> customers. The future value of money is well understood. If the cost
|> of
|> maintaining an address in the database can be expressed as a recurring
|> fee
|> then it can also be expressed as a one-time fee. A recurring fee is
|> just a
|> way to hide the true cost from the customer. It also decouples the fee
|> from the cost of maintaining the database (because the billing and
|> other
|> administrative overhead will dominate the computation), allowing lots
|> of
|> wiggle room for little extra expenses. And most people won't even do
|> the
|> annuity calculation to determine their equivalent up-front cost.
|
|I'm not sure the future value of money is that well understood for
|infinite length of time...
|Actually, I'm sure of the opposite.
A little while ago you seemed sure that the one-time fee model was equivalent
to a chain letter scheme even though the math is totally different. Your
economic analysis is, at best, questionable.
Dan Lanciani
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