Re: Incompetance abounds at the InterNIC

[Dean Anderson <dean () av8 com>]

At 07:32 PM 1/21/1999 -0800, Patrick Greenwell wrote:
> > But Internic isn't very forthcoming in how they manage their systems. Even
> > so, I think I could run an automated database service for very little cost
> > per transaction. On the order of hundreths of a cent per transaction.
>
> You and half a million other people claim to be able to do this. Running
> code please?

Running code on any of the dozens of discount brokerages.  Actually, their
code is much, much more complex than a domain registry. And much less
automated. So charging 14.95 (E-Trade's fee) is probably too much, even
with some "free" speculation.

Stock brokerages are probably a bad example, because they are not
completely analogous. They are way more complex, and much less automated,
and probably less automatable. But it is significant that brokerages are
LESS automated, MORE complex, and still charge LESS than Internic. [just
want to insert some random upper case letters ;-)]

Therefore, while its not such a good example, it still shows that Internic
is getting a windfall by comparison.

And it provides a real life example that one can run an automated database
service for close to what I (and half a million others) claim to be able to
do it for.

> > You also assume that domain speculators are the only ones who register more
> > domains than they pay for.  They aren't.  
>
> Yes, they are.

?? You contradict this in your next sentence.

> > I'll bet many here have registered domains that they later didn't want
> > and didn't pay for.
>
> So? That doesn't prove that non-speculators do this more often than
> speculators. Why don't you check with NSI on this?

I didn't say they do it more often. NSI wouldn't be able to answer this
either.  All they know is the total number of domains registered which
aren't paid for. They may have identified a few speculators, such as the
"on-hold" people.

> > Further, speculators ultimately pay for the domains they sell.  
>
> No, the purchaser pays for the domains they sell. The speculator often
> does not. 

This doesn't make sense. Its like saying the customer of a hardware store
pays for hardware, and hardware store does not.  While I suppose it could
be literally true, it isn't evidence that the hardware store "didn't pay".

Likewise, Internic got paid for the domain, because the speculator got
someone to pay for it.

> It stand up quite well. Having worked for a registrar that employed both
> models (post-pay and pre-pay) I can state unequivocally that our empirical
> data showed that because of speculation a post-pay model was undesireable
> as the speculators on the system at the time were not paying for the vast
> majority of domains they registered. 

But they generate a net profit for the registry. Why? They cause more
domains to be paid for than would otherwise be paid for. The revenue they
create for the registry is greater than the infinitesimal cost of the
domains which are never registered.

> Demostratively false, that is why we are having this discussion. The
> problems at NSI weren't caused from normal load that they expect. If you
> want to argue that they have a shoddy, underpowered infrastructure, I
> would tend to agree with you. 

Demonstration please?  *CLAIMS* that they cause internic problems are why
we have this discussion.  However, those claims are false. Internic
problems are due to poor management, and as you say "shoddy, underpowered
infrastructure", not speculators.

> > I think Internic can afford to scale with the volume regardless of
> > speculation. Internic is a nearly fully automated process which charges
>
> > Speculators that actively try to sell their domains quite likely cause more
> > domains to be registered, and so they increase the Internic sales revenue.
> > I haven't seen any evidence that the costs of their non-completed
> > transactions are more than cost of their completed transactions.   
>
> Think about what you are saying. The cost of a completed transaction is
> absored by the fees paid for that transaction. The cost of a non-completed
> transaction is paid for by the fees *everyone else* pays for *their*
> transactions. 

This isn't a sensible argument when you look closely. 

The total cost is subtracted from the total revenue.   But if you are going
to split up the costs, you must do it fairly. 

        Speculator revenue   less   Speculator costs
        --------------------------------------------
                                                            = Net profit


        Normal revenue       less   normal costs.
        --------------------------------------------
                                                            = Net Profit           

Since the speculators are generating positive cash flow (the revenue they
generate is greater than the costs they incur), "Normal" users aren't
subsidizing speculators.

What you are doing is this:

        Normal revenue  less    normal costs 
                                less    speculator costs.
        ---------------------------------------------
                                                             = Normal users subsidy

You leave out speculator revenue, and draw an incorrect conclusion.

> > The only speculators that might be able to register thousands of domains
> > with little effort are the ones who register on-hold domains.  But they are
> > doing a favor for Internic, because they are collecting fees.  
>
> Where do you get this wild idea? The only way this occurs is if the domain
> is sold which occurs in the minority of cases, and then it is usually the
> end purchaser, not the speculator that is paying for the domain. The
> speculator serves no useful purpose in the transaction chain for anyone
> involved save themselves. 

Speaking of wild ideas. I suppose that you think the marketing/sales
department serves no useful purpose either.  After all, it is the customer
(end purchaser) who buys services, not the sales person.  You are being
most naive.

The speculator is generating business that wouldn't otherwise be generated.
 Even the ones who register 'on-hold' domains.

The reason speculators can be targeted is because Internic needs a
scapegoat on which to blame their "shoddy, underpowered infrastructure",
and the internic can easily survive without speculators.  But lets not fall
for this again.

                --Dean

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           Plain Aviation, Inc                  dean () av8 com
           LAN/WAN/UNIX/NT/TCPIP          http://www.av8.com
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