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August 2, 1999 -- Newsletter #39
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GOODIES TO GO! (tm)
August 2, 1999 -- Newsletter #39
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Greetings, Weekend Silicon Warriors...
I actually had a pleasant experience installing new hardware on my new computer today. I gave my old computer to my father, along with my video capture and scanning cards, each of which had taken me forever and a day to install, configure, configure again (after a call to the manufacturer), and finally get to work. This morning I received my USB scanner and video capture cord (no card -- all the hardware was in the cord). Both were installed and working in under a half hour. My wife, who usually leaves the house when I install new hardware, was impressed. Me, too.
Did you hear...
>Microsoft is going ahead with its plans to offer on-line e-postage. For about $50, you get a device that hooks to your computer and allows you to use a scale and print postage downloaded from the USPS and Microsoft. The postage equipment is said to be created specifically to work in Microsoft software. Anyone else see this as being a real debacle?
>On the "the-Web-is-worth-billions-but-no-one-is-making-any- money" front, Microsoft is revamping their presence on the Web. President Steve Ballmer said the company will use their HotMail and MSN messenger services to get people to search and shop on Microsoft services. Analysts are suggesting Microsoft hire an Internet manager instead of trying to do things in-house.
Now, on to day's topic...
Have you purchased a domain name in the past five years or so? Yes? Then you got it from Network Solutions, Inc. (NSI). The Virginia-based Company has been doling out the .com, .net, and .org domains since 1992.
Well, now there's a concern and it all comes down to, what else, money. Here's the basic premise:
NSI appears to have a monopoly on domain names. They are responsible for over five million names with the three most popular suffixes. NSI is also the holder of the "registry" (the master list of all of the domain names in the world). In order for your domain to be recognized by the world, you have to get it on this list. Thus you go to the person with the registry. That's NSI.
Now it appears that the U.S. Commerce Department is upset. The Clinton administration has said it will end its deal with NSI unless the company comes to an agreement with a non-profit organization to take over tasks, and compete, in the Internet domain market.
The non-profit organization in question is ICANN (Internet Corporation for Assigned Names and Numbers). Guess who is its main backer? The U.S. Government. The Department of Commerce, to be exact.
As I understand it, ICANN itself would not be registering names per se, but would rather allow and police other companies to do the task. In a story dated April 23, 1999, ICANN announced they had chosen five companies to compete in a test of a new, shared system for registering the domain names. In a story dated July 8, ICANN said 15 registration companies had been approved.
That's good, right? Not so far. ICANN is in big financial trouble. The company started with a little less than a half million dollars and is currently in the hole for a million.
ICANN furthered its troubles by attempting to enforce a $1 per domain fee. People balked, of course, asking why a non-profit organization would charge a fee, be it one dollar or fifty. In addition, ICANN thought about asking for money from the companies that would provide the services of registering domain names. NSI flatly refused and that was dropped.
It's that buck-a-name thing that keeps jumping up.
So, now it gets hazy. PSINet was one of the original supporters of ICANN, donating $10,000 in an effort to start "a new era of competition" with "reduced involvement from government." That makes sense.
But then the government made the statement that ICANN would need to drop their $1 fee in order to receive government funding.
Huh? Government funding?
I'm confused. NSI might be dropped from a government contract in favor of ICANN, a non-profit company that wants to charge a fee, that must be dropped in order to get government funding in an effort to lessen government involvement?
Yes, I know a lot of non-profit groups receive government funding, but I was under the impression that ICANN would be supported by the Internet community rather than by an entity that seems to have a real stake in its success.
The ICANN saga just seems to be getting worse. Now congressional hearings are being called for (and carried out) to look into ICANN's company documents, e-mails, and phone records. An e-mail has surfaced claiming that ICANN's lawyer, Joe Simms, urged a Justice Department lawyer to "increase the level of pressure" on government officials who are in charge of getting NSI to work with ICANN.
Still, the biggest concern, in my mind, is the registry. I believe that He Who Owns The Lists Runs The Show. Even the most ardent domain name competition advocate has to agree that there can only be one registry list. If there are multiple lists, then it is only a matter of time before two people buy the same domain name due to multiple lists. Not good. That's a lawsuit and a half right there.
In a congressional sub-committee hearing, the head of NSI, Jim Rutt, said the registry is not the government's property to do with as it may. He claimed that the registry belonged to NSI and it was their decision what would be done with it.
Isn't this fun?
What this all comes down to is money. Depending on your view of the argument, (1) NSI is greedy and wants to keep their $35 dollar-a-year fee without having to lower it because of competition, (2) the Web should be completely free, (3) or it's another version of money good... money bad.
Here's where I usually get into a lot of trouble with some readers. I'm for profit. The Web is a wonderful thing, but the reality of it is that it costs money to run. No, I'm not for one or two people taking in jillions, but I am for people making money. Be honest. Would you work for free? Would you take a pay raise if you had the opportunity? I love to teach, but I can't do it for free. I have a mortgage and a light bill.
The concept of ICANN is a noble one. A central place where multiple domain companies can concentrate their technology in order to create a domain market where supply and demand would set prices.
Would prices drop? Of course. One of the many competing companies would undercut the other, and then another would undercut them until a lower price was reached. Still, there is a basement to the price, a point at which it cannot go any lower. The companies who will compete for the domain name market must make a profit. There's that word again: Profit. It's what they use to pay their employees.
Who is going to pay the ICANN employees? Maybe it's time to stop the non-profit mode of thinking. It's been a year and the company is almost belly-up. It ain't working.
Here's a thought: Why not set up ICANN as a profit-making center? I say install the $5000 fee. Install the $1 fee. Let ICANN make money apart from any reliance on funding from donors. Let their employees get paid. Let the profit go to upgrading systems.
If companies want to jump into the domain name offering business, then they pay the fee. This is common in business. No one opens a McDonalds on his or her own. There's a franchise fee that has to be paid to display the Golden Arches. You want to be in the domain name game, prove you can handle the job, and then pay the fee to get into business.
The result to you and me is the same. We see prices for domains drop, but we see it in an environment where the hub of all the buying activity is financially stable. If ICANN is given the go-ahead as a non-profit, what happens when this month's donors don't come through? A Net-athon? Will we see PBS-style programming where you get a tote bag for a donation?
Domain competition will probably settle the price of a name down around $19.95. That seems to be the benchmark for Internet access these days. So you, the consumer, get the domain name for a lower price. ICANN gets a buck and the company that provided you with the name gets a profit.
It seems like a win-win to me. Why must we get caught up in the hub being non-profit? That spells trouble. The signs are already there.
But after all of this, when all is said and done, the power still belongs to whomever owns the registry. The hub must have access or ownership of the registry. Without it, the hub will probably be forced to pay a fee for access. Non- profit or not, donors or not, that fee will need to be paid.
Does the U.S. government feel they own the registry and can take it away from NSI? It appears so. NSI says otherwise.
Yes, Virginia, there is an Internet Inc. We just don't know who it is quite yet.
And that's that...
Thanks again for reading. It's always great to write something you know people will read (and hopefully enjoy).
Joe Burns, Ph.D.
And Remember: What number-one selling song has the oldest lyrics? The Byrds', "Turn Turn, Turn." Most of the text comes from the Bible's book of Ecclesiastes.