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Proposed procedure for giving domains

By AnteTempore in News
Thu Jul 20, 2000 at 01:24:41 AM EST
Tags: Internet (all tags)
Internet

Everytime a new TLD is set free it creates a flood wave of registrations. These registrations overwhelm the receiving servers and may cause denial of service. To avoid this we propose using a slightly modified Dutch sale technique which will ensure that no one gets an advantage and that no one with any reason can feel cheated.


By Ole Tange <ole@tange.dk> and Hans Schou <hans@schou.dk>

Reason for this document

The Internet has gotten a reputation for being a wild west like community: Whoever gets a good domain name can sell this domain with huge profits.

When a whole new world is set free (i.e. a new TLD) there will be a rush on getting the good names that no one has any legal right to in the second level domain (e.g. car, business, tv). Therefore the registration rate during the first days will be so high that capacity is exeeded.

The only one benefiting from the scheme is the ones that gets the good domain names. The winners will be the companies with the best automated registration system who will then sell the names to those who really are going to use them.

It would be much better if the rate registrations were to accelerate slowly so capacity could be adapted to the current flow.

The Dutch sale technique

The Dutch sale is a technique for selling much like auctioning. But with autioning it is hard to jugde when to stop asking for bids. Also autioning is not good when you have an unlimited number of items (i.e. domain names).

The Dutch sale works by setting the start price very high. Preferably it should be so high that no one will pay the start price.

After some time the price is reduced. If no one buys the price is reduced further until someone buys.

The exponentially Dutch sale technique

The exponentially Dutch sale is just a specialisation of the Dutch sale. The reduction in price is done continuously and not in steps.

The price will never reach 0 but will slowly get closer and closer to 0 as time goes.

The formula for exponentially Dutch sale could be:

p1 = price at start of sale
p2 = price at time t1
t1 = time when price p2 should be reached
t = current time
p = current price

p = exp( ln(p2/p1)*t/t1 ) * p1
Example:
p1 = 1000'000'000 
p2 = 1
t1 = 12

+----+--------------+
|  t |       p      |
+----+--------------+
|  0 |   1000000000 | 
|  1 |    177827941 |
|  2 |     31622776 |
|  3 |      5623413 |
|  4 |      1000000 |
|  5 |       177827 |
|  6 |        31622 |
|  7 |         5623 |
|  8 |         1000 |
|  9 |          177 |
| 10 |           31 |
| 11 |            5 |
| 12 |            1 |
+----+--------------+
Why this works

By setting the start price very high no one wants to buy at once. However, when the price nears the point of value the good domains the buyers will slowly start to show.

Everyone is welcome to either buy now or wait. But if you wait for a lower price someone else may have bought the wanted domain at the higher price. Therefore you will probably give the most the domain is worth to you. Cyber squatters will suddenly be forced to pay the current bid and will not be able to buy thousands of domains for reselling because if the domain was worth more it would already have been sold.

As several .com domains have been sold in the price range of several millions the start price should be significanly higher.

We propose using 1'000'000'000 as a start number and end with 1 after a year. After the first year the price may just vanish because all good domains will have been sold long before this.

Who got here first

The perpetual problem is ofcourse: Who bought it first?

We propose the following guidelines for resolving this:

  • The domain is bought by when the first payment larger than the current price is received.
  • If payment is recieved from two parties at the same time, the party paying more is the buyer.
  • If two parites pay the same amount at the same time, the party with the lowest tracking number is the buyer.
Payment will ofcourse be refunded if no buy is made.

Who should get the payment?

The receiver of the payment should be a foundation. The mission of the foundation will be to enhance the Internet. Part of this could be by:

  • Funding the running cost of DNS for the TLD in question.
  • Funding international NICs (IANA, ICANN and perhaps ARIN, RIPE, APNIC and AfriNIC)
  • Instituting a price for new, revolting inventions made freely available for the Internet (a bit like the Nobel-price for Internet)
It would be reasonable to assume that the Dutch sale will generate enough renevue to fund the running of the TLD for eternity. The Dutch sale will thereby be an asset for the TLD.

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Related Links
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o Also by AnteTempore


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Proposed procedure for giving domains | 21 comments (20 topical, 1 editorial, 0 hidden)
Here's the problem... (1.75 / 4) (#1)
by rusty on Wed Jul 19, 2000 at 09:16:20 PM EST

This sounds like a really good idea, except for one problem-- it almost guarantees that the current problem with the biggest and richest getting the best names remains in place. It could potentially help the squatter problem, but at the expense of still ensuring that good domain names are out of reach of the "little guy", who will continue to be forced to resort to ridiculous names like "kuro5hin.org" to stake out their turf on the net. For your stated purpose of slowing the "land rush" of registrations, it seems like a pretty good idea.

____
Not the real rusty
Re: Here's the problem... (2.00 / 1) (#9)
by AnteTempore on Thu Jul 20, 2000 at 04:03:42 AM EST

it almost guarantees that the current problem with the biggest and richest getting the best names remains in place.

But that is the way it is already working: Unless you have automated registration machines you will not be able to get any good names after the first day. They will all have been sold to either large corporations or squatters.

And let us just say you got lucky: You actually did get a good name. What will you do if someone makes you an offer you cannot refuse? Sell the domain and be extremely rich and happy or keep the domain and be sued to hell (for whatever reason)?

I do not see how we can favor the little guy without favoring the cyber squatters, too. With this scheme the little guy gets a, albeit small, reward: The rich guys pay to the Foundation and thereby pay for running services that the little guy should have paid for otherwise.

[ Parent ]

fundamental flaw (3.70 / 3) (#2)
by Arkady on Wed Jul 19, 2000 at 09:20:54 PM EST

The fundamental flaw, of course, is that you're assuming that anyone has a right to sell off these pieces of the global infrastructure.

A more superficial flaw, as the other comment points out, is that it's just another way to sell off the global address space to the highest bidder. No thanks.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere Anarchy is loosed upon the world.


Re: fundamental flaw (none / 0) (#8)
by AnteTempore on Thu Jul 20, 2000 at 03:51:49 AM EST

The fundamental flaw [...] is that you're assuming that anyone has a right to sell [domains]

With the current economy this is the way things work. Very few these days are not affected by money. Think about it: Is kuro5shin.org for sale? Probably not, but what would kuro5hin.org do when a rich fellow gives the alternatives:

  • Make yourself a bilionaire and all your readers millionaires
Or:
  • I will use the same amount to sue the living shit out of you
I think even kuro5hin.org will be for sale if this actually happened.

[This is] just another way to sell off the global address space to the highest bidder. No thanks.

As argumented above: The highest bidder will always get the domain (assuming the bid is high enough). So now is the question: Who would you rather benefitted from the sale? A singe cybersquatter that got lucky or the Internet community?

[ Parent ]

Re: fundamental flaw (none / 0) (#12)
by YellowBook on Thu Jul 20, 2000 at 12:06:19 PM EST

With the current economy this is the way things work. Very few these days are not affected by money. Think about it: Is kuro5shin.org for sale? Probably not, but what would kuro5hin.org do when a rich fellow gives the alternatives:

Yes, but that also assumes that domains can be sold at all. That's true of .com, .org, .net, etc, but it is explicitly not true of at least some of the OpenNIC TLD's.



[ Parent ]
Re: Selling OpenNIC SLDs (none / 0) (#16)
by AnteTempore on Thu Jul 20, 2000 at 06:20:47 PM EST

If a company owns this-domain.$OpenNICTLD may it then give the domain to a daugther company? (E.g. a spin-off)

If a company is bought by another company does the domain follow?

If the answers are yes and yes then it is possible to work around the rules. Which gives us that if you want to sell a domainname all you have to do is start a company, transfer the domainname to the company and sell the company. A bit more paperwork but manageble.


[ Parent ]
Re: fundamental flaw (none / 0) (#20)
by Arkady on Sat Jul 22, 2000 at 04:10:38 PM EST

Right. It depends on the TLD. The OpenNIC TLD .null, for example, explicitly forbids the transfer of SLDs for compensation. But then, it explicitly forbids corps from holding .null domains as well, so there's no possibility of the sort of violation that can be expected on the TLDs that accept corps.

The basic idea is that the TLD context controls what goes on inside it. In some TLDs, it could be completely appropriate to sell domains to the highest bidder. I'm uncertain whether I think OpenNIC should ever launch one like that, personally, but I could see how it might be an attractive funding model for the free TLDs to have a commercial TLD as well.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere Anarchy is loosed upon the world.


[ Parent ]
Why not sell top level domains? (1.00 / 1) (#4)
by Cryptnotic on Thu Jul 20, 2000 at 02:11:06 AM EST

Why not open up ALL top level domains. .com, .net, .org, etc would remain the same. Although suppose I wanted to buy the TLD *.bob, why not allow that? Then I could dictate who could own *.big.bob, etc. If Rusty wanted to own the TLD .kuro5hin, why not allow that?

Re: Why not sell top level domains? (4.00 / 2) (#6)
by AnteTempore on Thu Jul 20, 2000 at 03:36:00 AM EST

Why not open up ALL top level domains?

There is a technical reason for this. If new toplevel domains are created they must be created on the name servers for . (root). These name servers are the ones that are mentioned in the file named.ca which is a pretty static file. When yet another root name server is added it is not automatically added to your named.ca (being a file on your harddisk). Thereby your server will not use the new root name server.

This sums up to: the balancing effect of DNS will be less. And as the root name servers are already loaded this seems not to be the way to go.

[ Parent ]

Domain names are not commodies (2.00 / 1) (#5)
by Anonymous Hero on Thu Jul 20, 2000 at 02:48:28 AM EST

I believe a better solution to cybersquatting is to have more specialized TLDs. Each industry might have a TLD, each company would have a right to own a SLD under their industry's TLD. Apple would have apple.computer, while the Anonymous Point-to-Point Lightweight Exchange ISP would have apple.isp. Non-commericial entities would be allocated their own TLD pertaining to their purpose. A dutch auction is an interesting idea, but should not be applied to domain names IMO. Organizations should have a _right_ to own a specific domain, a domain shouldn't be owned by someone who is wealthy enough to buy one.

Re: Domain names are not commodies (none / 0) (#7)
by AnteTempore on Thu Jul 20, 2000 at 03:40:35 AM EST

Organizations should have a _right_ to own a specific domain, a domain shouldn't be owned by someone who is wealthy enough to buy one.

You need to address the problem of:

  • defining when you have the right - What counts as right? Who will be the judge?
  • what happens when 2 organisations both have right


[ Parent ]
Re: Domain names are not commodies (none / 0) (#10)
by meadows_p on Thu Jul 20, 2000 at 07:05:13 AM EST

The original poster is right though. Economically the scarcity of domain names is totally artificial. Correct me if I'm wrong, but we could theorectically just keep introducing new levels into the domain name system, a bit like the hated .US geographical system.

[ Parent ]
Re: Domain names are not commodies (5.00 / 1) (#11)
by Anonymous Hero on Thu Jul 20, 2000 at 11:36:01 AM EST

I imagine you're right. But, of course, the more levels you add the more in the cumbersome the system becomes. I work for a community college, educational institutions which are barred for some unfathomable reason from using the .edu TLD. That means we're stuck with a preposterous domain name that everyone constantly mis-types, mis-speaks, and otherwise screws up. The whole situation has soured my opinion of both restricted domain spaces and hirearchal domains. -Bryan

[ Parent ]
Not squatters (none / 0) (#13)
by El Volio on Thu Jul 20, 2000 at 12:29:46 PM EST

I know that everyone has gotten used to calling a certain class of individuals "cyber squatters", but by doing so, you're legitimizing the large corporations' claims to any domain name they want. Why is this? Well, "squatters" are those individuals who are making (illegal) use of someone else's property, like people in the Old American West who tried to settle on land that was legally owned by someone else. The so-called "cyber squatters" typically already have a name registered, so they do have the "land deed", so to speak. What they're doing is speculating.

Now, there may be those who actually use a name that they have no legal right to continue to hold. One example would be somebody who realizes that (say) Microsoft forgot to register microsoftwindows.com and does so, speculating that MSFT will offer to pay them large sums of money for this name.

That can be handled by standard trademark law. But this scheme means that if MSFT decides that linux.$NEWTLD is something they want, they can get it simply by being willing to pay $500 million for it. I'm not sure what a better solution is, but this may not be it.

Re: Not squatters (none / 0) (#18)
by AnteTempore on Thu Jul 20, 2000 at 07:07:28 PM EST

[... it is not squatters. It is speculating ...]

Sorry, bad english. I should have said Speculating domain name owners (Any better word?). And I do not want to legitimize large corporations to any domain name they want. But I do not want a situation were you can make a huge profit just by being lucky to get the good domain name that can be sold.

[... trademarks as domain names ...]

Maybe it is not clear from the original posting, but we are not talking trademarks here - only the generic domain names that no one has more right to than others (E.g. cars or icecream).

But this scheme means that if MSFT decides that linux.$NEWTLD is something they want, they can get it simply by being willing to pay $500 million for it. I'm not sure what a better solution is, but this may not be it.

Linux being a trademark that will not be a problem. But please come up with a better proposal. If we do nothing the new TLDs will just be another .com gold rush than the Internet community will not benefit from.

[ Parent ]

Another problem (3.00 / 2) (#14)
by Anonymous Hero on Thu Jul 20, 2000 at 01:23:01 PM EST

No matter how you do it, you'll always have the same problem. There could be more than one Bob Smith, are they all entitled to bobsmith.com? Who gets bobsmith.com then? Disallow all names from being SLDs. Names can also conflict in organizations, so disallow them from being SLDs. And there can be more than one school of higher education in a location, so disallow them from being SLDs. Finally, disallow all generic words from being SLDs because no one is entitled to them... Nothing's left. We need a better system! We can't even require everything to be geographical, because people's names STILL don't work. Let's compare these to phone numbers:

* Companies pay to get 800 numbers with their name (i.e. 1-888-MEDIAONE). The number is easy to remember, and is free for the user to use.

* Consumers are assigned generic numbers in their location (i.e. (432) 555-8773). People only have to remember their friends' and familys' phone #s, and we're not complaining.

Apply the same philosophy. Domain names are only given to trademark holders in the name of their trademarks. Other than that, people use IPs. What's the difference between (432) 555-8773 and 24.147.102.52? Let's see:

4325551212
2414710252

Not much. And if we used hex:

4325558773
FFFFFFFF

The IP would ALWAYS be shorter! When IPv6 actually works, assign 00000000xxxxxxxx to consumers, and corporations get 00000001xxxxxxxx - FFFFFFFFxxxxxxxx. That means consumers get the ENTIRE IPv4 base, and corporations get the rest. That should be enough for us considering how little of the IPv4 we use now. If domain names could only map to the extended base (sort of like 800/888/877/900/etc.) we'd have the same situation as in phone and domain names would just be taken for granted, like 800 numbers.


The problem really is... (5.00 / 1) (#15)
by dragondm on Thu Jul 20, 2000 at 03:25:40 PM EST

The problem really is that the DNS system is fundumentally broken. Or more to the point, it's being used for something it wasn't designed to be used for.

DNS was never designed to find resources on the net, which is what people are using it for. It was designed to help find internet hosts. Period.

Example of this problem: Quick, what do you find at Saturn.com, cars or videogame consoles? Turns out it's cars, but the only way to tell is to look.

There are too many similarly named organizations around to have unique hierarchial names for them all, and in trying, things to degrade into AOL-Screenname-itis where Joe's Surf Shack is joesurf47.com, which ruins whatever memnonic value the DNS names might provide. Really, when you are looking for so-and-so.com you are not looking to find their web server you are looking to find their web site. It's the information you want, not the machine. DNS was designed to find machines, not information. What we really need is some sort of distributed search engine.

Of course, the second big cause of all the current mess was allowing domain names to be sold in the first place. Domain names are NOT property They should never have been allowed to be treated as such. Domain names are addresses. Do you own your street address? No. Can you sell it? No. Could you probably sue someone who was fraudulantly abusing your street address? (like filling out a bogus change of address form to route your mail to him) Sure. Could BigAnnoyingCorp sue you and make you give up your address and have to change all your stationary, etc because they are at 1000 Example St. and you are at 1000 Eximple St.? No.
Domain names should have been treated like street addresses, not property.

Really, DNS as it stands should be replaced. What most people use it for, finding information, could be done much better by system designed for the task. What it was designed for, finding machines, is not really a big deal, as you can use IP's directly. (or a private, internal DNS)

Re: Domain names are property - at least to the bu (none / 0) (#17)
by AnteTempore on Thu Jul 20, 2000 at 06:56:00 PM EST

[DNS is] being used for something it wasn't designed to be used for.

Not originally designed for, correct. But would you not be surprised if www.cars.com only contained, say, fluffy bears?

Domain names are NOT property They should never have been allowed to be treated as such. Domain names are addresses. Do you own your street address? No. Can you sell it? No. [...] Domain names should have been treated like street addresses, not property.

Analogies are always bad. To prove my point I will now show that your analogy does not hold: Can you sell your house? Yes. Will the new owner then have your street address? Yes. Can you keep your street address if you move? No. Can you keep your domain name if you move? Yes.

So your analogy does not hold. Let us stick to domain names and not use analogies; they will confuse the matter rather than make things more clear. The virtual world is not the same as the real world and rules are therefore different.

Domain names should have been treated like street addresses, not property.

I might give you that IP-addresses are more like street addresses: You cannot keep your IP-addresses if you move to another ISP.

If you really mean that domain names should be treated like street addresses then you implicitly states that the domain names are not important. You will thereby disagree with a bunch of people (E.g. people that thinks that kuro5hin.org is not an easily remembered domain name).

What we really need is some sort of distributed search engine.
[...]
Really, DNS as it stands should be replaced. What most people use it for, finding information, could be done much better by system designed for the task. What it was designed for, finding machines, is not really a big deal, as you can use IP's directly. (or a private, internal DNS)

Why do you want to replace DNS? Would it not be easy to put your distributed search engine upon the DNS? Already now Netscape lets you paste search words into the location bar and it will make a search for these words.

But let us get back on track: These days domain names are treated as property. That is the rules of the game today. I have seen no move from ICANN that even suggests they are going to change that.

So let us assume that we cannot change that fact. What would you then rather? Have a big company pay a large sum to the Internet community or to one lucky squatter?

Please feel free to come up with a better plan. But rest assured that if we do nothing we will get a .com gold rush II.

[ Parent ]

Country Codes (none / 0) (#19)
by Anonymous Hero on Thu Jul 20, 2000 at 09:06:40 PM EST

Instead of using .com, etc. why not have better organization? How about we just get rid of the tld's that are not country specific (.com, .org, .net, etc) and make everyone get a domain in the country they are in, so if you are in the usa you'd get a .us address, if you are in Canada get a .ca name, and so on and of course then it could be further organized by state/province code and then why not another level or two say a computers third level domain, or an auto third level domain and finally the registred name could be on the fourth level (or higher). What we really need is a whole new way of looking at how we find certain information. Hopefully that day will come soon.

whoohah! (none / 0) (#21)
by Anonymous Hero on Tue Jul 25, 2000 at 03:27:14 PM EST

whoohah!

Proposed procedure for giving domains | 21 comments (20 topical, 1 editorial, 0 hidden)
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