Incompetance abounds at the InterNIC

Phil Howard phil at
Wed Jan 20 22:39:24 UTC 1999

Dean Anderson wrote:

> I'll go on record here that in my opinion, speculation is a unavoidable
> "feature" of the system, which may be somewhat undesirable but one that
> cannot be removed.  The reason it cannot be removed is because of the delay
> involved in completing the financial transaction, and the possibility that
> such transactions can be terminated.  We can't change the banking system to
> prevent domainname speculation.

The InterNIC could keep a record of what CC numbers are excessively refuted
(they will need to define it, but probably not disclose it) and refuse to
accept future registrations from that CC number.  Speculators could get
another CC number, but this is nowhere nearly as easy as making up multiple
e-mail address in one domain that looks like many users in one ISP.

> Further, there are legit activities the look very much like speculation.  I
> don't know how many of you have been involved with startups, but I have
> advised a few.  Its a very hectic time as the principals try to select and
> register a name. Figure out trademark conflicts, etc.  Often the business
> idea, image, and focus change greatly during this initial period.  They
> typical register a dozen domains or more. Some are rejected. Others they
> get. Once they select one that they got, they usually don't want the others.
> My point is that there is a lot of legitimate "register, cancel-no pay"
> activities. It is precisely these same activities that speculators use for
> speculation.

Part of the costs involved are the costs of the processing registrations.
Those costs are incurred even for these "legitimate" "register and don't
pay".  I see such things as somewhat equivalent to "buying" something at
a store, taking it home for a while, deciding you don't want it, and then
returning it to the store to get your money back.

Maybe InterNIC should charge a "restocking fee".

The above example is a limited form of speculation ... speculating that you
may want the domain, or may not.  And then the rest of us effectively are
paying for the costs of processing all this for someone that doesn't want
to pay.

> While speculation may produce some additional load on NSI, there was also a
> time when people only bought and sold stock with the intention of buying or
> selling a company, rather than speculating about its future stock value. So
> speculators produce tremendous load on stock exchanges.  However, in doing
> so, they now provide much of the capital to finance business.

Will your broker let you cancel out your purchase of stock the next day
without charging you the broker fee?  And that's without even considering
if the stock price went up or down.

> I don't expect domain speculators to become the equivalent of stock
> speculators, but they really aren't any different from speculators in land,
> bonds, currency, grain, or anything else.  They are part of the market
> system.  Speculators in other areas don't enjoy the gratitude of the
> "regular users" of those areas either.  Farmers generally hate land
> speculators.  But they realize they have to live with that.

I personally have much less problem with speculators ... IF they pay for
the domains they want to speculate on.

> So I think the solution is to build a system that scales well to millions
> of transactions per day, regardless of the ultimate purpose for those
> registrations.  The per transaction cost becomes trivial, and the cost of
> speculation is likewise minimized.

If you can make the transaction cost minimal, that would be great.  If you
can do that by the end of January, I'll withdraw my yes vote for pre-pay.

 --    *-----------------------------*      Phil Howard KA9WGN       *    --
  --   | Inturnet, Inc.              | Director of Internet Services |   --
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