New gTLDs – Preliminary Reports on Competition and Pricing
ICANN has released preliminary reports on competition and pricing for new TLDs. The reports done by Professor of Economics Dennis Carlton of the University of Chicago cover the impact of new gTLDs on consumer welfare and price caps for new gTLD Internet registries.
In the report “Preliminary Report of Dennis Carlton Regarding Impact of New gTLDs on Consumer Welfare,” Professor Carlton states:
“I conclude that ICANN’s proposed framework for introducing new TLDs is likely to improve consumer welfare by facilitating entry and creating new competition to the major gTLDs such as .com, .net, and .org. Like other actions that remove artificial restrictions on entry, the likely effect of ICANN’s proposal is to increase output, lower price and increase innovation. This conclusion is based on the fundamental principles that competition promotes consumer welfare and restrictions on entry impede competition.”
The other report, “http://www.icann.org/en/topics/new-gtlds/prelim-report-registry-price-caps-04mar09-en.pdf,” addresses pricing issues associated with new TLDs. He concludes as follows:
“I conclude that price caps or ceilings on prices charged by operators of new gTLD registries are unnecessary to insure competitive benefits of the proposed process for introducing new gTLDs. I further conclude that imposing price caps on the registries for new gTLDs could inhibit the development and marketplace acceptance of new gTLDs by limiting the pricing flexibility of entrants to the provision of new registry services without generating significant benefits to registrants of the new gTLDs.”
These are among the first of many reports we will see on new TLDs in the coming months which are sure to spark heated discussions.
