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Silicon Valley Linux User Group: Editorials

Competition for DNS

by Chuck Ritter, SVLUG Member
March 29, 1999
San Jose, California

The Internet Corporation for Assigned Names and Numbers (ICANN) is preparing to allow additional companies to assign top-level com, org, and net domains -- previously the sole right of Network Solutions, Inc. (NSI). But will new registrars really create competition, or just share the wealth between a few well connected companies and a new regulatory agency? I think the latter.

The unlikelihood of real competition is a result of the methods ICANN has chosen to create it. Under the ICANN plan, the newly designated "competitors" will be granted access to the NSI database, to create new records and manage existing ones. In other words, there will still only be one infrastructure. This is what will create the problem. Sharing infrastructure implies sharing costs. Each company will manage their own administrative costs, but the operating costs are the same; NSI will have to send the others a bill. So what is NSI's incentive to reduce operating cost? And how will the competitors know that NSI is charging them only for operating expenses and not passing along their own administrative costs? The answer is: they won't.

This is exactly the same model of "competition" that regional telephone regulators have been trying to force on the local telephone companies in the United States -- and the electric power industry, for that matter. It will fail for the same reasons, too. First, the monopolist will try to pass their administrative cost on to the competition. Second, they will over-invest in capital for the operation, giving fat contracts to their friends and business partners. Finally, they will just lock the doors that are supposed to be unlocked. The regulators will chase them around like Keystone Cops, but competition will never materialize. Once a regulatory bureaucracy has been created, the governing body no longer has any incentive to dissolve the monopoly. If it goes, so do their jobs.

In the case of telephones and power, there is some basis to accept that a natural monopoly exists: the cost of redundant, competing, transmission lines would be prohibitive. But the DNS problem is not caused by the costs of redundant infrastructure -- DNS is redundant by design. The problem is caused by the design of the protocol. DNS may be elegant technically, but it is indifferent to the economic and political realities. The com, net, and org domains are the most valuable pieces of real estate to own, and always will be.

The best way to bring competition to DNS registration is to modify the protocol, to distribute not only the technical burden, but the authority as well. This could be accomplished by serializing DNS zone authority; a DNS server could be master for some portion of a domain, and be secondary for the rest. A named.conf record in BIND might look like:

                zone "com" {
                        type master;
                        serial xxxx;
                ...
                }

where xxxx is the server's serial number. The root domain servers would then be called on, to tell server xxxx what other master servers are responsible for resolving .com domains. Now, each competitor runs their own servers, and shares nothing with each other.

True competition in the assignment of Internet domain names is a serious issue. Even as ICANN is preparing to allow new registrars, NSI is taking actions to exercise further control over the process. Several months ago, NSI ceased permitting zone transfers of the top level domains, and just this week they have claimed to "own" the information contained in the DNS database. Will I as an Internet user be getting a bill for "use" of their service? If permitted to continue in this capacity, NSI can further restrict timely access to this data for the general public, raising the monopoly rents by every means available.

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