[bc-gnso] Promoting the market efficiencies of vertical integration

[Mike Roberts]

I used to have a professor at Stanford who used the phrase "utter 
rubbish" when he came across something he didn't agree with.

It's sad that the source of this utter rubbish is a Stanford 
professor.  It totally misses the point of why silos are bad and 
layers are good  in our generation of telecommunications.

Since 1983, we in the US have been making a transition from a 
completely vertically integrated telecom monopoly to a horizontally 
layered Internet communications system that is immensely more 
diversified, efficient, technologically advanced and competitive than 
anything that existed in the years of the Bell System.

Just ask yourself about the five best innovations in 
telecommunications in the last five years - take your pick - would 
any of them been successful if they didn't have one or more layers of 
the Internet stack to use as a platform for launching their chunk of 
innovation?

Internet entrepreneurs today will look for and exploit market niches, 
and once established, do their best to differentiate their products 
both vertically and horizontally in order to maximize profits. 
Sometimes this works and sometimes it doesn't.  All too frequently, 
the niche closes before they breakeven!  But VI is pretty incidental 
to other economic factors.

So I don't think this particular bit of "rubbish" is much help to our 
own discussions on VI.

- Mike Roberts
    Darwin Group


>As a communications counselor, I am always looking for analogies to 
>help aid the understanding of complex problems.  I view VI at ICANN 
>as one such complex problem.  A report from the Technology Policy 
>Institute may be the analogy.
>
>
>The Institute, a think tank focused on the economics of innovation 
>and change (and headed by U.S. Senate runner-up, Carly Fiorina), has 
>issued a report promoting vertical integration as "inherent" in 
>efficient markets.  Here is the link to the press release (with a 
>link to the report embedded): 
><http://www.techpolicyinstitute.org/news/show/23247.html>http://www.techpolicyinstitute.org/news/show/23247.html
>
>There are arguable differences between the open markets addressed by 
>the report and the noblesse oblige of ICANN with regard to domain 
>names, but I thought the article was provocative enough to add to 
>the mix.
>
>It may all be beside the point, of course, if Kurt Pritz was to be 
>believed at our meeting in Washington, D.C.  He said ICANN does not 
>want to have to monitor exceptions.
>
>Cheers,
>
>Berard
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