01 March 2006

The Credible Threat

About 15 years ago I was interviewing independant representatives to sell our products in Northern Calaifornia. I approached a guy whom everyone had referred me to to start managing and selling our product in his area. He was probably way above our caliber that we could afford. I asked him for a resume and some references and he refused. He told me, rather frankly, that the only reason he was talking to me was because he had been turned down to represent our biggest competitor adn the market share leader in our industry. He was only interested in taking on our product line because he wanted to prove to our competitor that he was the best guy in the market adn he wanted to prove it to them by selling our product.

In about 6 months he became our biggest territory in the world. He became almost 1/3 of our total sales!

Sometimes the worst thing you can do is underestimate a potential competitor. When you get so full of yourself that you feel you can push people around and they have to comply should be a danger signal that you are about to create a competitor when you could have had a great ally. I think you'll understand my point after you read the following:

as always click the link above for the full article:

"If you have been following the debate over Internet governance over the past few years, you know that while ICANN supporters (U.S., Canadian, Australian governments; business lobby) and critics (developing world and occasionally Europe) argue over the optimal approach, particularly with respect to government involvement in the domain name system, the reality has been that possession is all. The U.S. government retains ultimate control over the system and thus the debate is somewhat academic. In assessing the outcome at the World Summit on the Information Society last fall, I argued that:

"the U.S. simply had a very strong hand and played it well. Changes to the governance structure ultimately requires U.S. agreement since possession is even more than the proverbial 9/10th of the law. The U.S. had loudly indicated that it was not prepared to make concessions. During the negotiations at the PrepCom it adopted a very hard line - even raising the prospect of pulling back on ccTLD sovereignty or turning over the Internet Governance Forum to a private sector group like ISOC. Without a credible threat (the threat being the creation of alternate root), the U.S. was able to maintain its position and ultimately force everyone else to deal."

The alternate root has always lurked in the background as a possibility that would force everyone to rethink their positions since it would enable a single country (or group of countries) to effectively pack up their bags and start a new game. The U.S. control would accordingly prove illusory since a new domain name system situated elsewhere would be subject to its own rules. While the two could theoretically co-exist by having ISPs simply recognize both roots, the system could "break" if both roots contained identical extensions. In other words, one root can have dot-com and other other can have dot-corp, but they can't both have dot-com.

It is with that background in mind that people need to think about a press release issued yesterday in China announcing a revamping of its Internet domain name system. Starting tomorrow, China's Ministry of Information Industry plans to begin offering four country-code domains. In addition to the dot-cn country code domain, three new Chinese character domains are on the way: dot-China, dot-net, and dot-com. As the People's Daily Online notes this "means Internet users don't have to surf the Web via the servers under the management of the Internet Corporation for Assigned Names and Numbers (ICANN) of the United States." In other words, the Chinese Internet becomes a reality tomorrow. With it, the rules of the game may change as 110 million Internet users will suddenly have access to a competing dot-com (albeit in a different character set) and will no longer rely exclusively on ICANN for the resolution of Internet domain name queries. This change was probably inevitable regardless of the status of ICANN, however, the U.S. position can't possibly have helped matters. Indeed, some might note that while Congress has been criticizing U.S. companies for harming Internet freedoms by cooperating with Chinese law enforcement, those same Congressional leaders may have done the same by refusing to even consider surrendering some control over the Internet root to the international community and thereby opening the door to an alternate root that could prove even worse from a freedom perspective.

This week's announcement certainly doesn't mark the end of a global interoperable Internet. It does move one step further toward that path since in Internet governance terms, the credible threat is now real."

No comments: