Robert Coase's Testimony before the FCC, December 1959 about the merits of using markets (instead of hearings) as the mechanism for assigning spectrum licenses to particular owners. The hearing process had proven expensive and had been the subject of extensive controversy and criticism. Coase pointed out that markets could accomplish the job without any of those drawbacks. Coase's position ultimately won out. Today, almost all broadcast licenses are distributed by auction.

A few years ago, the federal government faced what might be considered a similar situation: the federal government was in charge of assigning domain names to particular websites.For those of you who are unaware, domain names are those alphanumeric phrases ("www.EnglishWordHere.com") that you type into your browser in order to tell your computer exactly which website you would like to see.

How similar is the problem raised by domain name allocation to the problem of spectrum allocation?Would Coase say that domain names should be distributed by market auction, with each name simply being awarded to the highest bidder? As a policy matter, would Coase be correct, or would hearings or lotteries offer special advantages in this setting? Is some other option better? Is this a bad analogy to begin with?

Note that, on the surface at least, the analogy is strong. Spectrum, we learned this week, is scarce. And domain names, too, are a limited resource in that there are only so many descriptive alphanumeric combinations available for use in the English language. Spectrum, we also learned, is subject to harmful interference. Again, the same can be said about domain names. If two parties choose the same or even confusingly similar domain names, consumers will have trouble finding the websites they seek.

In short, what does your understanding of Robert Coase's Testimony before the FCC, December 1959 teach us when it comes to designing a system for assigning Internet domain names?