IP: SSL Certificate "Monopoly" Bears Financial Fruit

[R. A. Hettinga]

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Status:  U
User-Agent: Microsoft-Entourage/10.1.0.2006
Date: Fri, 05 Jul 2002 17:56:09 -0400
Subject: IP: SSL Certificate "Monopoly" Bears Financial Fruit
From: Dave Farber <dave at farber.net>
To: ip <ip-sub-1 at majordomo.pobox.com>
Sender: owner-ip-sub-1 at admin.listbox.com
Reply-To: farber at cis.upenn.edu


From: Lauren Weinstein <lauren at vortex.com>
Subject: SSL Certificate "Monopoly" Bears Financial Fruit
To: dave at farber.net
Cc: lauren at vortex.com
Date: Fri, 5 Jul 2002 11:35:20 -0700 (PDT)


Dave,

As you know, the underlying core of most "secure" transactions on the
Internet involves SSL Certificates.  The effective market for these
certificates (I'll leave the details of how they function as an exercise to
readers) at one time boiled down to two firms -- VeriSign and Thawte.
Between them, they controlled virtually the entire market, and while it is
theoretically possible to create your own certificates, most widely-deployed
commercial applications will not accept the "homemade" variety in
a practical manner.

VeriSign then purchased Thawte for an immense sum, becoming effectively the
single source for widely acceptable SSL certs, along with being the mother
of all dot-com domain registration entities.  While Thawte theoretically
continued to operate with its own pricing schedules (that remained lower
than
VeriSign's), it still appeared likely that the merger would do nothing to
increase competition and lower prices in the SSL cert marketplace.

Thawte has now announced a round of major price increases.  New cert prices
appear to have almost doubled, and renewals have increased more than 50%.
While Thawte proclaims this is their first price increase in five years,
this comes at a time when we should be seeing *increased* competition and
*lower* prices for such virtual products, not such price increases.  But of
course, in an effective monopoly environment, it's your way or the highway,
so this should have been entirely expected.

For anyone who might doubt the big bucks involved, note that the founder of
Thawte, South African Mark Shuttleworth, was the most recent space tourist,
paying the Russian space program a reported $20 million for a jaunt up to
the taxpayer-funded international space station.

Now that's entertainment.

--Lauren--
Lauren Weinstein
lauren at pfir.org or lauren at vortex.com or lauren at privacyforum.org
Tel: +1 (818) 225-2800
Co-Founder, PFIR - People For Internet Responsibility - http://www.pfir.org
Co-Founder, Fact Squad - http://www.factsquad.org
Co-Founder, URIICA - Union for Representative International Internet
                     Cooperation and Analysis - http://www.uriica.org
Moderator, PRIVACY Forum - http://www.vortex.com
Member, ACM Committee on Computers and Public Policy


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-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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