Monday, November 28, 2005

<rambling> Web Ontology and the man.

RPM idea

Resale Price Maintenance (RPM) commonly refers to the action of forcing resellers to keep their prices above a certain level. It's sometimes called Retail Price Maintenance and it's illegal in most places. It's also so easy to do that only a vegetable could get caught (that's an actual quote from an experienced law enforcement official).

Don't be a vegetable. Stay in the governments "Meat" group by only Suggesting MSRP in writing.

The easiest way to fix prices among resellers is to tell all your vendors that you really like it when prices for your product are maintained at a certain level, and, nod-nod wink-wink, you are thinking of dropping some vendors that you do not like.

Nod and wink too much and someone *might* catch you doing it on tape. Not to worry, we'll discuss the alternatives. But first, why would a manufacturer want to do this dastardly deed?

RPM is a very handy tool for manufacturers. RPM means consistent profits for vendors. RPM maintains profits for small vendors and vendors who offer excellent service. RPM maintains the percieved value of the product, increases the likelihood that vendors will spend time marketing your high-profit products, and generally contributes to a quality reseller network and quality end-user experience.

RPM is illegal because it definitely doesn't contribute to the consumer's pocket-book(directly). Controlling RPM is of questionable value if competition exists at the manufacturer level. It gets more complicated to evaluate that when you consider intellectual property law and other factors affecting competition. Anyway, it's an interesting problem to think about, so here we go.

Let's play the "bad guy". Here's a way I came up with to maintain prices among your resellers without nod-nod wink-wink agreements. After going cross-eyed reading research papers I haven't been able to figure out what this method is called, so for now we'll call it the bodo method.

Here's the situation: You have a long-distance telephone service network. You want all your resellers to buy at 50 bucks a minute and sell at 100 bucks a minute.

Fix your sell prices to everyone, no matter who they are. In your reseller contract, tell your resellers that you will sell to certified resellers in all cases but one: you reserve the right to sell direct to customers that present a reciept or quote below MSRP. Obviously resellers can't match your 50 dollar price. RPM is not prosecutable if you are offering the customer a *lower* price than someone else. You gave absolutely no instructions to anyone to sell at a specific price, or to keep prices high. Your resellers do not have to be students of game theory to figure this out and everyone will sell at "suggested" MSRP.

All RPM schemes work better if you have some power in directing customers. For instance, let's say you have a website that refers customers to vendors. Someone is at the top of that list, someone is at the bottom, and some vendors don't make the list. How do you know who to put at the top?...say no more.

Of course, you need to keep track of what your vendors are doing. It's just good business to give customers a perk if they register a product with you, and to have them show their reciept to do so. This way you don't *have* to demand reports from your vendors. Anything to keep em' happy ;)

Not knowing much about RPM investigations, I can still hazard a guess as to why most economic safeguards are ineffective. First, if even I, a lowly hu-man on caffine, can think of unmeasurable ways to bypass economic safeguards, then anyone can. Second, the govt. can't effectively police something like nod and wink RPM, there are just not enough investigators. The only way to find this stuff and put countermeasures in place is by doing some statistical analysis and investigating the right people. However, the government doesn't have the data.

But what if they did?

Web Services Nirvana for you, me, and Uncle VAX

What if you purchased your long distance services as web services? Today, web services are things that are currently trolled for by humans and compared to one another in spreadsheets and code. However, in science-fiction land, you just tell a bot to do all that stuff - cruise the markets, discover services and run the standardized tests on standardized APIs. There is no human intervention. Heck, there are no humans! We turned most of them into green pellets and made the rest into slaves! No, today is another bright, beautiful day in the land of robots. So the end user gets phone service that has audio quality tested between the endpoints we care about, and great prices. The vendors change all the time, subject to the bot's search results. Kind of like a super-duper Least Cost Routing with web services. Same goes for every service the end user ever buys. Nice.

But wait, the manufacturer robot can't cheat anymore! RPM is impossible; not because we are probably cutting out any possible reason for a reseller network (a good point but it has some holes), but because we have standardized! Web Ontology has made the transactions easy to measure. RFID's are going into cash, and you have to assume that this is going to put lightbulbs over a few heads.

The web, after all, is where almost all our commerce is going to occur, so Uncle VAXs nefarious surveillance tactics will be web-based.

Cash is officially deprecated. Who cares about cash? Privacy advocates care, for one. Those who accept cash have RFIDs to bridge the gap to the web, and Uncle VAX will soon require that they report such transactions elecrtronically.

As soon as we step into that brave new world of web services, Uncle VAX is going to recognize the opportunity. A standard! He will demand electronic reporting and create some bloated XML specs for it. (Just when we were crawling out of XML soup, they drag us back in!) And Uncle VAX will not only be able to track every sale of every service ever made, but he will know exactly how to compare each one to the other, and he will recognize every trend. The data will not only show up RPM, but most tax evasion and other things he cares about.

When he's got regulation of services in place, he will regulate products the same way. Cash is dead. Transactions will report themselves ontologically via the wireless web server in your implant to...THE MAN. Yes, THE MAN likes WebOnt.

I don't see any immediate danger. The US government does have XML reporting initiatives, but in their current state they are for volountary filing, not real time reporting. Real-time ontological reporting will require oversight. What happens when a government no longer asks for information of any kind, but requires access to it at will? Well, clearly, any competent government with that much power will never be peacefully replaced. </rambling>

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