Re: [ga] ICANN Board can intervene to stop domain tasting for 1 year

[George Kirikos <gkirikos@xxxxxxxxx>]

Hi Karl,

--- Karl Auerbach <karl@xxxxxxxxxxxx> wrote:
> One chunk of information that is very much needed to intelligently 
> discuss these matters is a believable list of the cost elements at
> the registry level of a domain name registration cycle.
> 
> By my estimate it is on the order of a few units of $0.01(US), others
> have estimated it a bit higher, ICANN pegs it at around $7.00(US).

It's relatively simple to provide an upper bound. According to the most
recent .com registry monthly report from VeriSign (September 2007):

http://www.icann.org/tlds/monthly-reports/index.html
http://www.icann.org/tlds/monthly-reports/com-net/verisign-200709.pdf

There are several registrars that account for millions of add-grace
period deletes. Let's take one example, Belgium Domains. On page 17,
they had 37,829 "net-adds-1-yr", at $6.42 each for revenues of
$242,862.18 to VeriSign. On page 18, they had 12,449,184
"deleted-domains-grace.". That's a 1:300 ratio (which supports the
99.7% percentage I had mentioned in a prior message).

If registry costs were 3 cents per "deleted-domains-grace", then
VeriSign's costs for the "deleted-domains-grace" would be
$0.03*12,449,184 = $373,475.52, which means VeriSign would be losing
money from this registrar. You can be assured they're NOT losing money
from this registrar, or they'd be howling to implement a fee like PIR
did.
 
> If the cost elements are very low (my estimates) than rapid 
> registration/de-registration may not offload costs onto the community

You ignore externalities imposed on others, e.g. trademark, legal
costs, etc.

> And, if the cost elements are low, then on what grounds is ICANN 
> imposing a registry fee that is inconsistent with the costs?

Of course ICAN isn't imposing a registry fee that has anything to do
with costs. A tender process would bring the wholesale registry price
of .com domains to $2/yr or less, as we all know, with little change in
QoS.
 
> ICANN has long needed to perform an independent, highly detailed, and
> believable audit of the *actual* costs of registry services, clearly 
> separating out the various cost elements and in particular separating
> out the front-office (name registration) costs from the back-office 
> (name server) costs.  (It would also be useful to know the details of
> the costs of complying with ICANN's regulatory system.)

When ICANN was "selling" their settlement with VeriSign, they had
conference calls with various constituencies. I asked the General
Counsel to estimate what the cost of the settlements was to the
community (i.e. 7% increases in the future, etc.), so one can do a
cost-benefit analysis of the settlement, vs continuing to fight the
lawsuit. He had no answer, even while everyone with half a brain was
estimating it to be in the billions of dollars.
 
Sincerely,

George Kirikos
http://www.kirikos.com/