Re: [ga] Registrants

[Karl Auerbach <karl@xxxxxxxxxxxx>]

On 11/11/2009 12:31 PM, Roberto Gaetano wrote:

> Actually, the fees for domain names were introduced in 1995 by NetSol,
> the then monopoly Registry/Registrar, well before ICANN.
> For the record, in 1995 registrants were paying $50 for a domain name
> under .com, 30% of which of tax. The tax was later lifted, but the $35
> remained until ICANN introduced the separation between registry and
> registrar that made the prices drop.
Not to put too fine a point on it, but that was not what caused the 
prices to drop, nor has ICANN allowed prices to drop to a level 
commensurate with what was expected of the registry-registrar model.
Originally, when SRI ran the domain name registry, names were free.

Then along came Network Solutions and the Cooperative Agreement.

Under the old cooperative agreement, once charging was allowed at all, 
the price was fixed by the US Gov't at $50 with $15 going to the gov't 
as a net-users tax.
That $15 tax was declared unlawful and abandoned, leaving $35 per name.

The Cooperative Agreement was to have ended in 1997 or 1998 (I forget 
which) with Network Solutions/Verisign handing everything back to the Gov't.
Obviously that never happened.

Because of the unexpected growth of the net the USG was poised to get 
stuck with some cost overruns and the US Gov't couldn't act fast enough 
(the USG takes years to do things) to find its way out of the developing 
mess.
So, as a matter of expediency, the Cooperative Agreement was amended and 
extended several times to become the umbrella for all things ICANN and 
Verisign.
As part of this the US Gov't caused ICANN to be created by the law firm 
of Jones Day (a firm that still continues to this day to be one of 
ICANN's largest creditors and which still maintains considerable 
presence inside of ICANN.)
ICANN did not change the game of prices.

Rather it was the US Gov't that removed the price term, leaving the 
price to float whether there is registrar/registry separation or not.
In other words neither ICANN not the registry-registrar model can take 
the credit for the price drop.
The Cooperative Agreement games were documented in great depth in the 
Rony's book 
http://www.amazon.com/Domain-Handbook-Stakes-Strategies-Cyberspace/dp/0879305150/ref=sr_1_1?ie=UTF8&s=books&qid=1258055878&sr=8-1
But ICANN can take a bow and claim credit for the price not dropping as 
far as it could have dropped:
After the Gov't decreed price was eliminated ICANN inserted-back two 
fixed-price components: the registry fee (a fee based on nothing more 
substantial than warm air and hand waiving) and the ICANN tax.  The 
impact of these forms in many cases the largest part of the overall 
domain name cost to consumers.
If ICANN were to allow the registry fee component to reflect actual 
registry costs, internet users would save the larger part of a 
$1,000,000,000 USD per year in excessive domain name fees.
                --karl--