[ga] Re: [icann-people] drop pool registrars (fwd)

[Jeff Williams <jwkckid1@xxxxxxxxxxxxx>]

Rick and all,

  I agree with your analysis, which may surprise you Rick.  However if you
recall some two or more years ago I had predicted that ICANN would find
a way to shrink or eliminate Registrar competition even though the than
BoD and staff and the musical chair selection and replacement there of
professed at that time and in accordance with DOC/NTIA requirement,
would not do or ever happen.

Rick Wesson wrote:

> A little note I sent to the registrars list today.
>
> -rick
>
> ---------- Forwarded message ----------
> Date: Tue, 5 Oct 2004 09:46:54 -0700 (PDT)
> From: Rick Wesson <wessorh@xxxxxx>
> To: Registrars List <registrars@xxxxxxxx>
> Subject: drop pool registrars
>
> Registrars:
>
> Several months back I sent in an accreditation request to ICANN to
> accredit a new entity. There was soo much commotion about the drop-pool
> and how much ICANN was going to make off the registrars participating in
> it. It looks like alot of folks did what I did and created a new entity
> and sent in the accreditation paperwork.
>
> ICANN sat on my accreditation which they received August 5th and just
> yesterday, after a flurry of e-mail, announced that my application was
> almost complete. I just had a few minor hoops to jump through.
>
> I then poked veriSign and inquired how long it would take to become
> operational -- Well the "word" is that I'm looking at near "the end of the
> year" which in my mind means something like Jan 2005 or some 3 to 4 months
> from now. VeriSign stated that they are processing 5-10 applications per
> week, meaning there are some 60-120 registrars in front of my
> accreditation.
>
> The business decision is easy, game over. There is little incentive for
> creating a registrar that becomes operational in '05 with the batch-pool
> fees set as they are. This is not a big deal its nearly the end of the
> registrar boom cycle.
>
> the down side is that its be beginning of the registrar bust cycle, and
> ICANN's mandate for a stable DNS will be tested over this period. Let me
> reiterate the bust is for the little guy not the big fish, they will just
> pick up the registrants of the little failures that we will see.
>
> First the drop-pool revenue will decrease as Network Solutions and 2Cows
> implement their new auction models thus draining the number of available
> names for the various auction houses. the registrar that thrives of this
> as a majority of their income will start to have issues.
>
> As the new fee structure hits in '05 we will see registrars faced with a
> 13K initial outlay for their 1st quarter ICANN fees (plus $.25 per
> transaction)
>
> If you are not going to clear $13K in Jan-Mar '05 then you will rethink
> your accreditation. I expect to see about 75 registrars request to be
> decredited by June 2005.
>
> As the cost of accreditation meets then exceeds the revenue that one can
> obtain by participating in a drop pool I expect a lot of these registrars
> will leave the club. This will increase the amount each registrar pays of
> the 3.8 Million in increased fees.
>
> By years end the increased burden on small registrars by the exit of the
> batch-pool-only registrars should significantly hurt the viability of most
> small and mid-sized registrars.
>
> If ICANN is able to pick up the pieces the industry will probably continue
> on healthy, having the large registrars pick up registrants from some 150
> small and mid sized registrars businesses will help their bottom line and
> create new barriers to entry.
>
> The big questions is can just a few large registrars bare the entirety of
> the 3.8M registrar fees? Well, they don't have to. No registrar will pay
> more than 20K in ICANN fees, which will leave ICANN in worse shape.
>
> If you believe that ICANN was sufficiently staffed for its mandate -- we
> will test this and many other things as we witness the first real full
> business cycle in our industry.
>
> now, I'm going to tell ICANN that they can stuff my application for
> accreditation and I'm not going to make it operational. Anyone need an
> accreditation, its in-queue with a 90 day ETA -- just name your price =)
>
> -rick
>
> ps I'm often wrong -- but, your mileage will vary.
>
> _______________________________________________
> icann-people mailing list
> icann-people@xxxxxxxxxxxxxxxxxxxxxxxx
> https://lists.does-not-exist.org/mailman/listinfo/icann-people

Regards,

--
Jeffrey A. Williams
Spokesman for INEGroup LLA. - (Over 134k members/stakeholders strong!)
"Be precise in the use of words and expect precision from others" -
    Pierre Abelard

"If the probability be called P; the injury, L; and the burden, B;
liability depends upon whether B is less than L multiplied by
P: i.e., whether B is less than PL."
United States v. Carroll Towing  (159 F.2d 169 [2d Cir. 1947]
===============================================================
Updated 1/26/04
CSO/DIR. Internet Network Eng. SR. Eng. Network data security
IDNS. div. of Information Network Eng.  INEG. INC.
E-Mail jwkckid1@xxxxxxxxxxxxx
 Registered Email addr with the USPS
Contact Number: 214-244-4827