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[ga] Lesson for ICANN: Neustar lowers telephone database management costs

  • To: ga@xxxxxxxxxxxxxx
  • Subject: [ga] Lesson for ICANN: Neustar lowers telephone database management costs
  • From: George Kirikos <gkirikos@xxxxxxxxx>
  • Date: Mon, 25 Sep 2006 08:48:01 -0700 (PDT)
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In a time when monopoly registry operators are trying to raise prices,
it's interesting to note the following news stories about Neustar and
its telephone database management pricing:


"The contracts have been extended by 48 months to June 2015. Pricing
remains unchanged at $1.05 through the rest of the year, the company
said, and in 2007 transactions will cost 91 cents each regardless of
volume. Beginning in 2008 until the contract expires, transaction rates
will range from 95 cents to 75 cents depending on volume."

"NeuStar said it expects transactions to grow by at least 25 percent
under the contracts, resulting in about $30 million in first-year
savings to the industry."


"You can?t complete a telephone call in the U.S. without using
NeuStar,? Ganek says. ?We cannot charge monopoly rents; we have to
share the benefits of fast volume growth with our industry.?

"?With the NP [number portability] transaction pipeline now locked up
until 2015, NeuStar can redeploy assets and focus on next-gen growth
initiatives that should expand the company's international presence,
which accounted for only 3 percent of revenues in fiscal 2005.?

Thus, it is perfectly consistent to have renewals of contracts with
price cuts, and allow the registry operators to have enough money to
invest in infrastructure, yet share the benefits of economies of scale
with consumers. ICANN's feeble negotiators seem to have ignored this
economic reality, because they fall for the FUD spread by incumbent

You can't fault registry operators for trying to get a price increase.
But, ICANN should see through their smokescreen, and be negotiating
price cuts. There's no "presumptive renewal" for Neustar in these
deals, either. As noted in the secondard link, one analyst felt
possible competition from VeriSign and Telcordia was keeping prices in


George Kirikos

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