[registrars] Possibly the FINAL WORD on the budget - how could I have missed this

["Bhavin Turakhia" <bhavin.t@xxxxxxxxxxx>]

Hi all,

There may not need to be any $19000 fee actually. I am performing certain
calculations based on data that I have accumulated. This data has been
accumulated by our research arm www.WebHosting.Info
<http://www.webhosting.info/> . Here are some calculations based on the data
gathered -

Total Number of Add transactions which take place in one week: 300,000
(approx)
Total Number of Transfer transactions which take place in one week: 50,000
(very approximate right now)

Then I opened up my monthly scorecard sent by Verisign and found out that
the industry average renewal rate for com/net is 60%. This means that total
number of Renewal Transactions in one year => 23,089,700 (60% of the total
domains in CNOBI Zone files)

* The above data is infact lesser than it should be because it is based only
upon CNOBI. It does not include .NAME, .PRO, .MUSEUM, .AERO. Additionally
these numbers have been gleaned from the zone file and therefore miss out on
several domains which may temporarily be out of the zone file (especially
those in the Auto renew hold period).

* Over and above this there are some transactions which take place such as
Redemption Grace transactions etc which are too tiny and have not been
counted in this.

* Also as a trend these figures are on a rise every year and therefore in
year 2004-2005 the figures should be greater than this

* Plus in the Add transactions above we have only counted number of Adds and
not number of years

If I take the above approximate figures I get the number of transactions in
one year as below -

Renews: 23,089,700
Adds: 300,000 * 365/7 => 15,642,857
Transfers: 50,000 * 365/7 => 2,607,142

Therefore total number of transactions in the year => 41,339,699

Total money made by ICANN on these => 41,339,699 * 25 cents => USD
10,334,924

Total money made by ICANN on the annual accreditation fees => 4000 * 200 =>
$800,000 (this will be more as the registrars reach 250 Registrars. Also if
ICANN charges per TLD as it does now this further increases)

Total money made by ICANN therefore => USD 11,134,924 or USD 11.1 million
(or more)

Total money ICANN hopes to make from Registrars in this budget => USD 12.2
million (as per my earlier email)

The GAP => USD 1 million

I believe we can easily negotiate the budget USD 1 million downward. (As
such they should make this extra 1 million if the number of transactions
goes up, add to that there is the concept of alternative sources of revenue
too, plus number of registrars will increase etc)

This means that the transaction fees are more than sufficient to meet
ICANN's budgets. ICANN therefore does not need to charge anything else such
as a $19k fee at all

I will be publishing some more detailed stats on this early next week.
However we should ideally contact the Registries to get more accurate
figures since mine are based on weekly extrapolations. I may be wrong in my
calculations above, but I can say that only once i have some more data on my
hands.

Meanwhile it seems to me that ICANN can maintain status quo with just the 25
cents transaction fee. ICANN may have performed its calculations based on
last years data or last quarters data. However taking this year/quarter into
consideration this calculation is a whole lot different. All of us
Registrars simply took the budget document macro calculations for granted
and assumed that 3.8 million would have to come from a fixed fee despite the
25 cents per transaction.

If I am wrong at a few places, it wont make a difference of more than a few
hundred thousand dollars in either direction. I will have more accurate data
on this my team tells me by beginning next week. However if before that we
can obtain this data from the Registries by looking at last one month and
one quarter trends, it would give us a fairly good approximate. I would be
more than happy to liase with the Registries and make the necessary
spreadsheets and calculations to give a accurate picture of the amount
expected, alongwith growth trends and best and worst case scenarios. I would
have hoped this is already done by ICANN or the BAG. If so they could
provide the data. If not I will start from scratch and do this.

Based on this we may be able to move ahead with the budget at 25 cents per
transaction and we are even willing to let the annual icann fee remain as a
per TLD fee so ICANN makes that extra money. All of the above holds true
without negotiating the budget down by any substantial amount. That is an
area I am still to explore sometime next week once a more detailed line item
based costing comes in from ICANN.

Hope to have more detaild information on this soon. You will hear from me
shortly :). If I am wrong I am back to square one :) ..... but if I am right
we may have licked the issue

Best Regards
Bhavin Turakhia
Founder, CEO and Chairman
DirectI
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