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

["Elana Broitman" <ebroitman@xxxxxxxxxxxx>]

Good work Bhavin.  Whether your figures are correct or not in terms of
predicting the upcoming year, this indicates that we should consider
several caps:
a) per transaction cap, and
b) overall registrar contribution cap (so that ICANN can't charge a per
registrar fee above the net of this cap minus the total derived from the
transactions meets)

	-----Original Message-----
	From: Bhavin Turakhia [mailto:bhavin.t@xxxxxxxxxxx] 
	Sent: Thursday, June 10, 2004 7:10 AM
	To: 'Registrars Constituency'
	Cc: pritz@xxxxxxxxx; halloran@xxxxxxxxx;
registrars@xxxxxxxxxxxxxxx; 'Jim Tozzi'; namit.m@xxxxxxxxxxx;
budget-comments@xxxxxxxxx; ivanmc@xxxxxxxxxxxx;
tricia.drakes@xxxxxxxxxxxxxxxxxx; tniles@xxxxxxxxx; twomey@xxxxxxxxx;
'Rob Hall'; Elana Broitman; 'Tim Ruiz'; webmaster@xxxxxxxxxxxxxx;
fausett@xxxxxxxxxxx; ali@xxxxxxxxxxxx; froomkin@xxxxxxxxxxxxx
	Subject: Possibly the FINAL WORD on the budget - how could I
have missed this
	
	

	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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