Re: [registrars] ICANN Proposed budget is out for public comment
Rick and All, When I asked for the opportunity to represent the RC on the Budget Advisory Group (BAG) I stated that I felt there were three primary areas of concern: 1. Reexamining the registrars' funding model. 2. ICANN's future, which I believe affects our businesses' future. 3. Alternative forms of funding. I believe the proposed budget addresses these concerns, keeping in mind that it is part of a three plan. 1. Reexamining the registrars' funding model. --------------------------------------------- The current funding model, based on names under management, is neither predictable nor sustainable. When we sell a multiple year registration we really have no idea what the true cost is because we cannot predict what our fees to ICANN will be next year, or ten years from now. The transactional model will help solve that. First, we will know precisely the cost of registrations. If we sell a ten year registration today we will pay the current transactional fee and be done with it. Second, it allows us to more accurately set our pricing and pass the true cost on to registrants. I understand the concerns of some of the smaller registrars regarding the per registrar portion of the variable fee. This is the feedback the reps on the BAG need now. If registrars would prefer to see a higher transactional fee in return for a lower per registrar variable fee I am confident that your reps on the BAG, including myself, would represent that concern to the ICANN staff and rest of the BAG. I will point out however, that we have also heard concerns about accreditations being acquired simply for the purpose of renting out connections. Without commenting pro or con to such a business model, a higher per registrar variable fee would ensure that such registrars pay an appropriate portion in ICANN fees since the number of names under management by such registrars is relatively very low. A significant portion of the expense created by registrars does not depend on the number of transactions or the number of names under management, but is roughly the same across all accreditations. It seems appropriate that that portion be allocated equally across all registrars, regardless of business model. 2. ICANN's future, which I believe affects our businesses' future. ------------------------------------------------------------------ Do we believe that ICANN is important to the future of the DNS and our industry? If so: --They need to be able to meet the requirements of the MoU. --They need to be able to address threats such as law suites, the WSIS, etc. --They need to be able to enforce their agreements. The next three years' budget should reflect the ability to appropriately address those issues. I believe the level of this years' budget is appropriate based on those goals. Note, it has been reduced at least twice based on feedback and concerns expressed by various stakeholders, primarily registrars. 3. Alternative forms of funding. -------------------------------- Again, this year's budget proposal is part of a three year plan. You will note that it fixes the transactional fee at the proposed level over that three year period, relying instead on increases in transactional activity. Since transactional fees are based on realized revenue, increases in transactional activity will somewhat increase funds to ICANN yet have much less impact on registrars. By holding this fee steady, ICANN will also be motivated to meet appropriate goals in acquiring funding from alternative sources. Your reps on the BAG, as well as numerous other stakeholders, have suggested many alternative funding ideas to the ICANN staff, as well as encouraged increased funding from ccTLDs and the RIRs. While we do not see the level of funding from these sources increasing as much as we would like in this years budget, there are reasons to be encouraged that that will change over the next two years of this three plan. The RIRs funding has increased over 50% this year, and holding steady on the level of the registrar transactional fee will motivate ICANN to pursue its commitment to increase RIR funding to more appropriate levels. The establishing of the NRO and its MoU with ICANN will also put ICANN in a better position to pursue that goal. The formation of the ccNSO also creates a better situation for ICANN to pursue agreements with ccTLD operators and increase funding from them over the coming years. There will be new agreements with new sTLD and gTLD operators over the next few years. The ICANN staff has indicated that consideration will be given to increased funding from these new TLDs: increased fees; fees associated with new registry services, etc. As existing TLD agreements come up for renewal they can be brought into line with such additional sources. ICANN has committed to pursuing funding opportunities associated with other stakeholders and commercial entities that benefit from ICANN functions. Again, funding from these sources is not at the level we would like to see in this year's budget proposal. But I am encouraged from the level of participation that the ICANN staff has sought this year in formulating its budget. I am encouraged by having seen them make numerous adjustments to the budget based on feedback and input from numerous stakeholders, including registrars. And I believe we will see the same level of commitment in the upcoming years as ICANN pursues and increases these other areas of funding. I encourage all registrars to study the entire proposal carefully and submit your comments, concerns, and questions to your BAG reps (Rob, Elana, and myself). Tim -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Rick Wesson Sent: Monday, May 17, 2004 8:58 PM To: Jean-Michel Becar Cc: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment would those that have served on the budget committee provide specific comments on just what they did? It appears that the registrars burden will have increased 150% and I'm doubting that our reps did the registrars any good. would the reps on the budget committee please provide specific comments on just how they "helped" us this time? thanks, -rick Jean-Michel Becar wrote:
Dear fellows registrars,
The ICANN proposed budget for 2004 just get out for public comment. Enjoy the reading. Jean-Michel
Tim, Although you are correct in regards to accreditations being acquired for the purpose of renting our connections, whats going to happen when WLS goes into effect? These Registrars, which I am sure are many, will eventually go out of business. What does this mean? That the remaining Registrars have to pay for them! ICANN estimates 250 Registrars, which I doubt once WLS goes into effect. I personally believe it going to be more like 150. So $3.8M / 150 = $25k Although for the big Registrars this means nothing, for us the smaller ones is the difference between staying alive or becoming one of your resellers. Patricio Valdes Parava Networks, Inc. -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Tim Ruiz Sent: Tuesday, May 18, 2004 7:54 AM To: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment Rick and All, When I asked for the opportunity to represent the RC on the Budget Advisory Group (BAG) I stated that I felt there were three primary areas of concern: 1. Reexamining the registrars' funding model. 2. ICANN's future, which I believe affects our businesses' future. 3. Alternative forms of funding. I believe the proposed budget addresses these concerns, keeping in mind that it is part of a three plan. 1. Reexamining the registrars' funding model. --------------------------------------------- The current funding model, based on names under management, is neither predictable nor sustainable. When we sell a multiple year registration we really have no idea what the true cost is because we cannot predict what our fees to ICANN will be next year, or ten years from now. The transactional model will help solve that. First, we will know precisely the cost of registrations. If we sell a ten year registration today we will pay the current transactional fee and be done with it. Second, it allows us to more accurately set our pricing and pass the true cost on to registrants. I understand the concerns of some of the smaller registrars regarding the per registrar portion of the variable fee. This is the feedback the reps on the BAG need now. If registrars would prefer to see a higher transactional fee in return for a lower per registrar variable fee I am confident that your reps on the BAG, including myself, would represent that concern to the ICANN staff and rest of the BAG. I will point out however, that we have also heard concerns about accreditations being acquired simply for the purpose of renting out connections. Without commenting pro or con to such a business model, a higher per registrar variable fee would ensure that such registrars pay an appropriate portion in ICANN fees since the number of names under management by such registrars is relatively very low. A significant portion of the expense created by registrars does not depend on the number of transactions or the number of names under management, but is roughly the same across all accreditations. It seems appropriate that that portion be allocated equally across all registrars, regardless of business model. 2. ICANN's future, which I believe affects our businesses' future. ------------------------------------------------------------------ Do we believe that ICANN is important to the future of the DNS and our industry? If so: --They need to be able to meet the requirements of the MoU. --They need to be able to address threats such as law suites, the WSIS, etc. --They need to be able to enforce their agreements. The next three years' budget should reflect the ability to appropriately address those issues. I believe the level of this years' budget is appropriate based on those goals. Note, it has been reduced at least twice based on feedback and concerns expressed by various stakeholders, primarily registrars. 3. Alternative forms of funding. -------------------------------- Again, this year's budget proposal is part of a three year plan. You will note that it fixes the transactional fee at the proposed level over that three year period, relying instead on increases in transactional activity. Since transactional fees are based on realized revenue, increases in transactional activity will somewhat increase funds to ICANN yet have much less impact on registrars. By holding this fee steady, ICANN will also be motivated to meet appropriate goals in acquiring funding from alternative sources. Your reps on the BAG, as well as numerous other stakeholders, have suggested many alternative funding ideas to the ICANN staff, as well as encouraged increased funding from ccTLDs and the RIRs. While we do not see the level of funding from these sources increasing as much as we would like in this years budget, there are reasons to be encouraged that that will change over the next two years of this three plan. The RIRs funding has increased over 50% this year, and holding steady on the level of the registrar transactional fee will motivate ICANN to pursue its commitment to increase RIR funding to more appropriate levels. The establishing of the NRO and its MoU with ICANN will also put ICANN in a better position to pursue that goal. The formation of the ccNSO also creates a better situation for ICANN to pursue agreements with ccTLD operators and increase funding from them over the coming years. There will be new agreements with new sTLD and gTLD operators over the next few years. The ICANN staff has indicated that consideration will be given to increased funding from these new TLDs: increased fees; fees associated with new registry services, etc. As existing TLD agreements come up for renewal they can be brought into line with such additional sources. ICANN has committed to pursuing funding opportunities associated with other stakeholders and commercial entities that benefit from ICANN functions. Again, funding from these sources is not at the level we would like to see in this year's budget proposal. But I am encouraged from the level of participation that the ICANN staff has sought this year in formulating its budget. I am encouraged by having seen them make numerous adjustments to the budget based on feedback and input from numerous stakeholders, including registrars. And I believe we will see the same level of commitment in the upcoming years as ICANN pursues and increases these other areas of funding. I encourage all registrars to study the entire proposal carefully and submit your comments, concerns, and questions to your BAG reps (Rob, Elana, and myself). Tim -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Rick Wesson Sent: Monday, May 17, 2004 8:58 PM To: Jean-Michel Becar Cc: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment would those that have served on the budget committee provide specific comments on just what they did? It appears that the registrars burden will have increased 150% and I'm doubting that our reps did the registrars any good. would the reps on the budget committee please provide specific comments on just how they "helped" us this time? thanks, -rick Jean-Michel Becar wrote:
Dear fellows registrars,
The ICANN proposed budget for 2004 just get out for public comment. Enjoy the reading. Jean-Michel
Patricio, The per-registrar fee is a variable fee based on expenses directly related to supporting accredited registrars. The overall amount of that fee will fluctuate based on the number of accredited registrars (BTW, The currently proposed budget is based on a registrar count of approx. 190). So if there were a significant drop off in accredited registrars the amount allocated to the per registrar fee to support them would go down from the $3.8MM and may not result in any increase in the individual fee allocated or at least not be as big of an increase as you indicate. Also, you'll note that the annual accreditation fees are being reduced from $4000 for the first TLD plus $500 for each additional one, to a flat $4000. So if you are offering COM, NET, ORG, INFO, and BIZ that would reduce the annual accreditation fee by $2000. More if you offer .NAME, .PRO, etc. This offsets a portion of any per-registrar variable fee. Tim -----Original Message----- From: Patricio Valdes [mailto:valdes@parava.net] Sent: Tuesday, May 18, 2004 10:06 AM To: 'Tim Ruiz'; 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment Tim, Although you are correct in regards to accreditations being acquired for the purpose of renting our connections, whats going to happen when WLS goes into effect? These Registrars, which I am sure are many, will eventually go out of business. What does this mean? That the remaining Registrars have to pay for them! ICANN estimates 250 Registrars, which I doubt once WLS goes into effect. I personally believe it going to be more like 150. So $3.8M / 150 = $25k Although for the big Registrars this means nothing, for us the smaller ones is the difference between staying alive or becoming one of your resellers. Patricio Valdes Parava Networks, Inc. -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Tim Ruiz Sent: Tuesday, May 18, 2004 7:54 AM To: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment Rick and All, When I asked for the opportunity to represent the RC on the Budget Advisory Group (BAG) I stated that I felt there were three primary areas of concern: 1. Reexamining the registrars' funding model. 2. ICANN's future, which I believe affects our businesses' future. 3. Alternative forms of funding. I believe the proposed budget addresses these concerns, keeping in mind that it is part of a three plan. 1. Reexamining the registrars' funding model. --------------------------------------------- The current funding model, based on names under management, is neither predictable nor sustainable. When we sell a multiple year registration we really have no idea what the true cost is because we cannot predict what our fees to ICANN will be next year, or ten years from now. The transactional model will help solve that. First, we will know precisely the cost of registrations. If we sell a ten year registration today we will pay the current transactional fee and be done with it. Second, it allows us to more accurately set our pricing and pass the true cost on to registrants. I understand the concerns of some of the smaller registrars regarding the per registrar portion of the variable fee. This is the feedback the reps on the BAG need now. If registrars would prefer to see a higher transactional fee in return for a lower per registrar variable fee I am confident that your reps on the BAG, including myself, would represent that concern to the ICANN staff and rest of the BAG. I will point out however, that we have also heard concerns about accreditations being acquired simply for the purpose of renting out connections. Without commenting pro or con to such a business model, a higher per registrar variable fee would ensure that such registrars pay an appropriate portion in ICANN fees since the number of names under management by such registrars is relatively very low. A significant portion of the expense created by registrars does not depend on the number of transactions or the number of names under management, but is roughly the same across all accreditations. It seems appropriate that that portion be allocated equally across all registrars, regardless of business model. 2. ICANN's future, which I believe affects our businesses' future. ------------------------------------------------------------------ Do we believe that ICANN is important to the future of the DNS and our industry? If so: --They need to be able to meet the requirements of the MoU. --They need to be able to address threats such as law suites, the WSIS, etc. --They need to be able to enforce their agreements. The next three years' budget should reflect the ability to appropriately address those issues. I believe the level of this years' budget is appropriate based on those goals. Note, it has been reduced at least twice based on feedback and concerns expressed by various stakeholders, primarily registrars. 3. Alternative forms of funding. -------------------------------- Again, this year's budget proposal is part of a three year plan. You will note that it fixes the transactional fee at the proposed level over that three year period, relying instead on increases in transactional activity. Since transactional fees are based on realized revenue, increases in transactional activity will somewhat increase funds to ICANN yet have much less impact on registrars. By holding this fee steady, ICANN will also be motivated to meet appropriate goals in acquiring funding from alternative sources. Your reps on the BAG, as well as numerous other stakeholders, have suggested many alternative funding ideas to the ICANN staff, as well as encouraged increased funding from ccTLDs and the RIRs. While we do not see the level of funding from these sources increasing as much as we would like in this years budget, there are reasons to be encouraged that that will change over the next two years of this three plan. The RIRs funding has increased over 50% this year, and holding steady on the level of the registrar transactional fee will motivate ICANN to pursue its commitment to increase RIR funding to more appropriate levels. The establishing of the NRO and its MoU with ICANN will also put ICANN in a better position to pursue that goal. The formation of the ccNSO also creates a better situation for ICANN to pursue agreements with ccTLD operators and increase funding from them over the coming years. There will be new agreements with new sTLD and gTLD operators over the next few years. The ICANN staff has indicated that consideration will be given to increased funding from these new TLDs: increased fees; fees associated with new registry services, etc. As existing TLD agreements come up for renewal they can be brought into line with such additional sources. ICANN has committed to pursuing funding opportunities associated with other stakeholders and commercial entities that benefit from ICANN functions. Again, funding from these sources is not at the level we would like to see in this year's budget proposal. But I am encouraged from the level of participation that the ICANN staff has sought this year in formulating its budget. I am encouraged by having seen them make numerous adjustments to the budget based on feedback and input from numerous stakeholders, including registrars. And I believe we will see the same level of commitment in the upcoming years as ICANN pursues and increases these other areas of funding. I encourage all registrars to study the entire proposal carefully and submit your comments, concerns, and questions to your BAG reps (Rob, Elana, and myself). Tim -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Rick Wesson Sent: Monday, May 17, 2004 8:58 PM To: Jean-Michel Becar Cc: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment would those that have served on the budget committee provide specific comments on just what they did? It appears that the registrars burden will have increased 150% and I'm doubting that our reps did the registrars any good. would the reps on the budget committee please provide specific comments on just how they "helped" us this time? thanks, -rick Jean-Michel Becar wrote:
Dear fellows registrars,
The ICANN proposed budget for 2004 just get out for public comment. Enjoy the reading. Jean-Michel
I can easily see the number of registrars drop drastically after the new addition to ICANN's yearly fees. Imagine a registrar that went into business thinking the max he would have to pay is $6000/year plus per domain fees who now has to pay $4000/year + $19,000/year + per transactions fees (the transaction model over the domain model is definitely much better). First thing that comes to mind is that is there no law that prohibits such a big rise in fees? Why aren't the larger registrars taxed and why aren't the registries taxed? That's a drastic increase in yearly fees, I'm sure no new/small registrar could have imagined it. Eventually it just becomes that the larger registrars will be able to cut everyone else out of the business purely based on fixed financial fees. The fee is supposed to indicate a portion of fees that it takes to "support accredited registrars". Now you can't tell me it takes $19,000 + to support each registrar equally. If I remember right, the top 10 registrars control 75%+ of the domain names. This number might be slightly more or slightly less now +-5%. I'm sure it takes more to support these 10 registrars than the other 180. I don't believe this is a registrar-support fee, but simply another way to pad ICANN's budget. So, even after many registrars have dropped, I don't see this fee going down by much. Every registrar is simply going to have to pay more of their share even if they don't have an equal pie in the overall number of domains registered. If WLS doesn't happen, then its great for ICANN and registrars in general because all domain-catching registrars will have no problem paying the extra yearly fees. They'll simply drop a month or two or profit for ICANN fees. This will not make those registrars disappear, but will force registrars who don't currently participate in domain-dropping to do so. Then, if WLS does happen, then we will see the domain-dropping registrars disappear first. Then, the fee per registrar starts going up and we start seeing smaller registrars disappear. In the end you only have the larger registrars left. I simply don't see the ICANN fee going down. Its not like that portion of the fee is only set for "registrar supporting activities". It made part of ICANN's budget as a whole. http://www.whois-search.com/deleting/who.php lists 117 names that take part in this. Now I'm not sure of the complete accuracy of the count, but that leaves 73 registrars that don't have fees supplemented by domain-drop fees. Even if you cut that number down to 50, you can probably count at least that number out once the new fee goes into effect. Cost of implementation also goes up drastically for those that were taking their time to develop their registrar systems. If the purpose is to cut out registrars who are only using their ICANN accreditation for domain dropping services, then this is not the way to go about doing it. Simply make it a part of the application process to enforce that they must have a valid business model outside of domain dropping (although I'm sure everyone probably submits applications with valid business models). -Nitin ----- Original Message ----- From: "Patricio Valdes" <valdes@parava.net> To: "'Tim Ruiz'" <tim@godaddy.com>; "'Registrars Constituency'" <registrars@dnso.org> Sent: Tuesday, May 18, 2004 12:06 PM Subject: RE: [registrars] ICANN Proposed budget is out for public comment Tim, Although you are correct in regards to accreditations being acquired for the purpose of renting our connections, whats going to happen when WLS goes into effect? These Registrars, which I am sure are many, will eventually go out of business. What does this mean? That the remaining Registrars have to pay for them! ICANN estimates 250 Registrars, which I doubt once WLS goes into effect. I personally believe it going to be more like 150. So $3.8M / 150 = $25k Although for the big Registrars this means nothing, for us the smaller ones is the difference between staying alive or becoming one of your resellers. Patricio Valdes Parava Networks, Inc. -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Tim Ruiz Sent: Tuesday, May 18, 2004 7:54 AM To: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment Rick and All, When I asked for the opportunity to represent the RC on the Budget Advisory Group (BAG) I stated that I felt there were three primary areas of concern: 1. Reexamining the registrars' funding model. 2. ICANN's future, which I believe affects our businesses' future. 3. Alternative forms of funding. I believe the proposed budget addresses these concerns, keeping in mind that it is part of a three plan. 1. Reexamining the registrars' funding model. --------------------------------------------- The current funding model, based on names under management, is neither predictable nor sustainable. When we sell a multiple year registration we really have no idea what the true cost is because we cannot predict what our fees to ICANN will be next year, or ten years from now. The transactional model will help solve that. First, we will know precisely the cost of registrations. If we sell a ten year registration today we will pay the current transactional fee and be done with it. Second, it allows us to more accurately set our pricing and pass the true cost on to registrants. I understand the concerns of some of the smaller registrars regarding the per registrar portion of the variable fee. This is the feedback the reps on the BAG need now. If registrars would prefer to see a higher transactional fee in return for a lower per registrar variable fee I am confident that your reps on the BAG, including myself, would represent that concern to the ICANN staff and rest of the BAG. I will point out however, that we have also heard concerns about accreditations being acquired simply for the purpose of renting out connections. Without commenting pro or con to such a business model, a higher per registrar variable fee would ensure that such registrars pay an appropriate portion in ICANN fees since the number of names under management by such registrars is relatively very low. A significant portion of the expense created by registrars does not depend on the number of transactions or the number of names under management, but is roughly the same across all accreditations. It seems appropriate that that portion be allocated equally across all registrars, regardless of business model. 2. ICANN's future, which I believe affects our businesses' future. ------------------------------------------------------------------ Do we believe that ICANN is important to the future of the DNS and our industry? If so: --They need to be able to meet the requirements of the MoU. --They need to be able to address threats such as law suites, the WSIS, etc. --They need to be able to enforce their agreements. The next three years' budget should reflect the ability to appropriately address those issues. I believe the level of this years' budget is appropriate based on those goals. Note, it has been reduced at least twice based on feedback and concerns expressed by various stakeholders, primarily registrars. 3. Alternative forms of funding. -------------------------------- Again, this year's budget proposal is part of a three year plan. You will note that it fixes the transactional fee at the proposed level over that three year period, relying instead on increases in transactional activity. Since transactional fees are based on realized revenue, increases in transactional activity will somewhat increase funds to ICANN yet have much less impact on registrars. By holding this fee steady, ICANN will also be motivated to meet appropriate goals in acquiring funding from alternative sources. Your reps on the BAG, as well as numerous other stakeholders, have suggested many alternative funding ideas to the ICANN staff, as well as encouraged increased funding from ccTLDs and the RIRs. While we do not see the level of funding from these sources increasing as much as we would like in this years budget, there are reasons to be encouraged that that will change over the next two years of this three plan. The RIRs funding has increased over 50% this year, and holding steady on the level of the registrar transactional fee will motivate ICANN to pursue its commitment to increase RIR funding to more appropriate levels. The establishing of the NRO and its MoU with ICANN will also put ICANN in a better position to pursue that goal. The formation of the ccNSO also creates a better situation for ICANN to pursue agreements with ccTLD operators and increase funding from them over the coming years. There will be new agreements with new sTLD and gTLD operators over the next few years. The ICANN staff has indicated that consideration will be given to increased funding from these new TLDs: increased fees; fees associated with new registry services, etc. As existing TLD agreements come up for renewal they can be brought into line with such additional sources. ICANN has committed to pursuing funding opportunities associated with other stakeholders and commercial entities that benefit from ICANN functions. Again, funding from these sources is not at the level we would like to see in this year's budget proposal. But I am encouraged from the level of participation that the ICANN staff has sought this year in formulating its budget. I am encouraged by having seen them make numerous adjustments to the budget based on feedback and input from numerous stakeholders, including registrars. And I believe we will see the same level of commitment in the upcoming years as ICANN pursues and increases these other areas of funding. I encourage all registrars to study the entire proposal carefully and submit your comments, concerns, and questions to your BAG reps (Rob, Elana, and myself). Tim -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Rick Wesson Sent: Monday, May 17, 2004 8:58 PM To: Jean-Michel Becar Cc: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment would those that have served on the budget committee provide specific comments on just what they did? It appears that the registrars burden will have increased 150% and I'm doubting that our reps did the registrars any good. would the reps on the budget committee please provide specific comments on just how they "helped" us this time? thanks, -rick Jean-Michel Becar wrote:
Dear fellows registrars,
The ICANN proposed budget for 2004 just get out for public comment. Enjoy the reading. Jean-Michel
Dear fellow Registrars, Yes, I see the elephant in the room. However there is no way to get rid of it until WLS eats the elephant whole. If the $19,000 a year extra is there to annoy the elephant, yes the fee will do that. But once WLS rolls out it will reveal a landscape of only big registrars. The smaller registrars holding elephants will leave, and the true victim of a high barrier of entry will only be smaller registrars wanting to compete on traditional registrar services. Pulling up the rope ladder and closing the tree house door may be exactly what large registrars want. Some experts in 2000 claimed there would be a huge consolidation in the market. How could registrars survive on several dollar margins. Well over the last 4 years we have seen the market grow several fold. And now the question is how can registrars survive on dollar margins? Well, the only solution is to force the consolidation and reward the larger registrars. At $19,000 x 200 registrars it comes out to $3,800,000 a year. Two years after WLS, I predict the number of registrars will be cut in half. So the fee will double, because there are half the registrars, That would be $38,000 a year. Then one year later, there will be 50 registrars, so fee according to the purposed budget would be $76,000 per year. Today to be in the top 100 Registrars in the world, your company must have over 13,229 domains registered. When the 100 Registrar day comes, you will need to make $38,000 on 13,229 domains, you need to make about $2.85 per domain year. Or $6.00 + $0.25 + $2.85 = $9.10 per domain to break even on fees. Then comes cost of employees, rent, computers, etc... A new registrar would be lucky to be able to sell a name at $12.00 a domain and still make money. Smaller registration companies will be forced into reseller programs. Perhaps this is a good thing if you have a reseller program. When the 50 registrar today arrives (current number #50 has 71,776 domains) the math would be like this: $76,000 on 71,776 would be about $1.10 a domain. That would be $6.00 + $0.25 + $1.10 = $7.35 per domain year. So, in three years, the biggest registrar will have a huge competitive advantage. Hence rolling up the ladder. It seems to me that $0.49 a domain to ICANN would be more fair. The smaller registrars will be paying an extra $1.10 per domain. And the largest registrars (assuming about 7MM domains) will be paying only an extra $0.01. This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in 2007 paying $1.35 for each of their 70,000 domains. Jay Westerdal Name Intelligence, Inc. http://www.nameintelligence.com -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Tim Ruiz Sent: Tuesday, May 18, 2004 6:54 AM To: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment Rick and All, When I asked for the opportunity to represent the RC on the Budget Advisory Group (BAG) I stated that I felt there were three primary areas of concern: 1. Reexamining the registrars' funding model. 2. ICANN's future, which I believe affects our businesses' future. 3. Alternative forms of funding. I believe the proposed budget addresses these concerns, keeping in mind that it is part of a three plan. 1. Reexamining the registrars' funding model. --------------------------------------------- The current funding model, based on names under management, is neither predictable nor sustainable. When we sell a multiple year registration we really have no idea what the true cost is because we cannot predict what our fees to ICANN will be next year, or ten years from now. The transactional model will help solve that. First, we will know precisely the cost of registrations. If we sell a ten year registration today we will pay the current transactional fee and be done with it. Second, it allows us to more accurately set our pricing and pass the true cost on to registrants. I understand the concerns of some of the smaller registrars regarding the per registrar portion of the variable fee. This is the feedback the reps on the BAG need now. If registrars would prefer to see a higher transactional fee in return for a lower per registrar variable fee I am confident that your reps on the BAG, including myself, would represent that concern to the ICANN staff and rest of the BAG. I will point out however, that we have also heard concerns about accreditations being acquired simply for the purpose of renting out connections. Without commenting pro or con to such a business model, a higher per registrar variable fee would ensure that such registrars pay an appropriate portion in ICANN fees since the number of names under management by such registrars is relatively very low. A significant portion of the expense created by registrars does not depend on the number of transactions or the number of names under management, but is roughly the same across all accreditations. It seems appropriate that that portion be allocated equally across all registrars, regardless of business model. 2. ICANN's future, which I believe affects our businesses' future. ------------------------------------------------------------------ Do we believe that ICANN is important to the future of the DNS and our industry? If so: --They need to be able to meet the requirements of the MoU. --They need to be able to address threats such as law suites, the WSIS, etc. --They need to be able to enforce their agreements. The next three years' budget should reflect the ability to appropriately address those issues. I believe the level of this years' budget is appropriate based on those goals. Note, it has been reduced at least twice based on feedback and concerns expressed by various stakeholders, primarily registrars. 3. Alternative forms of funding. -------------------------------- Again, this year's budget proposal is part of a three year plan. You will note that it fixes the transactional fee at the proposed level over that three year period, relying instead on increases in transactional activity. Since transactional fees are based on realized revenue, increases in transactional activity will somewhat increase funds to ICANN yet have much less impact on registrars. By holding this fee steady, ICANN will also be motivated to meet appropriate goals in acquiring funding from alternative sources. Your reps on the BAG, as well as numerous other stakeholders, have suggested many alternative funding ideas to the ICANN staff, as well as encouraged increased funding from ccTLDs and the RIRs. While we do not see the level of funding from these sources increasing as much as we would like in this years budget, there are reasons to be encouraged that that will change over the next two years of this three plan. The RIRs funding has increased over 50% this year, and holding steady on the level of the registrar transactional fee will motivate ICANN to pursue its commitment to increase RIR funding to more appropriate levels. The establishing of the NRO and its MoU with ICANN will also put ICANN in a better position to pursue that goal. The formation of the ccNSO also creates a better situation for ICANN to pursue agreements with ccTLD operators and increase funding from them over the coming years. There will be new agreements with new sTLD and gTLD operators over the next few years. The ICANN staff has indicated that consideration will be given to increased funding from these new TLDs: increased fees; fees associated with new registry services, etc. As existing TLD agreements come up for renewal they can be brought into line with such additional sources. ICANN has committed to pursuing funding opportunities associated with other stakeholders and commercial entities that benefit from ICANN functions. Again, funding from these sources is not at the level we would like to see in this year's budget proposal. But I am encouraged from the level of participation that the ICANN staff has sought this year in formulating its budget. I am encouraged by having seen them make numerous adjustments to the budget based on feedback and input from numerous stakeholders, including registrars. And I believe we will see the same level of commitment in the upcoming years as ICANN pursues and increases these other areas of funding. I encourage all registrars to study the entire proposal carefully and submit your comments, concerns, and questions to your BAG reps (Rob, Elana, and myself). Tim -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Rick Wesson Sent: Monday, May 17, 2004 8:58 PM To: Jean-Michel Becar Cc: 'Registrars Constituency' Subject: Re: [registrars] ICANN Proposed budget is out for public comment would those that have served on the budget committee provide specific comments on just what they did? It appears that the registrars burden will have increased 150% and I'm doubting that our reps did the registrars any good. would the reps on the budget committee please provide specific comments on just how they "helped" us this time? thanks, -rick Jean-Michel Becar wrote:
Dear fellows registrars,
The ICANN proposed budget for 2004 just get out for public comment. Enjoy the reading. Jean-Michel
This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in
I would much rather myself vote for a $0.49 flat fee per domain year than vote for a model where smaller Registrars are bearing a higher cost than the larger ones. Offcourse id even much rather see a portion of that $0.49 come out of Registries who are already making fixed margins. bhavin
When we reach 38 Registrars left, each Registrar will pay $100K per year, ironically the same fee as running a Registry. I would agree, registries should pay based on how many domains they have, rather then a flat Registry fee. If I can pay $100K for a Registry, where do I sign up? Jay Westerdal Name Intelligence, Inc. http://www.nameintelligence.com -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Bhavin Turakhia Sent: Tuesday, May 18, 2004 10:20 AM To: 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment
This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in
I would much rather myself vote for a $0.49 flat fee per domain year than vote for a model where smaller Registrars are bearing a higher cost than the larger ones. Offcourse id even much rather see a portion of that $0.49 come out of Registries who are already making fixed margins. bhavin
I also agree that this is a plan to get rid of smaller registrars and am in favor of the higher per transaction fee. -Nitin ----- Original Message ----- From: "Bhavin Turakhia" <bhavin.t@directi.com> To: "'Registrars Constituency'" <registrars@dnso.org> Sent: Tuesday, May 18, 2004 1:19 PM Subject: RE: [registrars] ICANN Proposed budget is out for public comment
This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in
I would much rather myself vote for a $0.49 flat fee per domain year than vote for a model where smaller Registrars are bearing a higher cost than the larger ones. Offcourse id even much rather see a portion of that $0.49 come out of Registries who are already making fixed margins. bhavin
Bhavin, I agree with you that larger registrars, on a per volume basis have it much easier than smaller ones. But the registries have contracts with ICANN that say they will only pay x per year. Not x per domain. For example Verisign pays $132,000 per year for currently 28 million .com domains. Or $0.0047142857142857142857142857142857 per domain name. But since the registries have contracts with ICANN they won't them pay anymore. Personally I blame the increase on all of the companies that decided to sue ICANN over the past year! Could you image if say for example Verisign sued ICANN over SiteFinder and they would have won? And then they said they would have wanted back pay from when ICANN told them to shut it down? There would be 2 maybe 3 domain registrars left if ICANN would lose that lawsuit. But we still have no protection from ICANN losing a lawsuit to anybody. So one day when it does happen, and it will, get ready for some real increases. Will the fun ever end? Donny
-----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner- registrars@gnso.icann.org] On Behalf Of Bhavin Turakhia Sent: Tuesday, May 18, 2004 12:20 PM To: 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment
This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in
I would much rather myself vote for a $0.49 flat fee per domain year than vote for a model where smaller Registrars are bearing a higher cost than the larger ones. Offcourse id even much rather see a portion of that $0.49 come out of Registries who are already making fixed margins.
bhavin
ICANN should stop making new contracts or renewing contracts for Registries based on cost per year. Registries should have to pay their fair share, I would say a Registry should pay 65% of the cost on gTLDs and Registrars should pay 35%. VeriSign can literally sue ICANN all it wants and make its 15% investment in NetSol that much more valuable by driving out all the smaller registrars. It is about time Registries pay there fair share. I know the position is, Registrars have more power if we are the ones funding ICANN. But to be honest, we don't have any power. I think Registries have the power. Jay Westerdal Name Intelligence, Inc. http://www.nameintelligence.com -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org] On Behalf Of Donny Simonton Sent: Tuesday, May 18, 2004 10:56 AM To: 'Bhavin Turakhia'; 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment Bhavin, I agree with you that larger registrars, on a per volume basis have it much easier than smaller ones. But the registries have contracts with ICANN that say they will only pay x per year. Not x per domain. For example Verisign pays $132,000 per year for currently 28 million .com domains. Or $0.0047142857142857142857142857142857 per domain name. But since the registries have contracts with ICANN they won't them pay anymore. Personally I blame the increase on all of the companies that decided to sue ICANN over the past year! Could you image if say for example Verisign sued ICANN over SiteFinder and they would have won? And then they said they would have wanted back pay from when ICANN told them to shut it down? There would be 2 maybe 3 domain registrars left if ICANN would lose that lawsuit. But we still have no protection from ICANN losing a lawsuit to anybody. So one day when it does happen, and it will, get ready for some real increases. Will the fun ever end? Donny
-----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner- registrars@gnso.icann.org] On Behalf Of Bhavin Turakhia Sent: Tuesday, May 18, 2004 12:20 PM To: 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment
This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in
I would much rather myself vote for a $0.49 flat fee per domain year than vote for a model where smaller Registrars are bearing a higher cost than the larger ones. Offcourse id even much rather see a portion of that $0.49 come out of Registries who are already making fixed margins.
bhavin
On 5/18/2004 2:20 PM Jay Westerdal noted that:
It is about time Registries pay there fair share.
The registries aren't the problem. The address registries, ccTLDs and other under-contributing parties are. Let's stay focused on where the real problems are. I don't see the registries as being the culprits here - or as a real source of alternate funding that won't come out of our pockets anyways... -- -rwr "Don't be too timid and squeamish about your actions. All life is an experiment. The more experiments you make the better." - Ralph Waldo Emerson Got Blog? http://www.blogware.com My Blogware: http://www.byte.org
It is about time Registries pay there fair share. I know the position is, Registrars have more power if we are the ones funding ICANN. But to be honest, we don't have any power. I think Registries have the power.
And now add to that the Larger Registrars ...... If this budget goes through bhavin
On 5/18/2004 2:31 PM Bhavin Turakhia noted that:
And now add to that the Larger Registrars ...... If this budget goes through
The quickest way to make sure we lose our voice within the process is to lose our coherency as a group. The fact is that registrars, across the board, are paying more than their fare share. There's not a spreadsheet in the world that will tell you any different. If the under-contributing parties each step-up, then this problem goes away. -- -rwr "Don't be too timid and squeamish about your actions. All life is an experiment. The more experiments you make the better." - Ralph Waldo Emerson Got Blog? http://www.blogware.com My Blogware: http://www.byte.org
Actually Donny, that is not really true. The Registries have both a fixed and variable fee in their contracts. The fixed is as you state. The variable however, is not as you state, and can (and perhaps should) increase dramatically. It has been set at zero for the last few years. Interestingly enough, it is we Registrars who have the power to make the Registries start paying a higher fee. Even more interesting, this would have the effect of capping the ICANN budget way below what is being proposed. I will explain more on the conference call. Rob. -----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner-registrars@gnso.icann.org]On Behalf Of Donny Simonton Sent: Tuesday, May 18, 2004 1:56 PM To: 'Bhavin Turakhia'; 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment Bhavin, I agree with you that larger registrars, on a per volume basis have it much easier than smaller ones. But the registries have contracts with ICANN that say they will only pay x per year. Not x per domain. For example Verisign pays $132,000 per year for currently 28 million .com domains. Or $0.0047142857142857142857142857142857 per domain name. But since the registries have contracts with ICANN they won't them pay anymore. Personally I blame the increase on all of the companies that decided to sue ICANN over the past year! Could you image if say for example Verisign sued ICANN over SiteFinder and they would have won? And then they said they would have wanted back pay from when ICANN told them to shut it down? There would be 2 maybe 3 domain registrars left if ICANN would lose that lawsuit. But we still have no protection from ICANN losing a lawsuit to anybody. So one day when it does happen, and it will, get ready for some real increases. Will the fun ever end? Donny
-----Original Message----- From: owner-registrars@gnso.icann.org [mailto:owner- registrars@gnso.icann.org] On Behalf Of Bhavin Turakhia Sent: Tuesday, May 18, 2004 12:20 PM To: 'Registrars Constituency' Subject: RE: [registrars] ICANN Proposed budget is out for public comment
This is a plan to get rid of smaller registrars. That is my two cents on this situation. I would vote for $0.49 per domain flat, rather then making the smallest registrar in
I would much rather myself vote for a $0.49 flat fee per domain year than vote for a model where smaller Registrars are bearing a higher cost than the larger ones. Offcourse id even much rather see a portion of that $0.49 come out of Registries who are already making fixed margins.
bhavin
Morning Tim, We registrars have a higher duty of care for names-that-are-marks. We don't have a mandated floor price above the base registry price that allows us to recover the cost that higher duty of care imposes. This is independent of ICANN mark-up or thread-rental or whatever else may provide passing distraction. A few weeks ago when Google rolled out their gmail product, someone wrote on the economics of store -- something on the order of $2/GB/yr was the cost factor. Quite a few domain registrations will "fit" inside of one GB, so there is something wildly different about the registry-side of the real business of maintaining accessable state and publication bandwidth, and the same technical fundamentals that drive the content industry. In a nutshell, the per-domain-year registry cost is pennies, not dollars. This too is independent of ICANN mark-up or thread-rental or whatever else may provide passing distraction. Ignoring everything else (for the moment), there is a cost differential to be recovered -- a "mark-up" to make a modest pun, and a protected margin to be recovered. If these can't be addressed, that is, if the interests of the registrars is insufficient to cause true cost, in the case of marks and marks-associated duties, and true margin, in the case of the annual per-domain registry fee, to be reflected in the ICANN pricing structure, then we don't have much to work from. Eric
participants (9)
-
Bhavin Turakhia -
Donny Simonton -
Eric Brunner-Williams -
Jay Westerdal -
Nitin Agarwal -
Patricio Valdes -
Rob Hall -
Ross Wm. Rader -
Tim Ruiz