Benchmarking Submission by Michael Palage

["Michael D. Palage" <michael@xxxxxxxxxx>]

My name is Michael Palage. I am President and CEO of Pharos Global, Inc. a
consulting company that provides management solutions to domain name
registration authorities. These comments are submitted in an individual
capacity and do not necessarily reflect the opinions/viewpoints of any
current/future/past clients.

 

Overall this document has been a very important and constructive first step
analysis in providing some financial metrics for prospective gTLD applicants
and the evaluators that ICANN will be retaining to evaluate new gTLD
applications. There are, however, a couple of specific questions/comments
that I have.

 

1)      Further delineation of registry sizes and an expanded survey base
would be useful. Based upon my experience working with numerous registries
as a consultant over the last decade, registries generally break down into
the following thresholds:

 

Micro                    Under 10,000 (.AERO, .COOP, .MUSEUM) 

Small                     10,000 to  100,000 (.CAT, .JOBS, .PRO)

Normal                 100,000 to  1,000,000 (.ASIA, .TRAVEL, .TEL, .NAME)

Large                     1,000,000 to  10,000,000 (.MOBI, .BIZ, .INFO,
.ORG)

Mega                    Over 10,000,000  (.COM, .NET)

 

2)      Question 50 of the current DAG requires that prospective TLD
applicants to secure a financial instrument in an amount totaling three
years of operational expenses in the case of registry failure. Based upon
the figures provided by in the KPMG survey, this figure would be in an
excess of 5 million dollars for a small registry. During the recent IPC
consultation in New York City (pre Nairobi) and then again in the Nairobi
consultations there were representations made by ICANN staff that this
financial instrument would be less, and that ICANN "was talking with
registries and discussing actual costs" and that ICANN was in "active
discussion with registries" to "ascertain the right number."

Could ICANN please provide the community with details regarding these
subsequent discussions and which registries were consulted. If ICANN decides
to deviate from the benchmark levels provided in the initial KPMG survey,
will ICANN staff do so unilaterally after independent consultation with
these registry operators, or will they engage KPMG to do a supplemental
survey?

 

3)      Will ICANN be incorporating any of these financial numbers into the
DAG (e.g. question 50) to better educate/inform potential applicants as to
the cost of running a registry, or will this remain an ancillary document
incorporated only by reference with no specific financial threshold numbers
incorporated into the DAG?

 

4)      What guidance will ICANN provide to evaluators in connection with
prospective applicants that fall short of the financial benchmarks provided
in this document. Since there will be multiple evaluator teams, would it not
be prudent for ICANN to provide a standard objective set of criteria for
applicants that deviate from these benchmarks? 

 

5)      For multiple TLD strings filled by affiliated/related entities, how
will the evaluators weigh these benchmark criteria (e.g. if subsidiaries A
thru E apply for five separate TLD strings, but the parent only meets the
benchmark financial requirements for a total of 3 strings, how will the
evaluators proceed?)

 

6)      Given the high threshold of these financial numbers, does ICANN
envision any program whereby a public sector gTLD applicant would be able to
post a reduced financial security instrument if it had the support of a
local/relevant government?

 

Thank you for the consideration of this submission.

 

Best regards,

 

Michael D. Palage