Fees Payable to ICANN and Anchoring

["Antonis Polemitis" <antonispolemitis@xxxxxxxxxxx>]

1. Fees Payable to ICANN

Please note the ICANN fee structure in the new contracts, particularly the
sentence I have bolded:



?The per name transaction fees, however, are subject to adjustment depending
on the average price of domain name registrations during each calendar
quarter throughout the term of the agreement?



In other words, the amount ICANN is paid per name will go up as the price of
the average domain registered goes up.  Here we have it, in plain writing,
that these contracts have been written with the explicit expectation that
registries will proceed to raise prices and ICANN, far from being upset by
this, intends to share in the spoils.  (I find the thought that registries
will use this clause to reduce prices so naïve as to be not even up for
discussion. As profit-making entities they would be violating their
fiduciary duties to their shareholders by doing that.)

 

This is equivalent to the Head of Purchasing at a corporation having a
compensation system where his or her salary goes UP as the price of the
supplies he or she purchases go UP. Needless, to say this is would be
considered prima facie evidence of an unbelievably stupid (or corrupt)
system in the private or public sector.  

 

One can only conclude that, at least some at ICANN, are now actively and
openly showing that they working against the interests of the registrants
they are meant to represent. It will be fascinating to see how this process
is handled, since, from my analysis, exactly 100% of the public comments to
date are somewhere between very negative to extraordinarily negative.

 

2. Anchoring

I will also warn you that ICANN/the registries are engaging in ?anchoring? ?
putting out something so blatantly awful that it will appear as a
concession/victory if the next version is just bad.  I encourage the
community of registrants to aim for a *fair* outcome, not just *less unfair*
one.  

 

A commercially fair agreement would have probably have:

a) a competitive renewal process of some type (for obvious reasons)

b) no tiered pricing (there is no justification for tiered pricing for a
registry in a common carrier type role)

c) prices that most likely fall (not rise) over time (as the cost of
computing resources drops)

 

I already see many posts rationalized that well, if we can get rid of X,
then Y might be acceptable.  That is no way to negotiate with the
registries.

Any thing much worse than the terms above is a concession by registrants
that should be compensated for elsewhere in the contract

                                                            

Respectfully submitted,

 

Antonis Polemitis

 

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Fees Payable to ICANN. (full summary text)

The proposed new .BIZ, .INFO and .ORG registry agreements provide for a
sliding scale of transactional fees payable to ICANN per annual increment of
a domain name, starting with $0.15 in 2007 and 2008, $0.20 in 2009 and 2010,
and increasing to $0.25 in 2011 and 2012* (*the proposed new .ORG registry
agreement has a fee schedule implementation date of July 2007, and will
continue through June 2013). The per name transaction fees, however, are
subject to adjustment depending on the average price of domain name
registrations during each calendar quarter throughout the term of the
agreement. Each of the proposed new agreements provide only for a
transactional fee component payable to ICANN, with no fixed fee. This is a
markedly different approach from the fixed fee established in the 2001 BIZ
and .INFO registry agreements, and 2003 .ORG registry agreement, and is
intended to appropriately scale the fees payable by each registry to ICANN
to the success or decline of the registry business