Fees Payable to ICANN & 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 
quoted:


“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 practically an 
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 - if they were itching to lower their 
prices, they are welcome to at any time. As profit-making entities they would be
violating their fiduciary duties to their shareholders by doing that when they 
do not have to.)







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 ICANN is now actively and openly showing that
it is working against the interests of the registrants it is supposed to 
represent.  I am open to being convinced otherwise, but I struggle to see how...



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 implicitly rationalized that well, if we can get rid of X, then Y might 
be *so* bad.  You also see this rationalization jump from agreement to 
agreement.  "Well, .net earned a price increase, .com should also..."   There 
is no doubt that whatever precedent is set in these contracts will, over time, 
migrate to the other contracts, up to and including, .com.  



Key point not to lose sight of: 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