EnCirca supports RegistryPro Amendment: Helps equalize the playing field for gTLD's

["Thomas Barrett - EnCirca" <tbarrett@xxxxxxxxxxx>]

June 29, 2009

EnCirca Supports RegistryPro Amendment:  Helps equalize the playing field
for gTLD's

EnCirca (http://www.encirca.com) supports the RegistryPro request to pay
ICANN fees based on actual registration volume, comparable to the fee model
used by other ICANN gTLD's.

Approving this amendment will provide significant benefits to consumers.

The RegistryPro flat rate fee model was conceived in another era, when
expectations and forecasts for new gTLD's were in the millions.  History has
shown however that .com has significant market power and every new TLD
approved by ICANN has under-performed expectations.

Changing the fee model that RegistryPro uses to pays ICANN will help level
the playing field for the .pro gTLD compared to the other ICANN TLD's and
provide for a more competitive TLD marketplace.

There is no justification for ICANN to require RegistryPro to continue to
use a flat rate model and pay fees in excess to what ICANN receives from its
other registries, many of whom have registration volumes far exceeding that
of the .pro registry.  ICANN should standardize on a fee model directly tied
to registration activity.

RegistryPro has been required to pay a flat annual fee since its inception,
regardless of the actual number of names registered.  This fixed fee started
at $80,000 with automatic increases every year.  In contrast, other ICANN
TLD's have a flexible model based on actual registration activity.  As a
result, other ICANN TLD's pay fees at a fraction of what RegistryPro is
paying ICANN.

We should remember that the original .pro registry operator decided that the
original .pro business was not viable.  While there are several factors that
convinced the original managers of the .pro domain name to exit the registry
business, the fixed ICANN fees certainly contributed to their unwillingness
to justify on-going investments in .pro.  The current RegistryPro ownership
deserves to have the same flexible rate model provided by ICANN to its other
TLD's.

The relevant RegistryPro section pertaining to fees is 3.14.4:

                3.14.4. Fee Caps. The Fixed Registry-Level Fee Cap shall be
US$80,000 per year until and including 30 June 2002; shall automatically
increase by 15% on July 1 of each year beginning in 2002; and may be
increased by a greater amount in the manner provided by Subsection 4.3 The
sum of the Fixed Registry-Level Fees and the Variable Registry-Level Fees
due to be paid in any year ending on any 30 June during or within one year
after the Term of this agreement by all TLD sponsors and registry operators
having sponsorship or registry agreements with ICANN shall not exceed the
Total Registry-Level Fee Cap described in the following sentence. The Total
Registry-Level Fee Cap shall be US$5,500,000 for the fiscal year ending 30
June 2002; shall increase by 15% each fiscal year thereafter; and may be
increased by a greater amount in the manner provided by Subsection 4.3.

As a result of this formula, RegistryPro is paying over $125,000 in fees to
ICANN in 2009 irrespective of actual registration volume.   The current
volume is about 36,000 registered domain names.

The rate structures paid by the other ICANN new TLD's are primarily based on
actual registration volume: a much more rational fee structure for start-up
TLD's.  Here is a fee summary as published on the ICANN website.
Registration volumes are as of January, 2009.

        *       .info: pays 20 cents per name.  Increases to 25 cents in
2011. 5
million names registered

        *       .biz: pays 20 cents per name.  Increases to 25 cents in
2011. 2
million names registered

        *       .mobi: pays 20 cents per name. 850,000 names registered

        *       .name: pays 15 cents per name and will move to 20 cents this
month
for 2 years, then 25 cents until the fiscal year ending in June, 2013.
~300,000 names registered

        *       .coop: pays $5k per year until they reach 50,000 names.
Thereafter
they will pay 75 cents per name. 6,000 names registered

        *       .asia pays 75 cents per name. 250,000 names registered

        *       .travel pays $10k per year and $2 per name.  138,000 names
registered

        *       .jobs pays $10k per year and $2 per name.  15,000 names
registered

In light of the recent discussion on market power, here are the fees paid by
the legacy TLD's:

        *       .com paid $625k on signing and then a flat fee each year.
Approximately $6M in the last year.  80 million names registered

        *       .net paid $266k in the fiscal year ending in June, 2009 and
will pay
$306k in the next subsequent fiscal year.  12 million names registered
 
        *       .org: 15 cents per name in the fiscal year ending in June,
2009, and
will pay 20 cents per name in the next two year, followed by 25 cents per
name thereafter for two years until their contract is up for renewal.  No
flat annual fee.  7.5 million names registered


In summary, EnCirca supports the RegistryPro amendment to adopt the fee
model ICANN already uses for its other new TLD's.

Consumers will be the ultimate beneficiary of approving the RegistryPro
amendment, as the .pro Registry will be able to more effectively compete in
the TLD marketplace.

Yours Truly,

Thomas Barrett- President
EnCirca, Inc - http://www.encirca.com 
Woburn, MA USA