Re: [soac-newgtldapsup-wg] charter language

[Alan Greenberg <alan.greenberg@xxxxxxxxx>]

Two replies to Tony.

At 12/05/2010 10:49 AM, Anthony Harris wrote:

> The rationale was that the gTLD process development costs reduced 
> ICANN's ability to build its reserve, and that when received for new 
> applications, would go into the reserve. There was a strong negative 
> reaction to this at the time it was first introduced, and no change 
> was made. I am not optimistic that at this point, where the 
> projected FY11 budget is rather constrained and the contribution to 
> the reserve has been reduced, that this is a productive path to follow.
> Obviously any proposal we come up with may well be rejected, 
> nonetheless as far as budgets go I have difficulty in feeling 
> concerned about them, when on page 3 of the ICANN explanation 
> document we are told that if 500 applications are presented, this 
> will mean a total intake of U$S 92.5 million !!!
True, but the majority of this is aimed at paying the cost of 
processing (using the one-fee-fits-all formula). It may also be 
interesting to question whether the 500 is still a "reasonable" 
number, but I am afraid that my crystal ball is in for repairs today.

> One possibility is that we do not argue against recovering these 
> sunk costs in general, but that we do recommend that they be waived 
> for whatever group of applicants meets the criteria developed under 
> Objective 1. That will be a moderately small percentage of the 
> overall applicant group and may be palatable.
> A very good suggestion. But what about the U$S 60.000 "just in case" 
> risk contribution that is part of the application fee?
When I first heard about the $60k "risk" component, my reaction was 
exactly the same - why assess this for applications that are far less 
likely to be "risky" (that is, risky during the applications process, 
not whether it will succeed of fail once deployed). But on re-reading 
the description, that is not what the primary rationale is. It is 
considering the risk that they have far fewer or far more than 500 
applications, or that they botched the cost estimate for some of the 
tasks, or that they completely forgot or ignored some aspect of the 
process and thus did not cost it at all. As mentioned, it was derived 
through a complex process that will be difficult or impossible to 
audit and its validity is based solely on the confidence level in the 
input into the process, the theoretical soundness of the process that 
was used, and the correct implementation of that process. I fear that 
we have the ability to judge none of that.
One could argue that the process for sponsored or not-for-profit TLDs 
will inherently be smoother and not as subject to all of these 
worries, but that attacks the one-fee-fits-all principle.
Alan