Re: [soac-newgtldapsup-wg] Financial instrument

[Eric Brunner-Williams <ebw@xxxxxxxxxxxxxxxxxxxx>]

Tijani, Avri,

This (Tijani's variation on Richard's suggestion) lowers the months at 
some cost per month from 36 to 6.
What this doesn't do is provide a rational basis for the cost per month.

There is a fixed costs, the monthly reports to ICANN being one.

There are the variable costs, the minimum power, cooling, 
connectivity, computational capacity, office space and staffing, for 
operations "during continuity".
My first claim (really a CORE operational observation) is that both 
the fixed and variable costs are so small that an operator providing 
back-end services to a very few registries would write off the 
overhead of both costs.
So, where a few applicants share facilities (line 253 Avri), the 
proper amount the applicants should deposit as a continuity instrument 
is zero.
My second claim is that where two or more registries being 
"continuity", there is only nominal cost for each additional registry 
being "in continuity". The incremental cost of doing the N+1 monthly 
report to ICANN is nominal. The incremental cost of operations is nominal.
So, as long as some of the applicants who form shared facilities 
(again, line 253) are not "in continuity", there is no additional cost 
from sharing applicants going "into continuity".
Now suppose the Board rejects this too, and the applicants must all 
set aside some amount representing N months (possibly 36) at a burn 
rate the Board finds credible.
What happens when an registry commences "continuity" operations?

Does the current operator draw from the fund or does the fund go to 
some other operator, who will then draw from the fund, until the fund 
is exhausted, or possibly until the operations are profitable, and the 
operator (original or subsequent) replenishes the continuity fund?
Is this a "contingency" capability, or is it a transfer of resources 
from an applicant meeting the "needs" criteria to an operator, perhaps 
one of VGRS, AF, NS, CORE, ... that does not meet the "needs" 
criteria, which is triggered at any time ICANN, or a market dominated 
by VGRS, AF, NS, CORE, ..., causes small registries early in their 
operational history to have revenues that don't meet expenses for a 
quarter?
Eric