Re: [soac-newgtldapsup-wg] Financial instrument

[Avri Doria <avri@xxxxxxx>]

Hi,

thanks.

This would be really good material for one of the FAQ entries.

E.g. Why should the security period be lowered from 3 years


I think it might make the recommendation more complicated and make the 
recommendation would get lost in the discussion.

a.

On 1 Oct 2010, at 15:02, Eric Brunner-Williams wrote:

> 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
>