more on ICANN lifts price caps on .NET registry fees

[David Farber <dave () farber net>]

Begin forwarded message:

From: Karl Auerbach <karl () cavebear com>
Date: July 4, 2005 7:07:51 PM EDT
To: Bret Fausett <fausett () gmail com>
Cc: David Farber <dave () farber net>
Subject: Re: [IP] ICANN lifts price caps on .NET registry fees
Reply-To: Karl Auerbach <karl () cavebear com>



On Mon, 4 Jul 2005, David Farber wrote:


> As you probably recall, back in 1999 when ICANN finally brought
> Network Solutions under its authority, ICANN imposed a $6/registration
> cap ...

It wasn't a price cap, it was a price floor.  It was a fee that  
Verisign received per name per year from registrars.  There was no  
mechanism in the contract to reduce that fee no matter what the  
actual costs of providing the registry service might be nor where  
there incentives to induce Verisign to drive down those costs.

The absence of any reality about this fee was one of the reasons why  
I voted against the ICANN-Verisign contract in the first place.

That $6 amount because a fixed cost component for every domain name  
in .com/.net for every year - and with the number of names  
in .com/.net the amount of that cost component amounted to several  
hundred million dollars per year drawn out of the pockets of consumers.

There is no reason to believe that this new "cap" will be any  
different. The only thing that seems to have changed is the total  
number (reduced), the size of the ICANN portion (increased), and an  
the removal of the prohibition against changing the rate.

The new price "cap" includes a $0.75 per name per year ICANN fee.   
That is a pretty substantial tax, especially when considered as a  
percentage of the registry fee of $3.50 - roughly 20% .  Why should  
consumers be paying such an exhorbinate tax on things that harm  
consumer interests (e.g. the privacy-busting "whois" and ICANN's pro- 
trademark UDRP), particularly given the exclusiong of the consumer of  
domain names from those parts of ICANN that actually make decisions?

Given that ICANN still arbitrarily precludes the creation of long  
term contracts in which name buyers can lock-in terms, there still  
remains the confiscatory potential to which you (Bret) allude.

This continues ICANN's tradition of price fixing - it was nothing  
less than that.  And this price fixing is only one part of ICANN's  
non-technical doings.  When compared with the virtually nothing of a  
technical nature that ICANN has done, this "change" merely reduces  
the percentage of ICANN's non-technical to technical jobs from 100% :  
0% to 100% : 0%.

        --karl--





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