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Mail sent by Bhavin Turakhia to ICANN demonstrating adequate funds availability from transaction fee only
Dated: 10th June 2004
Hi all,
There may not need to be any $19000 fee actually. I am performing
certain calculations based on data that I have accumulated. This data has been
accumulated by our research arm www.WebHosting.Info. Here are some
calculations based on the data gathered -
Total Number of Add transactions which take place in one week: 300,000 (approx)
Total Number of Transfer transactions which take place in one week: 50,000
(very approximate right now)
Then I opened up my monthly scorecard sent by Verisign
and found out that the industry average renewal rate for com/net is 60%. This
means that total number of Renewal Transactions in one year => 23,089,700
(60% of the total domains in CNOBI Zone files)
* The above data is infact
lesser than it should be because it is based only upon CNOBI. It does not
include .NAME, .PRO, .MUSEUM, .AERO. Additionally these numbers have been
gleaned from the zone file and therefore miss out on several domains which may
temporarily be out of the zone file (especially those in the Auto renew hold
period).
* Over and above this there are some transactions which take place such as
Redemption Grace transactions etc which are too tiny
and have not been counted in this.
* Also as a trend these figures are on a rise every year and therefore in year
2004-2005 the figures should be greater than this
* Plus in the Add transactions above we have only counted number of Adds and
not number of years
If I take the above approximate figures I get the number of transactions in one
year as below -
Renews: 23,089,700
Adds: 300,000 * 365/7 => 15,642,857
Transfers: 50,000 * 365/7 => 2,607,142
Therefore total number of transactions in the year => 41,339,699
Total money made by ICANN on these => 41,339,699 * 25 cents => USD
10,334,924
Total money made by ICANN on the annual accreditation fees => 4000 * 200
=> $800,000 (this will be more as the registrars reach 250 Registrars. Also
if ICANN charges per TLD as it does now this further increases)
Total money made by ICANN therefore => USD 11,134,924 or USD 11.1 million
(or more)
Total money ICANN hopes to make from Registrars in this budget => USD 12.2
million (as per my earlier email)
The GAP => USD 1 million
I believe we can easily negotiate the budget USD 1 million downward. (As such
they should make this extra 1 million if the number of transactions goes up,
add to that there is the concept of alternative sources of revenue too, plus
number of registrars will increase etc)
This means that the transaction fees are more than sufficient to meet ICANN's budgets. ICANN therefore does not need to charge
anything else such as a $19k fee at all
I will be publishing some more detailed stats on this early next week. However
we should ideally contact the Registries to get more accurate figures since
mine are based on weekly extrapolations. I may be wrong in my calculations
above, but I can say that only once i have some more
data on my hands.
Meanwhile it seems to me
that ICANN can maintain status quo with just the 25 cents transaction fee.
ICANN may have performed its calculations based on last years
data or last quarters data. However taking this year/quarter into consideration
this calculation is a whole lot different. All of us Registrars simply took the
budget document macro calculations for granted and assumed that 3.8 million
would have to come from a fixed fee despite the 25 cents per transaction.
If I am wrong at a few
places, it wont make a difference of more than a few
hundred thousand dollars in either direction. I will have more accurate data on
this my team tells me by beginning next week. However if before that we can
obtain this data from the Registries by looking at last one month and one
quarter trends, it would give us a fairly good approximate. I would be more
than happy to liase with the Registries and make the
necessary spreadsheets and calculations to give a
accurate picture of the amount expected, alongwith
growth trends and best and worst case scenarios. I would have hoped this is
already done by ICANN or the BAG. If so they could provide the data. If not I
will start from scratch and do this.
Based on this we may be
able to move ahead with the budget at 25 cents per transaction and we are even
willing to let the annual icann fee remain as a per
TLD fee so ICANN makes that extra money. All of the above holds
true without negotiating the budget down by any substantial amount. That
is an area I am still to explore sometime next week once a more detailed line
item based costing comes in from ICANN.
Hope to have more detaild information on this soon. You will hear from me
shortly :). If I am wrong I am back to square one :) .....
but if I am right we may have licked the issue
Best Regards
Bhavin Turakhia
Founder, CEO and Chairman
DirectI
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