<div dir="ltr"><div><div>Milton, I think the transaction costs remain the same for both options. In Option B, Contract Co incurs the transaction (contracting, negotiation, monitoring) costs and the IANA Operator indemnifies Contract Co for the costs. In Option C, IANA Operator directly incurs the transaction costs. Overall, the transaction costs for the institutional arrangement remain the same, at least from an economics perspective.</div><div><br></div><div>How transaction costs may increase?</div><div>The transaction costs may quite possibly be higher for Option C, as the RZM will need to be re-contracted every time the IANA Operator changes, thus increasing the frequency of the contract (thereby increasing the negotiation, contracting costs). In contrast, in Option B, the RZM operator need not change every time the IANA Operator changes.<br></div><div><br></div><div>How the transaction costs may reduce?</div><div>The overall transaction costs can only be lower in Option C if the RZM function is completely subsumed by the IANA Operator thereby removing the need for a Cooperative Agreement. .</div></div><div><br></div><div>Adding to the pros and cons listed by you:</div><div><br></div><div><b>"<span style="color:rgb(0,0,0);font-family:'Times New Roman',serif;font-size:16px">b) Contract Co. contracts with RZM"</span></b></div><div>Option B would:</div><div>1) Make Contract Co and MRT even more bulkier/attractive/politicised (not too much though in my opinion).</div><div><br></div><div><b>"<span style="color:rgb(0,0,0);font-family:'Times New Roman',serif;font-size:16px">c) IANA Operator contracts with RZM"</span></b></div><div>Option C would:</div><div>1) Increase frequency of RZM re-contracting: Option C will require the RZM to be re-contracted by the new IANA Operator each time the IANA Operator is changed after a RFP.<br></div><div>2) Invite the possibility that the IANA Operator subsumes the RZM function (by self-contracting) unless precluded by the IANA Contract.<br></div><div>3) Require Work Stream 1 in CCWG-Accountability to recommend a accountability structure for managing the Cooperative Agreement with the RZM. However, since accountability for IANA and RZM fall in the domain of this CWG, we could also recommend the accountability structure for Option C in our proposal.</div><div><br></div><div><br></div><div><br></div><div class="gmail_extra"><br><div class="gmail_quote">On Wed, Dec 10, 2014 at 5:52 PM, Milton L Mueller <span dir="ltr"><<a href="mailto:mueller@syr.edu" target="_blank">mueller@syr.edu</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;padding-left:1ex">
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<p class="MsoNormal"><span style="color:rgb(31,73,125);font-family:Calibri,sans-serif;font-size:11pt">But it is also easier from a transactions cost perspective in
that the IANA contractor would take responsibility for coordination or operating the RZM and the MRT wouldn’t have to worry about it.</span><br></p>
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<p class="MsoNormal"><span style="font-size:11pt;font-family:Calibri,sans-serif;color:rgb(31,73,125)">--MM<u></u><u></u></span></p>
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