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<DIV><SPAN class=442562513-10062004><FONT face=Arial color=#0000ff size=2>Good
work Bhavin. Whether your figures are correct or not in terms of
predicting the upcoming year, this indicates that we should consider several
caps:</FONT></SPAN></DIV>
<DIV><SPAN class=442562513-10062004><FONT face=Arial color=#0000ff size=2>a) per
transaction cap, and</FONT></SPAN></DIV>
<DIV><SPAN class=442562513-10062004><FONT face=Arial color=#0000ff size=2>b)
overall registrar contribution cap (so that ICANN can't charge a per registrar
fee above the net of this cap minus the total derived from the transactions
meets)</FONT></SPAN></DIV>
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<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left><FONT
face=Tahoma size=2>-----Original Message-----<BR><B>From:</B> Bhavin Turakhia
[mailto:bhavin.t@directi.com] <BR><B>Sent:</B> Thursday, June 10, 2004 7:10
AM<BR><B>To:</B> 'Registrars Constituency'<BR><B>Cc:</B> pritz@icann.org;
halloran@icann.org; registrars@icannbudget.org; 'Jim Tozzi';
namit.m@directi.com; budget-comments@icann.org; ivanmc@akwan.com.br;
tricia.drakes@parvil.demon.co.uk; tniles@uscib.org; twomey@icann.org; 'Rob
Hall'; Elana Broitman; 'Tim Ruiz'; webmaster@icannwatch.org;
fausett@lextext.com; ali@circleid.com;
froomkin@law.miami.edu<BR><B>Subject:</B> Possibly the FINAL WORD on the
budget - how could I have missed this<BR><BR></FONT></DIV>
<P><FONT face=Verdana size=2>Hi all,<BR><BR>There <B><I>may not need to be any
$19000 fee actually.</I></B> I am performing certain calculations based on
data that I have accumulated. This data has been accumulated by our research
arm <U><A href="http://www.webhosting.info/">www.WebHosting.Info</A>.</U> Here
are some calculations based on the data gathered -<BR><BR>Total Number of Add
transactions which take place in one week: 300,000 (approx)<BR>Total Number of
Transfer transactions which take place in one week: 50,000 (very approximate
right now)<BR><BR>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)<BR><BR>* 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).<BR><BR>* 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.<BR><BR>* 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<BR><BR>* Plus in the Add transactions above we have only counted number
of Adds and not number of years<BR><BR>If I take the above approximate figures
I get the number of transactions in one year as below -<BR><BR>Renews:
23,089,700<BR>Adds: 300,000 * 365/7 => 15,642,857<BR>Transfers: 50,000 *
365/7 => 2,607,142<BR><BR>Therefore total number of transactions in the
year => 41,339,699<BR><BR>Total money made by ICANN on these =>
41,339,699 * 25 cents => USD 10,334,924<BR><BR>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)<BR><BR>Total money made by ICANN therefore
=> USD 11,134,924 or USD 11.1 million (or more)<BR><BR>Total money ICANN
hopes to make from Registrars in this budget => USD 12.2 million (as per my
earlier email)<BR><BR>The GAP => USD 1 million<BR><BR>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)<BR><BR>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<BR><BR>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.</FONT></P>
<P><FONT face=Verdana size=2>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.</FONT></P>
<P><FONT face=Verdana size=2>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.</FONT></P>
<P><FONT face=Verdana size=2>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.</FONT></P>
<P><FONT face=Verdana size=2>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<BR><BR>Best
Regards<BR>Bhavin Turakhia<BR>Founder, CEO and
Chairman<BR>DirectI<BR>--------------------------------------<BR>http://www.directi.com<BR>Direct
Line: +91 (22) 5679 7600<BR>Direct Fax: +91 (22) 5679 7510<BR>Board Line
(USA): +1 (415) 240 4172<BR>Board Line (India): +91 (22) 5679
7500<BR>--------------------------------------
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