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<DIV dir=ltr align=left><FONT face=Verdana size=2>To,<BR>Paul
Twomey<BR>ICANN<BR><BR>cc: Vint Cerf, ICANN Budget Committee, Registrar Budget
Advisory Group, Registrars Constituency, Alliance Registrars, other
Participants</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Subject: ICANN Budget 2004-2005<BR>Hyperlink: A
Copy of this letter is available at <A
href="http://www.icannbudget.org">http://www.icannbudget.org</A></FONT></DIV>
<P><FONT face=Verdana size=2>We represent an alliance of 75 Registrars (and
growing, please refer to - <A
href="http://www.icannbudget.org/">http://www.icannbudget.org</A>) who have
common concerns about the proposed new budget and believe that certain
fundamental modifications are required to the budget in order to make the budget
a win-win situation and a feasible proposition for the Registrar community. The
current budget in its proposed form has significant ambiguities for both ICANN
and the Registrars, and we therefore have detailed out an alternative budget
proposal which we believe achieves mutual objectives. <U><I>All of
us</I></U><I><U> 75 Registrars believe the current proposed budget is harmful to
our business, and harmful to ICANN too. We therefore DO NOT support the current
budget.</U></I></FONT></P>
<P><FONT face=Verdana size=2>We recognize and respect the need for a strong
ICANN and a well financed ICANN, however the growth of the budget in terms of
the amount, as well as its controversial structure comes somewhat as a shock to
the entire Registrar community. We realise that this budget document has been a
result of significant debate and discussion within ICANN and we appreciate the
efforts taken by ICANN in the last few weeks to actively discuss and work around
the issues in cooperation with the Registrar community. Instead of spending time
on random conversations, we have within our group discussed multiple strategies
and in the end formulated a budget strategy that we believe is fair and
represents a win-win situation for everyone.</FONT></P>
<P><FONT face=Verdana size=2>Please note, as you will see in the budget proposal
document below that we have not in our efforts attempted to at all thwart the
existing budget, nor attempted to unreasonably and irrationally cut it down.
Infact quite the contrary what we have proposed are extremely fair and
reasonable points and structure/amount changes which are well within the current
scope of the budget, and which provide a long term feasible budget for all the
parties involved.</FONT></P>
<P><I><U><FONT face=Verdana size=2>All of the 54 Registrars listed below stand
by this alternative proposal as detailed out below and WILL SUPPORT the budget
as is exactly laid out below</FONT></U></I></P>
<P><FONT face=Verdana size=2>Thanking you<BR>Yours sincerely<BR>Representing the
Registrar Community listed below<BR>Bhavin Turakhia<BR>Chairman &
CEO<BR>Directi<BR> </FONT></P>
<P><U><B><FONT face=Verdana>Our </FONT></B></U><FONT face=Verdana><U><B>Proposed
Budget items and points (assumption 250 Registrars - which figure should be
reached in the next quarter and should increase beyond that
too)</B></U></FONT><FONT face=Verdana size=2><BR><BR>* ICANN's total budget
figure should reduce in whatever cost-cutting manner that is possible</FONT></P>
<P><FONT face=Verdana size=2>* ICANN should also give an idea of its approximate
projected budget for the next 3 years, especially considering that this years
budget is twice that of last years</FONT></P>
<P><FONT face=Verdana size=2>* Registrars contribution of the budget will be $11
million per annum totally including fixed and variable fees. This amount will
be capped for the next 3 years, after which it may increase at 10% per
year</FONT></P>
<P><FONT face=Verdana size=2>* ICANN will charge $4000 per Registrar per year as
annual accreditation fees for all TLDs</FONT></P>
<P><FONT face=Verdana size=2>* This fee is charged once a year at the beginning
of the year for each Registrar. With 250 Registrars this would come to $1
million</FONT></P>
<P><FONT face=Verdana size=2>* Next ICANN charges a variable fee of 25 cents per
transaction on a quarterly basis for every domain year added through an Add,
Renew or Transfer for each Registrar. Based on calculations and data this should
come to around $2.7 million per quarter</FONT></P>
<P><FONT face=Verdana size=2>* The total of the above therefore comes to $11.8
million</FONT></P>
<P><FONT face=Verdana size=2>* If ICANN has already collected $11 million then
ICANN must in the last quarter adjust its per transaction fees (reduce it) such
that it does not cross the $11 million mark. The $11 million serves as a cap of
what ICANN can make from the Registrars totally in a year. So if ICANN finds in
the last quarter that the per transaction fee is yielding it greater than $11
million it must reduce the per transaction fee.</FONT></P>
<P><FONT face=Verdana size=2>* If ICANN finds that it has not managed to collect
$11 million by the end of the year then in the last quarter ICANN has the right
to charge upto $6000 per Registrar uniformly. So for instance if ICANN falls
short by $500,000, it can charge $2000 per Registrar. If ICANN falls short by
$750,000 it can charge $3000 per Registrar and so on. The maximum however it can
charge a Registrar is $6000</FONT></P>
<P><FONT face=Verdana size=2>* In 1999 the ICANN budget task force had divided
the ICANN budget and put a burden of 50% of the budget onto gTLD Registrars. In
this budget $11 million of $15.8 million is funded by Registrars - which
accounts for 70% of ICANN's budget. ICANN must take proactive steps to ensure
that this contribution percentage to ICANN's budget must reduce to reasonable
levels in the next budget round and thereafter.</FONT></P>
<P><FONT face=Verdana size=2>* There must be a provision in the budget to allow
for an audit process. This audit maybe carried out by a task force or an audit
committee with representatives from various constituencies in the proportion of
contribution from those constituencies. The audit committee would NOT engage in
micro management of the budget. However the audit committee would be able to
ascertain that the fund allocation required for each specific macro objective
was appropriately allocated and well-spent. It would also give intelligent
inputs on the amount of funds that would be required to be allocated to such
objectives in future years. This audit committee should have appropriate
representation from the cross section of the community</FONT></P>
<P><FONT face=Verdana size=2>* In this model the Registrar fixed fee will
typically be $4000 and can maximum reach $10000. It is most likely that ICANN
will be able to recover $11 million without charging an extra $6000, since
transactions are on a rise each year</FONT></P>
<P><FONT face=Verdana size=2>* In this model there is NO forgiveness factor and
therefore no ambiguous forgiveness criterias</FONT></P>
<P><FONT face=Verdana size=2>* All Registrars are charged equally. There is no
contention of a batch pool fee and ICANN's budget is not based upon selective
business models of Registrars</FONT></P>
<P><FONT face=Verdana size=2>* This model does NOT break apart if WLS comes
in</FONT></P>
<P><FONT face=Verdana size=2><BR></FONT><FONT face=Verdana><U><B>Registrars out
of the alliance who have already signed this Budget Document</B></U></FONT></P>
<P></P><FONT face=Verdana size=2>
<DIV></DIV>
<OL>
<LI><FONT face=Verdana size=2>! $ ! Bid It Win It, Inc. </FONT>
<LI><FONT face=Verdana size=2>!!! BB Bulk, Inc. </FONT>
<LI><FONT face=Verdana size=2>!$6.25 DOMAINS! Network, Inc. </FONT>
<LI><FONT face=Verdana size=2>007Names, Inc. </FONT>
<LI><FONT face=Verdana size=2>123 Registration, Inc. </FONT>
<LI><FONT face=Verdana size=2>1stDomain.Net </FONT>
<LI><FONT face=Verdana size=2>A Mountain Domains, Inc. </FONT>
<LI><FONT face=Verdana size=2>A. W. B. Trading, Inc. </FONT>
<LI><FONT face=Verdana size=2>Alice's Registry </FONT>
<LI><FONT face=Verdana size=2>All West Communications,Inc. </FONT>
<LI><FONT face=Verdana size=2>BB Online UK Limited </FONT>
<LI><FONT face=Verdana size=2>BestRegistrar.com </FONT>
<LI><FONT face=Verdana size=2>CADiware AG </FONT>
<LI><FONT face=Verdana size=2>Colorado Names Domains, Inc. </FONT>
<LI><FONT face=Verdana size=2>Directi </FONT>
<LI><FONT face=Verdana size=2>DNS:NET Internet Service GmbH </FONT>
<LI><FONT face=Verdana size=2>Domain Name </FONT>
<LI><FONT face=Verdana size=2>Domain The Net Technologies Ltd </FONT>
<LI><FONT face=Verdana size=2>DomainRegistry.com Inc. </FONT>
<LI><FONT face=Verdana size=2>Dynadot </FONT>
<LI><FONT face=Verdana size=2>easyDNS Technologies Inc. </FONT>
<LI><FONT face=Verdana size=2>Emily Names Domains, Inc. </FONT>
<LI><FONT face=Verdana size=2>Encirca </FONT>
<LI><FONT face=Verdana size=2>Esoftwiz Inc. </FONT>
<LI><FONT face=Verdana size=2>French-Connexion, SARL. </FONT>
<LI><FONT face=Verdana size=2>Future Media Network K.K. </FONT>
<LI><FONT face=Verdana size=2>Get SLD, Inc. </FONT>
<LI><FONT face=Verdana size=2>GKG.NET, INC. </FONT>
<LI><FONT face=Verdana size=2>Globedom Datenkommunikations GmbH, </FONT>
<LI><FONT face=Verdana size=2>HJ Linnen </FONT>
<LI><FONT face=Verdana size=2>I.D.R Internet Domain Registry LTD </FONT>
<LI><FONT face=Verdana size=2>Initials Online Limited </FONT>
<LI><FONT face=Verdana size=2>JJH Investments, L.L.C. </FONT>
<LI><FONT face=Verdana size=2>Korea Information Certificate Authority, Inc.
</FONT>
<LI><FONT face=Verdana size=2>Le Grand Nom, Inc. </FONT>
<LI><FONT face=Verdana size=2>Lead Networks Domains Pvt. Ltd. </FONT>
<LI><FONT face=Verdana size=2>Moniker Online Services LLC </FONT>
<LI><FONT face=Verdana size=2>Name Share, Inc. </FONT>
<LI><FONT face=Verdana size=2>Netpia </FONT>
<LI><FONT face=Verdana size=2>Online Orders Network</FONT>
<LI><FONT face=Verdana size=2>Parava Networks, Inc. </FONT>
<LI><FONT face=Verdana size=2>RegisterSite </FONT>
<LI><FONT face=Verdana size=2>Registry Info Avenue </FONT>
<LI><FONT face=Verdana size=2>RJG Ventures, L. L. C. </FONT>
<LI><FONT face=Verdana size=2>Secura GmbH </FONT>
<LI><FONT face=Verdana size=2>Server-Service GmbH </FONT>
<LI><FONT face=Verdana size=2>Signature Domains </FONT>
<LI><FONT face=Verdana size=2>Total Calories, Inc. </FONT>
<LI><FONT face=Verdana size=2>Transecute (I) Pvt Ltd </FONT>
<LI><FONT face=Verdana size=2>Transecute Inc. </FONT>
<LI><FONT face=Verdana size=2>Vivid Domains, Inc. </FONT>
<LI><FONT face=Verdana size=2>Walela Brook, Inc. </FONT>
<LI><FONT face=Verdana size=2>Webagentur.at Internet Services GmbH</FONT>
<LI><FONT face=Verdana
size=2>Webmasters.com</FONT></LI></OL></FONT></BODY></HTML>