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<DIV dir=ltr align=left><SPAN class=906411413-18102004><FONT face=Arial
color=#0000ff size=2>I also believe that NSI is contractually bound to vote in
favour of the budget is the amount owing by them to ICANN is 2 million or
less.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906411413-18102004><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906411413-18102004><FONT face=Arial
color=#0000ff size=2>So I bet the 2 million figure is strategic, in that they
must now always vote in favour of the budget by default.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=906411413-18102004><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=906411413-18102004><FONT face=Arial
color=#0000ff size=2>Rob.</FONT></SPAN></DIV><BR>
<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left>
<HR tabIndex=-1>
<FONT face=Tahoma size=2><B>From:</B> owner-registrars@gnso.icann.org
[mailto:owner-registrars@gnso.icann.org] <B>On Behalf Of </B>Tim
Ruiz<BR><B>Sent:</B> Sunday, October 17, 2004 1:21 PM<BR><B>To:</B> Elmar
Knipp<BR><B>Cc:</B> Bhavin Turakhia; 'Registrars List'; Paul
Goldstone<BR><B>Subject:</B> RE: 2MM cap (was: [registrars] knowing when to fold
'em)<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV>My comment was directed to Paul. I guess I replied to the wrong
email.</DIV>
<DIV> </DIV>
<DIV>Paul was concerned that the $2MM cap would mean that smaller registrars
might have to pay more to make up for some shortfall. I was pointing out that
because of the way the two components work that could not happen, and that if
one or more registrars hit that cap it would likely mean a reduction in the
annual portion (paid quarterly). Of course, as you point out, all registrars
would benefit from that reduction.</DIV>
<DIV> </DIV>
<DIV>I was not commenting on the viability or fairness of the $2MM cap
itself.<BR><BR>Tim</DIV>
<DIV> </DIV>
<BLOCKQUOTE
style="PADDING-LEFT: 8px; MARGIN-LEFT: 8px; BORDER-LEFT: blue 2px solid"><BR>--------
Original Message --------<BR>Subject: 2MM cap (was: [registrars] knowing when
to fold 'em)<BR>From: "Elmar Knipp" <Elmar.Knipp@corenic.org><BR>Date:
Sun, October 17, 2004 11:21 am<BR>To: "Tim Ruiz"
<tim@godaddy.com><BR>Cc: "Bhavin Turakhia" <bhavin.t@directi.com>,
"'Registrars List'"<BR><Registrars@dnso.org>, "Paul Goldstone"
<paulg@domainit.com><BR><BR>On Sat, 16 Oct 2004, Tim Ruiz
wrote:<BR><BR>> The $2MM cap has no affect on smaller registrars
whatsoever. The annual<BR>> portion of the variable fee (the $3.8MM) is
billed quarterly so it will<BR>> be paid first before any registrar
will hit the $2MM cap. It will be the<BR>> transaction fees that cause a
larger registrar to hit the cap. And<BR>> actually, if one or more large
registrars hit that cap it will mean lower<BR>> fees for everyone
else.<BR>> <BR>> The reason is that ICANN will have obviously
underestimated what the<BR>> transaction fee will bring in, and the budget
calls for using any excess<BR>> transaction fees to reduce the annual
portion.<BR><BR>Tim,<BR><BR>I am not sure whether I got the point in your
message. The cap has nothing <BR>to do with the quarterly collection of the
fees. The quarterly collection <BR>is only the technic of charging and is
independent of the yearly result.<BR><BR><BR>Assume the following simplified
two scenarios:<BR><BR>Scenario 1)<BR><BR>350 Registrars, nobody gets
forgiveness, 1 registars has 7 million domains <BR>(called R-7), all other
have the same number of domains, which is lower <BR>than 7 million (called
R-all).<BR><BR>Every registrar has to pay 3,800,000 USD / 350 = 10,857
USD.<BR>Every registrar also has to pay 0.25 USD per domain year.<BR><BR>R-7
will have payed at the end of the year 10.857 USD + 7,000,000 * 0.25 <BR>USD =
1,760,857 USD.<BR><BR><BR>Scenario 2)<BR><BR>Same as above, but 7 million
domains are transfered from R-all to R-7 <BR>(20,000 domains from each R-all).
R-7 has now 14 million domains.<BR><BR>In my view, R-7 has to pay at the end
of the year 10.857 USD + 14,000,000 <BR>* 0.25 USD = 3,510,857 USD. But in the
ICANN model he only has to pay <BR>2,000,000 USD, the
cap.<BR><BR><BR>Conclusion: With the ICANN model R-7 gets a relief of 1,5
million USD or <BR>pays only 14 cent per domain. This seems to me
inequitable.<BR><BR>If there is more income than expected in the budget, the
balance could go <BR>to 50 % in the reserves and the other 50 % should reduce
the variable fees <BR>*of all* and *not only* from the huge
registrars.<BR><BR><BR>Best Regards,<BR>Elmar </BLOCKQUOTE></BODY></HTML>