[ncdnhc-discuss] taking politics out of the .org delegation

Tue Mar 5 17:10:55 CET 2002

At 11:01 AM -0500 3/5/02, Michael Froomkin - U.Miami School of Law wrote:
>what is .org worth?  As I understand it, the incumbent keeps all the fees
>paid for registrations to date, however long they are, and the new bidder
>takes on the uncompensated task of keeping those entries updated until
>renewed.  So on day one, it's a big liability...  or am I missing
>something?

I think that's right -- although if a non-commercial operator takes 
over .org, then there's a US$5 million fund established by VeriSign 
to help it get on its feet.

>
>On Tue, 5 Mar 2002, James Love wrote:
>
>>  Rob,
>>
>>  1.    If you want to get a low price for the .org registry, award the
>>  registry contract to the firm that offers the lowest price in a competitive
>>  procurement.  This is fine with us.  I don't think this has been done before
>>  in ICANN.

OK I misunderstood what you meant by low bid. Although I don't 
believe the contract should be awarded solely on economic terms, and 
I wanted to flag that even if it's awarded on totally different terms 
(one of which could be an evaluation of the applicants' contact with 
the non-commercial community), there still might not be a significant 
surplus to speak of.

r

>  >
>>  2.  If you don't award the contract on the basis of the low bid, you are
>>  basically giving someone or some group a contract worth millions.  .Org has
>>  a large installed base.  If ICANN sets the maximum price at a particular
>>  number, such as $5 or $6 per year, I am confident that the winning bid for
>>  the contract in a competitive auction would be greater than zero.   What
>>  makes you think the market clearing price would be zero?
>>
>>  3.  If nothing is done on the basis of the prices that firms bid, you are
>>  just finding a way to award your friends a lucrative contract.   This is a
>>  not something new in the world.  Some government have been forced to adopt
>>  rules on procurements after predictable stories about kickbacks, bribes and
>>  favoritism.  Maybe here we will have to have some well documented corruption
>>  before we can have procurement system that is less subject to such abuses.
>>  I'm not suggesting the big bucks spent on various consultants and lawyers to
>>  curry favor with ICANN constitute bribes or improper payments, but one has
>>  to ask, is this the right way to do business at ICANN?
>>
>>    Jamie
>>
>>  ----- Original Message -----
>>  From: "Rob Courtney" <rob at cdt.org>
>>  To: "James Love" <love at cptech.org>
>>  Cc: "ncc" <discuss at icann-ncc.org>
>>  Sent: Tuesday, March 05, 2002 10:23 AM
>>  Subject: Re: [ncdnhc-discuss] taking politics out of the .org delegation
>>
>>
>>  > At 12:01 PM -0500 3/4/02, James Love wrote:
>>  > >To those working on the .org, issue, I would like to expand upon comments
>>  we
>>  > >have offered in off-line discussions and in some written comments we have
>>  > >made in various fora, including on the .us redelegation, as it relates to
>>  > >how one addresses the potential windfall when someone suddenly is given
>>  the
>>  > >right to run an existing TLD registry that has potentially a signficant
>>  > >economic value.
>>  > >
>>  > >One approach would be to award the contact to the low bidder, subject to
>>  > >constraints such as not letting Verisign bid, to promote competition
>>  > >objectives.  But if people were not comfortable with awarding a contract
>  > to
>  > > >the low bidder, fearing some unsustainable lowballing strategy 
>that would
>  > > >fail and end up in renegotiation, one might set a maximum registry price
>>  > >(the current ICANN practice), and then award the registry bid to the
>>  company
>>  > >that offered the highest bid (probably best in cash, but perhaps
>>  something
>>  > >else, such as a royalty from future revenues, maybe capped at some $$$
>>  > >number the firm bids).
>>  > >
>>  > >The competitive market would then set the market clearing price of the
>  > > >opportunity to run the TLD, and there would not be a ton of politics in
>>  > >terms of who gets it.
>>  > >
>>  > >Next, you would have to deal with the surplus.
>>  >
>>  > Are we certain there would be a surplus?
>>  >
>>  > There might be a substantial benefit to non-commercial organizations
>>  > if the retail price of a .org registration was cut substantially,
>>  > closer to cost, rather than charging a higher price in order to run a
>>  > surplus/profit.
>>  >
>>  > I only raise it because a lot of people talk about .org as a cash cow
>>  > when it might not be one.
>>  >
>>  > r
>>  >
>>  > --
>>  >
>>  > Rob Courtney
>>  > Policy Analyst
>>  > Center for Democracy & Technology
>>  > 1634 Eye Street NW, Suite 1100
>>  > Washington, DC 20006
>>  > 202 637 9800
>>  > fax 202 637 0968
>>  > rob at cdt.org
>>  > http://www.cdt.org/
>>  >
>>  >   --
>>  >
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>>  >     JOIN THE CDT ACTIVIST NETWORK!
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>>
>>
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>
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>A. Michael Froomkin   |    Professor of Law    |   froomkin at law.tm
>U. Miami School of Law, P.O. Box 248087, Coral Gables, FL 33124 USA
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