Local cost related to running a TLD

[Norbert Klein]

Tan Tin Wee wrote:
> So in line with Avri's implications, if one doesn't bother to document
> the fact, one loses the argument. Conversely speaking,
> one charges a lot of money and gathers all the facts,
> then one has the chance to win.  Ironic, since the asymmetry of
> the situation is such that nobody would probably want to prove
> that it cost so little for them to run a service which other
> people have to pay increasingly less for! Not the way to run
> a viable business. Which is why I don't think a potential operator
> will give her the facts she needs to argue her case. So let me try
> and take a first stab at it then, and
> how about let Norbert anyone else correct me here, if
> my estimates below are way off the mark.
They are probably OK now - but they are widely off the mark when I
consider the years 1996 to 1998, after I had created the Cambodian ccTLD
and administered it for three years: it was much cheaper.
>
> 1. Cost of putting an internet server in an ISP per year
>    USD 3,000 (700 if you put it on a cloud on Amazon EC2)
> 2. Internet dialup link  (or borrow from your neighouring internet cafe)
> 3. Cost of buying a server that lasts a year USD 500
> 4. Cost of hiring a staff a year USD 15,000
>    to take phone calls at the rate of 50 a day for six day workweek
>    of which 10 leads to registrations of which each takes five minutes
>    to enter into the RR record using Webmin, half an hour to process
>    the paper work, and lick an envelope to send the invoice etc
>    or enter a spreadsheet.
> 5. Cost of hiring a TLD manager who speaks English and has to attend
>    ICANN meetings every year at least once $40,000 plus budget airfare.
Nice salary - I had US$500/month for many years, that is US$6,000/year.
> 6. Rental of space in a corner of a shop   $20,000 a year.
> 7. Registration fee to start a local company $2,000 a year?
Even that is at present only US$560; I checked it recently with the
Ministry of Commerce.
> 8. Auditor fee to audit the accounts         $1,000 a year?
> Misc: etc
> Let's round it to $90,000 a year for a properly run registry.
>
> Say Registry takes in 5,000 domain names year 1, 10,000 year 2 etc.
> Cost of an IDN domain name registration per year:
>     $18 in year 1, $9  in year 2, etc. about
>     1/2 day's salary of the "average" salary man
>     and about the cost of a .com
>
> But if this proper registry has to cough up 185K fee upfront,
> compared to these operational figures in a developing country
> we're talking about $55K in year 1. with >50% of the money going
> to ICANN for covering "costs".
>
> Admittedly, this artificial scenario doesn't quite amount to
> what it takes to run a "proper" registry by developed country
> standards. No 24 hour airconditioning for their servers right no
> proper sanitation for their staff, uncomputerised records
> and no call center for prompt service, like many things which
> the developed country may have. And most certainly, no
> "properly" paid CEO, and a CFO or CTO with proper bonuses
> or proper medical benefits and insurance...
> But if proper developing country Registry should
> have a developed country registry amount of cost of operations,
> costing more than a small town hospital, or a clinic that dispenses
> polio and TB vaccines to the community...
> this is the moral hazard of applying Developed
> Country standards and yardsticks to developing ones.
>
> I grew up in a third world country
> with third world airports, which became a first world
> country in less than a generation, with one of the highest
> per capita income in the world, with a world class airport,
> and I started work in a third world university, which became
> a first world university today. I can see the huge discrepancy
> between the two!
>
> So Norbert, you have run an internet service before, how much does it
> really cost to run a registry, a properly run registry in a developing
> country
> that doesn't cost more than a basic service like a hospital or clinic,
> or a fire station or a regional police post, or an ambulance service,
> in a developing country?
Well, see the figures above. Things were not done "properly" according
to some far away economic conditions, but we did all the necessary
things, to build up the Cambodian ccTLD and administer it. 1998 it went
to the Ministry of Post.

Norbert

> On 3/18/2010 10:20 AM, Norbert Klein wrote:
>> Thanks, Rafik,
>>
>> to take up the question of running a TLD, and the fact that these costs
>> might be quite different depending on the location. (I created and
>> administered a ccTLD for some years).
>>
>> Most of the discussions I see related to new TLDs are dealing with the
>> "$185,000" - and though I know this is to be "cost recovery" I am not
>> aware how this is  being calculated in detail (any lead/URL is
>> appreciated).
>>
>> Is this "cost recovery" calculation also related to the location where
>> it is done? Surely. Is this necessarily so?
>>
>>
>> Norbert Klein

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