Local cost related to running a TLD

[Tan Tin Wee]

So in line with Avri's implications, if one doesn't bother to document
the fact, one loses the argument. Conversely speaking, one
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.

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.
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?
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 $55 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?



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
>
> =
>
>
> Rafik Dammak wrote:
>> Hello Jorge,
>>
>> during questions to the board members, one argument that we used was
>> that cost for running ccTLD in developing countries isn't so high, is
>> there any study about that?
>> there will be working group about possible funding approach for
>> applicants (at least I heard that there is attempts to contact world
>> bank and so on to fund applicants from developing countries)
>> the board resolution :
>> "the Board requests stakeholders to work through their SOs and ACs,
>> and form a Working Group to develop a sustainable approach to
>> providing support to applicants requiring assistance in applying for
>> and operating new gTLDs ."
>>
>> Regards
>>
>> Rafik
>>
>> 2010/3/18 Jorge Amodio<jmamodio at gmail.com<mailto:jmamodio at gmail.com>>
>>
>>      Well, if that is your understanding good luck going through the
>>      technical evaluation, be aware that once you pay the evaluation fee
>>      depending on what phase of the evaluation your application goes
>>      through if you withdraw or become not eligible not all the monies are
>>      refundable.
>>
>>      BTW, I ran a ccTLD for many years, TLDs are not hard to create they
>>      are hard to maintain.
>>
>>      Regards
>>      Jorge
>>
>>      On Wed, Mar 17, 2010 at 2:23 PM, Marc Perkel
>>      <marc at churchofreality.org<mailto:marc at churchofreality.org>>  wrote:
>>      >  Actually I don't think you're right. I haven't done it but TLDs
>>      are not hard
>>      >  to create. Just a few lines in a BIND file. All you need to make
>>      it official
>>      >  is having the root servers hand it off to my private TLD
>>      servers. As to
>>      >  capacity, if the TLD is small then you don't need much of a
>>      server to handle
>>      >  it. I could add it to my current name servers.
>>      >
>>      >  Jorge Amodio wrote:
>>      >>
>>      >>  Actually as other said $185K is just for starters, it really
>>      depends
>>      >>  on what do you intend to do with the new gTLD.
>>      >>
>>      >>  To run or outsource a full fledged registry you have to think
>>      in the
>>      >>  order of a $500K-$1M initial investment, and that does not
>>      include the
>>      >>  costs of a legal battle with others such as ReMax that may
>>      intend to
>>      >>  apply for the same string.
>>      >>
>>      >>  If you don't have that money on the bank or investors willing
>>      to foot
>>      >>  the bill you are out of the game.
>>      >>
>>      >>  My .02
>>      >>  Jorge
>>      >>
>>      >>
>>      >>  On Wed, Mar 17, 2010 at 12:15 PM, Marc Perkel
>>      <marc at churchofreality.org<mailto:marc at churchofreality.org>>
>>      >>  wrote:
>>      >>
>>      >>>
>>      >>>  Avri Doria wrote:
>>      >>>
>>      >>>  On 17 Mar 2010, at 13:11, Marc Perkel wrote:
>>      >>>
>>      >>>
>>      >>>
>>      >>>  BTW - how do I apply for the .reality TLD?
>>      >>>
>>      >>>
>>      >>>  once the final applicant guidebook is released sometime
>>      between now and
>>      >>>  2012
>>      >>>  (draft details can be found at
>>      >>>  http://www.icann.org/en/topics/new-gtld-program.htm), follow its
>>      >>>  instructions, pay the big bucks (185,000 USD at the moment)
>>      and then go
>>      >>>  through the process and hang on through the challenges.
>>      >>>
>>      >>>  better have some deep pocket for the ride.
>>      >>>
>>      >>>  a.
>>      >>>
>>      >>>  $185,000 - so only the rich can get TLDs. Why is that?
>>      >>>
>>      >>>
>>      >>>
>>      >
>>
>>
>
>