[At-Large] FW: My comments on new gTLDs and the role of ICANN

[Vittorio Bertola]

Olivier MJ Crepin-Leblond ha scritto:
> Hello Vittorio,
> 
> your reasoning wrt costs is one which has been echoed by many
> participants.
> 
> However, have you read the document entitled "New gTLD Programme:
> Draft Applicant Guidebook (Draft RFP), Explanatory Memoranda and
> Supporting Documents"?
> Do you disagree with the methodology described in the part of the
> document entitled "Cost Considerations of the New wwgTLD Program"?
> Of particular inteest, do you disagree with the diagram shown on page
> 9 of the document?

It's not that I "disagree", it's that the numbers in that document are
insufficient to make any real evaluation. They could be true or not, we
can't know. I actually sent an evaluation about this to someone who
replied to my original message to the Board, so here it is:

===
First the paper says: we spent $1.8M to process ten applications in
2003, so the processing cost was $180k/application.

Then ICANN also estimated the cost bottom-up. The paper says that ICANN
already spent $12.8M, mostly in salaries, on this program, which makes
$26k/application.

Then it estimated the work-hours required by the processing itself,
attaching a probability to each possible processing path; here there are
no published numbers to support the conclusion, but it adds up to
$100k/application.

Then there is a final figure, which is what in a business plan you
usually add as "misc" or "reserve" to cover for unexpected expenses,
which was estimated by Willis to be $60k/application.

The total, $185k/application, is actually very similar to the 2003 cost.

Now, we have really no information to verify these evaluations - you
would have to go through the entire data set. Seen from the outside,
however, there are some things that are not convincing, and most people
I've talked to have questioned them.

The most frequent points are:
- how come that per-application costs for processing 500 applications in
a structured manner are the same than for processing 10 applications on
an experimental basis several years ago?
- how can you have a 'risk fee' of 1/3 of the total? isn't that
excessive, or just a way to inflate the fee?
- almost all the cost is made up by people's work; now, with $185k one
could hire 4-6 people for a year, per each application - or, with $80M
one could hire hundreds of people for a year; do you really need that
much work? what will those people be actually doing?
- even if this was the actual cost of processing these application,
isn't ICANN making this thing excessively complex? couldn't it just pick
a simpler process that would have a lower cost?

(I actually disagree with the last objection, but I agree about the
first three.)

> BTW I am entirely neutral on the matter. I can understand ICANN's
> explanation for the high fees, but I also understand that for
> applicants such as yourself, this is very expensive. As such, I fear
> that there may not be any win-win position on this.

The problem here is that we all should win, not ICANN or the applicants.
So, how can you get the best and fairest result from this process?

ICANN's role is supposed to be that of a neutral steward and supplier of
a service which is necessarily provided under a monopoly. This is why it
should just charge its costs, not more. Several people really can't see
how, in the end, one can claim that it costs $92.5 million to add 500
new TLDs to the root (when Verisign can add millions of .com domains for
$7 each and still make huge profits). This doesn't mean that this cost
is necessarily false, it just means that it's hard to believe and better
proofs are needed.

For example, let's pick the 12.8 million dollars that ICANN claims to
have already spent on this project, of which almost 8 million are
salaries. Whose salaries are they? For how long? What did these people
do? Are these expenses really and directly related to new gTLDs, or not?
We really can't say and we need much deeper information.

Otherwise, the result will just be a rush of people saying that it's
just "empire building" by people at ICANN who enjoy fat salaries and
five star travel at the expense of Internet users, and want to extract
as much money as possible to further the situation. This is quite a
simplistic and ingenerous view, yet it's what emerges from many.

Ciao,
-- 
vb.                   Vittorio Bertola - vb [a] bertola.eu   <--------
-------->  finally with a new website at http://bertola.eu/  <--------