Re: Tired of Waiting

["Roeland M.J. Meyer" <rmeyer at mhsc.com>]

At 12:48 PM 7/16/98 -0400, John Charles Broomfield wrote:
>
>(A little late, but...)
>
>Richard Sexton wrote:
>> At 02:43 PM 7/14/98 -0400, Perry E. Metzger wrote:
>> >"Christopher Ambler" writes:
>> >> >In other words, it's *critical* that the *Registry* for a new TLD be
operated
>> >> >as a public trust, not as someone's way to "make money fast".
>> >> >(If you don't see why for-profit, but competing, Registries don't
work, ask
>> >> >yourself how you'd feel once your snappy URL
http://my_name.new_tld/foo/bar
>> >> >is embedded in 10,000 web pages world-wide, and your for-profit
Registry then
>> >> >ups the rate to $1,000 per month....)
>> >> 
>> >> This argument has been countered, time and again.
>> >
>> >No, it has just be denied by individuals like you who want to make
>> >money by getting a profitable monopoly on public resources. The bulk
>> >of the community has a pretty obvious interest in the other direction.
>> >Perry
>> 
>> Perry, Chris want's to sell names directly to the public. His prices
>> posetd on the webtld.com website are $35/yr with discounts for multiple
>> years. Chris has agreed to stipulate or contactually agree to 
>> a long term increase shcedule.
>> 
>> On the other hand, the CORE registrars that would *like* to sell
>> IAHC's version of .web charge, on average $75 to $100/yr as
>> middlemen.
>> 
>> So, if Chris can sell names at almost a third of the price, on
>> a for profit basis with a guarentee of yearly reregistration
>> fees, and the non-profit CORE model has the price is almost
>> 3X as much, perhaps you can explain to me the logic that says

>> non-profit is better for me the consumer?
>
>Well, if that is the case, and seeing that Chris can sell at $35/yr, with
>registrar AND registry integrated, why doesn't he divest from the registry
>part, just stick to the registrar part, and bundle in with CORE. His
>infastructure costs and needs to run the registry part would suddenly
>disappear,

MHSC is looking at the same business operations model as IOD (which Chris
is not directly involved with anymore, he works for Microsoft now). I see
no benefit in breaking out the registry. Most of the cost is in the
registrar anyway. Especially if the hardware is already sunk-cost for other
operations. In that case the registry is no cost, just a postgreSQL
table-set, occupying disk space, and CPU, which other operations are
already paying for. IOW, your argument carries no weight.

The trick is that no single-service ISP can do this. The same reason that
we can cut Verisign's price structure out from under them, it's not our
main source of revenue, it's gravy. We pay the rent from other, more
profitable, services. However, we will never operate a service at a loss,
but we don't have to. It's the incremental profits, from a full range of
services, that make the next generation ISP profitable.

> (maybe Chris can inform us of how much that part costs him in
>systems, staff and personal time, but I'd be surprised if he was managing at
>less than $10 per name. I think he has around $1000 names registered, so if
>he wants to argue that he has spent less than $10.000 I would be very
>surprised),

Then continue to be amazed. Given sufficient volume in other services, the
TLD stuff drops below the financial "noise" level. I can run a TLD registry
on a four-year old 486. Given three year depreciation rates, the box is
zero-cost. Maint, once it is running, is not much higher than the cost of
keeping a 150 watt light-buld lit 24x7. The real cost is the development of
the registry/registrar software (about $600K) which, amortized over three
years, comes out to $1.6K per month. At $35 per month, break-even is about
45 SLD's per month for that TLD. The interesting thing is that the second
TLD uses the same software, but it's a sunk-cost. Better, the IRS will
allow the write-off as a deductible loss., which recovers $0.28, per
dollar-spent.

> so from his $35/yr he has maybe $10 dedicated to the registry
>business. CORE *TODAY* would charge him $15 per name, so he could "up" the
>price by $5 to $40. Seeing that you're so convinced that the CORE bunch is
>going to stay at ludicrously high prices, wow... he's going to make a
>killing!

One man's killing is another man's poverty. Please define this killing.
BTW, NSI has set the expectation for SLD prices. The upper bound, at least.
Given that the minimal costs are "fixed" the amount of margin is
volume-based. How many SLD registrations, per month,  are you assuming?
___________________________________________________ 
Roeland M.J. Meyer, ISOC (InterNIC RM993) 
e-mail: <mailto:rmeyer at mhsc.com>rmeyer at mhsc.com
Internet phone: hawk.mhsc.com
Personal web pages: <http://www.mhsc.com/~rmeyer>www.mhsc.com/~rmeyer
Company web-site: <http://www.mhsc.com/>www.mhsc.com/
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