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</o:shapelayout></xml><![endif]--></head><body lang=EN-IN link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><span style='mso-fareast-language:EN-US'>Do you have some data points for the assumption that operating the registry at Donuts will reduce the costs by “a lot”?<o:p></o:p></span></p><p class=MsoNormal><span style='mso-fareast-language:EN-US'><o:p> </o:p></span></p><p class=MsoNormal><span style='mso-fareast-language:EN-US'>Domain registrations in org aren’t growing all that fast - .org is at 10 million domains – lower than ccTLDs like uk, tk and de (</span><a href="https://www.verisign.com/en_IN/domain-names/dnib/index.xhtml?section=tlds">https://www.verisign.com/en_IN/domain-names/dnib/index.xhtml?section=tlds</a>). If you limit your search to actual non profits registering .org names that will show at most a fractional increase year on year.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='mso-fareast-language:EN-US'><o:p> </o:p></span></p><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0cm 0cm 0cm'><p class=MsoNormal><b><span style='font-size:12.0pt;color:black'>From: </span></b><span style='font-size:12.0pt;color:black'><governance-request@lists.riseup.net> on behalf of "Imran Ahmed Shah (via governance Mailing List)" <governance@lists.riseup.net><br><b>Reply to: </b><ias_pk@yahoo.com><br><b>Date: </b>Monday, 2 December 2019 at 12:26 PM<br><b>To: </b>IGCaucus <governance@lists.riseup.net>, Bill Woodcock <woody@pch.net><br><b>Subject: </b>Re: [governance] PIR Case/or the .org sell<o:p></o:p></span></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>Dear Bill,<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>While comparing the revenue and income project of next 10 years, also add the yearly growth of domain registrations. <o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>Secondly, also note that....."PIR generated $101 million in revenue in 2018 and contributed nearly $50 million to Internet Society. It contributed $74 million to ISOC in 2017." "PIR paid over $33 millions to Afilias (in 2014)" to run the Registry Operations. Comparing with donuts.domains, if .Org operations are shifted from Afilias, the expense will reduce a lot. <o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>Think about 2-3 years ahead, if this investor exit and sells it to new bidder for $2b or $3b, should they calculate for setting up new prices for return of investment?<o:p></o:p></span></p></div></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>However, question is not how the .Org is profitable for perceptive buyers, either it is ethos and any other future bidder, the question is the Public Interest vs Commercial Interest (or Non Public Interest). <o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>Regards<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'>Imran Ahmed Shah<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue"'><o:p> </o:p></span></p></div></div><div id="ydpe9278200yahoo_quoted_5476278818"><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>On Monday, 2 December 2019, 03:49:28 GMT+5, Bill Woodcock <woody@pch.net> wrote: <o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><div id=ydpe9278200yiv1387642728><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>Forwarded from another list:<o:p></o:p></span></p><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p><div><p class=MsoNormal><span class=ydpe9278200yiv1387642728><b><span style='font-size:10.0pt;font-family:Helvetica;color:#26282A'>From: </span></b></span><span class=ydpe9278200yiv1387642728><span style='font-size:10.0pt;font-family:Helvetica;color:#26282A'>Bill Woodcock <<a href="mailto:woody@pch.net" target="_blank">woody@pch.net</a>></span></span><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p></o:p></span></p></div><div><p class=MsoNormal><span class=ydpe9278200yiv1387642728><b><span style='font-size:10.0pt;font-family:Helvetica;color:#26282A'>Date: </span></b></span><span class=ydpe9278200yiv1387642728><span style='font-size:10.0pt;font-family:Helvetica;color:#26282A'>December 1, 2019 at 10:01:19 PM GMT+1</span></span><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p></o:p></span></p></div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>Since I haven’t seen anyone else actually post this analysis yet, here goes:<o:p></o:p></span></p><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div></div></div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><img border=0 width=800 height=357 style='width:8.3333in;height:3.7187in' id=ydpe9278200yiv1387642728CC38E21B-70F8-432A-B063-B34DC2AD22BC src="cid:image001.png@01D5A910.63469A80" alt="cid:YXhsGI1ykGLnR9KgzXET"><o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p><div><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>Ethos’ offered purchase price is $1.135B. At that price, if they exercise the maximum 10% annual wholesale price increase, .ORG domains wind up at $26/year at the end of the ten-year period. If Ethos pays the actual cost of registry and DNS services, without the subsidies ISOC currently receives, but continues at the same level of quality, they’d make a total of $318M in profit over the ten years, or 8.59% annualized return. If they cut spending to the bone, using the crappiest available registry and DNS services and not caring how much downtime they had, they could increase their profit to $598M, or 9.71% annualized return.<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>If they were to do a single 10% increase, at the beginning of the first year, they’d lose $355M if they maintained current service levels, or $55M if they axed spending. If they maintained current prices, they’d lose $435M or $155M. Private equity doesn’t plan to lose money. Therefore the suggestions from the public that the deal be allowed to proceed “if they agree not to raise prices” or “if they only raise prices 10%” simply won’t happen.<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>The other implication of this is that if a non-profit were to buy from ISOC and maintain current prices, putting all available money toward ISOC and keeping nothing for themselves, they could only offer $700M, and that would be at the rate of $70M per year, “seller financed” at no interest. ISOC is currently chewing up $45M/year, but once they’re no longer dependent on .ORG, they could drop a significant chunk of their spending that’s going toward maintaining those interests. Let’s say that they could drop their spending to $30M. That would leave $40M in excess profits each year going toward an endowment:<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div></div></div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><img border=0 width=400 height=456 style='width:4.1666in;height:4.75in' id=ydpe9278200yiv1387642728B3C31C7C-1564-4045-9FBA-739E756074E3 src="cid:image002.png@01D5A910.63469A80" alt="cid:w1dx1QW3npxLPXgRsW4e"><o:p></o:p></span></p><div><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>At the end of the ten-year period, the endowment would stand at $626M, and interest from the endowment would be $50M/year. Which is more than they’re receiving right now. If they continued to just draw $30M/year, the endowment would continue to grow by $20M/year, making it safer and safer over time.<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'>So, I don’t think it works to ask Ethos to not raise prices, but (putting aside the fact that they’ve already signed an agreement with Ethos, which ICANN or the State of Pennsylvania would have to stop) ISOC could certainly do well (not _as_ well, but much better than they’re doing right now) and be completely out of the domain name business, while giving .ORG registrants a guarantee of no price increases, and having .ORG become fully non-profit, rather than the odd non-profit/for-profit hybrid it is right now.<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'><o:p> </o:p></span></p><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Helvetica Neue";color:#26282A'> -Bill<o:p></o:p></span></p></div></div></div></div></div></div></div></div></div></div></div><p class=MsoNormal>--- To unsubscribe: List help: <o:p></o:p></p></div></body></html>