[governance] Are Internet users powerless or empowered, and how?

[Karl Auerbach]

George Sadowsky wrote:

> However, I do think that the way you phrase it, i.e. "the body that 
> extracts over half a billion dollars (US$ out of the pockets of domain 
> name buyers every year," goes in the wrong direction.  It's correct that 
> ICANN is involved in price setting, but per domain name the cost is 
> closer to $6.

My estimate is based on a computed registry cost (which I'll get to in a 
few paragraphs), an ICANN granted registry fee of about $7 (not to 
mention the ICANN piece of every registration), and about 75,000,000 
names (largely in .com).

There is no doubt that domain name buyers are paying in excess of 
$500,000,000 per year just in the ICANN granted registry fee.  The 
question is how much does it actually cost to provide those registry 
services?

A price-setting regulatory body ought to know how much it costs to 
provide the regulated service being provided.  Unfortunately the body of 
internet governance that sets domain name registry prices (and its own 
fee as well) seems to never have bothered to inquire as to the actual cost.

Perhaps it is obvious to that body, but it is certainly not obvious to me.

The $6 appears to be nothing but a fiat amount - it appears to be based 
on no evidence, no information, no audit - no nothing.  There is no 
evidence that ICANN has never tried to establish a cost basis.  And now 
it is going up to $7, not $6, with an additional bi-yearly 7% rise, 
again without any supporting accounting, much less audited accounting.

I've estimated the cost at about $0.03 per name per year.  Perhaps that 
is too low, perhaps not.  But what evidence is there to contradict my 
calculations?  I'd love to hear concrete, auditable, quantitative 
information that leads me (and us) to a real answer that we can believe 
and use rather than debate.

The analysis of others also indicates that $6 much, much higher than the 
real cost.

Suppose that I'm off by a factor of 33x.  That still means that ICANN is 
pumping/taxing the internet to the tune of about $400,000,000 (USD) on 
.com alone every year and splitting the proceeds between itself and 
Verisign.

Alternatively we can use Tucow's bid at running .com at $2 - on which 
basis the money pump is a mere $330,000,000 every year (on .com alone) 
and rising with ICANN's 7% solution.

Even at these lesser amounts, the sums are still quite significant.

Thus we see an ICANN, because it is not accountable to the community of 
internet users, that has become excessively accommodating to the 
registry industry - gifting it with huge revenue streams and profit 
margins that are measured in the 1000% to 35,000% range.

When the body of internet governance not only guarantees registries a 
profit, but a profit margin measured in tens of thousands of percents, 
is it still internet governance?  Or is it something else?

When I was on the board at ICANN I found an across-the-board (pun 
intended) reluctance to look at any sort of hard numbers of anything, 
even ICANN's own expenses.  Indeed, when I went to look for myself I 
found my way barred and I had to bring legal action simply so that I 
could do what board members around the world are empowered to do - look 
at the financial records.

In other words, I am suggesting that there may be an institutional 
aversion to asking too many questions about where and how money flows.

One of my concerns about ICANN's nominating committee process is that it 
tends to produce people who are worthies but are of an accommodating 
nature, not of the ilk will demand to see hard proof of an assertion.

As such it is not surprising that ICANN has simply accepted a domain 
name registry price policy that began with an arbitrary number - a 
number that was simply created out of thin air a few years ago - and 
increments it by a percentage that was also created out of thin air.

Had ICANN had a working election process it may have found its board 
populated by more people willing to require hard facts before granting 
rich price terms, paid for not by ICANN but, instead, out of the pockets 
of the users of the internet.


> I agree with you that WHOIS continues to be a problem, complicated by 
> competing interests but also by non-interoperable national legal codes, 
> over which we have relatively no control (at least in the short run).  
> I'd like to see that sorted out also, but I don't see any voting scheme 
> able to solve that problem without creating other problems of equal or 
> greater magnitude.

You are right that voting systems alone will not solve Whois.

But allowing internet users light a fire under ICANN's board, a fire 
created through the accountability provided by elections, then I submit 
that ICANN would not have repeatedly waivered when the intellectual 
property industry said "boo", as it did just a few weeks ago in Los Angeles.

> I understand that you have a severe dislike of the current UDRP.  Is 
> there a comprehensive alternative you would like to suggest that is 
> significantly better?  If you have already suggested it, what has been 
> its reception and why?

The UDRP starts with a fundamental error: It acts as a sword to 
vindicate rights in a name only if those rights are based on trademark.

In other words, if I own a trademark "foo" then I can use the UDRP to 
challenge others who use "foo".  I might win, I might loose, but at 
least I have the UDRP as a tool.

On the other hand, if I am named "foo" or my god is named "foo" or my 
university is named "foo" - all of which are legal, valid, and 
legitimate non-trademark uses of that name - and I feel that my rights 
are violated by someone else's use of "foo", then I can not call upon 
the UDRP, the UDRP is not a tool that I can invoke simply because my 
rights in the name are not trademark based.

In other words, the first thing to fix in the UDRP is to make require 
only that the plantiff have rights in a name, not that those rights are 
trademark rights.

Secondly, the UDRP replaces the existing legal system.  The legal system 
is complex and expensive because it bends over backwards to be fair. 
The UDRP is attractive to intellectual property owners and lawyers (like 
me, on both counts) because it is fast and cheap.  But that speed and 
low cost come at a price - the loss of fairness.  Among the ways the 
UDRP is unfair is the way that those who make choices are paid, it tends 
to make them friendly to the plaintiff.

Thirdly, because the UDRP is a private law that supersedes nations it 
tends to squash cultural differences.  I'm certain that in the Sudan 
right now nobody is wondering about the trademark names associated with 
a certain teddy bear that has been in the news.  That situation 
demonstrates how different are the cultural feelings about names that 
the UDRP covers with a single worldwide, commercial trade name based system.


> What do you think of my suggestion to concentrate on the great majority 
> of Internet users, mostly those without domain names, and do two 
> things.  First, define their real needs to the best of our ability.  
> Second, and only after we've done the first, discuss what forms of 
> structure, conduct and governance would best meet those needs, nows and 
> in the future?

Yes is useful to remember that the internet is much larger than those 
who spend money on domain names.  And that is precisely why I find the 
"stakeholder" conception so pernicious - it tends to identify the degree 
of interest ("stake") and thus the degree of authority in bodies of 
internet governance with the amount of money that the putative 
"stakeholder" spends or makes.

So yes, we ought to remember the vast masses who are unheard and who's 
money in the net is not clearly identifiable and not, on an individual 
basis, very large.

On the other hand, when we have a fairly clear cut issue - such as 
domain name registry fees unrelated to the actual cost of providing the 
domain name registry service - and a well identifiable body of people 
being harmed (those who buy domain names and also, as we should not 
forget, those who find them too expensive and this forego buying a 
domain name), and an amount of money that would be significant even by 
Rockefeller standards, then that is an issue we ought to face.

		--karl--
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