Re: Specific Questions

[Karl Denninger <karl@Mcs.Net>]

> Hey, I have no problem putting up $50,000 (!) for a registry, as that
> makes good business sense, too. But that's not the issue. If there is
> nothing to be done with that money but to pad the IAHC, then it's no
> longer a 'fee,' it's a bribe.
> 
> --
> Christopher Ambler
> President, Image Online Design, Inc.

Chris, you and I both know that this isn't about documentable and reasonable
expenses.

Its about raising the bar to entry so few try, and then destroying the
profit potential and business position of those firms in relationship to 
NSI.

On analysis of the proposal I can't find any other legitimate justification 
for the majority of its provisions.

I have no problem with the DNS namespace being run as a public trust - as
long as its across the board.  The problem is that the IAHC knows damn well
that they can't enforce this for existing registries that are
IANA-sanctioned.

So why should anyone else, who has put in time, effort, and money, respect
their decisions?  

There are so many problems with the draft, and they're so firmly-engrained
in the brains of the IAHC members, that I doubt we're going to see any
peaceful resolution or compromise on these points.  Let's look at some of
the deliberate actions that the IAHC has taken:

1)	Deliberate restraint of trade - 60 day "waiting period" requirements.
	There is no precedent in any branch of corporate law in the United
	States in any other form of business organization or registration to
	suggest that this is a good idea, or that its even legal.  Yet its
	in there.  Can someone show me a requirement to do this from some
	other country (ie: you must register your business name but CANNOT
	perform any act of commerce under it until the 60 days have elapsed?)

	That some set of lawyers would LIKE the world to operate this way in
	other forms of commerce, but can't get the governments of the world
	to allow it -- and so they move here where its currently unregulated
	to exert their will -- is irrelavent.  

	Cyberspace exists in the real world.  It is not disjoint from its
	social and legal systems.  DEAL WITH IT.

2)	Deliberate inflation of costs.  The expectation of a need to charge
	a $20,000 application fee is all the evidence that anyone needs to 
	see.  There are PLENTY of ways to cut costs in this format; you can 
	conduct deliberations by email, you can use tools like Netmeeting, 
	Internet Phone, and Internet-based conference calling tools (yes, 
	they do exist) to make trans-oceanic phone calls a non-starter.  You 
	can, as a group, agree on a common platform for the participants to 
	make all of this easier.   I have challenged the IAHC to produce a
	line-item budget justifying these fees.  They have not yet done so.
	I am willing to bet they NEVER WILL DO SO, since if they do I and
	everyone else get to whack at the line items one at a time until we
	whittle down the projections to REAL expenses and costs.

3)	Deliberate refusal to tap EXISTING fund sources.  NSI has $7M in
	escrow right now for infrastructure development.  This is a logical,
	and quite legitimate, use for these funds.  Yet if you tap them
	(with the NSF's permission, natch) you submit to government
	oversight in the US *AND* you eliminate the need for the $20,000
	application fee.  IF THE FEE EXISTED TO REIMBURSE ACTUAL COSTS ONLY,
	and had no other agenda, this would have been attempted.  There has
	been no evidence presented that this was even investigated.

4)	Deliberate restraint of registry trade.  Part of the reason the IAHC
	needs to charge exhorbitant fees for applications is, IMHO, that they
	wish to limit their number.  If you allowed 300 registries, you'd 
	have a much larger "tax base" to spread the pain over.  Of course,
	economies of scale once again eat into the artificial bar that I
	believe the IAHC wishes to erect to prevent free entry into this 
	market.

5)	Improper levels of fee surcharge and oversight.  Credit and business
	reviews by a "Big 7" accounting agency will be required?!  Do you
	have ANY idea how much this kind of thing costs?  I do -- its in 
	the tens of thousands of dollars for such an evaluation and written
	opinion.  You're talking about a full-scale audit here folks!  This
	is EXTREMELY expensive, and completely unnecessary unless the firm
	is publically traded (in which case its already being done, and the
	IAHCs insistance that they order their own is a PURE tax; there's no 
	need to pay for what's already been performed!)  I've been involved
	in these (as a high-level employee of a public firm that had to do
	them for SEC complience reasons); they are a serious pain in the 
	ass and a lot more expensive in terms of staff time than just the
	fee paid to the accounting company.

6)	Complete irrelavance to the real world in regards to (5).  If the
	TLDs are all shared, the net effect of a registry failure is ZERO.
	Since the net effect is ZERO on the users of the Internet (many
	others can instantly pick up and modify those records) the
	justification for (1) artificial limits on the number of entries, 
	(2) credit reviews, and (3) technical standards becomes complete
	horse-hockey.  It serves NO public interest.  In fact, its CONTRARY
	to the public interest, and IMHO should serve as adequate
	justification for the revocation of the IAHCs (if applicable) and
	the ISOCs (definitely applicable) non-profit status under IRS
	regulations.

In my opinion there's a pattern here folks.  Its a pattern of obstruction 
of free commerce, attempted usurpation of the judicial branch of every 
country in the free world, and deliberately-placed barriers to entry coupled
with deliberate constraints designed to destroy the value in any registry
business before it can get started.

There's only one firm exempt from all of this that I've been able to
determine:  NSI

For the peanut gallery -- you tell me what this adds up to.

Its time for a wholesale revolt.  Paul Vixie made commentary about
"modified" version of BIND being released.  Paul, you're an ass, and you
know it.  If you don't "own" BIND, and its public code, then nobody can
claim to have the "official" version.  You've said as much yourself.

This kind of proceeding leaves little choice for those of us who believe in
free and open markets and commerce but to attempt to foment revolution in
the user community at large.

--
-- 
Karl Denninger (karl@MCS.Net)| MCSNet - The Finest Internet Connectivity
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