January 12th, 2005

Where did the .ORG money goes?


A friend pointed me to the latest Internet Society budget for 2005 :- ISOC is expecting PIR (ie, .ORG) to contribute 3.4M to the society! Wow, thats 2-3x as much as what Internet Society gets from its membership!

I think that’s pretty neat because ISOC has been in the red for many years and could certainly use some help financially. Afterall, it is hosting IETF and also paying for the IANA registry and RFC-Editors, all of which is critical to the Internet standardization process. Best of all, this also means ISOC would have some budget surplus to fund some useful projects :- 1.1M was allocated to that for Education and Policy development, including one doing African IDN :-)

But there is also another side to the story: Given there are approximately 3.3M .ORG names, this works out to be about US$1/name for ISOC. Hmm, didn’t each .ORG cost US$6 to the registrar so where did the rest of the money goes? Well, I suppose some money are needed to keep PIR going but PIR is a pretty thin organization1 so not much overhead there. Thus, I think the majority of the US$5 goes to Afilias, the registry operator for .ORG but discussion sake, lets just say US$3/name.

Now, back in the days when I was the CTO of i-DNS 3-4yrs ago, I remember doing a spreadsheet calculation on the cost to do full-fledge registry operation. At 100k domain names, it would work out to be about US4-5/name but once it reach 1M domain names, the cost falls to less then US$1/name. And it get sweeter as you gain economy of scale :- at 20M names, it cost US$0.10/name! So with 3+M .ORG names, I don’t think it would cost more then US$1/name for Afilias to run .ORG. That’s means a cool 7M profit to Afilias2 which is more then whats was contributed back to ISOC!

Now, I don’t have problem commercial companies making money. I mean, compared to Verisign which makes US$5.95/name for .COM, the profit Afilias makes is relevant little. But I think there is something fundamentally wrong when a commercial company makes money riding on a non-profit society. Shouldn’t more money be given to ISOC, or if ISOC don’t need it, why not lower the cost of .ORG registration and give it back to the Internet community?

This is also one of the reasons I don’t support the proposed .ASIA, with Afilias trying to replicate what the .ORG arrangement.I feel the AP community is been made use of and that feeling isn’t very good.

1 I only know Edward Viltz, the CEO & President of PIR but I haven’t met anyone else who works in PIR.

2 Disclaimer: I don’t have any insider information regarding the deal between Afilias & PIR so I don’t know how much they gets. Neither do I know the exact operational cost for Afilias so the 7M profit is just my intelligent (conservative) estimation.

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