Just as a quick followup, to give some quantitative numbers, the differences between for-profit and non-profit salaries can be quite significant. For example, see the bottom of the article at:

http://www.cnn.com/2007/US/Careers/05/16/cb.profit/index.html

for profit salaries are:

Attorney: 78% higher than non-profit
Recruiter: 68% higher
Sr. Accountant: 22% higher
Contracts Administrator: 3% higher
HR Specialist: 23% higher
Project Manager, IT: 21% higher

These are significant aggregate dollar values that were wasted given the enormity of ICANN’s spending on staff salaries. Indeed, not only should ICANN reduce the existing salaries, there should be clawbacks of past overpaid amounts, and an investigation into how this debacle happened. ICANN’s non-profit status might even be in jeopardy, if they were audited by the IRS.

Or, more accurately, this post puts about eight carts before one donkey. The issue of executive compensation was raised in 2008 and so ICANN responded by putting full details of how this was calculated into the Annual Report (flagging it up in the accompanying announcement).

Taking issue with those details is one thing but to extrapolate standard compensation practices into a catch-all explanation for everything the organization does is bizarre, bordering on silly.

I still don’t understand this sense that ICANN staff is somehow ICANN itself. ICANN staff are effectively a secretariat for the multistakeholder model of many thousands of people from many different spheres and many different countries. The idea that staff will wish to - or for one second would be able to - increase the size of the organization, or “rush” new gTLDs in order to have a (minuscule) knock-on effect on salaries is absurd.

This is the reality of the situation:

* The entire budget process was developed from community input. Staff asked what people wanted the organization to do, and then the price of doing that was calculated. At the end of that process, the budget had to be significantly reduced because the community was asking for too many things and the jump in budget that would be needed to do them was more than the Board and Staff felt the community would be willing to accept. Don’t take my word for it - there were several public sessions and public comment forums on this very issue. I am happy to post the URLs for full transcripts and comments if you wish to read up on the process.

* The suggestion that ICANN staff is somehow rushing the gTLD process is particularly ironic given the fact that one of the most consistent criticisms of the process has been that it isn’t going fast enough. I’m afraid the assertion not only doesn’t hold up but is the opposite of what has been happening within the community.

* To attack the Fellowship program as somehow representative of a “spendthrift” ICANN is almost surreal. One of the most consistent calls from the community is an increase in the participation of people from sectors and countries that may not otherwise be able to attend. The Fellowship program seeks to deal with that in a small way by covering the costs of a number of people to attend meetings. The applicants are carefully assessed and invited. There are not that many and they are also fewer than the number of community members that are supported to attend ICANN meetings due to their positions in the various supporting organization and advisory committees. Full details of the program are available on the ICANN site and regularly updated stats, plus announcements are made about the program. So far, I have yet to hear anything but praise for the program.

* You appear to believe that the US government is in charge of ICANN and everything it does. The reality - as you must surely know from 10 years of real-world experience - is that the US government takes a hands-off approach to ICANN’s work and that it is the community that decides which way the organization progresses. I would be extremely surprised if you could name one example of that not being the case.

It’s one thing to criticize the organization and its staff if there is disagreement within the community, but this approach of finding something - anything - from which to launch an incoherent scattergun attack is really not worth taking up CircleID readers’ time and, to my mind, reflects badly on the author.

Kieren McCarthy
General manager of public participation, ICANN

This is a really poor article George. Having worked for not-for-profits in the past, I know from experience that if a not-for-profit doesn’t compete with for-profits, then they often miss out on the better staff.

It is not just ICANN that uses for-profit sector salaries when competing for staff, it is many not-for-profits.

I guess if ICANN paid lower salaries and employed staff who were not as competent, you would be writing about ICANN employing incompetent staff. ICANN is in a no-win situation here.

Since the past five years, I’ve chaired the fellowships committee for APRICOT (http://www.apricot.net) - the largest network operators conference in the asiapac, sort of like the asiapac equivalent of NANOG.

We have an active fellowship program and extend fellowship to anywhere between 8 to 20 fellows each year.  We’re careful to identify people from developing countries, and if we give someone a fellowship, or he has received a fellowship from another regional internet conference (such as apnic or sanog) we dont give him another fellowship for the next 4 years.

This is both to ensure that we give others their fair chance at getting a fellowship, and to steer clear of “fellowship fellow travelers” who kind of enjoy a paid holiday going from one fellowship program to the other.  Once they are in the country, such people more often than not tend to go shopping or sightseeing rather than attend the sessions .. which kind of defeats the whole idea of fellowships, eh?

Kieren, your response is laughable. Let’s take a few of them on:

1) To describe a non-profit using for-profit comparables when determining compensation practices as “standard” is beyond belief. It would be “bizarre, bordering on silly” to NOT expect criticism of this—- that likely explains why the annual report was published during the holidays, when one might hope not too many people would read it. Now as people get back to work and read the annual report for themselves, they can decide for themselves whether ICANN has been acting like a non-profit.

2) “The issue of executive compensation was raised in 2008” neglects to mention that it was I who raised it, when I posted the quantitative analysis of ICANN’s Form 990 filings, which demonstrated a 74% year-over-year increase in total compensation for the top 5 employees of ICANN, just as I’ve raised other important issues (see CircleID articles) like SiteFinder or tiered-pricing for domains or the awful VeriSign 7% price increases, etc. Is a 74% increase somehow “standard” in ICANN’s imagination, too? I wonder how government employees at comparable organizations like say the NTIA, DOC, or USPTO would classify a 74% increase?

3) “if you wish to read up on the process” pretends or suggests I’m not very well informed about ICANN and its foibles, when the exact opposite is true. I probably know ICANN’s contracts and processes better than ICANN’s staff, given past policy input. Indeed, from your own blog, you aknowledged the first correction to the new gTLD Guidebook was because of my input (“our first correction is in.”) So, these aren’t the incoherent posts of a Jeff Williams, but the comments of one who is very well informed, so don’t patronize me and the rest of the public by suggesting we’re uninformed. Indeed, we must constantly be vigilant against ICANN misinformation (e.g. see #4).

4) “the fact that one of the most consistent criticisms of the process has been that it isn’t going fast enough” (in relation to new gTLDs) You’re obviously off your rocker on this one, to mischaracterize the input of the public in such an obviously blatant manner. Anyone can read the public comments on new gTLDs and verify that the vast majority of individuals and companies are against ICANN’s plan, including the US Department of Justice and Department of Commerce! When Deborah A. Garza of the DOJ writes:

ICANN’s approach to TLD management demonstrates that it has adopted an ineffective approach with respect to its obligation to promote competition at the registry level.

or when Microsoft writes:

In conclusion, Microsoft objects to ICANN’s planned introduction of new ASCII new gTLDs.

and yet the “General manager of public participation” claims that the people are saying that the process “isn’t going fast enough”, obviously the input of the public is not being heard. Indeed, for you to somehow find this as “particularly ironic” and the “opposite of what has been happening within the community” demonstrates to all that ICANN has no idea what the community has stated in the over 178 public comments (and more in other sections) that were received.

5) The Fellowship program has been criticized in the past by myself as a boondoggle that fills seats with paid attendees, and even today Danny Younger questions whether any policy dialogue has emerged after all the money spent on those seat-fillers. I dare you to give the GNSO constituencies an opportunity to use the funds currently wasted on the Fellowship program, and you’ll quickly see that program dissolve, if given a choice.

In conclusion, this issue of compensation goes to the very essence as to why the US government should not and will not give up oversight of ICANN. Only in ICANN’s imagination are 7% annual price increases for VeriSign “reasonable” in a world where technology costs are decreasing. Only in ICANN’s imagination is tiered pricing something that would be suicide for registry operators to try, and reintroduce the loophole for new gTLDs. Only in ICANN’s imagination are .biz, .info, .pro, .travel and .asia huge successes that warrant the introduction of even more new gTLDs. Only in ICANN’s imagination are companies like Microsoft in favour of more new gTLDs. And it’s only in ICANN’s imagination that the US government employees will ignore the fact that ICANN purports to be a non-profit organization following the wishes of the public, but acts and pays its staff as if it’s a for-profit enterprise.

P.S. David, I’ve long written about ICANN incompetent staff. Do a search in Google for “kirikos icann incompetent” for a few past thoughts of my own, or simply “icann incompetent” for the 6,000+ other matches on the subject by others.

1. See David’s comment above re: compensation.
2. So you are writing a post about your own comments?
3. So you are writing a post about your own comments?
4. http://www.icann.org/en/participate/cairo-public-forum-response.html#delay (among many others)
5. So you are writing a post about your own comments?

ICANN needs to achieve a consensus of more than one before it produces material for review.

Kieren McCarthy
General manager of public participation, ICANN

Thanks Kieren .. that part about keeping “fellow travelers” out was a lesson we had to learn early on.

The other thing we learnt was that we had to actively hunt for fellows. And have people on the fellowship committee who are from developing countries, and who are well wired into the local internet scene (so you actually know some of the applicants, and can look beyond a lot of high flown words in a fellowship application).

Kieren: The self-serving comments of a handful of prospective new gTLD operators who want to go “faster” before the public’s views are expressed fully doesn’t achieve a “consensus.” Anyone can read all the comments that were posted and determine what the overwhelming views of the public were, excluding those who lobby ICANN in person at meetings in faraway lands. It’s been true that the more folks become educated about ICANN’s plans, the more vocal they have become against those plans—expect that to continue.

This distracts from the main point of the article, though, namely whether for-profit salaries belong in a non-profit organization, and what incentives that creates. It’s my position that employees need to be paid much less, comparable to what non-profits get. Indeed, even for-profit companies like Yahoo are laying off staff. Where are the cutbacks at ICANN even when they attempt to suggest they are emulating for-profit companies? Instead, it’s full steam ahead, the best of all bubble worlds, as long as someone else pays the tab, namely domain registrants. That’s not accountability or fiscal responsibility.

George,

Your comments re what people shoule be paid in the not-for-profit sector are baffling to be kind, but in reality, idiotic.

What are you saying is that when someone works for a not-for-profit, they are to be condemnded to lower salaries than in the for-profit-sector. It’s like saying because one lives in a developing countries, you shouldn’t aspire to living conditions in the first world.

It’s also saying people who work for not-for-profits are not worthy. That they are second class employees.

It is utterly contemptible to contemplate such ideas. Rather, not-for-profts should be encouraged to employ the best staff, which means salaries and/or conditions comparable to the for-profit sector.

Whether you think ICANN staff are competent or not is another issue. That you think someone is less deserving because they work for a not-for-profit because they are working to help the homeless, the disabled, the environment or other such cause does yourself a disservice and shows a total lack of knowledge of the sector.

David

David: Clearly you see this as an emotional and moral issue when you toss in terms like “not worthy” or “second class citizens.” This is simple economics, that’s all. Everyone can argue that so-and-so “deserves” more (indeed, Marx wrote about this!), but ultimately decisions have to be made. Good corporate governance (read “The Snowball” about Warren Buffett, for example, and his situation on the board of Salomon Brothers) demands that an independent board act in the best interests of shareholders (in the case of ICANN, the public, its stakeholders), and not cave in to excessive compensation demands by staff.

This is not a “condemnation to lower salaries” or some class warfare issue. It’s simply a factual comparison as to what other comparable staff at similar organizations are getting, and that if ICANN’s Board is to be serving the public interest, they have a duty to allocate resources most efficiently (i.e. at lowest possible cost to the consumer). 3-ply toilet paper costs more than 2-ply, but 2-ply can do just as good a job. Coach and first-class seats both get one to the same destination, but flying coach saves the public’s money.

If ICANN staff wants to maximize their earnings, they can go to a for-profit company, with its inherent risks (e.g. risks of being fired for poor performance, risks that competitors will cause their company to go bankrupt, etc.). If they want the better job security that goes with a non-profit or government agency job, the trade-off is a lower salary. It’s clear ICANN’s Board is unprepared to make the tough decisions and say “no” and that the staff is running the show. They can always tax the public (through higher fees), as they have a monopoly, to cover any expenses, and thus avoid making tough economic decisions. As long as ICANN’s Board demonstrates they can’t say “no” when it is appropriate, it’s clear they’re not ready to be independent of the US government, who can and will say “no” (and Kieren asked for an example earlier, and I’ll give you the example of .XXX).

No George, I don’t see this as a moral or emotional issue. I see it as justice. I see it as a case of one must look after one’s staff or they go elsewhere.

Obviously your knowledge of the not-for-profit sector is gleaned from statisitics and having never worked in it. I have. I was also the union delegate negotiating an enterprise agreement.

It’s not all about pleasing shareholders/stakeholders. There is also something called staff management. It’s about ensuring your staff are happy. Otherwise they leave. Then you have to recruit, train and deal with all the other costs of new staff. In ICANN’s case word would quickly spread they are not an organisation to work for and desired staff would never work there.

If one wants to encourage staff to work for an organisation, and then stay, the staff have to be rewarded adequately. Salary is one part of this.

From an ICANN perspective you seem to have no problems having the staff travel economy as they travel the world. You can argue whether all the travel is required. This is another issue. But even in the not-for-profit sector most organisations I know of send employees business class on long haul flights. It’s a no brainer. It’s sensible. Of course, you can always pay for your staff to spend a day or two in a 4-5 star hotel recovering from their long haul flight.

As for ICANN’s travel policy, 6 months ago to my knowledge ICANN made staff travel economy. I don’t know if this has changed. But if you want your staff to travel to meetings around the world, business should be the minimum on anything classified as long haul.

Your lack of knowledge on this issue George is embarrassing for you. It is a case of you are happy to condemn not-for-profit workers of all persuasions to be second class citizens. Your argument should be how can we get those working in the not-for-profit sector to have working conditions comparable to the for-profit sector.

David

David: I don’t have to work on a farm to know that if you leave a box of cookies open in a pig pen, the pigs will eat every single last one.

These are not “second-class” citizens working in India that would be the comparables. These are well paid employees of the NTIA, DOC, USPTO and other government agencies or universities that are the comparables. No one is going to go starving with pay cuts, they’ll just be paid what comparable people are getting paid for doing similar jobs. That’s called getting value for the money of the stakeholders.

Your sense of “justice” appears to be that as long as someone else is paying for it (e.g. domain registrants), ICANN staff can pay themselves whatever they want to make themselves “happy.” Fortunately, that’s not the way the world works, and where it’s been tried (communist countries, authoritarian regimes that are not subject to oversight, etc.), the people eventually wise up and demand accountability. If it’s some “crime” to be for accountability, and making sure that the services are provided at the lowest possible cost to the public and that money isn’t squandered, then I’m guilty as charged.

Remember, it was folks like me that opposed the 7% annual price increases that ICANN gave VeriSign in a sweetheart deal. It’s your kind of reasoning that leads to justifications for VeriSign “deserving” that, instead of facing the realities of the marketplace (i.e. that the same services could have been received at lower cost to the public). One can be assured that I (and many others) would take the duty of spending other people’s hard earned money ($60 million/yr for ICANN’s bloated budget) a lot more seriously than the current ICANN board who signed off on these sweetheart deals for employee compensation.

George,

Once again you don’t understand the issues. If the pigs are sick, as per your analogy, they won’t eat the biscuits. You have to manage farm animals like any other resource.

And once again, if you don’t treat staff well, and it’s not just salaries as I’ve repeatedly mentioned, then they leave. Even many of the large consulting firms among others realise they have to look their staff, and not just with salaries.

You bring in a lot of arguments that have bugger all to do with the issue I raise. That you supported or opposed the seven per cent price rises you mentioned is immaterial to my point.

Again, since you have trouble following my point, it is that staff have to be rewarded to reflect their expertise and the work they do. That they work in the for-profit or not-for-profit sector should be immaterial. It is, but there should be an emphasis away from this. Obviously your knowledge of the sector is negligible, but I know in Australia many realise they do need to compete to get the good staff. Again, to make it clear, salaries are one part of this.

To reflect the move away from this, many of the large foundations in the US, and a growing number elsewhere, are making not-for-profits accountable for the grants they receive. Which is good. And which reflects what happens in the for-profit sector.

Another (new) point is how many not-for-profits expect their staff to be repeatedly travelling away from their families and friends to all ends of the globe? Again, there is an argument as to whether they should. But it is the situation that many ICANN staff have conditions that 99 per cent of not-for-profit staff would never encounter. This needs to be factored into any analysis of salaries in the sector.

I am all for people being adequately compensated for the work they do (salaries and conditions) along with being accountable.

If you want to attack ICANN regarding salaries, then you need to take into account the work they do and compare it to others. You haven’t done this and have used a blunt analysis of ICANN salaries that is demeaning to yourself and ICANN.

David

.. and that’s the UN. I consult for the ITU from time to time, and they have salaries separate from perdiem when traveling. 

Airfare is covered, and there’s a fixed perdiem (per day allowance that covers hotel, local expenses) for anybody traveling on the UN’s dime.

Perdiem rates are at http://www.who.int/bfi/tsy/PerDiem.aspx .. and as far as I can see, it lets you stay in a decent hotel, but won’t get you rich, and won’t let you stay at the Waldorf either.

Travel less than 9 hours is in coach with a rest day allowed, and travel over 9 hours CAN be paid in business class (but no stopovers or rest days)..

And you’d normally get booked into business, IF there is project budget available as the costs of flying have to come out of the overall budget for the project and the difference between coach and business is often $2000..2500, certainly far more the $250 (average) cost of a 4 to 5 star hotel.

David: You’re essentially making religious and moral arguments that for-profit and non-profit compensation should be the same. Wake up and smell the coffee, they’re not. Whether they “should” be is out of scope and is best left to philosophers. You can preach all you want that they should be the same, but ICANN’s Board is simply not getting the best bang for the buck when they allow their staff, employees at a purported non-profit, to successfully make the case that the comparable should be a for-profit company. ICANN’s Board has a duty to its stakeholders get the best value for the money. They’ve not done this, because they should be using government agencies, universities and other non-profits as the comparable when setting salaries. (I brought in the example of VeriSign to demonstrate the Board’s pattern of behaviour, that they’re routinely not looking out for the interests of stakeholders, to get the best value for the money; the DOJ letter also picked up this point, that the new gTLD guidebook needed to be amended to favour consumer interests, i.e. lower prices, best value for the buck).

ICANN’s staff don’t have some special skills that 10,000 other replacements don’t also have. Many people are willing to travel, and many see it as a perk of the job. Government employees at embassies or negotiating trade agreements travel routinely, for example. People engaged in fundraising for charitable institutions often travel.

Bottom line is, as you’ve said is “you need to take into account the work they do and compare it to others.” I have done this—- ICANN tells us they’ve done this, and their comparable is the for-profit people doing the same job (i.e. they obviously found a comparable). My argument is simple, they need to use the non-profit alternative, which is significantly lower (as per the averages in my very first comment above).

Religious and moral arguments? I’m dealing in the real world world George and realise not-for-profits need to either compete for the best staff, or settle for staff that are leftover and can’t get the jobs with companies that offer the best salaries and conditions.

That not-for-profits on average pay lower salaries is unfortunate. But, the not-for-profit sector is large. Separate out the larger foundations and charities that are run along for-profit lines and the results will be somewhat different.

That not-for-profit salaries and conditions should compete with for-profit is not something left to philosphers. It’s something that human resource staff and managers deal with.

That *you* think ICANN’s board doesn’t get value for money is a separate issue. If the board believes this, they should either get new staff or train the existing ones to do the job they do better. They don’t pay them lower.

And as the old saying goes, you pay peanuts, you get monkeys. Just because there are 10,000 others you say who will do the job is pointless. There are billions of alternatives around the world to run governments and businesses. But just because they exist and have ideas of how the job should be done doesn’t mean they can do the job competently.

And again, you imply just because someone works for a not-for-profit they should be treated second class since you want to aspire to the lowest common denominator. ICANN salaries and conditions should be comparable to similar work full stop. And as I more or less said, ICANN is unique in some ways given the demands on their employees. This needs to be factored in. From what I see of ICANN staff, burn out is an issue with the demands on their time. Factor it in, don’t ignore it.

David: According to your profile at DomainNews.com:

Since 2002 David has operated an online media monitoring service dealing with internet governance issues, and in particular domain names. Clients include ICANN and a number of registries and registrars around the world.

I think your comments supporting high ICANN staff salaries need to have that context, and you should have prefaced your comments with that full disclosure. Obviously the interests of those receiving money from ICANN, and who thus benefit from higher ICANN spending and waste, differ from those of the public.

I think you will find I gain no benefit from what you call ICANN’s waste. I provide a service that nobody else can match given the quality and price of what I do.

That apart, I’m not defending ICANN, but your belief that people who work for not-for-profits aren’t worthy of salaries and conditions that for-profit companies pay.

That’s my argument and it continues to be my argument. I’ve made it clear in my comments that “if *you* think ICANN’s board doesn’t get value for money [it] is a separate issue.

I’m showing up your poor research on the issue and the belief you have that people who work for not-for-profits should accept second class salaries.

I await your disclosure.

Nice try, David, I’ve more than demonstrated the quality of my research, both here and in the past. You’re continuing to argue religious beliefs, instead of economic reality that the comparables should have been the non-profits (like universities, government agencies, etc.). Words like “second-class” and “worthy” are best left to philosophers. I speak in economic language, like “efficiency”, “waste”, and “value for the money.” ICANN’s board should be embarrassed by the quality of its corporate governance, and certainly those who hold ICANN accountable will at some point do the right thing if the Board does not.

As for my “disclosure”, I can declare that ICANN doesn’t pay me a dime. The last person who “challenged my background” was Veni Markovski, a past board member who is now on ICANN staff, what irony! Perhaps you’ll be on the payroll too one day. My answer to Veni still holds true today.

And if you believe you offer a service and price that no one else can match, put this to the test by having ICANN do a public tender for the services you provide. You might be surprise at the competition, and what prices they offer. Frankly, anyone with Google Alerts or with RSS feeds can do monitoring for free. Feel free to post a link to ICANN’s tender, when you convince them to put it up.

Oh George, I can see it now, the economic rationalist, the wunderkind of the 80s and 90s. Sorry, the quality of your research has failed big time here. And anything that opposes the economic rationalist is religious. Interesting theory.

There is more to employment than economic reality. Employers have to deal with staff retention. It costs them a lot of money when an employee leaves, especially a valued one. They have to make their workplace appealing. Paying second-rate salaries and/or second-rate conditions just doesn’t cut it this century. Maybe you should get out in the real world and see what employers do to retain people. What issues they have to consider.

As for a tender, that’s up to my clients. I provide the service, my clients like it. And one of my clients actually does also use an alternative. I’ve seen it. It’s crap.

And fine. If you think anyone with an RSS feed and Google Alerts can do media monitoring, you really are deluded.

Over and out.

David: I’ve seen your technewsreview.com.au site—my info is so superior to that, I have no need to even monitor your site or subscribe to its RSS feed. Thank you Google Alerts plus a personal network that sends me interesting stuff.

Your argument that spending more money is the solution to every “problem” might work at ICANN staff meetings, but doesn’t cut it in the real world. Even mighty Google has been laying off contractors, yet ICANN is spending like it’s partytime all the time. That’s simply irresponsible to be wasting resources, resources of hard working consumers who own domain names.

You just don’t get it do you George.

I will repeat it again. My argument is that employers need to be competitive. How many times and in how many ways do I have to say this? There may well be a case to criticise ICANN. I don’t have enough knowledge of the organisation to debate this. But I do know economic rationalism has failed. And managers and human resource staff are well aware people need to be adequately compensated if they want to retain competent staff.

I don’t argue that spending more money is the solution to everything. Read what I say please.

Further, my website isn’t the full service. Geez. Do you think I’d make my full service freely available? Then I couldn’t charge. And I don’t care if you don’t want to use my site or service. Others do. One of my clients surveys its members every year and regularly finds that around 4 in 5 members find my service the best thing the organisation provides its members.

I don’t see the link between Google and ICANN though. Anyway, this doesn’t matter.

Now that this discussion has descended into tediousness it should be left to die.

PS: thanks for the plug for my site!

Your article is really unacceptable.

As a promoter of the Internet in emerging countries I found your article totally inappropriate and offending.

You have omitted the fact that “Applicants must be citizens of economically eligible countries […] of low, lower-middle, and upper-middle economies.” this means that these “grants” are reserved for “poor countries citizens” where the average income does not allow ANYONE to travel abroad. So having a couple of students (which generally represents the engineering elite of these countries) traveling with a grant is far from representing a “spendthrift attitude […] where money is thrown away”.

The voices of these countries has to be heard and taken into account into the global policy of the ICANN. Everybody is very grateful for the ICANN to sustain the development of Internet in these emerging countries… 

The selfish elitist attitude that you are promoting is a simply a shame. With such attitude the Internet would never have developed outside the boundaries of research labs and military programs of the 70’s… 

Grégory Bernard
Manager of the reg.it.ao project.

George has generously undertaken a volunteer study (without compensation) and writen a report supported by facts and data. It is worth noting that his critics here are unable to refute George’s research or his conclusions.

McTim: You appear to be confused about the meaning of percentile rank.

These are not percentage discount rates—when one is in the 50th to 75th percentile, it means one’s pay is in the top half of comparable salaries. These are percentage “rank” numbers. For instance, if one looks at household income in the USA, the median (i.e. 50th percentile) was $44,389. The 75% percentile was in the $80,000 to $82,499 range (i.e. 75% of housholds earned less than that). Households with more than $250,000 in income were in the 98.5% percentile. Imagine bell curves and old statistics classes.

So, when ICANN says it’s paying between the 50th and 75th percentile, that means it’s paying in the top half (above the 50th percentile) of wages, and if at the 75th percentile, that means that 75% of comparable people at other firms are earning less than they do. i.e. just like a household earning $80,000/yr, vs. $44,000/yr. One would need the exact statistical distribution of income for the relevant job titles, to see the exact income stats, although they obviously disclosed some of them, as I pointed out in the analysis where income for the top 5 went up 74% year-over-year from the Form 990 filings.

Had ICANN been picking the 50th to 75th percentile at non-profit firms, there’d be less of an argument. But, picking FOR-PROFIT firms, where salaries are much higher, as the comparable is unacceptable. It’s like a college deciding that it’s going to pay its president not based on what salaries are at other colleges, but instead looking at what salaries are for presidents in the Fortune 1000, an inappropriate comparable, apples vs. oranges. Or, managing directors at a hospital deciding to look at total compensation of Wall Street managing directors, instead of managing directors at other hospitals.

Gregory: You believe ICANN should be doing charitable work, bridging the digital divide and solving the problems of global poverty. While those are both commendable goals, it’s out of ICANN’s scope. There are other organizations tackling those problems. Take a peek at the non-commercial constituency mailing list archives or the At-Large mailing list archives, or any of the public comment forums on ICANN policy matters, and show me the great contributions of all the fellows. If they want to be “heard”, where are their posts? I read all the messages, and can’t find any meaningful contributions, but I leave it to you as an exercise to prove me wrong.

If you think that providing couple of grants to specific persons to be able to attend and maybe contribute to the ICANN discussions is a “charitable work”, well I don’t share your opinion… Or you really have a restricted view of “charity”.

While I am very thankful to M. Kirikos to have contributed to any paper / draft / proposal that might help setup a better Internet. I still think this is very disapoiting position to point out the “ICANN fellowhip grants” as a “throwing away money” program.

ccTLD management is also a large part of the ICANN work as far as I can tell.

Bernard: According to the Terms and Conditions of the Fellowship program, “Each Fellow is required to submit a summary report to ICANN within two weeks following the end of the Fellowship.” ICANN has never posted those reports—I expect they would read like vacation diaries, rather than serious input into ICANN policy making.

As for your comments about ccTLD management, you lost all credibility, as ICANN specifically keeps its hands off of what ccTLDs do. ICANN is responsible for gTLDs. If ICANN were managing ccTLDs, would Cameroon be allowed to wildcard .cm? ccTLDs contribute minimally to ICANN’s annual budget, and indeed many countries have decided to contribute nothing. In 1999-2000, when ICANN’s total revenues were $5.5 million, ccTLD contributions were $1,496,000 with Germany contributing nearly $500K (and only $2.8 million was actually spent). However in the latest financial statements ending June 30, 2008, when revenues were almost $51 million (page 5) and expenses of almost $40 million, ccTLD contributions were a mere $1.2 million, with the list of countries contributing far smaller than the number of ccTLDs. These are facts.

David Goldstein says “If one wants to encourage staff to work for an organisation, and then stay, the staff have to be rewarded adequately. Salary is one part of this.”

George Kirikos mentions no less than three times in his comments that the appropriate comparables are “..government agencies, universities and other non-profits…”

Don’t government agencies and universities deal with compensation and employee retention issues as well?  If so, that would seem to make them, well… comparable.

Frankly, it’s an insult to many fine universities, government agencies and other non-profits to compare them with the utter failure that is ICANN. ICANN staff pay should be in the bottom quartile of that range, reflecting their history of low achievement.

Consider today that PIR acknowledges on their blog that:

On December 18, NTIA posted a comprehensive set of comments to ICANN’s proposal which effectively halt the current plan and timetable due to some of these same concerns and lack of research.

in regards to new gTLDs. Accountable organizations would terminate the responsible individuals responsible for such utter drivel that was contained in the New gTLD Guide and presented to the public. But, not at ICANN. That’s job security, indeed, that drives out talented people, when an organization is not a meritocracy, but instead failure is rewarded.

One of the biggest failures of ICANN was the SiteFinder situation, which led to the terrible settlement with VeriSign at the expense of the public (but to the benefit of ICANN in terms of more revenue). Where was ICANN? According to an article in Boston.com:

VeriSign began work on the system a year ago, spokesman Tom Galvin said. “We began to think of a service that would help improve Web navigation,” he said. Galvin said VeriSign informed a major Internet regulatory body, the Internet Corporation for Assigned Names and Numbers (ICANN), of the Site Finder plan. He said ICANN president Paul Twomey raised no objections.

Did Twomey resign? Did relevant staff get terminated? Outsiders like myself warned about it before it even launched. ICANN staff is paid to be better informed than outsiders. But now, we’ve seen their compensation skyrocket, despite their disastrous performance.

Thus, the bottom quartile is generous for an organization with such a history, and such a present.

Kieren: You should re-read your personal blog post from 2 years ago, when you decided to take the job at ICANN. Especially the part:

I also feared that taking a job with ICANN would be a cop-out. I have seen countless colleagues take the corporate buck and lose all sense of perspective. Within months they arrive in snappy clothes and tell you that you need to see things from a different viewpoint and that it’s more complex than you realise. Perfectly true in many situations, except sooner or later you find them bending the truth as far as it can go in order to cover up some minor misdeed. If I took a job with ICANN, I asked myself, how long before I am doing the same while deluding myself that I am slowly changing the culture from within?

You also complimented yourself a few months ago about a US news rant you made on the Guardian’s website. So, I’ll take it as a compliment that you made another attempt at a put-down, instead of coming up with some hard numbers to dispute any of the above facts.

Put up some precise metrics for success, e.g. 500 new gTLDs in the root by 2010. And when those metrics are not reached, resign, recognizing failure. ICANN always claims “success”, despite obvious failures. The level of compensation should match the truth of failure, not the fantasy of success. ICANN in the past measured success due to lowering of .com prices from $35/yr to $6/yr. Yet, those prices are now going up, instead of down. Another failure, quantitatively measurable.

If you’re applying for the job of ICANN spokesperson, I don’t think Edelman has much to fear, given your lack of hard data, facts, and numbers to attempt to refute any of the above. Of course, those numbers don’t exist, because the compensation scheme is simply indefensible.

Here’s another exercise one can do—- get the tax returns of ICANN employees for the years preceding their ICANN employment, and after they joined. Normalize them, in order to provide anonymity, and set time zero to the date they joined ICANN (so one has graphs like year -2, year -1, year 0, year 1, year 2, year 3, etc. Then, compare their pre-ICANN and ICANN salaries, and compare that to the “average” person changing jobs. One will likely find that the jump in salary at ICANN was excessive. Similar kinds of studies (called “event studies”) are done in the financial markets all the time (e.g. to measure the impact of stock-splits, earnings announcements, or other interesting events). This study would be the “event” of joining ICANN, and its impact on salary, as compared to other organizations.

George’s visceral hatred of ICANN is obviously clouding is poor research skills.

First, whatever and whoever you want to compare an organisation’s salaries with, you also need to compare positions with similar accountabilities and skills. The poor comparison of ICANN salaries with not-for-profits in general is patently inadequate. The comparison MUST be with similar positions.

And it’s not just salaries. It is also conditions such as annual leave, carer’s leave, sick leave, health care, allowances for studying, hours of work and the list goes on and on. Obviously George’s comparison makes no allowance for this either.

As I said Scott if you would read my comments, comparing salaries with organisations whose salaries, and sometimes conditions, have been downgraded regularly over the years. So why the comparison with sectors whose salaries have not kept up? I guess it’s the economic rationalists commenting here can’t stomach this.

And Michael, George’s research is poor. I wouldn’t expect his research to be accepted as first year university research given he has not taken into account any of the points I’ve raised above.

So George and crew, do your homework, do it properly, and then start a discussion based on facts, not visceral hatred and your own prejudices. Then it might be worth listening to, and could be a constructive debate.

Until then, as Kieren said, it’s an “aimless rant” and its only goal being hatred of ICANN.

David: Are you saying they don’t have webmasters at universities, hospitals, NTIA, DOC, DOJ? They don’t have policy makers at the USPTO who go to conferences all over the world on intellectual property? ISI wasn’t doing much of the work of ICANN, and indeed ICANN wasn’t working in the ISI offices? The IETF, ISOC, W3C, ANSI, ISO don’t do many of the same types of work as ICANN? Hospitals, universities don’t give sick leave, or health care? The comparisons do exist in the non-profit sector, but they’re consciously making the choice to ignore those comparables, for self-benefit.

Your political ideology is obviously socialist by your continuing attempt to insult using the terms “economic rationalist”—sorry if most people don’t support your idea of a socialist worker’s paradise starting with ICANN, instead of ICANN staff getting paid salaries similar to comparable organizations. Cuba isn’t the model for ICANN, just yet.

As for being published, you challenged my credentials earlier, and I’ve been published twice (including in Risk Magazine), and have the educational background in economics and finance, with the real world experience. That’s why my criticisms carry a little more weight than you’ll acknowledge, but that’s ok, your opinion doesn’t matter much to anyone besides yourself.

Has Kieren changed ICANN, or has ICANN changed Kieren? You used to enjoy rants, espeically about ICANN. I read a wonderful one by you written about ICANN before you joined their payroll. Your original is still on your blog, but if it should disappear mysteriously, don’t worry, I’ve saved a PDF. It’s nice to keep backups, just in case. Such nuggets as:

But the fact remains that ICANN retains the same culture where ageing chairman Vint Cerf continues to push his personal and out-dated views and undermines anyone that argues with him, and CEO Paul Twomey continues to cut any secret deal he can that will give him control of a more powerful organisation.

or

Should VeriSign be given permanent control of the dotcom registry? The answer is startlingly obvious: No, it shouldn’t. It is in no-one’s interests except VeriSign’s.

or

Should VeriSign be allowed to raise prices? No, of course not. The prices of domains are going down. Why on earth is ICANN pulling itself into a contract that rips people off? How stupid does it have to be?

or

The problem with getting used to cutting dodgy deals is that, after a while, the human being becomes incapable of recognising when they should just say No. The individual loses that vital bit of wider clarity which marks great men from powerful men.

or

ICANN has been through a hell of a lot in the past decade but just when it thinks it is the most powerful and stable it has ever been, the irony is that it has never been weaker.

Thanks to David, who I’m sure appreciates this bit of “research.” This is why organizations choose spokespersons carefully, lest their amateurish attempts at damage control lead to even more damage. One needs the hazard suit of an Edelman to try to defend the indefensible at ICANN.

Since you are unable and/or incapable of answering the substantive issues I have raised George, this discussion is pointless.

You have been published in some journal. Was it peer reviewed. If so, great. If not, so what? I’ll be going shopping soon - should I be looking for a medal for you, or maybe a chest to pin it on. I’ve been published too. But it hasn’t been peer reviewed.

As for who to compare salaries to, fine, a webmaster might be easy. Sit down and look at the job descriptions and see if they are similar.

And I see as you give examples of other industries, you use multiple industries. You don’t pick and choose conditions you want to compare to.

Given that I have had experience in negotiating enterprise agreements, I am fully aware of the issues involved. Any half-competent HR employee or manager knows a blunt comparison of salaries is near pointless.

And if you were aware of any HR issues, you would also be aware firms such as major consulting firms and law firms realise there is more to life than a salary. Are they socialist too? And what’s Cuba got to do with it?

And your knowledge of what is the not-for-profit sector is poor. There are many variations in the sector. Some pay “market rates”, others don’t. Some are small community groups, others are large with millions of dollars at their disposal. Even many registries are not-for-profit organisations.

Since you are incapable of realising this, I’ll tell you in simplistic terms what you should do.

1. Do research on what salaries and conditions are paid in a range of organisations where you can realistically compare ICANN too.
2. Compare these to ICANN.

3. Then there is another discussion. Are ICANN staff competent? This is a totally separate discussion. It shouldn’t matter what their salaries are for this.

4. Then if it is found they are incompetent, look at why. There can be a multitude of reasons for this, if it is found to be true.

5. At some stage after stage 2 their can also be an examination of whether staff are overpaid or underpaid, given both salaries AND conditions.

The above can be applied to any organisation. And I’m not defending ICANN. But the evidence trotted out is amateurish.

I notice you keep going off on tangents from the discussion. I presume this is because I have shown your research to be inadequate and you are unable and/or incapable of addressing these issues.

This conversation is going nowhere, we’ll never agree and until there is something substantive to add it should be terminated.

David: Are you pretending to be obtuse, or is this some form of denial? Eventually, you’ll reach the point of “acceptance”, passing through the various stages of grief over a losing position. The only thing that has been “pointless” is the score on your side: George 50, David NIL. People who care about organizational accountability do care whether money is being squandered on excessive compensation or other wasteful spending. ICANN is about to be judged this year by the higher powers—expect this topic to come up again. Simple belated disclosure on this year’s appendix to the annual report is too little, too late.

It was you who brought up the issue of research quality, saying “George’s research is poor.” I answered that. Now you question the quality of the journals? Go to Google Scholar and search my name, and you can assess the quality of the 2 journals, and whether they are at the “first year university level” for finance.

Risk is “the world’s leading financial risk management magazine.” Articles “are then sent without author details to one or more anonymous referees for peer review.” Canadian Investment Review “is Canada’s leading investment and finance journal for professional institutional investors. It’s peer reviewed also (e.g. see here which mentions in the bio of a former editor that it’s a “quarterly peer reviewed journal”). Indeed, it was in the process of reviewing someone else’s paper that we got the idea for our own paper.

You acknowledge “fine, a webmaster might be easy.” So, a webmaster at a non-profit (like a government agency, university, hospital) is easy to compare to ICANN’s webmaster. But, read the annual report. They could not find comparables in the non-profit sector! ICANN was “unique”! (I gave a bunch of examples of potential comparables, e.g. NTIA, DOC, DOJ, universities, hospitals, USPTO, ISI, IETF, ISOC, W3C, ANSI, ISO).

Then you get this magical idea that “There are many variations in the sector. Some pay “market rates”, others don’t.” Earth to David. Earth to David. Back to simple statistics basics. “Variations in the sector” means “statistical distribution.” Did you read the part about 50th percentile, 75th percentile, etc.? It’s acknowledged that there are variations—no one is disputing that! But, you somehow believe that this is a matter in dispute. One does look at the universe of non-profits, with their statistical distribution of salaries for a given position, and chooses an appropriate percentile (ICANN’s Board picked the 50th to 75th percentile, i.e the 2nd highest quartile, because it is “obvious” that ICANN is above average, roll the eyes). But, they of course made the mistake of picking the universe of for-profit companies instead as their comparable.

As for your enumerated points:

1. Point done, see the first comment on this thread above titled “Some numbers to ponder” which links to CNN. Or, ICANN can do its job and get those same numbers from their external consultants, factored in for the non-profit, instead of for-profit sector, with ranges to let the community see each quartile (the CNN article just looked at the average salaries, i.e. presumably the 50th percentile).

2. Done, see the first comment on this thread above. Obviously, ICANN staff are overpaid, compared to the relevant comparables in the non-profit sector.

3. Are ICANN staff competent? I think Kieren’s illuminating blog post said it all. Let me remind you “Why on earth is ICANN pulling itself into a contract that rips people off? How stupid does it have to be?” and “The problem with getting used to cutting dodgy deals is that, after a while, the human being becomes incapable of recognising when they should just say No.”

4. Look at why? Typical socialism, try to reform the sinners, rather than terminate them for cause and replace them with people who can do the job at a high level of performance.

5. Oh, now it’s those horrible “working conditions” that have kept down the common man, and are to blame—workers are the victims, being attacked by the greedy capitalists! Up with workers, down with everyone else. There are always excuses and someone else to blame in your view of the world, and no personal accountability and responsibility. That twisted mentality seems to have infected the minds of some of the Board members and staff too, obviously.

Once again you are unable to answer my questions George. Your diatribes against ICANN do not deal with the issues.

The last not-for-profit I worked for employed, at quite considerable expense, a human resources organisation to look at the organisation’s packages (salaries and conditions) and to see if they were competitive. I don’t see that any of your research deals with the combination of salaries and conditions.

And none of the diatribes from you deal with packages (salaries and conditions).

Once you get over your visceral hatred of the organisation, maybe you will be able to deal with this issue in a balanced manner.

And to prove my point - you give some scorecard. I’m not sure how you totalled your scorecard. Maybe it’s like your inability to conduct balanced research.

David: You’re making the assumption that I’m trying to convince you. This is false. You’ve already said “we’ll never agree.” I’m speaking above you to the audience that is reading this debate, and they don’t have the blinders on that you do. Just because you don’t like the answers, it doesn’t mean I’ve not answered them time and time again, fully, and can keep on answering them, with numbers, data, facts, and specific examples.

And for the record, as George has been unable to conduct unbiased research, nor research that covers all the issues he contests (namely that both salaries and conditions need to be included in any analysis of remuneration), his views should be treated with contempt until he can do so.

David: You speak as if ICANN workers are in some deep coal mine shaft, in some “really bad conditions” that are so unique that they’ve never been encoutered before. That’s simply a joke, as anyone can attest. They work in, here’s a shocker, an “office building”, GASP! Such terrible and unique “conditions” that we need to factor in! Oh, there must be 5, 10, no, make that 50 million or more other people out there who work in office buildings! Sheesh, why don’t we conduct a special study just for ICANN, survey all these unique animals called “office workers” that have never been encountered before in the history of compensation analysis. Oh, and many even work from home, and have housing allowances! Sheesh, call the union bosses, we need to unionize these poor workers who have to face such a long commute (10 seconds) from their bedroom to their home office. Call 60 Minutes and The Washington Post, to learn about these Dickensian working conditions that you are so worried about, that some ICANN staff get to work barefoot in their pajamas from home, all alone, and unsupervised!

You don’t see how silly you are, but everyone else does. Keep up the good work at amusing everyone with your foolishness.

Here we go again…

I’m not sure how to explain this to you George in simpler English. What I have said is that any comparison of employees in one organisation to another MUST include all factors including salaries AND other conditions. My argument is not about ICANN, it’s about you being incapable of understanding how to conduct basic research.

And any medium or large organisation, and many small ones, will be perfectly aware of salaries and conditions of their competitors for staff. It’s good business sense.

As for people working from home and having a working at home allowance, why shouldn’t they? It would be cheaper in many cases than having someone in an office providing them with office space and all the paraphernalia required.

I’m sorry you are unable to understand the issues involved.

This is getting childish.

David: You’ve made my point for me. You said they “MUST include all factors including salaries AND other conditions.” I’m not disputing that at all—- that’s what I’m arguing for!

And the factor that MUST be included is whether it’s a non-profit or a for-profit organization! I can’t put it any more basic than this.

You said it yourself, you MUST include ALL factors. However, you’ve wasted the time of the readers above arguing instead that “no, we as moral people cannot consider whether it’s a non-profit vs. a for-profit, as this offends my notion of fairness, social justice, concern for the working man, blah blah blah.”

Either you include ALL the factors, or you don’t. Which is it?

I’m exactly arguing the point that we must include all the factors, including organizational type (for-profit vs. non-profit).

Was that in simple enough English for you to comprehend?

You’re the one who was biased above trying to insert your socialist agenda and personal bias that “oh no, we mustn’t include these special factors.” Sorry, we include them ALL, to be unbiased.

Since George is into full disclosure, I’m surprised he didn’t declare his support for the ITU. Could it be his support for the ITU clouds his judgement on ICANN?

It has been brought to my attention the following posting by George back in 2003, that read in part:
“... Looks like Verisign has proven once and for all that the ICANN Board is full of spineless jellyfish, and needs to be replaced with the ITU.”

The source is http://does-not-exist.org/mail-archives/ga/msg00131.html.

From what I read, this idea has been thoroughly discredited.

Before you ask, I have on occasion consulted for the ITU (its right out there in my circleid profile too), but I dont see George coming across as a fan of the ITU, at all.  Just for example, see below.

Now will you two please, please cut it out?  Circleid doesnt even have a killfile feature ..

http://www.dnforum.com/f17/itu-says-would-ready-run-internet-thread-115048.html#post672183 for example

Re: ITU Says It Would Be Ready To Run Internet
ITU would be a disaster, but ICANN sucks too. It’s a choice between which is the lesser evil.

Better to keep it with Uncle Sam, in my opinion, instead of places where banana republics have equal votes as the USA.
__________________
George Kirikos

Suresh: Correct, David missed my “punchline” which was the next sentence, in the context of SiteFinder, namely “At least with the ITU, we don’t have paid jingles appearing when we misdial a telephone number.” Given the recent analysis of Deborah Garza of the DOJ in support of the DOC’s letter, I’m even more comfortable with US government control and oversight. I’m for good policy making and stewardship, whoever can deliver it.

ICANN staff has so much spare time on their hands, they spend it researching my political beliefs about Obama.

I remain convinced that you only want lower prices because you want to maintain a large domain portfolio at minimal cost for your business purposes. Mind you there is nothing wrong with that. But it is not ICANN’s business to make the unit price for domain names fit your business model.

In my economics 101 class they taught us about Supply and Demand and in my studies and real world experiences I have never seen prices come down because there is lots of demand for an item or service.  Here is where you will trot out your non-profit and monopoly mantra; but by most definitions non-profit does not preclude surplus revenues.  And I reiterate that I would be quite happy for those surpluses to be spent on funding Research and Development and expanding the Fellowship programs to make the Internet governance and development more inclusive.  Your objection to these basic initiatives is what blows your cover of pretending to be fighting for the average Registrant.
$7/yr does not phase any businessman or college student.  It will undoubtedly be by FAR the smallest expense that any business has over the course of a year. I am fairly certain that even large corporations that feel the need to do a lot of defensive domain registrations are not losing sleep over the annual cost of domain names, I daresay it is a minimal expense in the grand scheme of things. (of course that could change if the new gTLDs were to be significant in number)

I am sure you know better, so I don’t know how you could possibly classify ICANN as the middleman in the domain selling business.  How much does ICANN actually get from the Registrars per domain name?  If anything ICANN has to be considered the Regulator in whom you have no faith right?

I also read you as being smarter than to think for a moment that the futures market and oil speculators did the world economy any good when they artificially pushed the price up to $140.00, based on pure greed and Vodoo economics.
I would like to see your reaction to a primary domain market manipulated (if not directly controlled) by speculators who helped to fluctuate the price of domain names predominantly upwards based on all sorts of variables such as threats of cyber terrorism and the number and quality of IT students graduating in America and the state of relations between India and Pakistan etc.

I suspect we won’t change each others views to any great degree, so I will step aside and leave you be in your quest to get a lower price for you and your fellow Domainers who want to continue buying domain names in bulk.
Sorry but you have failed to convince me that you have any more altruistic motives.

And of course George, speculation (and greed) had nothing to do with the world’s current financial predicament. And of course, speculation in oil had nothing to do the recent spikes in the price of oil, and that was just dandy for the world economy. Actually, what good do speculators do? Nothing. They allow a select few to get rich at the expense of the vast majority.

So George thinks just because oil prices come down, then so must public transport costs. Not necessarily. The government may be smart enough to invest in the transport infrastructure that was for so long neglected, for example.

Unfortunately George just can’t get a coherent argument going. He’ll find an analogy for anything and go off on tangents without sticking to one line of argument.

I guess George is just a good old free market lover, when it suits. And then he wants government to come in and give him the back up. Privatise the profits and socialise the losses seems to be his line of thinking. Or the end result.

And as for the questions asked by the Department of Commerce in the new gTLD process, I’ve read the letter a few times. There are some good points raised, but I await ICANN’s response. It could be, and I have no knowledge one way or the other, that these are all, or mostly, issues ICANN has considered and have ready answers for. The reporting of the issues has been at least a little sensationalist. But then, that’s what the media does best as it gains eyeballs. Being realistic won’t get so many.

And the comments from the Department of Justice appear to me, at least in part, to have been shaped by CADNA and its supporters as they parrot many of the views put forward by the organisation. Nothing wrong with that if it’s those views you support. So it’s in this context I question how accurate their view, and George’s quoting of the figure, that domain names should be ~$2 per year.

Jon: Lower prices benefit all consumers. We’re not talking about $5, but $400 million in aggregate, per year. If someone builds a “bridge to nowhere” that cost $400 million, that’s “only” $1.33 per US citizen in your eyes. By your logic, anyone opposing such waste must have some ulterior motive, rather than being someone who simply hates waste of all kind. If folks didn’t speak out against $1.33 here, $5 there, $0.52 here, then all those “middlemen” that you despise would be making out like gangbusters, as there’s lots of places for them to take a cut. These “R&D;and Fellowship” programs that you seem to be supporting are not producing any results, and are just more “bridges to nowhere”, wasteful spending that can be eliminated.

David: Speculators make money by buying low, and selling high. Alternatively, they make money by selling high, and then buying back when prices are low. Think about that. That helps to stabilize prices. When prices are lower than they should be, a speculator will make money by buying. This buying causes the demand for the item to increase, thereby raising its price (which was previously too low). They’ll keep on buying as long as the price is too low. Similarly, if something is overvalued, speculators make money by selling it (or selling it short). This selling presure increases supply, thereby pushing the price down and closer to equilibrium.

While speculators are an easy target for the naive masses, they actually stabilize the market. They’d be all losing money if they were buying when prices are high, and selling when prices are low, destabilizing the system.

What happens when you eliminate speculators? Price shocks are bigger. The smartest people are no longer there, looking forward to anticipate where prices should be in the future, and trading based on that superior analysis or information. Their act of trading helps the “price discovery” function of markets, as per the above, because their trading will move markets towards that equilibrium.

Communist “centrally planned” economies would have shortages of items in demand, and surpluses of stuff people don’t want. That’s far, far worse.

I’ve not asked for the government to socialize my losses. I’m opposed to the banking bailouts, auto bailouts, etc. They’re throwing good money after bad, and setting a terrible precedent in terms of moral hazard.

Where government does have a proper place is in regulating natural monopolies, as per the DOJs letter, ensuring that this market power isn’t costing consumers.

You’re entitled to your mistaken views, it’s a free society that we live in after all, but this is very basic economics and throwing out these conspiracy theories that CADNA or a cabal of “domainers” or whatever is the small niche trying to twist things is simply false.

In most other government procurement situations, the contract is put out to tender, and the lowest cost supplier is selected for a certain term, whether it’s to build tanks to a certain specification, manage lunchrooms, clean toilets, supply pencils, and so on. That’s not happening, though, with the dot-com contract. It stands out like a sore thumb, and that’s due to this “experiment” called ICANN having failed.

Good god George, you really are away with the pixies. You should get a job trying to sell real estate or holidays in Palestine, Zimbabwe or Iraq.

You are equating ending speculating with a centrally planned economy. Ummm. Isn’t it speculation in the financial markets that caused most of the current financial crisis? And you are telling me the smartest people are speculators? Damn. And I thought they were people like scientists and educators. Oh, sorry, that would be communist to you.

And on speculators. Say we look at housing. People who buy in the hope the price goes up. They price out the average person meaning they can no longer buy. Then the system collapses. A funny way to advantage us all. Especially when financial institutions collapse that so many depend on.

And it sort of defeats your argument about the benefit to society when it comes to cheaper domain names. You want cheaper domain names, but advocate for the lucky few who can charge high prices reflecting the supply and demand of the internet’s prime “real estate”.

Which side of the fence do you really sit on? Or do you flip and flop depending on how it suits your argument?

I also suggest, that whether you think they are right or wrong, there is a hell of a lot of what the Department of Justice has said which is precisely what CADNA wants. Coincidence? It seems the views of trademark holders have been given precedence. Obviously there are those who think this is correct.

If I’ve got mistaken views, yours are just idiotic.

What happened is an example of moral hazard, due to poor policy decisions by the Fed, combined with bad government policies and lax regulation. The Fed had a history of lowering interest rates far too low when things got bad, i.e. the so-called “Fed put.” This convinced some people that some assets were safer bets than they really were, i.e. the risk premium for those assets became out of whack with what it should have been. Some people believed housing prices always would go up. This caused a bubble in house prices, when it was combined with government policies that encouraged lenders to give loans to poor credit risks in order to encourage home ownership, and then securitize those mortgages to dumb investors looking for extra yield (because of the abnormally low interest rates). Poor credit rating agencies gave AAA ratings to junk. Those credit ratings agencies were poorly regulated and monitored. Can bubbles be traced to speculation? Sure, but most of the time speculation does the exact opposite, it stabilizes prices. More often the bubbles can be traced to bad policies that led speculators to logically go in one direction all at the same time (i.e. all the people buying up houses, thinking they’d never go down, because the government or someone else would bail them out). Those folks who bet wrong, though, shouldn’t have been bailed out. Smart folks (e.g. John Paulson) had the foresight to bet the other way, that the markets were in a bubble. And their foresight was properly rewarded. By rewarding people who made bad decisions with a bailout, it keeps them in the game longer, and it should be no surprise when they make more bad decisions in the future. Had they gone bankrupt, their ability to apply their bad judgement in the marketplace again would have disappeared.

Cheaper domain names are argued for at the monopoly level, i.e. between VeriSign and registrants. What registrants do with their domain names is in a competitive marketplace. Those “lucky few” as you call them aren’t “lucky” at all. That’s skill, business prowess, foresight, the “winners” in a competitive environment. It’s always socialists like yourself who think that successful people or companies are simply random lottery winners, all luck, and that they should thus be taxed due to this “luck”, as opposed to their success being due to their greater abilities that are being rewarded in the marketplace, just like a baseball player who can hit 40 home runs in a year, or a hot dog vendor who realizes they could make more money locating their hot dog stand on Main Street, rather than in the countryside.

That “coincidence” is caused because the DOJ understands basic economics, unlike you. CADNA has lots of businesses within it, which also understand basic economics. We all speak the same language, which seems to be foreign to you.

Here’s a simple question. I gave an exact procedure on setting the price of dot-coms between the wholesale level (i.e. VeriSign currently) and registrants, namely hold a tender process and give it to the company that is willing to supply the service at the lowest cost to the consumer, for a given specification (i.e. the 99.9999% availability, speed of resolution standards, uptime, etc.). This would lead to a price of $2/yr or less for consumers.

How do you propose to justify any different mechanism than that, a basic system that nearly all government procurement contracts have been based on for ages?

Oh, so greed and morally repugnant actions are fine, in this case in regards to the the financial markets, if governments allow it? Especially when they lead to a “collapse” in the financial system that leaves the perpetrators free. Yeah, let’s just blame it on the government. They were lobbied long and hard for lax regulation, and then when the system collapses, it’s the government’s fault again.

As for me, I don’t have the solution, if one is needed. But I am willing to listen to cogent arguments. Not uninformed rants that have as their basis an ever-changing rationale from someone who would be lucky to be able to lie straight in bed given the every-twisting rationale you put up. So I would be interested in an informed debate on what is the appropriate price of a domain. It hasn’t happened on this thread.

And CADNA is specifically set up to represent trademark holders. There are many who believe the influence of trademark holders is already too great.

George,

It is clear that these two see greed and harm in all kinds of speculation. Farmers that plant seed, hoping that they will have a profitable harvest, store owners that buy products hoping that customers will buy them, bankers that loan money hoping that they will be repaid with interest, domainers that register domain names hoping to develop them or sell them at a profit are all acting with despicable motivations in their eyes. Only those who plant and buy items to give to the poor are worthy of their admiration. Of course it is a puzzle that they want to protect monopolies that benefit from an exclusive back room deal.

Jon, supply and demand does not work to find natural prices in a controlled monopolistic environment. If you want to see supply and demand work in domain name prices, ask ICANN to put the .com contract up for bid to the lowest price bid from a qualified service supplier.

David, speculation does not price the average person out of a home, at least not for long. If the home prices paid by speculators cannot be supported in a local market (the people who want to live in them), guess what happens? Prices go down and speculators lose money, but in short-term speculator demand increases builder profit and increases home building. Now the prices are lower and inventory of homes for the average buyer to choose from is larger than before. I know; I live in Florida.

Joe - well, yes, but as we’ve seen (this decade for sure but even further back), our non-government “leaders” are probably just as corrupt and inefficient (incompetent) if not more so, whether they are from Enron to Arthuer Anderson to MCI Worldcom to Wall Street to Fannie Mae to Detroit, etc., etc., too many to list, thus the more and more regulation we are now seeing.  Yes, it sucks completely and I wish it were not the case, but what can you do given the quality and integrity of the folks that are running the show.  Anyway, this comment is off the point of this posting - sorry!

ICANN might want to take note of the brouhaha over at the California Avocado commission where folks are up in arms over $1.5 million in questionable spending.

“It’s incredibly blatant,” said Mike Reardon, who has 140 avocado trees in Fallbrook, a town in northern San Diego County. “They’re supposed to be working for us and doing it with integrity and reasonable fees and costs.”

People are concerned in other industries besides the domain industry that spending be reasonable. That means, going back to the original topic, using non-profit organizations (e.g. government agencies, universities, hospitals, etc.) as comparables. It’s high time the IRS or State of California audit ICANN to ensure that ICANN is not wasting the money of those who fund its operations.

Yes Michael. I along with the thousands, could it be millions, who have suffered from the greed of speculators in the financial markets who have lost their jobs, homes, superannuation, investments and more, probably don’t see speculators as adding much to society.

Speculation isn’t about supply and demand. It makes a few greedy people rich while the rest end up suffering.

Joe: It seems some of these folks simply parrot uninformed and poor analysis from sources like 60 Minutes. One can read a complete rebuttal to such garbage reporting from places like Seeking Alpha.

These so-called evil speculators that some of the above criticize include the California Pension Fund and the Harvard Endowment. I guess they should all be locked up and put in jail, according to the uninformed and naive analysis that blames “speculators” for things they don’t have the brainpower to understand. Ridiculous.

Following ICANN’s “defenders of the faith” means having to “suffer fools.” I and others are not ones to suffer fools gladly.