Sniping from the Americans for Tax Reform

[Pete Farmer <pfarmer@strategies-u.com>]

On another mailing list, Declan McCullagh <declan@well.com> quoted a letter
from the Americans for Tax Reform to House Commerce committee members,
protesting ICANN's idea of a not-to-exceed $1/year/domain name fee as
"taxation without representation."  I have asked ATF for
clarification/explanation, for based on my understanding of the facts, I
must politely state that their head seems to be screwed on backwards.

Here's how I understand things:

1. Network Solutions Inc. (NSI) operates as exclusive registrar into .com,
.net, and .org, by virtue of a government-granted monopoly.

2. NSI charges $70 for two years for registering a domain name.

3. NSI had net income in 1998 of $11.2 million, on revenues of $93.6
million, for having registered a cumulative total of 3.4 million
registrations.  Stated differently, they *clear* over $3/domain name/year.

4. The Americans for Tax Reform don't characterize NSI's fees and profits as
a tax.  They describe NSI as a "successful technology company" that is
threatened by big, bad ICANN.

5. ICANN is trying to open up registry and registrar services to competition
and, ultimately, will likely increase the number of top-level domains.

6. To do things such as hold public meetings in all corners of the world
(i.e. gathering input into their decision-making processes), ICANN incurs
operating expenses.  It has floated the idea of instituting an annual fee,
not to exceed $1/domain name, to cover expenses.

7. The Americans for Tax Reform have a bee up their bonnet that this
represents taxation without representation and is encouraging one and all to
write their Congresscritters.

Am I the only one who thinks that ATR has its wrong?

I would like to express my appreciation to the ICANN Board and Staff for
keeping a steady (albeit frustratingly slow) course towards realizing the
goals of the White Paper.

Pete
___________________________________________________
Peter J. Farmer -- Director, Optical Communications
Strategies Unlimited <http://www.strategies-u.com> 
Mountain View, CA
+1 650 941-3438 (voice)
+1 650 464-1243 (mobile & voice mail)
+1 650 941 5120 (fax)

-----Original Message-----
>Date: Fri, 18 Jun 1999 09:02:35 -0400
>To: politech@vorlon.mit.edu
>From: Declan McCullagh <declan@well.com>
>
>
>[Attached is the letter from Americans for Tax Reform 
>(atr.org) on ICANN that is scheduled to go out today 
>to House Commerce committee members. --Declan]
>
>... 
>
>Dear Member,
>
>Americans for Tax Reform is dedicated to opposing all tax 
>increases as a matter of principle.  The government^Òs, 
>the only entity that may legally assess a tax, power to 
>control one^Òs life derives from its power to tax.   We 
>believe that power should be minimized. 
>
>Nothing could be more damaging to our guaranteed liberties 
>as U.S. citizens than to have our government taxing and 
>regulating individuals without representation.  Recently, 
>ICANN (Internet Corporation for Assigned Names and
>Numbers) imposed a taxation requirement on every 
>person that registers a domain name.  This illegal tax will 
>be repealed by the passage of HR 749, sponsored by
>Congressman Terry and S 705, sponsored by Senator 
>John Ashcroft.          
>
>However, passage of this legislation will only address 
>one element of the harm that ICANN has begun to inflict.  
>A much larger concern is, the legitimacy of
>the creation of ICANN in the first place.  This entity's 
>legitimacy, organized as a private non-profit corporation 
>that answers to the Commerce Department, is
>questionable.  One is left to wonder how this organization 
>can have powers greater than the government, such 
>as imposing taxes without the approval of a
>legislative body, simply by answering to a government 
>agency.  Further, my understanding is that this organization 
>has expressly threatened the existence of a successful 
>technology company, Network Solutions, Inc.(NSI).  Of course,
>ICANN has provided an alternative -- surrendering all intellectual 
>property rights to ICANN and giving ICANN the permission to 
>effectively put NSI out of business on 15 days notice. 
>
>Taxation without representation, onerous regulation of the 
>engine of our continued economic expansion, deprivation 
>of a private citizen's right to own property, and exercising 
>seeming governmental powers  ICANN^Òs operations
>must be examined.  On behalf of the taxpayer's movement, 
>as represented by the Americans for Tax Reform, I call on you 
>to seek the appropriate oversight hearings.  If ICANN's defenders 
>are correct then the hearings will prove their actions justified.  
>If the taxpayers are correct then ICANN must be stopped as
>scheme of the Commerce Department to hinder competition and 
>deprive individuals of Constitutional liberties.
>
>Indeed, oversight hearings may be the only way to ever discover 
>exactly what this organization is attempting in cooperation with 
>the Commerce Department.  While ICANN continues to act as 
>a governmental entity none of its decisions, meetings or directors 
>are subject to sunshine laws.  Further, ICANN has refused
>to hold open board meetings, or explain how the Board was 
>chosen.  Yet, ICANN operates with international academics and 
>business executives serving as board members who are acting 
>to put NSI, an American company out of business.
>
>I look forward to discussing this issue with you at your 
>convenience.  If you need any further information please do 
>not hesitate to contact me, or Bartlett Cleland of my staff.

>Onward, 
>
>Grover G. Norquist