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November 1, 1997 - The World Waits
A Status Report of the Registry Industry
It is November 1, 1997. The world is waiting to see what
the U.S. Government decides to do about the future of
the Registry Industry in the U.S. At the present time, it
appears that Congress and the various government agencies
will be helpless in preventing the industry from moving
off-shore. The NSF has helped to allow a billion dollar
industry to be picked from the "intellectual pockets" of the
United States taxpayers.
As of this date, 83 companies have decided to each toss
$10,000 into a hat they are passing to raise money to fund
an International version of the InterNIC. That amounts to
$830,000 minus the costs of "the hat" and the processing
fees, which evidently only the Swiss-backed CORE organization
It is unfortunate that major U.S. companies can not easily
get involved in these activities for fear of violation of various
U.S. laws which could include...SEC, RICO, franchising,
anti-trust, IRS, trademark, copyright, and wire fraud at
both the federal and state levels. U.S. company's hands
have been tied, while the rest of the world moves forward.
The IRS can not begin to tell a company how to account
for the $10,000 fee. Is it an expense ? Is it capital invested
in another company ? Is it subject to capital gains if the
CORE organization does well. Is it an off-shore investment ?
Is it a franchise fee ? Is it a donation to the non-profit
ISOC ? Is it a bribe ? Is it a membership fee ? Is it a tax ?
Is it a fee for Auther Anderson's accounting work in New
York ? Can Arther Anderson advise companies what it is ?
Can the NSF explain what it is ?
The $830,000 raised by the companies that have decided
to move the billion dollar per year Registry Industry out of
the U.S., is a small amount compared to the $3.5 billion
dollar annual budget of the U.S. National Science Foundation.
The NSF budget is of course a tiny fraction of the U.S.
DOD budgets and other budgets that help to fund the
Despite this imbalance, part of the Registry Industry will
no doubt go to the off-shore groups that are working
outside of the U.S. laws to pick the pockets of the U.S.
taxpayers via the Internet. It is somewhat ironic that
they have been allowed to do this because of the
NSF endorsement of their process and because the
NSF has helped to restrain trade and prevent other U.S.
companies from competing in the Registry Industry.
The NSF has done this by censoring the key Root Name
Servers that the U.S. funds and operates. They have
only permitted certain people's and companies additions
to those servers to be made, while they arbitrarily
discriminate against non-academic people who they
systematically disadvantage in their programs. The
NSF supports the academic elite and they appear
to be proud of that fact. The Congress funds them each
year to manipulate these markets and to pay millions
to fund their "pet projects" with no concern about
what industries are damaged and what commercial
opportunities are lost to the U.S. taxpayers.
The NSF has endorsed the process in a variety of ways
with both actions and more importantly inaction (or
what some would call mismanagement). One of the most
important actions of the NSF has been the participation
of NSF managers on committees that helped to plan
the move of the Registry Industry, off-shore. Just the
presence of the NSF management on those committees
and at the various meetings gave those activities a level
of credibility that other U.S.-based industry groups did
The NSF managers also openly disparage U.S. taxpayers
and companies in favor of unknown "international" players
who pay-off NSF managers with intellectual and professional
"perks". The NSF managers, lured by the hype of the
Internet, lured by international deal making around the
world, and lured by travel and good times follow these
non-U.S. agendas without concern for the loss to the
In the area of inaction, the NSF has been alllowed to
quietly raise "taxes" on domain name registrations to
the tune of 30% of the $50 paid per year for names in
the .COM, .NET and .ORG top level domains. Those
taxes were supposed to be used to help expand the
Internet infrastructure but they have sat idle in an
account which now has over $34,210,958.00.
By not using these taxes to help improve the Internet
infrastructure, the NSF has allowed other groups to
prosper, while the parties that contributed many of
those fees (U.S. ISPs) are left without any support
of proactive programs to help them compete as equals
in the Registry Industry.
In summary, the U.S. Government lead by the Congress
has allowed the National Science Foundation to spend
their $3.5 billion dollar per year budget without the
proper oversight and checks and balances needed to
determine whether the NSF programs help or hurt
U.S. businesses and U.S. taxpayers who provide that
$3.5 billion dollars. The only way this cycle will end
is for the U.S. Congress to drastically cut that $3.5
billion dollar budget. This will allow U.S. businesses
to retain that money to be invested as they see fit,
as opposed to NSF managers. Also, it will prevent
the NSF from actively developing programs that are
aimed at underming the very U.S. businesses that
supplied those funds in return for some academic and
professional "perks" that only benefit NSF managers.
Without the money...the NSF can not meddle and
the world will be much better off...free market forces
will once again begin to shape the future of the net...
not the NSF "good old boy network"...
IBC, Tortola, BVI