November 1, 1997 - The World Waits

[Jim Fleming <JimFleming@doorstep.unety.net>]

  	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
  controls.
  
  	http://www.gtld-mou.org/docs/reg-results.html
  
  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
  Internet.
  
  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
  not enjoy.
  
  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
  U.S. taxpayers.
  
  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.
  
  	http://rs.internic.net/announcements/iif-update.html
  
  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"...
  
  
  Jim Fleming
  Unir Corporation
  IBC, Tortola, BVI