Dot Net and ICANN's Budget
Waaaay back in July 2004, ICANN's budget was set at $15 million. I suggested that we not focus on the number (which represented a doubling over the prior year) but instead make sure that future budgets were (a) very closely tied to ICANN's mission and (b) scrutinized by watchdog groups with the resources to do something about overreaching.
I even suggested that ICANN wasn't interested in expanding its scope of activities.
Boy, was I wrong.
If you look at the recently-released ICANN Request for Proposals for .net (pdf file here), you'll see something remarkable on p.11:
[A]pplicants should assume that the following fees will be payable: (i) an annual fee to ICANN of US$132,000 for the first year, increasing by no more than 15% each year thereafter and (ii) registry-level transaction fees totaling non-refundable amounts of US$0.75 for each annual increment of an initial domain name registration and US$0.75 for each annual increment of a domain name re-registration registered by a registrar. . .
If this “transaction fee” of .75 per name becomes the model for future ICANN contracts, ICANN must be planning to have enormous resources at its disposal. There are about 40 million names registered in the gTLD domains (.com, .net, .biz etc. — this category doesn't include the country code top level domains).
40 million times .75 is $30 million. If something happens (a transfer, a renewal) to each one of these names once every three years, that's $10 million additional dollars every year. Plus all the .75 fees coming in for each year of every new registration — could be another $10 million a year. That's a lot of money.
These contracts are essentially non-negotiable — indeed, ICANN states in the .net RFP that the assumption of these registry-level fees is “an absolute criterion.” Does ICANN have authority in its MOU with the Department of Commerce to require particular transaction-payments of registries? Perhaps this is part of ICANN's strategic plan, which should be coming out tomorrow. People will be looking for limiting principles in that plan.
Given the .net fee structure, it may be that ICANN's ambitions are loftier than I thought they were.
Comments
3 Responses to “Dot Net and ICANN's Budget”
Got something to say?
Susan — this isn't the first time you've discovered in retrospect that you were optimistic about ICANN. Have you ever been too pessimistic?
I don't mean this to be catty: I'm sincerely suggesting that many smart observers such as you, David Johnson, and others, have not been using what we know about bureaucracy theory, thinking that ICANN's internet affiliations somehow take it outside of 'what bureaucrats maximize', interest group politics, and even the iron law of oligarchy. But reality intrudes: ICANN is a lot like other organizations, only with fewer constraints….
Michael — I think what surprises me is not that the staff wants more territory (that's expected, that's what bureacracies do) but that the Board doesn't have the backbone to stop them. I'm worried about the independence and strength of this Board, and I'm continuing to be optimistic that they'll get the situation in hand.
would it even be possible for a change like that to be made to the .com contract? my recollection was that .com was not subject to changes of this nature.
in addition, I also believe (no, I also expect) that this would, dollar for dollar, lessen the current registrar burden. currently, registrars fund any deficit in the ICANN budget.
for these two reasons I do not believe that this would change the budget $1! of course, I could be wrong