No $8 million discount for dot-brands, says ICANN

ICANN has rejected a request for a 80% discount on registry fees paid by dot-brand gTLD operators.

The Brand Registry Group had asked ICANN in May for a reduction in the annual fixed fee from $25,000 to $5,000, largely on the basis that they have essentially no abuse and require very little Compliance oversight.

But interim CEO Sally Costerton has now responded to “respectfully decline” the request, which would have wiped out about $8 million of ICANN’s annual budget, about 5% of its total revenue.

“The cost to support New gTLDs is not merely based on the number of domains under management or the level of abuse. Regardless of the size of the TLD, registry operators must still comply with the Registry Agreement and associated policies, and ICANN must monitor that compliance,” Costerton wrote.

Dot-brands already have lower fees because they uniformly don’t pass the 50,000 domains limit at which transactional fees kick in, she said.

There are mechanisms in the Base Registry Agreement that all amendments to be made, she said.

Brands want new gTLD fast track

The Brand Registry Group is to propose a set of principles for the next round of ICANN’s new gTLD program that it thinks would see the initial application fee slashed by more than half and some evaluations starting as early as this October.

Under the proposals, TLD-curious applicants could get into the system for as little as $100,000 per string, about $150,000 lower than ICANN’s current estimate, and could see ICANN accepting applications as early as April 2025.

The recommendations, drafted by GoDaddy’s Tony Kirsch and Pharos Global’s Michael Palage, will be presented at a session on Saturday, the first day of ICANN’s 76th public meeting, in Cancun, Mexico.

They’re calling the proposals “Option 2a”, a reference to the two options laid out in ICANN’s Operational Design Assessment of the next round, which was completed in December.

The plan would allow applicants to pay $100,000 to submit a bare-bones application and test the waters in terms of contention, objections and similarity. They could then choose to withdraw before submitting the financial and technical portions of their bid.

Applicants with straightforward applications (presumably including most dot-brands) would have a lower overall cost than those who need additional reviews, contention resolution and objection processing.

The paper also criticizes the “astonishing” estimate of a $400 million program development cost, suggesting instead that ICANN repurpose its existing tools such as Salesforce to roll out the application submission system.

It reckons ICANN could start its Registry Service Provider Pre-Evaluation Program, based on the process it already uses when registries switch back-ends, in October this year.

If ICANN adopts the proposals, the BRG reckons a final Applicant Guidebook could be approved in October 2024, with applications accepted from April 2025.

Be the next “face” of dot-brands

The Brand Registry Group is seeking a new executive director, after incumbent Martin Sutton decided he’s to leave the group next year.

Sutton, who’s been in the role since 2015, said the BRG is looking for somebody to be the new “face of the dotBrand community”.

Arguably the group’s biggest issue right now is the next new gTLD application round, which still appears to be years away after a decade’s worth for navel-gazing by ICANN.

If BRG members are to be believed, a whole lot of companies that missed out on the 2012 round or have been founded since then are champing at the bit for the chance to get their own dot-brands.

It’s pretty clear from Sutton’s job posting that a long-time ICANN community member is being sought, and I can think of maybe two or three people who would make perfect candidates.

The BRG is not a formal ICANN structure, but it gets time on the agenda at ICANN meetings and has some political clout. Its members include the likes of Apple, Amazon, Fox, Honda and JP Morgan & Chase.

The executive director is its only full-time employee role.

Big dose of reality for gTLD-hungry dot-brand applicants

Anyone tuning into yesterday’s Brand Registry Group session at ICANN 72 expecting good news about new gTLDs was in for a reality check, with a generally gloomy outlook on display.

BRG members expressed frustration that ICANN continues to drag its feet on the next application round, failing to provide anywhere near the degree of certainty applicants in large organizations need.

Meanwhile, a former ICANN director clashed with GoDaddy’s chief new gTLD evangelist on whether the 2012 round could be considered a success and whether there really is a lot of demand for the next round.

The BRG has arguably been the most vocal group in the community when it comes for calling for ICANN to stop messing around and approve the next round already, so members are naturally not enthused about the recent approval of an Operational Design Phase, a new layer of bureaucracy expected to add at least 13 months to the next-round runway.

Deborah Atta-Fynn, a VP at current and prospective future dot-brand owner JP Morgan Chase, expressed frustration with ICANN’s inability to put a date on the next round, or even confirm it will be approved, saying that it’s tough to get departmental buy-in for a project with undefined timing and which may never even happen.

Would-be dot-brands “need that clarity, and they need that definitive timeline” she said.

“In the same way that ICANN has to ramp up, we need to ramp up,” she said. “We have to get internal stakeholders from legal and marketing and whatever other groups may be involved to buy into it. They need to see the value, they need to see the use cases.”

“That open-endedness of the timeline makes it very difficult for us to get that stakeholder buy-in that we need. It makes it difficult for us to do any definitive planning,” she said.

Nigel Hickson, now the UK’s Governmental Advisory Committee representative and a civil servant but a senior ICANN staffer at the time of the 2012 round, concurred with the need for firmer timeline.

“It’s very difficult to tell ministers that something is going to happen, and then it doesn’t happen for a couple of years, because basically they lose interest,” he said. “Having some predictability in this process is very important.”

But probably the most compelling interventions during yesterday’s session came from former ICANN director Mike Silber, a new gTLD skeptic who abstained from the 2011 vote approving the program, and new gTLD evangelist Tony Kirsch, now with GoDaddy Registry after years with Neustar.

Silber had some stern words for ICANN of 2011, and for the two CEOs preceding Goran Marby, and indicated that he was an admirer of the policy work done by the New gTLD Subsequent Procedures working group (SubPro) and a supporter of a thorough ODP.

Silber started by taking a pop at former ICANN directors and staffers who he said pushed the program through “for their own personal benefit or ego boost or whatever”, then left the Org to let others “clean up the mess they created by rushing”. He didn’t name them, but I can think of at least three people he might have been talking about, including ICANN’s then-chair and then-CEO.

“This time it doesn’t look like a rush,” he said.

He went on to say that he expects the next application round to be a different animal to 2012, with less speculation and a more realistic approach to what new gTLDs can achieve.

“If you look at the number of applications and look at the number of TLDs actually launched and the number of TLDs that have actually been successful, I think that he hype that existed in 2012 is not there any longer,” he said.

“I think people are going to look long and hard before submitting an application,” Silber said. “These weird and wonderful applications for these weird and wonderful TLDs, by people who thought they would make a fortune, are vaporware.”

“I think applicants now are more serious, and I think there’s going to be a lot less speculation,” he said.

This hype-reduction takes the pressure of ICANN to quickly approve the next round, he said.

Counterpoint was provided by GoDaddy’s Kirsch, a long-time cheerleader for new gTLDs and in particular dot-brands. He’s not a fan of the ODP and the delay it represents.

Kirsch said that new gTLD advocates are reflecting the fact that there’s demand for both top-level and second-level domains out there.

“If there is no customer base, if there is no demand, then there is no revenue base,” he said.

He pointed to data showing that, while there are only 26 million new gTLD domains registered today, there have been 136 million registered over the lifetime of the 2012 round to date (about seven years).

While agreeing that the next round might see less wild top-level speculation, and that the industry has “matured”, Kirsch suggested there might actually be more applications for generic dictionary TLDs next time, but with a better understanding of the marketing commitment needed to make them succeed.

“I’m working with people right now who are doing that with a far greater business plan underneath it, and an understanding that if they don’t have that they won’t succeed with a generic term in the new world,” he said.

Silber dismissed the 136 million number as “indicative of speculation”, which Kirsch did not try very hard to dispute, and expressed skepticism about the level of demand at the top level.

“I find it quite amusing that people say there’s real demand, but then they need a target date to actually drive demand and it makes me worry that maybe the demand’s not quite as real as they think it is,” he said.

Atta-Fynn, Kirsch and session chair Martin Sutton challenged this.

“I think that the the idea that we need to target date to drive demand is incorrect,” Kirsch said. “I think we need a target date to convert interest into demand.”

“It is incumbent on ICANN to make sure that it provides a robust and visible plan for applicants to buy into this, because I think everyone’s watching and we’ve had enough time. It’s time to turn this into a into a real program that that benefits all internet users around the world,” he said.

New Domain Name Association names interim board

The formative Domain Name Association has started calling itself the Domain Name Association and is moving closer to a proper launch under the guidance of an interim board of directors.
This is the trade group that started getting together in January, kick-started by Google, and launched a one-page web site at WhatDomain.org in March.
Right now, ARI Registry Services CEO Adrian Kinderis is acting as chair of the interim board.
The rest of the board comprises: Jon Nevett (Donuts), Elizabeth Sweezey (FairWinds), Rob Hall (Momentous), Jeff Eckhaus (Demand Media), Statton Hammock (Demand Media), and Job Lawrence (Google).
According to a presentation Kinderis gave at a meeting of ICANN execs and industry leaders in New York yesterday, the DNA will be a non-profit, independent organization funded by membership fees.
Membership will be open to registries, registrars, resellers, back-end providers and individual consultants.
The mission is to: “Promote the interests of its members by advocating the use, adoption, and expansion of domain names as the primary tool for users to navigate the Internet.”
The finer details of scope, marketing, governance and funding are still being worked out, but if you’re in the industry you can probably expect an invitation to join before too long.
It’s actually not the only industry trade group forming at the moment.
Judging by presentations given in Beijing two weeks ago, the Brand Registry Group is thinking about coming together as a trade association as well as a constituency within ICANN’s policy-making structure.