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Coronavirus has made ICANN $11 million richer than predicted so far this year

Kevin Murphy, February 16, 2021, Domain Policy

ICANN made a lot more money and spent a lot less money in the second half of 2020, compared to the predictions made in its current budget.

Funding for the six months from July 1 to December 31 (the first half of ICANN’s fiscal 2021) came in $6 million higher than expected, at $69 million, according to data released by ICANN tonight.

Over the same period, its outgoings came in at $55 million, which was $5 million less than its approved budget had anticipated, leading to a net gain of $11 million.

The reason for the variance appear to be mostly related to the unanticipated positive impacts of the coronavirus pandemic.

Last April, when the FY21 budget was being drafted, ICANN thought the economic impact of the disease would prove a serious blow to the industry that funds it.

But the opposite turned out to be true. ICANN failed to predict that the government-enforced lockdown of large parts of the high street in many countries would see a rush by small bricks-and-mortar businesses to the interwebs.

This boosted domain growth for many companies and led to an increase in ICANN transaction taxes fees, which are paid whenever a domain is registered, renewed or transferred.

ICANN’s revenue was up across all three main segments in H1 FY21, when compared to its budget expectations.

Registry transaction fees were $2 million over budget at $27 million, and registrar transaction fees were also over by $2 million at $18 million. Registry and registrar fixed fees were also up by $1 million each, suggesting fewer companies terminated their contracts than expected.

“Funding higher than Budget driven by higher than planned transaction fees”, an ICANN slide deck (pdf) states.

On the expenses side, ICANN of course spent less cash on its meetings because it wasn’t subsidizing international flights and expensive hotels for 500-odd staff and community members.

“Lower Travel & Meetings due to travel restrictions from the COVID-19 pandemic”, the slide deck states.

Travel expenses, rounded, accounted for 0% or $0 of its H1 expenditure.

When the budget was passed in June last year, ICANN still thought it was possible that the October meeting would go ahead in-person in Hamburg, so it put aside $4.2 million to pay for it.

As it turned out, the Org ended up spending $100,000 on Zoom and other audiovisual services and another $400,000 on translation and interpretation services. And that was all.

The $2.2 million it expected to pay sending staff and community members to Hamburg came in at $0.

ICANN’s adopted budget for FY21 also anticipated the March 2021 meeting would go ahead in Cancun, Mexico, but that’s already been rescheduled for Zoom, which will save it a few million more bucks this year.

The Org hasn’t yet officially relocated its planned June 2021 in-person meeting from The Hague to Zoom, but I’m fairly confident it’s going to have to.

Its $12.2 million travel budget for FY21 is probably going to come in much closer to $2 million.

Lockdown bump was worth $600,000 to ICANN, but end of Club Med saves 10x as much

Kevin Murphy, October 19, 2020, Domain Policy

The coronavirus pandemic lockdowns and the resulting bump in domain name sales caused ICANN’s revenue to come out $600,000 ahead of expectations, up 4%, the org disclosed last week.

But ICANN saved almost 10 times as much by shifting two of its fiscal year 2020 public meetings to an online-only format, due to travel and gathering restrictions.

The organization’s FY20 revenue was $141 million, up by $5 million on FY19, against a rounded projection of $140 million. ICANN’s financial years end June 30.

ICANN said it is “uncertain if these market trends will continue”.

Back in April, the organization lowered its revenue forecast for FY21 by 8%, or $11 million.

Expenses were down $11.1 million at $126 million, 8% lower that expectations and $4 million lower than the 2019 number.

That was mostly due to a $6.2 million saving from having two public meetings online-only.

ICANN typically spends $2 million per meeting funding over 500 travelers, both ICANN staff and community members, but that was down to almost nothing for the first two meetings of this year.

Pre-pandemic, ICANN expected these meetings, slated for Cancun and Kuala Lumpur, to cost $4.2 million and $3.4 million respectively, but the switch to Zoom brought them in at $1.4 million and $0.4 million.

ICANN would have occurred some pre-meeting travel expenses for the Cancun gathering, which was cancelled at the last minute, as well as cancellation fees on flights and hotels.

The org has previously stated that the switch away from face-to-face meetings could save as much as $8 million this calendar year.

The rest of the savings ICANN chalked down to lower-than-expected personnel costs, with hiring slowing during the pandemic.

Incidentally, if you’re wondering about the headline above, it’s a reference to a notorious 2009 WSJ article, and outrage about ICANN’s then $12 million travel budget.

Eleven years later, the FY20 travel budget was $15.7 million.

ICANN rejected Israel as meeting venue due to threat from Gaza and Iran

Kevin Murphy, July 24, 2018, Domain Policy

Israel was rejected as a possible venue for one of ICANN’s 2020 public meetings due to concerns about Middle East violence, DI has learned.

A proposal to host a meeting in Tel Aviv was discounted, with ICANN staff telling the board of directors that it is “not suitable for an ICANN meeting due to security concerns.”

“With the proximity to the Gaza strip and the escalation of an Iran/Israel conflict we feel it is best to avoid this region,” the board was told at its meeting last month.

Cost was also cited as a reason to avoid the city, though there was no mention of visa problems (which I imagine would be a concern for many community members).

Tel Aviv, which was proposed by a local registrar, was among five possible venues for ICANN’s mid-2020 Policy Forum that were rejected in favor of Kuala Lumpur, Malaysia.

The others, which all came from the Asia-Pacific region per ICANN’s regional rotation policy, were Macau (China), Auckland (New Zealand), Sydney (Australia) and Adelaide (Australia).

It also appears that locations proposed by community members seem to get preference over those proposed by venues, such as convention centers, themselves.

The alternative proposals have come to light because ICANN neglected to redact confidential information from a set of board briefing documents (pdf) published last week. The unredacted information reads:

Other Hosting Proposals Received:

  • Macao, China: Yannis Li (DotAsia), Bonnie Chun (HKIRC) and Paco Xiao (MONIC) submitted a proposal. However, we found this location to be more expensive than Kuala Lumpur.
  • Auckland, New Zealand: Jordan Carter from InternetNZ submitted a proposal. However, we found this location to be more expensive than Kuala Lumpur.
  • Tel-Aviv, Israel: Yoav Keren from Domain The Net Technologies Ltd. submitted a proposal. However, we found this location to be more expensive than Kuala Lumpur and not suitable for an ICANN meeting due to security concerns. With the proximity to the Gaza strip and the escalation of an Iran/Israel conflict we feel it is best to avoid this region.
  • Sydney, Australia: Joanne Muscat from Business Events Sydney submitted a hosting proposal. However, this location was proposed by the meeting venue not a community member and is more expensive than Kuala Lumpur.
  • Adelaide, Australia: Jacqui Lloyd from Adelaide Convention Bureau submitted a proposal. However, this location was proposed by the meeting venue not a community member and is more expensive than Kuala Lumpur.

The same document also reveals that proposals to host ICANN’s 2020 Latin America meeting — which was ultimately awarded to Cancun, Mexico — were received from Lima, Peru and Monterrey, Mexico.

Monterrey was also rejected due to unspecified “security and accessibility concerns”.

The US State Department currently classifies Monterrey with a “Level 3 — Reconsider Travel” status, whereas Cancun has a lower “Level 2 — Exercise Increased Caution” status.

The unredacted text reads:

  • Lima, Peru: Johnny Laureano from the Asociación de Usuarios de Internet del Perú submitted a hosting proposal. The proposed convention center is still in the process of selecting a management company. The host has not followed through with a valid proposal.
  • Monterrey, Mexico: Monica Trevino from Cintermex Convention Center submitted a hosting proposal. The location was not suitable for an ICANN meeting due to security and accessibility concerns.

Paris, Budapest, The Hague, and Geneva — some of which had been scouted by ICANN as opposed to being proposed by third parties — were rejected as venues for the 2020 European meeting.

The unredacted document reads:

  • Paris, France: Laure Filloux from VIPARIS Palais des Congrès de Paris submitted a hosting proposal. However, this location was proposed by the meeting venue not a community member and is more expensive than Hamburg.
  • Budapest, Hungary: Balazs Szucs from HungExpo Budapest submitted a hosting proposal. This location was proposed by the meeting venue and was not suitable for an ICANN meeting.
  • The Hague, Netherlands: Identified by the ICANN meetings team as a possible location was also considered. The location was more expensive than Hamburg.
  • Geneva, Switzerland: Identified by the ICANN meetings team as a possible location was also considered. The location was more expensive than Hamburg.

The European meeting will instead take place in Hamburg at the invitation of local trade group eco and the city council.

The cost of each successful proposal, which seems to be the clincher in each case, is redacted in these documents.

ICANN heads to Cancun for Spring Break boondoggle

Kevin Murphy, June 26, 2018, Domain Policy

ICANN has named the three venues for its 2020 public meetings. They are Cancun, Kuala Lumpur and Hamburg.

The first meeting of the year, the so-called Community Forum, will be held March 7 to 12 at the Cancun International Convention Center.

Cancun is pretty horrific at the best of times, but the March dates place ICANN 67 in peak Spring Break — the time of year when American university students descend on Cancun by their thousands to take advantage, to excess, of Mexico’s more reasonable drinking age laws.

Don’t expect to keep your T-shirts dry.

Meeting two, the more modest Policy Forum, will see ICANN head to Malaysia, specifically the Kuala Lumpur Convention Center, from June 22 to 25. The local chapter of the Internet Society is hosting.

Finally, the AGM will be held in Hamburg, Germany, where eco, DENIC and the local city council will host at the Congress Center.

Before 2020, we still have Barcelona later this year, and Kobe, Marrakech (again) and Montreal (again) in 2019. The Panama City policy forum is going on right now.

ICANN’s rules require it to rotate its meeting locations around the five major geographic regions.

Anger as ICANN splashes out $160,000 on travel

Kevin Murphy, March 15, 2016, Domain Policy

Should representatives of Facebook, Orange, Thomson Reuters, BT and the movie industry have thousands of ICANN dollars spent on their travel to policy meetings?

Angry registrars are saying “no”, after it emerged that ICANN last month spent $80,000 flying 38 community members to LA for a three-day intersessional meeting of the Non-Contracted Parties House.

It spent roughly the same on the 2015 meeting, newly released data shows.

ICANN paid for fewer than 10 registries and registrars — possibly as few as two — to attend the equivalent Global Domains Division Summit last year, a few registrars told DI.

The numbers were released after a Documentary Information Disclosure Policy request by the Registrars Stakeholder Group a month ago, and published on Friday (pdf).

It appears from the DIDP release that every one of the 38 people who showed up in person was reimbursed for their expenses to the tune of, on average, $2,051 each.

The price tag covers flights, hotels, visa costs and a cash per diem allowance that worked out to an average of $265 per person.

ICANN also recorded travel expenses for another two people who ultimately couldn’t make it to the event.

The NCPH is made up of both commercial and non-commercial participants. Many are academics or work for non-profits.

However, representatives of huge corporations such as Facebook and BT also work in the NCPH and let ICANN pick up their expenses for the February meeting.

Lawyers from influential IP-focused trade groups such as the Motion Picture Association of America and International Trademark Association were also happy for ICANN to pay.

One oddity on the list is the CEO of .sucks registry Vox Populi, who is still inexplicably a member of the Business Constituency.

MarkMonitor, a corporate registrar and Thomson Reuters subsidiary that attends the Intellectual Property Constituency, also appears.

Despite $80,000 being a relatively piddling amount in terms of ICANN’s overall budget, members of the Contracted Parties House — registries and registrars — are not happy about this state of affairs as a matter of principle.

ICANN’s budget is, after all, primarily funded by the ICANN fees registries and registrars — ultimately registrants — must pay.

“CPH pays the bills and the non-CPH travels on our dime,” one registrar told DI today.

One RrSG member said only two registrars were reimbursed for their GDD Summit travel last year. Another put the number at five. Another said it was fewer than 10.

In any event, it seems to be far fewer than those in the NCPH letting ICANN pick up the tab.

It’s not entirely clear why the discrepancy exists — it might be just because fewer contracted parties apply for a free ride, rather than evidence of a defect in ICANN expenses policy.

The NCPH intersessional series was designed to give stakeholders “the opportunity, outside of the pressures and schedule strains of an ICANN Public Meeting to discuss longer-range substantial community issues and to collaborate with Senior ICANN Staff on strategic and operational issues that impact the community”, according to ICANN.

Crocker sees new gTLDs going live “towards the end of the year”

Kevin Murphy, January 10, 2013, Domain Policy

Not exactly the news that new gTLD applicants wanted to hear.

ICANN chairman Steve Crocker has put a tentative date of “towards the end of the year” for the first approval and delegation of new gTLDs, months later than some applicants were expecting.

In a video interview with ICANN media affairs chief Brad White, reviewing the organization’s goals for the year, Crocker said:

We will see some strings towards the end of the year I think actually approved and perhaps delegated into the root and so it will be interesting to see the how all that comes out what kinds of moves are made.

That time-frame is later than most industry experts speaking to Bloomberg BNA for a recent briefing paper had predicted. Some expected new gTLDs to start hitting the root as early as April.

Better news for applicants came in Crocker’s response to a question about whether ICANN was wedded to its 1,000 delegations-per-year limit, which could artificially throttle some applicants’ plans. He said:

I do not want to suggest that there will be a change, but I suspect there is plenty of capacity to increase that somewhat if it were necessary to do so.

The interview also discusses ICANN’s investment strategy for its new gTLD funds, its meetings strategy for the next few years, and the Registrar Accreditation Agreement (which Crocker said is “nearing completion”).

Watch the whole thing here:

No more Club Med? America and Africa would lose out under ICANN meetings overhaul

Kevin Murphy, October 2, 2012, Domain Policy

ICANN is having a big rethink about how it decides where to drag the community to on its thrice-yearly meetings.

A proposal published tonight would reduce the number of cities it visits between 2014 and 2016 from nine to seven, meaning Africa and North America would both lose a meeting.

ICANN says its meetings are getting bigger and it’s getting harder to find suitable locations that it hasn’t already been to:

As ICANN Meetings have increased in size and scope, the number of facilities capable of hosting an ICANN Meeting has decreased considerably. In addition, the number of facilities that actually meet all of the established meeting location selection criteria is very limited.

ICANN Meetings have already been held in more than 40 different cities worldwide. It is becoming increasingly difficult to identify new hosts, as well as new host cities with the appropriate facilities.

Under the new proposal, ICANN would pre-select conference centers worldwide that are big enough, are easy to get to, have decent internet access, have plenty of nearby hotels and so forth.

It reckons it could save money by negotiating multi-year deals with such venues, but that this would mean a reduced number of locations.

Under ICANN’s current plan, 2014-2016 would see two meetings in Europe, two in North America, two in Asia-Pacific, two in Africa, and one in Latin America. Each would be in a different city.

The new plan would increase Europe and Asia-Pacific to three meetings each, but in four countries instead of six. Africa and North America would both lose a meeting. Latin America would still have one meeting.

ICANN wants to know what you think about this idea. I can see it being divisive along predictable lines.