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ICANN proposes pricing changes for new gTLDs

Kevin Murphy, June 1, 2016, 11:30:54 (UTC), Domain Services

ICANN is to give gTLD registries greater power to change their pricing under a proposed new deal.
The organization also says it could accept reduced fees from registries under some circumstances.
These are among about 40 substantial changes appearing in a new version of the standard new gTLD Registry Agreement that has been put out for comment.
The proposed new RA was posted last night after ICANN and registries spent months negotiating the details behind closed doors.
The contract would apply to registries that have signed the base new gTLD contract, not legacy gTLDs such as .com (though, in the passage of time, leaks may occur).
Many of the changes seek to bring clarity to registries’ technical obligations, particularly during their launch phases, and their data reporting requirements.
But there are a few notable changes concerning fees.
First, it seems registrars are going to be stripped of their right to challenge registry fee increases through the ICANN process.
Currently, any substantial changes to their Registry-Registrar Agreements has to go through scrutiny by ICANN and the registrars, and the registrars are allowed to object to the changes.
We saw such objections at the start of the year with .sucks, but RRA changes usually happen a few times a month.
Under the proposed new RA, that process would no longer apply when the only change made to an RRA is to change the registry fee.
Registrars would still have to be provided with 30 to 180 days notice, depending on the extent of the fee change, but there would be no ICANN review or registrar challenge process.
ICANN reasons that this is sensible because, unlike legacy gTLDs, its new gTLD contracts don’t regulate prices anyway.
Second, ICANN has introduced a new “Fee Reduction Waiver” concept to the contract. The draft deal states:

In ICANN’s sole discretion, ICANN may reduce the amount of registry fees payable hereunder by Registry Operator for any period of time (“Fee Reduction Waiver”). Any such Fee Reduction Waiver may, as determined by ICANN in its sole discretion, be (a) limited in duration and (b) conditioned upon Registry Operator’s acceptance of the terms and conditions set forth in such waiver. A Fee Reduction Waiver shall not be effective unless executed in writing by ICANN as contemplated by Section 7.6(i). ICANN will provide notice of any Fee Reduction Waiver to Registry Operator in accordance with Section 7.9.

It’s not entirely clear who asked for this or why.
I can imagine scenarios in which struggling registries might seek a handout from cash-rich ICANN, or in which dot-brands whose registrations are not linked to revenue might ask for a waiver.
Dot-brands — that is, registries that have signed Specification 13 of the RA — also get some love in the new RA, including an effective right of veto over changes that could affect their special status.
If in future an RA change is proposed that would effectively amend Spec 13, it will not happen unless Spec 13 registries vote in favor of the change.
The vote would require a two-thirds majority, with registries voting power weighted according to how much they pay ICANN in registry fees.
The whole contract is now open for a 43-day public comment period, which you can find here.

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