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New gTLD registries want a $17 million ICANN rebate

Kevin Murphy, March 24, 2017, 11:41:48 (UTC), Domain Registries

Many gTLDs are performing more poorly than expected and their registries want some money back from ICANN to compensate.
The Registries Stakeholder Group this week asked ICANN for a 75% credit on their quarterly fees, which they estimate would cost $16.875 million per year.
The money would come from leftover new gTLD application fee money, currently stashed in an ICANN war chest valued at nearly $100 million.
The RySG, in a letter to ICANN (pdf), also asked for $3 million from the fund to be used to pay for advertising the availability of new gTLDs.
“These measures combined would support ICANN’s mission to promote competition for the public interest and operational interoperability of the internet,” the proposal states.
Currently, all gTLDs on the 2012-round contract have to pay ICANN $25,000 per year, split into quarterly payments, in fixed fees.
Transaction volume over 50,000 transactions per year is taxed at $0.25 per add, renewal or transfer.
The RySG wants the $6,250 quarterly fee reduced by $4,687.50 for a year, with the possibility of the discount being renewed in subsequent years.
In its letter, it cites an example of 900 delegated gTLDs being affected, which would cost $16.875 million per year.
However, that’s only three quarters of the total number of new gTLDs in the root. That currently stands at over 1,200 string, so the actual cost would presumably be closer to £23 million.
Because the new gTLD program, with its $185,000 application fees, was never meant to turn a profit, the RySG thinks it’s fair that the excess money comes back to the companies that originally paid it.
The rationale for the discount is that many new gTLDs (not all, as the RySG is quick to point out) are struggling under poor sales volumes, meaning a 5,000-name TLD, of which there are many, is in effect costing the registry $5 per name per year in fixed ICANN fees.
But that rationale does not of course apply to all new gTLDs. There are currently almost 470 dot-brand gTLDs in the root, which have business models oriented on harder-to-quantify ROI rather than sales volumes and profits.
It’s not clear from the RySG letter whether the discount would apply to all gTLDs or only those with a straightforward old-school profit motive.

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Comments (7)

  1. Mobile Notary says:
    March 24, 2017 at 12:41 pm

    If your business model sucks, then you just should shutdown.

    Reply
  2. Expired Picks says:
    March 24, 2017 at 2:15 pm

    Think some should get a fine instead for lying. Saying your plan is to be a cheap alternative since all the good .com’s are taken , then holding back and slapping $20,000 price tags on all the good domains is lying.

    Reply
  3. R P says:
    March 24, 2017 at 3:33 pm

    What about using money they made from contention sets? Or did the already blow that free money

    Reply
  4. Marius says:
    March 24, 2017 at 4:25 pm

    Poor rich beggars!

    Reply
  5. Reality says:
    March 25, 2017 at 7:40 am

    They shouldn’t have got involved in such a RySGy business.

    Reply
  6. Dot Advice says:
    March 26, 2017 at 6:06 pm

    A much much simpler,fairer, equitable approach and solution would be to refund/ distribute the excess profit made ( ICANN is 501 not for profit)over the current live 1216 gTLDs. The profit is in fact $121.8M( $89.3+ $32.5) vhttps://www.icann.org/en/system/files/files/adopted-opplan-budget-fy17-25jun16-en.pdf . So simply rounded @ $100K for each Registry. What are the chances of this being achieved before the 2018 budget is approved next month ?

    Reply

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