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No $17 million rebate for struggling new gTLDs

Kevin Murphy, August 31, 2017, 13:48:06 (UTC), Domain Registries

ICANN has turned down a request for about $17 million to be refunded to under-performing new gTLD registries.
The organization cannot spare the cash from its $96 million new gTLD program war chest because it does not yet know how much it will need to spend in future, Global Domains Division president Akram Atallah told registries this week.
The Registries Stakeholder Group made the request for fee relief back in March, arguing that the $25,000 per-TLD fixed annual fee each registry must pay amounts to an unfair “burden” that has “hampered their success and put them at a competitive disadvantage”.
The RySG proposed that this $6,250 per quarter fee should be reduced by $4,687.50 per quarter for a year, a 75% reduction, at a cost to ICANN of $16.87 million.
The money, they said, should be drawn from the $96.1 million in new gTLD application fees that were still unspent at the time.
The new gTLD program charged each applicant $185,000 per application. About third of the fee was to cover unforeseen events, and is often sniggeringly referred to as its legal defense fund.
Because the program was meant to work only on a cost-recovery basis, there are question marks hanging over what ICANN should ultimately do with whatever cash is left over.
(It should be noted that this cash is separate from and does not include the quarter-billion dollars ICANN has squirreled away from its new gTLD last-resort auctions).
Now that the vast majority of the 2012 round’s 1,930 applications have been fully processed, it must have seemed like a good time for the RySG to ask for some cashback, but ICANN has declined.
Atallah said in a August 29 letter (pdf) to the group that ICANN has had to spent lots of its program reserve on unanticipated projects such as name collisions, universal acceptance, the EBERO program and the Trademark Clearinghouse. He wrote:

We do not yet know how much of the New gTLD Program remaining funds will be required to address future unanticipated expenses, and by when. As such, at this time, ICANN is not in a position to commit to the dispensation of any potential remaining funds from the New gTLD Program applications fees.

It seems for now the hundreds of new gTLDs with far fewer than 10,000 registrations in their zones are going to keep having to fork over $25,000 a year for the privilege.

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Comments (16)

  1. John Colascione says:
    August 31, 2017 at 8:26 pm

    Sounds like some new gTLDs are about to disappear from the marketplace… Surprise Surprise.

    Reply
    • Dot Advice says:
      September 1, 2017 at 7:43 pm

      But that cant happen, unless ICANN triggers the EBERO . There are 27 known cases of TLDs that have breached their SLAs with ICANN, but NO EBERO has been triggered to date by ICANN . Why not ? Today 1044 of 1224 TLD have less than 10,000 registrations ,so are potentially not commercially viable. Admittedly approx. 500 are closed .brands .

      Reply
  2. ThcNames says:
    August 31, 2017 at 9:26 pm

    Good, a lot of extensions need to go away!

    Reply
  3. Mettalica says:
    September 1, 2017 at 3:15 am

    The gtlds suck so bad it hurts. They are a .distraction and .embarrassment to the domain industry.
    To learn that some registries had less than 10,000 registrations is not a surprise. What were these morons thinking? They took a calculated risk on the .crap and lost. Duh! Why should they be given a break?

    Reply
  4. ada says:
    September 1, 2017 at 5:30 am

    Why help them? they just litter the internet and make everything more confusing.
    If there is no demand for them it means people do not need them.
    They faster they go down the better for everyone.

    Reply
  5. Jovenet Consulting says:
    September 1, 2017 at 8:36 am

    Good, a lot of extensions are going to be made available for sale.

    Reply
  6. James Stevens says:
    September 1, 2017 at 9:56 am

    “put them at a competitive disadvantage” … compared to ccTLDs, there is truth in this, but ICANN was clear about the terms on day-1
    “name collisions, universal acceptance, the EBERO program and the Trademark Clearinghouse.” … I think I could have anticipated these, odd ICANN couldn’t.

    Reply
  7. Colin Campbell says:
    September 1, 2017 at 3:45 pm

    Fact 1: Many entrepreneurs and visionaries went into this market to support greater options for consumers (Yes with the intent of making money). We are beginning to see competition and innovation in the industry but lack of awareness has slowed progress.
    Fact 2: ICANN has $350 million from auctions and application fees remaining that was generated by the new gTLD industry. To tax a fledgling industry trying to get off the ground, hoarding funds by ICANN and not returning it is in an injustice.
    Fact 3: The RYSG proposal that .CLUB supported was, and I admit, self serving for the industry as the benefit would go to the registries and not the greater community.
    I believe that it makes sense for the RYSG and ICANN to take another approach on this issue; one where the benefit would support ICANN, domain investors, consumers, the registrars and the registries.
    There are two specific proposals at .CLUB that we have considered that would achieve a more equitable approach:
    1. A broad awareness campaign for the new gTLDs to support global awareness and global acceptance in the amount of $4 million per year. This could be earmarked to support dozens of trade shows globally in every region of the world.
    2. A temporary 3 year ICANN tax reduction to .18 cents from .25 cents (which equals what the registrars currently pay ICANN on every domain year). ($5 million total)
    This drop in the bucket to ICANN, a $9 million proposal would have an impact by reducing prices for all users, increasing awareness, and ultimately increasing the demand for all domain names.
    Colin Campbell, CEO .CLUB Domains

    Reply
    • YamadaMedia says:
      September 6, 2017 at 12:39 pm

      Can you explain why it is ICANN’s duty to do marketing for new Gs?
      They are supposed to be an independent organization. They should not push consumers in any direction.
      How come registry CEOs won’t talk about capping price increases with ICANN?

      Reply
  8. Richard Johnson says:
    September 5, 2017 at 6:55 pm

    You failed – use your own money. Simple. Stop trying to mask the fact that you want someone else to pay for your mistakes and grow up. If you had made a lot of money (as you stupidly thought you would) none of that profit would have been returned to the consumer in any form. If you can’t succeed in business get out.

    Reply

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