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More sticker shock as new gTLD fees could top $300,000

Kevin Murphy, June 10, 2024, 11:42:52 (UTC), Domain Policy

The base new gTLD application fee could top $300,000, according to an analysis released by ICANN at its meeting in Kigali, Rwanda, this morning.

The per-gTLD fee will likely range between $208,000 and $293,000, according to the latest estimate, but this does not include mandatory fees that have yet to be figured out that as a whole could amount to “tens of millions”.

ICANN is blaming inflation for most of the increase from the 2012 round, where the fee was $185,000. Staff said that if you take into account a 44% rise due to 14 years of inflation, the 2026 application fee could actually be lower in real-money terms.

The reason for the broad range provided is that ICANN still doesn’t have a good guess as to how many applications it will receive. The program is being run on a cost-recovery basis and ICANN has already budgeted for a spend of $70 million before the application window even opens.

If it only receives 500 applications, it could lose tens of millions of dollars even with a high application fee. With a fee of $242,000, ICANN would need 1,000 applications to make its money back, staff said during an ICANN 80 session today.

There were 1,930 applications in 2012, but demand in 2026 will depend a lot on how many desirable strings remain undelegated, particularly in non-English languages and non-Latin scripts, and how enthusiastic brand owners are about the dot-brand concept (or defensively registering their dot-brands).

The main unknown not included in the latest estimate is the cost of implementing the recommendations of the second Name Collision Analysis Project, which in May called for all gTLDs to be tested live in the DNS before being awarded to the applying registry.

Each of the NCAP2 recommendations could cost between “thousands” and “tens of millions” in total, which would be divided between all the applicants, staffers said. Scrawling on the back of an envelope, it looks to me like this could easily push the top end of the range well over $300,000.

The good news is that if ICANN gets a lot of applications and recovers its costs, it already anticipates giving applicants some of their money back. As an example, it said that if the fee is $220,000 and there are 2,000 applications, applicants could each get $35,000 back.

But that ray of sunlight was not enough to temper the concerns of community members in the room in Kigali today, several of whom sparred with CFO Xavier Calvez and new gTLD program lead Marika Konings over their calculations.

Registry services providers are already angry about the large increase in evaluation fees for the RSP program announced last month.

One thing that doesn’t seem to be under any dispute is that high fees will scare off some applicants, meaning the cost burden will be borne by fewer shoulders, meaning the fees did in fact need to be high; a self-fulfilling prophecy.

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Comments (4)

  1. Andrew says:
    June 10, 2024 at 2:21 pm

    Did they discuss taking future auction proceeds to defray the costs?

    Reply
  2. Matthias Pfeifer says:
    June 17, 2024 at 6:12 pm

    2.000 applications .. wow

    Reply

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