Cybersquatting cases up because of .com

The World Intellectual Property Organization handled cybersquatting cases covering almost a thousand extra domain names in 2017 over the previous year, but almost all of the growth came from complaints about .com names, according to the latest WIPO stats.
There were 3,074 UDRP cases filed with WIPO in 2017, up about 1.2% from the 3,036 cases heard in 2016, WIPO said in its annual roundup last week.
That’s slower growth than 2016, which saw a 10% increase in cases over the previous year.
But the number domains complained about in UDRP was up more sharply — 6,370 domains versus 5,374 in 2016.

WIPO said that 12% of its 2017 cases covered domains registered in new gTLDs, down from 16% in 2016.
If you drill into its numbers, you see that 3,997 .com domains were complained about in 2017, up by 862 domains or 27% from the 3,135 seen in 2016.
.com accounted for 66% of UDRP’d domains in 2016 and 70% in 2017. The top four domains in WIPO’s table are all legacy gTLDs.
As usual when looking at stats for basically anything in the domain business in the last few years, the tumescent rise and meteoric fall of .xyz and .top have a lot to say about the numbers.
In 2016, they accounted for 321 and 153 of WIPO’s UDRP domains respectively, but they were down to 66 and 24 domains in 2017.
Instead, three Radix TLDs — .store, .site and .online — took the honors as the most complained-about new gTLDs, with 98, 79, and 74 domains respectively. Each of those three TLDs saw dozens more complained-about domains in 2017 than in 2016.
As usual, interpreting WIPO’s annual numbers requires caution for a number of reasons, among them: WIPO is not the only dispute resolution provider to handle UDRP cases, rises and falls in UDRP filings do not necessarily equate to rises and falls in cybersquatting, and comparisons between .com and new gTLDs do not take into account that new gTLDs also have the URS as an alternative dispute mechanism.

Privacy could be a million-dollar business for ICANN

ICANN has set out the fees it plans to charge to officially accredit Whois proxy and privacy services, in the face of resistance from some registrars.
VP of finance Becky Nash told registrars during a session at ICANN 61 last week that they can expect to pay $3,500 for their initial accreditation and $4,000 per year thereafter.
Those are exactly the same fees as ICANN charges under its regular registrar accreditation program.
Registrars that also offer privacy should expect to see their annual ICANN flat fees double, in other words. Per-domain transaction fees would be unaffected.
The up-front application fee would be reduced $2,000 when the privacy service is to be offered by an accredited registrar, but it would stay at $3,500 if the company offering service is merely “affiliated” with the registrar.
Nash said all the fees have been calculated on a per-accreditation basis, independent of the volume of applications ICANN receives.
Director of registrar services Jennifer Gore said that while ICANN has not baked an estimate of the number of accredited providers into its calculations, registrars have previously estimated the number at between 200 and 250 companies.
That would put the upper end of annual accreditation fees at $1 million, with $875,000 up-front for initial applications.
Volker Greimann, general counsel of the registrar Key-Systems, pointed out during the session that many registrars give away privacy services for free or at cost.
“This just adds cost to an already expensive service that does not really make money for a lot of providers,” he said.
He suggested that the prices could lead to unexpected negative consequences.
“Pricing this in this region will just lead to a lot of unaccredited providers that will switch names every couple months, an underground that we don’t really want,” he said. “We want to have as many people on board as possible and the way to do that is to keep costs low.”
“Pricing them out of the market is not the way to attract providers to join this scheme,” he said.
Nash responded that registrars are forbidden under the incoming privacy/proxy policy from accepting registrations from unaccredited services.
She added that the fees have been calculated on a “cost-recovery” basis. Costs include the initial background checks, outreach, contract admin, compliance, billing and so on.
But some registrars expressed skepticism that the proposed fees could be justified, given that ICANN does not plan to staff up to administer the program.
Another big question is whether proxy/privacy services are going to continue to have value after May this year, when the European Union’s General Data Protection Regulation kicks in.
The current ICANN plan for GDPR compliance would see individual registrants have all of their private information removed from the public Whois.
It’s not currently clear how many people and what kinds of people will continue to have access to unmasked Whois, so there are likely still plenty of cases where individuals might feel they need an extra layer of protection — if they live in a dictatorship and are engaged in rebellious political speech, for example.
There could also be cases where companies wish to mask their details ahead of, say, a product launch.
And, let’s face it, bad actors will continue to want to use privacy services on domains they intend to misuse.
The proxy/privacy policy came up through the formal GNSO Policy Development Process and was approved two years ago. It’s currently in the implementation phase.
According to a presentation from the ICANN 61 session, ICANN hopes to put the final implementation plan out for public comment by the end of the month.

Is ICANN over-reacting to Whois privacy law?

Is ICANN pushing the domain industry to over-comply with the European Union’s incoming General Data Protection Regulation privacy law?
Governments and plenty of intellectual property and business lobbyists think so.
After days of criticism from unhappy IP lawyers, ICANN’s public meeting in Puerto Rico last week was capped with a withering critique of the organization’s proposed plan for the industry to become GDPR compliant as pertains Whois.
The Governmental Advisory Committee, in unusually granular terms, picked apart the plan in its usual formal, end-of-meeting advice bomb, which focused on making sure law enforcement and IP owners continue to get unfettered Whois access after GDPR kicks in in May.
Key among the GAC’s recommendations (pdf) is that the post-GDPR public Whois system should continue to publish the email address of each domain registrant.
Under ICANN’s plan — now known as the “Cookbook” — that field would be obscured and replaced with a contact form or anonymized email address.
The GAC advised ICANN to “reconsider the proposal to hide the registrant email address as this may not be proportionate in view of the significant negative impact on law enforcement, cybersecurity and rights protection;”.
But its rationale for the advice is a little wacky, suggesting that email addresses under some unspecified circumstances may not contain “personal data”:

publication of the registrant’s email address should be considered in light of the important role of this data element in the pursuit of a number of legitimate purposes and the possibility for registrants to provide an email address that does not contain personal data.

That’s kinda like saying your mailing address and phone number aren’t personal data, in my view. Makes no sense.
The GAC advice will have won the committee friends in the Intellectual Property Constituency and Business Constituency, which throughout ICANN 61 had been pressuring ICANN to check whether removing email addresses from public Whois was strictly necessary.
ICANN is currently acting as a non-exclusive middleman between community members and the 20-odd Data Protection Authorities — which will be largely responsible for enforcing GDPR — in the EU.
It’s running compliance proposals it compiles from community input past the DPAs in the hope of a firm nod, or just some crumbs of guidance.
But the BC and IPC have been critical that ICANN is only submitting a single, rather Draconian proposal — one which would eschew email addresses from the public Whois — to the DPAs.
In a March 13 session, BC member Steve DelBianco pressed ICANN CEO Goran Marby and other executives and directors repeatedly on this point.
“If they [the DPAs] respond ‘Yes, that’s sufficient,’ we won’t know whether it was necessary,” DelBianco said, worried that the Cookbook guts Whois more than is required.
ICANN general counsel John Jeffrey conceded that the Cookbook given to the DPAs only contains one proposal, but said that it also outlines the “competing views” in the ICANN community on publishing email addresses and asks for guidance.
But email addresses are not the only beef the GAC/IPC/BC have with the ICANN proposal.
On Thursday, the GAC also advised that legal entities that are not “natural persons” should continue to have their full information published in the public Whois, on the grounds that GDPR only applies to people, not organizations.
That’s contrary to ICANN’s proposal, which for pragmatic reasons makes no distinction between people and companies.
There’s also the question of whether the new regime of Whois privacy should apply to all registrants, or just those based in the European Economic Area.
ICANN plans to give contracted parties the option to make it apply in blanket fashion worldwide, but some say that’s overkill.
Downtime for Whois?
While there’s bickering about which fields should be made private under the new regime, there doesn’t seem to be any serious resistance to the notion that, after May, Whois will become a two-tier system with a severely depleted public service and a firewalled, full-fat version for law enforcement and whichever other “legitimate users” can get their feet in the door.
The problem here is that while ICANN envisions an accreditation program for these legitimate users — think trademark lawyers, security researchers, etc — it has made little progress towards actually creating one.
In other words, Whois could go dark for everyone just two months from now, at least until the accreditation program is put in place.
The GAC doesn’t like that prospect.
It said in its advice that ICANN should: “Ensure continued access to the WHOIS, including non-public data, for users with a legitimate purpose, until the time when the interim WHOIS model is fully operational, on a mandatory basis for all contracted parties”.
But ICANN executives said in a session on Thursday that the org plans to ask the DPAs for a deferral of enforcement of GDPR over Whois until the domain industry has had time to come into compliance while continuing to grant access to full Whois to police and special interests.
December appears to be the favored date for this proposed implementation deadline, but ICANN is looking for feedback on its timetable by this coming Friday, March 23.
But the IPC/BC faction are not stting on their hands.
Halfway through ICANN 61 they expressed support for a draft accreditation model penned by consultant Fred Felman, formerly of brand protection registrar MarkMonitor.
The model, nicknamed “Cannoli” (pdf) for some reason, unsurprisingly would give full Whois access to anyone with enough money to afford a trademark registration, and those acting on behalf of trademark owners.
Eligible accreditees would also include security researchers and internet safety organizations with the appropriate credentials.
Once approved, accredited Whois users would have unlimited access to Whois records for defined purposes such as trademark enforcement or domain transfers. All of their queries would be logged and randomly audited, and they could lose accreditation if found to be acting outside of their legitimate purpose.
But Cannoli felt some resistance from ICANN brass, some of whom pointed out that it had been drafted by just one part of the community
“If the community — the whole community — comes up with an accreditation model we would be proud to put that before the DPAs,” Marby said during Thursday’s public forum in Puerto Rico.
It’s a somewhat ironic position, given that ICANN was just a few weeks ago prepared to hand over responsibility for creating the first stage of the accreditation program — covering law enforcement — wholesale to the GAC.
The GAC’s response to that request?
It’s not interested. Its ICANN 61 communique said the GAC “does not envision an operational role in designing and implementing the proposed accreditation programs”.

A lazy blogger’s wish-list for ICANN remote participation

Remote participation at ICANN meetings is pretty damn good, but I’m an ungrateful asshole and I want more.
I’ve had a personal wish-list of remote participation features during and immediately after every ICANN meeting for a few years now, but when ICANN turned off Adobe Connect for the back half of ICANN 61 last week I was inspired to put pen to paper and rant about it in public.
Make no mistake, these are minor quibbles and no diss to the thoroughly lovely people on the ICANN meetings team.
In a community where are great many people are tasked with herding cats, the meetings guys are the only ones who have to physically herd the cats into their windowless pens through the sheer power of their organizational skills.
Not to mention they have to ensure all the cats are fed, watered, caffeinated, inebriated, and have trays of gravel into which to do their dirty business.
(Sorry, that metaphor got away from me a little there.)
My point is, the fact that anyone ever gets anything done at an ICANN meeting is due in no small part to the folk who actually organize the events, including the remote participation.
With all those disclaimers in mind, here are a few things I would like to see in future.
Archive the scribe feeds
The ICANN scribe feed, provided for as long as I can remember by Brewer & Darrenougue and StreamText is excellent.
It provides a live, scrolling, text transcription, in English, of whatever is being said in a session. It’s not 100% accurate all of the time, but it’s damn close.
Over the years, the scribes seem to have gained an ear for the regular speakers. It’s increasingly rare to see “[SAYING NAME]” in a feed, and we don’t often see pleas from the scribes for speakers to slow down any more.
This allows Anglo monoglot basement-dwellers such as myself to identify who’s talking and get a rough idea what they’re saying, even when they are Catalan registry operators speak quickly in heavily accented, non-native English.
The problem with the feed is that they disappear immediately after each session ends, usually at lunch time and again at the end of the day. Remote participants then have to wait anywhere from a day to several days for the full, edited transcript to be published.
I think the resource cost of immediately publishing the full, warts-and-all scribe transcript would be negligible.
Even if StreamText doesn’t offer it as an automated feature, copy-pasting a session transcript from a browser window into a PDF and banging it on the ICANN web site shouldn’t take more than a few minutes. I know; for several meetings I did it myself on selected sessions as a public service.
Bring back the MP3s
Not too long ago, the audio-only streams were recorded into MP3 files and dumped on the meeting web site in short order, often the same day.
Now, instead, we get M3U files, which are basically just links to streams. And the streams are extremely temperamental, regularly skipping around, restarting or simply stopping for no readily apparent reason.
Today, attempting to re-listen to the M3U of last Thursday’s Public Forum, I had to restart the stream and go hunting for the position I’d been kicked out maybe a dozen times. It was very irritating.
MP3s have the added advantage that they can be listened to offline, allowing you to catch up on sessions you missed while, for example, loitering at an airport with crappy wifi.
I want the MP3s back, dammit!
Consider YouTube maybe?
Recent meetings have seen the introduction of Livestream.com as an alternative to Adobe Connect for viewing live video.
I assume ICANN is paying for this service, probably five figures per year, but I have no idea what benefit (if any) the service offers over YouTube live streaming.
It doesn’t even always work. Try getting Thursday’s Public Forum recording to play. I couldn’t.
Is there any particular reason YouTube is not a viable option? As far as I know it’s free and reliable. YouTubers with far greater audiences than ICANN seem to get away with using it on a daily basis.
It could even be monetized, turning an expense into a small source of additional revenue.
Bring back meaningful filenames
ICANN is pretty good about publishing transcripts, presentations and other documentation as PDFs on the pages for each session. But for some reason in Puerto Rico it started naming the files with apparently meaningless numerical strings.
In all the meetings I can recall before ICANN 61, a downloadable transcript might be named something like “transcript-public-forum-10mar16-en.pdf”. Now, you’ll get something like “1521076292.pdf” instead, which is a step backwards.
Sure, I could manually rename the file to something meaningful myself, but that would take me at least 30 seconds — 30 seconds I could better use listening to Marilyn Cade introduce herself, Goran Marby apologize for something, or literally anyone else in the community complain that nobody listens to them any more.
Keep the redundancy!
Finally, as ICANN discovered this week, redundancy is essential to maintaining uninterrupted remote participation.
Even with Adobe Connect offline across the board for half of the week, it was still possible for those of us in the cheap seats to see video, hear audio, read the scribes, and submit questions and comments.
It wasn’t perfect, but it did the job well enough (previous complaints notwithstanding).
Even when Adobe is turned on, the alternative methods of listening in are extremely useful for overcoming its occasional limitations.
Often, AC rooms are barely audible. This problem occurs on an almost daily basis during ICANN. It affects some rooms but not others and I’ve yet to spot a predictable pattern.
But when you can’t hear what’s going on in AC, it’s always possible to mute the room and launch the always-audible live M3U stream separately.
Similarly, on the rare occasions the audio or video is down, the scribes can often allow us to follow the gist of the discussion while the nerds work on a fix.
In short, redundancy is good.
UPDATE (MARCH 21): Josh Baulch from the ICANN meetings team has left a comment addressing some of these points. It turns out MP3s are actually available elsewhere on the ICANN web site and Livestream costs ICANN far, far less than I had estimated based on Livestream’s published price list.

Austria to stop publishing most Whois data

Austrian ccTLD operator nic.at will no longer publish any Whois information for individual registrants, in order to comply with incoming EU privacy law.
“Natural persons’ data will no longer be published from mid-May 2018,” the company said today.
Data concerning legal entities such as companies will continue to be published, it added.
The move is of course an effort to become compliant with the General Data Protection Regulation, which currently has the industry scrambling around in the dark looking for ways avoid avoid millions of euros of potential fines.
nic.at will continue to collect the private data of individual registrants, but it will only publish technical information such as the name of the registrar and name servers in response to public Whois queries.
Companies will have their names and addresses published, but will have the option to have their email address and phone number hidden.
nic.at said it will disclose records to “law enforcement agencies, lawyers or people who contact nic.at following domain disputes and can prove that their rights have been infringed”.
People will be able to opt-in to having their information published
It’s arguably a more Draconian implementation of GDPR than the one proposed by ICANN for gTLDs, but it appears to be in line with plans already announced by Nominet for .uk and DENIC for .de.

Data leak security glitch screws up ICANN 61 for thousands

A security vulnerability forced ICANN to take down its Adobe Connect conferencing service halfway through its ICANN 61 meeting in Puerto Rico.
The “potentially serious security issue” could “could possibly lead to the disclosure of the information shared in an ICANN Adobe Connect room”, ICANN said in a pair of statements.
Taking down the service for the remainder of the meeting, which ends today, meant that potentially thousands of remote participants were left to cobble together a less streamlined replacement experience from a combination of live streams, transcription and email.
At the last ICANN meeting, over 4,000 unique participants logged into Adobe Connect. With only 1,900 or so people on-site, we’re probably looking at over 2,000 remote participants relying on AC to take part.
At this point, it’s not clear whether ICANN has discovered a previously undisclosed vulnerability in the Adobe service, or whether it simply buggered up its implementation with sloppy configuration settings.
It’s also not clear whether the glitch has been actively exploited to expose private data, though ICANN said it was first reported by a member of the Security and Stability Advisory Committee.
ICANN said in the second of two statements issued yesterday:

The issue is one that could possibly lead to the disclosure of the information shared in an ICANN Adobe Connect room. We are still investigating the root cause of the issue. We have formulated different scenarios based on authentication, encryption, and software versions, which we are testing in a controlled fashion in attempt to replicate and understand the root cause of the issue.
We are working directly with Adobe and with our cloud service provider to learn more.

Adobe Connect is a web conferencing tool that, at least when ICANN uses it for public meetings, combines live video and transcription, PowerPoint presentation sharing, and public and private chat rooms.
I also understand that there’s also a whiteboarding feature that allows participants to collaboratively work on documents in closed sessions.
Given that everything shared in the public sessions (outside of the private chat function) is by definition public, it might be reasonable to assume that ICANN’s primary concern here is how the software is used in closed sessions.
I hear ICANN uses Adobe Connect internally among its own staff and board, where one might imagine private data is sometimes shared. Other relatively secretive groups, such as the Governmental Advisory Committee and Nominating Committee, are also believed to sometimes use it behind closed doors.
While Adobe is infamous for producing buggy, insecure software, and ICANN uses a version of it hosted by a third-party cloud services provider, that doesn’t necessarily mean this wasn’t another ICANN screw-up.
In a similar incident uncovered in 2015, it was discovered that new gTLD applicants could read attachments on the confidential portions of their competitors’ applications, after ICANN accidentally had a single privacy configuration toggle set to “On” instead of “Off” in the hosted Salesforce.com software it was using to manage the program.
Ashwin Rangan, ICANN’s CIO and the guy also tasked with investigating the Salesforce issue, has now started a probe into the Adobe issue.

Next new gTLD round unlikely before 2022

ICANN is unlikely to accept any more new gTLD applications until a full decade has passed since the last round was open.
That’s the conclusion of some ICANN community members working on rules for the next round.
Speaking at ICANN 61 in Puerto Rico this weekend, Jeff Neuman, co-chair of the New gTLD Subsequent Procedures Working group, presented a “best case” timetable for the next round.
The timetable would see the next new gTLD application window opening in the first quarter of 2021, nine years after the 2012 round.
But Neuman acknowledged that the timeline would require all parts of the ICANN community — working groups, GNSO Council, board of directors, staff — to work at their most efficient.
With that in mind, 2021 seems optimistic.
“Even if we hit the 2021 date, that’s still a decade after the launch of the last round, which is crazy,” Neuman said.

The timetable assumes the GNSO wraps up its policy development a year from now, with the ICANN board approving the policy mid-2019.
It then gives the ICANN staff about six months to publish an updated Applicant Guidebook, and assumes whatever is produced is approved within about six months, after the first pass of public comments.
It’s worth noting that the 2012 round’s AGB hit its first draft in 2008 and went through half a dozen revisions over three years before it was finalized, though one imagines there would be less wheel-reinventing required next time around.
After the board gives the AGB the final nod, the timeline assumes ICANN staff about six months to “operationalize” the program.
But one unidentified ICANN staffer, who said she was “the person that will be ultimately responsible for the implementation” of whatever the GNSO comes up with, said during this weekend’s session that she doubted this was realistic.
She said ICANN the organization would need “at least 12 months” between the ICANN board approving the AGB and the application window opening. That would push the window to late 2021.
The Subsequent Procedures policy work is of course not the only gating factor to the next round.
There’s also a potential bottleneck in work being carried out to review rights protection mechanisms, where fears of filibustering have emerged in an already fractious working group.
All things considered, I wouldn’t place any bets on an application window opening as early as 2021.

Donuts scraps 200 companies, consolidates under Binky Moon

Donuts has consolidated all of its original portfolio of new gTLD contracts under a single LLC, scrapping almost 200 shell companies in the process.
At least 196 contracts, each of which were originally allocated to a unique LLC, have been assigned now to Binky Moon LLC.
This seems to have happened back in late November, but ICANN only added the transfers to its published list of reassignments last week.
When Donuts applied for over 300 gTLDs back in 2012, each application belonged to a different shell company. Apparently randomly generated names — such as New Sky LLC, Sand Shadow LLC and Bitter Fields LLC — were chosen for each.
This was for “tax and other purposes” that made sense when Donuts was a new company, I’m told.
Now, with Donuts by one measure the fastest-growing tech company in the world, it made more sense to “retire” the old LLCs and realize the “operational efficiencies” of consolidation, a spokesperson said.
Not all of Donuts’ contracts belong to Binky Moon. When the company acquired 2003-round .travel last month it assigned the Registry Agreement to Dog Beach LLC.

ICANNWiki fans protest funding cut

ICANN should continue to fund the independent ICANNWiki project, according to high-profile industry supporters.
As I first reported back in December, ICANN plans to stop giving a $100,000 annual grant to ICANNWiki, a repository of about 6,000 community-sourced articles on the people and organizations involved in the ICANN community.
While ICANNWiki does not merit an explicit mention in ICANN’s latest proposed budget, both organizations have confirmed to DI that the funding is for the chop, as ICANN attempts to rein in spending in the face of depressed revenue.
About a quarter of the 41 comments filed on the budget express support for the wiki.
Consultant Kurt Pritz, a 10-year veteran of ICANN and one of the key architects of its new gTLD program, wrote that the wiki “has been an essential part of the ICANN culture for many years… often saving ICANN meetings from terminal ennui.”
Roland LaPlante, chief marketing officer of Afilias (one of about 15 sponsors listed on ICANNWiki’s front page), wrote:

The complete withdrawal of funding from ICANN so abruptly not only threatens the viability of the project, but rather disrespectfully junks the valuable time and resources that the community has invested over the years. Ultimately the loss of ICANNWiki would be a loss to our overall sense of community.
ICANN should continue to support ICANNWiki at a reasonable level in the next fiscal year. At a minimum, please consider giving the team time to find other sources of funding.

Sandeep Ramchandani, CEO of Radix, concurred, writing:

ICANNNWiki benefits the entire ICANN community. Cutting the funding entirely would effectively halt its operations and be a disservice to the community it serves. It is in ICANN and the community’s best interest to continue funding it in an amount that works for ICANN long-term, and provide ICANNWiki sufficient time to develop a more sustainable business plan.

Simon Cousins, CEO of Chinese market localization specialist Allegravita, said:

Before ICANNWiki, there was precious little information on industry fundamentals in China, and since Allegravita has supported the pro-bono translation of ICANNWiki content into Chinese, the vital platform that is ICANNWiki has been acknowledged hundreds of times.
We do not support the immediate and full withdrawal of funding for ICANNWiki. We guardedly support incremental, annual decreases to give ICANNWiki the time necessary to generate new sponsorship income to cover their costs.

Pablo Rodriguez of .pr ccTLD operator PRTLD, host of ICANN 61 and an ICANNWiki sponsor, wrote:

We believe that they should not be cut out from the ICANN’s Budget, instead, they should be supported and embraced to continue their engaging approach and work with ICANN’s Community and as well newcomers, veterans, special programming for beginners and others in order to deliver what is ICANN and what does the organization do and so forth.

Several other commentators on ICANN’s budget asked ICANN to maintain the funding and I was unable to find any comments supporting its withdrawal.
It’s worth noting that ICANN’s $100,000 is not ICANNWiki’s only financial support. It says it receives an additional $61,000 a year from corporate sponsorship, and as a wiki much of its output is produced by volunteers.
It has been in existence for a decade, but ICANN has only been giving it money for three years.
The costs associated with running it appear to be mostly centered not on maintaining the web site but on its outreach and promotional activities, such as attending meetings and the popular caricatures and card decks it distributes.
It could be argued that ICANNWiki is pretty good value for money when compared to cost of a dedicated outreach professional (the average cost of an ICANN staffer has been estimated at $175,000+ in the latest budget).
ICANNWiki will host an “Edit-A-Thon” during the current ICANN 61 public meeting in San Juan, Puerto Rico on Tuesday at 0900 local time.

Is ICANN still over-estimating revenue from “stagnating” gTLD industry?

ICANN may have slashed millions from its revenue estimate for next year, but it has not slashed deeply enough, according to registrars and others.
Industry growth is flat, and below even ICANN’s “worst case” expectations for the fiscal year starting July 1, registrars told the organization in comments filed on its FY19 budget last week.
The Registrars Stakeholder Group said that “the FY 2019 budget fails to recognize that overall industry growth is flat.”
ICANN’s budget foresees FY19 revenue of $138 million, up $3.5 million on the projected result for FY18.
“These revenue projections presume growth in the domain market that is not aligned with industry expectations,” the RrSG said, pointing to sources such as Verisign’s Domain Name Industry Brief, which calculated 1% industry growth last year.
ICANN’s predictions are based on previous performance and fail to take into account historical “one-time events”, such as the Chinese domain speculation boom of a couple years ago, that probably won’t be repeated, RrSG said.
RrSG also expects the number of accredited registrars to decrease due to industry consolidation and drop-catching registrars reducing their stables of shell accreditations.
(I’ll note here that Web.com has added half a dozen drop-catchers to its portfolio in just the last few weeks, but this goes against the grain of recent trends and may be an aberration.)
RrSG said ICANN’s budget should account for reduced or flat accreditation fee revenue (which as far as I can tell it already does).
The comment, which can be read in full here, concludes:

Taken together, these concerns represent a disconnect between ICANN funding projections, and the revenue expectations of Registrars (and presumably, gTLD Registries) from which these funds are derived. In our view, ICANN’s assessment of budgetary “risks” are too optimistic , and actual performance for FY19 will be significant lower.

For what it’s worth, the Registries Stakeholder Group had this to say about ICANN’s revenue estimates:

Reliable forecasts, characterised by their scrutiny and realism, are fundamental to put together a realistic budget and to avoid unpleasant surprises, such as the shortage ICANN is experiencing in the current fiscal year. The RySG advises ICANN to continue to conduct checks on its forecasts and to re-evaluate the methodology used to predict its income in order to prevent another funding shortfall such as that which the organization experienced in FY18.