ICANN budget: mild optimism amid maturing industry

ICANN thinks the domain industry, including the new gTLD industry, is maturing and will continue to grow, in its just-published draft budget for fiscal 2023.

The Org is predicting growing transactions across the board, as well as an increase in the number of accredited registrars and a slowing decline in the number of contracted gTLDs.

ICANN is expecting funding of $152 million for FY23, which includes the $4 million bung it negotiated with Verisign as part of the deal to allow the company to raise .com prices.

That’s up from the $149.1 million is expects to receive in the current fiscal year.

As usual, the bulk of the funding comes from gTLD transaction fees — the taxes registrants pay through their registrars and registries whenever they register, renew or transfer a domain name.

Legacy gTLD transaction fees are expected to amount to $93.1 million, up 3% on a forecast of $90.1 million in the current year, while new gTLD transaction fees are expected to rise modestly from $9.5 million to $9.9 million, a 4% increase.

Transactions in legacy gTLDs are expected to be 201.2 million, versus 193.6 million in the current year.

New, post-2012 gTLDs are expected to process 25.8 million transactions, up from 24.8 million, of which 21.1 million will be billable, up from 20.3 million. New gTLDs only pay transaction fees after 50,000 domains under management.

ICANN is expecting to lose four registries in FY23 — this almost always means dot-brands that cancel their contracts — with the total declining from a June 2022 total of 1,149 to 1,145 a year later. This will have a modest impact on fixed registry fees.

But the Org is once again expecting to see an increase in the number of registrars paying fixed accreditation fees, up by 28 to 2,447 at the end of FY23.

Accompanying the budget, ICANN has published some industry trend analysis (pdf) outlining some of the assumptions behind the budget forecasts.

Basically, the document describes what regular readers already know — many domain companies benefited from pandemic-related lockdowns driving small businesses online, but overall industry volumes were driven down by low-cost new gTLDs experiencing huge junk drops.

For ICANN’s purposes, factors such as customer quality and pricing are irrelevant. A spammer registering 1,000 domains in bulk pays ICANN the same amount in fees as 1,000 small businesses building their first web sites.

The document reads:

Taken as a whole, DUMs failed to expand in the past twelve months ending in mid-2021. While this decline is at least partly attributable to lower promotional activity among some of the largest new gTLDs which could be reinitiated in the future, it nonetheless points to an industry that has shifted from a period of rapid expansion to one that is now witnessing steady maturation.

The draft ICANN budget covers the 12 months beginning July 1, 2023, and is now open for public comment before possible revisions and final approval.

Delta variant cranks up Aussie domain regs in Q3

Australia’s ccTLD had a growth spurt in the third quarter, driven by pandemic lockdown rules.

Local registry auDA today reported that it took 171,846 new domain creates in Q3, up 22% on Q2. There were over 60,500 new regs in July, making it .au’s second-biggest sales month of all time.

auDA said in its quarterly report (pdf):

This increase took place at a time when COVID-19 restrictions were re-introduced in several states, and followed a levelling out of demand and seasonal dip over Easter in Q2. However, Q3 registrations are only slightly below the same period in 2020, which experienced a historic peak in new domain names created, driven by COVID-19.

Such lockdown bumps were experienced by many registries in 2020, as bricks-and-mortar businesses rushed to get an online presence to continue functioning while stores and venues were closed.

The delta variant of Covid-19 started worrying Australia in June, leading to lockdown rules in major cities that lasted most or all of July. The country has had a relatively low incidence of the virus, but has taken a hard line on restrictions.

At the end of September, .au registrations were up 5% at 3,386,186 names, auDA said. The .com.au level names were up 6% but .net.au was down 1.5%.

Next March, Australia will follow in the footsteps of some other ccTLDs and make second-level .au domains available for the first time.

Three ICANN directors wanted to go to Puerto Rico

The ICANN board of directors’ decision to scrap the in-person component of its next public meeting was not unanimous, it has emerged.

Three directors voted against the November 4 resolution, which said ICANN 73 would be ICANN’s seventh consecutive online-only gathering, according the a preliminary board report.

The plan for months was to have a “hybrid” meeting, with some face-to-face component at the convention center in San Juan, Puerto Rico, as an intermediate step towards post-pandemic normality.

But at the time of the vote travel restrictions in the US were such that getting to Puerto Rico was tough even for fellow Americans, so ICANN’s meetings team had not been able to do on-site preparation.

Nine directors voted to make 73 virtual, with four absent during the vote, the preliminary report states.

Five directors have taken their seats since the coronavirus pandemic began, and have therefore never officially met with their board colleagues in person.

It’s not the first time the board has been split on this matter. Last year, directors Ron Da Silva and Ihab Osman voted to return to face-to-face for the October 2020 Hamburg meeting.

Da Silva is no longer on the board, but there are at least two other directors among the current line-up on the same page.

The voting breakdown will not be revealed until the board approves the November 4 minutes, which could be months if history is any guide.

ICANN abandons face-to-face plan for Puerto Rico

ICANN has canceled its plans for a “hybrid” ICANN 73, saying this morning that the meeting will go ahead as an online-only virtual meeting.

Its board of directors yesterday voted to abandon efforts to have a face-to-face component in Puerto Rico as originally planned, as I predicted a few days ago.

"Impact of COVID-19 on ICANN73". That's the same language ICANN board uses in its agenda items when it's planning for no face-to-face component. Just saying. https://t.co/TZc7lExu7N

— Kevin Murphy (@DomainIncite) November 3, 2021

ICANN of course said it’s because of the coronavirus pandemic, and more particularly the associated travel restrictions and the lack of access to vaccines in some parts of the world from which its community members hail.

The US Centers for Disease Control currently rates Puerto Rico as its second-highest risk level, meaning ICANN’s meetings staff have been unable to travel there to do on-site planning. ICANN said:

While there has been progress that might make it feasible to plan for and convene a meeting in San Juan, Puerto Rico in March 2022, the current risks and uncertainties remain too high to proceed with an in-person meeting or with an in-person component.

Its board resolution stated:

Between the global inequity in vaccine availability across the world, continuing restrictions on persons from many countries or territories being allowed to enter the U.S., and backlogs in visa processing for those who are able to enter the U.S., ICANN org cannot estimate with any confidence the ability for attendees outside of the U.S. to attend ICANN73.

So 73 will be Zoom again. The time zone will remain UTC-4, Puerto Rico local time, which should make it less problematic for Europeans to attend.

The dates are still slated for March 5 to March 10 next year, but it seems likely that we’ll be looking at a March 7 kick-off, as March 5 is a Saturday and people don’t like working weekends if not somewhere they can also work on their tans.

ICANN said it “affirmed its intent” to attempt the hybrid model again for the mid-year ICANN 74 meeting, which is due to take place in The Hague, Netherlands, next June.

It’s bad news for ICANN participation, which has been declining in the new era of virtual meetings, but good news for its bank account. Virtual meetings cost a few million dollars less than in-person ones.

Marby finds his pandemic pessimism

CEO Göran Marby has spelled out his goals for ICANN’s current fiscal year, and they include a scaled-back ambition when it comes to face-to-face public meetings in the face of an ongoing pandemic.

His first enumerated goal for the year ending June 30, 2022 is:

Develop, with the community and with support from the Board, the ability to conduct hybrid meetings that are inclusive and enhance the opportunity for community interaction and decision-making.

Compare this with his equivalent goal from July 2020:

Work with Supporting Organization and Advisory Committee leaders, community members, and the Board to define and implement a phased plan to return to face-to-face meetings.

The goal of creating a “face-to-face” meetings plan has been replace with a “hybrid” meeting plan, where some section of the community can only participate online, depending on travel restrictions.

A lot has happened in the last 15 months when it comes to the coronavirus pandemic.

In June 2020, there was still some optimism in the ICANN board that the October meeting that year would go ahead in Hamburg as normal. That didn’t happen, and the face-to-face components of the three subsequent meetings have also been cancelled.

At that time, the world still hadn’t experienced the reality of Covid-19 variants, and the possibility of multiple lockdown scenarios was still largely theoretical.

So it’s probably no surprise that Marby has been forced to rein in his hopes for bumping elbows with the global community any time soon.

ICANN 72 later this month, originally planned for Seattle, will be the sixth consecutive online-only public meeting, but Marby has been tasked by the board with making the Puerto Rico meeting next March a “hybrid” affair.

Given his goals run to mid-2022, it seems possible ICANN 74, slated for The Hague next June, is also being considered most likely a hybrid meeting.

Marby has nine goals for the year in total. Seven he wrote himself, two were set by the board. Last year, he had 10 in total of which four were set by the board.

Other areas of interest coming from his own pen include greater focus on legislation around the world, emerging technologies such as blockchain naming, outreach in the developing world, DNS security and stability and prioritizing ICANN’s increasingly overwhelming workload.

Not all of them are stated as goals, at least in Marby’s blog post, and not all appear to have measurable outcomes.

The board has told him to “stimulate Universal Acceptance” and “work with Internet governance stakeholders”. Again, it’s all pretty amorphous stuff.

One 2021 goal that does not make an appearance this year is “Develop a plan for the potential economist function”, or hiring an “astrologer in chief” as I phrased it last year.

Reasonable people could disagree with whether this one was fulfilled — the economist job has been advertised on the ICANN web site all year, but does not yet appear to have been filled.

ICANN now has half a billion bucks in the bank after huge pandemic profits

ICANN, the non-profit organization with the limited technical mandate, now has over half a billion dollars in the bank, after the affects of the coronavirus pandemic boosted funding and slashed costs.

The Org ended June 2021 with cash and investments of $521 million, up $40 million over the preceding 12 months.

While some of this gain can be attributed to investment gains, the majority chunk comes from ICANN largely misjudging the length and impact of pandemic-related restrictions.

Expenses were $10 million lower than budget, because all three ICANN meetings during the year were held online, where they cost about half a million bucks a pop, about $3 million lower than in-person gatherings.

ICANN had budgeted for its 2021 meetings to take place face-to-face in venues around the world, but governmental travel restrictions made this impossible.

The Org saved well over half a million dollars in director expenses alone.

On the top half of the financial statement, the numbers also show a failure to predict how much the pandemic would be generally a boon, rather than a burden, to the domain name industry.

ICANN received $142 million in funding during the year, which was $12 million ahead of budget and $1 million more than it received in fiscal 2020.

ICANN cuts the weekend from next public meeting

ICANN has changed the dates for ICANN 72, its 2021 annual general meeting, making it two days shorter.

The old plan was for the meeting to run October 23-28. Now it will be October 25-28.

Basically, this means nobody will have to work at the weekend. October 23 is a Saturday.

The presumably truncated schedule will be published October 4.

ICANN said it made the decision “to support better working hours for attendees and encourage greater participation”.

ICANN 72 came close to having an in-person component in Seattle, but the board of directors decided last month to stick to Zoom due to ongoing pandemic uncertainties.

Over 2,000 attendees for ICANN 73?

Puerto Rico is expecting as many as 2,100 people to show up to ICANN’s public meeting there next year, according to a local report.

A local business publication, NimB, cites Pablo Rodríguez of NIC.pr as saying ICANN 73 could have about 2,100 attendees, bringing as much as $8 million to $10 million to the San Juan economy.

My first thought was that the dollar figure seemed high — it works out to about $5,000 per head — until I realized that most attendees are funded by either ICANN or their company credit cards, and not everyone is as frugal as yours truly.

But then I realized that 2,100 is by far the more surprising number.

Consider that it’s by no means assured that there will be an in-person component to the meeting at all. ICANN is certainly planning for one, but like everyone else the Org is subject to the whims of a microscopic glob of goo.

The plan is for a “hybrid”, a mix of face-to-face and Zoom, with some recognition that there are some parts of the world that will show up with extremely light delegations.

Consider also that the last time ICANN met in San Juan in March, just a couple years ago, the grand total was 1,564 people, 37% of whom hailed from outside the Americas.

With that in mind, 2,100 seems like an incredibly ambitious prediction.

ICANN 73 will be “virtual first”

ICANN’s public meeting next March will prioritize online participation, according to chair Maarten Botterman.

Botterman told members of the APAC Space community group this week that ICANN 73 will have “a meaningful ‘virtual first’ hybrid format to support the community’s ongoing priorities, policy advice, and development work”.

APAC Space, you will recall, had written to ICANN to protest the possibility of this October’s ICANN 72 meeting moving to a hybrid model with an in-person component that most Asia-Pacific community members would not be able to take advantage of due to ongoing pandemic-related travel restrictions.

But the ICANN board, in part due to these concerns, decided to keep 72 online-only rather than showing up in Seattle in person, while stating an intention to go hybrid for 73 if “feasible”.

ICANN 73 is due to take place in Puerto Rico, part of the North America region, next March. As a US territory, the venue will be easier to attend for Americans.

Indeed, APAC Space is skeptical about its members ability to attend 73 in person also.

Botterman addressed this, saying:

We appreciate you have similar concerns about holding a hybrid meeting for ICANN73. At this time, relevant experts have a higher level of confidence that the global pandemic situation, in particular vaccination and infection rates, will be much improved by early 2022. While we will continue to closely monitor the situation, our intentions are to hold ICANN73 as a hybrid meeting with an in-person component if it is feasible to do so.

The five online-only meetings ICANN has held since the pandemic hit are generally regarded as being pretty good as far as Zoom meetings go, but there can be no replacement for the corridor conversations, cocktail events and private dinners that face-to-face meetings permit.

Even the ICANN board of directors is affected — due to the annual turnover, some members haven’t even met each other face-to-face in a board context.

Irish domain sales closely track pandemic restrictions

Sales of .ie domains saw their best-ever first half this year, with registration growth closely tracking pandemic-related restrictions.

Local registry IEDR reported this week that it added 33,815 new .ie domains in the six months to June 30, up 1.6% on last year. It ended the period with 324,074 .ie domains under management, up 9.6% on last year.

The registry is in no doubt that it benefited from the cross-industry lockdown bump associated with the coronavirus pandemic.

Comparing first quarter numbers show Q1 2021 regs up 34% on Q1 2020.

Ireland was in strict lockdown measures in the first months of this year, but did not enter lockdown until towards the end of the quarter in 2020.

Second quarter number reflected the same pattern in reverse — regs were down 22% this year, when lockdown had been eased, IEDR said.

The lockdown bump is a phenomenon whereby domain name sales spiked as traditional bricks-and-mortar small businesses rushed to establish an online presence in order to carry on business behind closed doors.

Domain keywords directly related to the pandemic were down in H1 compared to last year, while domains related to summertime, pools and barbecues spiked, the registry said.