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ICANN trying to water down its transparency obligations

Kevin Murphy, January 13, 2022, Domain Policy

ICANN? Trying to be less transparent? Surely not!

The Org has been accused by some of its community members of trying to shirk its transparency obligations with proposed changes to its Documentary Information Disclosure Policy.

The changes would give ICANN “superpowers” to deny DIDP requests, and to deny them without explanation, according to inputs to a recently closed public comment period.

The DIDP is ICANN’s equivalent of a Freedom of Information Act, allowing community members to request documentation that would not be published during the normal course of business.

It’s often used, though certainly not exclusively so, by lawyers as a form of discovery before they escalate their beefs to ICANN accountability mechanisms or litigation.

It already contains broad carve-outs that enable ICANN to refuse disclosure if it considers the requested info too sensitive for the public’s eyes. These are the Defined Conditions for Nondisclosure, and they are used frequently enough that most DIDPs don’t reveal any new information.

The proposed new DIDP broadens these nondisclosure conditions further, to the extent that some commentators believe it would allow ICANN to deny basically any request for information. New text allows ICANN to refuse a request for:

Materials, including but not limited to, trade secrets, commercial and financial information, confidential business information, and internal policies and procedures, the disclosure of which could materially harm ICANN’s financial or business interests or the commercial interests of its stakeholders who have those interests.

The Registries Stakeholder Group noted that this is “broader” than the current DIDP, while the At-Large Advisory Committee said (pdf) it “essentially grants ICANN the right to refuse any and all requests”.

ALAC wrote that “rejecting a request because it includes commercial or financial information or documents an internal policy makes a mockery of this DIDP policy”.

Jeff Reberry of drop-catch registrar TurnCommerce concurred (pdf), accusing ICANN of trying to grant itself “superpowers” and stating:

Extremely generic terms such as “confidential business information” and “commercial information” were added. Frankly, this could mean anything and everything! Thus, ICANN has now inserted a catch-all provision allowing it to disclose nothing.

Other comments noted that the proposed changes dilute ICANN’s responsibility to explain itself when it refuses to release information.

Text requiring ICANN to “provide a written statement to the requestor identifying the reasons for the denial” has been deleted from the proposed new policy.

A collection of six lawyers, all prolific DIDP users, put their names to a comment (pdf) stating that “the change results in less transparency than the current DIDP”.

The lawyers point out that requests that are denied without explanation would likely lead to confusion and consequently increased use of ICANN’s accountability mechanisms, such as Requests for Reconsideration. They wrote:

Simply stated, the Revised Policy allows ICANN to obscure its decision-making and will ultimately cause disputes between ICANN and the Internet community — the complete opposite of the “accountable and transparent” and “open and transparent processes” required by ICANN’s Bylaws.

One change that didn’t get much attention in the public comments, but which certainly leapt out to me, concerns the turnaround time for DIDP responses.

Currently, the DIDP states that ICANN “will provide a response to the DIDP request within 30 calendar days from receipt of the request.”

In practice, ICANN treats this obligation like one might treat a tax return or a college essay — it almost provides its response exactly 30 days after it receives a request, at the last possible moment.

The revised DIDP gives ICANN the new ability to extend this deadline for another 30 days, and I don’t think it’s unreasonable to assume, given past behavior, that ICANN will try to exploit this power whenever it’s advantageous to do so:

In the event that ICANN org cannot complete its response within that 30-calendar-day time frame, ICANN org will inform the requestor by email as to when a response will be provided, which shall not be longer than an additional 30 calendar days, and explain the reasons necessary for the extension of time to respond.

The predictably Orwellian irony of all of the above proposed changes is that they come in response to a community review called the Cross-Community Working Group on Enhancing ICANN Accountability Work Stream 2 (WS2), which produced recommendations designed to enhance accountability and transparency.

Whether they are adopted as-is or further revised to address community concerns is up to the ICANN board of directors, which is of course advised by the staff lawyers who drafted the proposed revisions.

ICANN staff’s summary of the seven comments submitted during the public comment period is due next week.

Domain firms plan “Trusted Notifier” takedown rules

Kevin Murphy, June 23, 2021, Domain Policy

Domain name registries and registrars are working on a joint framework that could speed up the process of taking down domain names being used for behavior such as movie piracy.

Discussed last week at the ICANN 71 public meeting, the Framework on Trusted Notifiers is a joint effort of the Registrar Stakeholder Group and Registries Stakeholder Group — together the Contracted Parties House — and is in the early stages of discussion.

Trusted Notifiers are third parties who often need domain names taken down due to activity such as copyright infringement or the sale of counterfeit pharmaceuticals, and are considered trustworthy enough not to overreach and spam the CPH with spurious, cumbersome, overly vague complaints.

It’s not a new concept. Registries in the gTLD space, such as Donuts and Radix, have had relationships with the Motion Picture Association for over five years.

ccTLD operator Nominet has a similar relationship with UK regulators, acting on behalf of Big Copyright and Big Pharma, taking down thousands of .uk domains every year.

The joint RrSG-RySG effort doesn’t appear to have any published draft framework yet, and the discussions appear to be being held privately, but members said last week that it is expected to describe a set of “common expectations or common understandings”, establishing what a Trusted Notifier is and what kind of cooperation they can expect from domain firms.

It’s one of several things the industry is working on to address complaints about so-called “DNS Abuse”, which could lead to government regulations or further delays to the new gTLD program.

It obviously veers into content policing, which ICANN has disavowed. But it’s not an ICANN policy effort. Whatever framework emerges, it’s expected to be non-contractual and voluntary.

Trusted Notifier relationships would be bilateral, between registry and notifier, with no ICANN oversight.

Such deals are not without controversy, however. Notably, free speech advocates at the Electronic Frontier Foundation have been complaining about Trusted Notifier for years, calling it “content policing by the back door” and most recently using it as an argument against Ethos Capital’s acquisition of Donuts.

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

Kevin Murphy, March 11, 2018, Domain Policy

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.

Community calls on ICANN to cut staff spending

Kevin Murphy, March 11, 2018, Domain Policy

ICANN should look internally to cut costs before swinging the scythe at the volunteer community.
That’s a key theme to emerge from many comments filed by the community last week on ICANN’s fiscal 2019 budget, which sees spending on staff increase even as revenue stagnates and cuts are made in other key areas.
ICANN said in January that it would have to cut $5 million from its budget for the year beginning July 1, 2018, largely due to a massive downwards revision in how many new gTLD domains it expects the industry to process.
At the same time, the organization said it will increase its payroll by $7.3 million, up to $76.8 million, with headcount swelling to 425 by the end of the fiscal year and staff receiving on average a 2% pay rise.
In comments filed on the budget, many community members questioned whether this growth can be justified.
Among the most diplomatic objections came from the GNSO Council, which said:

In principle, the GNSO Council believes that growth of staff numbers should only occur under explicit justification and replacements due to staff attrition should always occur with tight scrutiny; especially in times of stagnate funding levels.

The Council added that it is not convinced that the proposed budget funds the policy work it needs to do over the coming year.
The Registrars Stakeholder Group noted the increased headcount with concern and said:

Given the overall industry environment where organizations are being asked to do more with less, we are not convinced these additional positions are needed… The RrSG is not yet calling for cuts to ICANN Staff, we believe the organization should strive to maintain headcount at FY17 Actual year-end levels.

The RrSG shared the GNSO Council’s concern that policy work, ICANN’s raison d’etre, may suffer under the proposed budget.
The At-Large Advisory Committee said it “does not support the direction taken in this budget”, adding:

Specifically we see an increase in staff headcount and personnel costs while services to the community have been brutally cut. ICANN’s credibility rests upon the multistakeholder model, and cuts that jeopardize that model should not be made unless there are no alternatives and without due recognition of the impact.

Staff increases may well be justified, but we must do so we a real regard to costs and benefits, and these must be effectively communicated to the community

ALAC is concerned that the budget appears to cut funding to many projects that see ICANN reach out to, and fund participation by, non-industry potential community members.
Calling for “fiscal prudence”, the Intellectual Property Constituency said it “encourages ICANN to take a hard look at personnel costs and the use of outside professional services consultants.”
The IPC is also worried that ICANN may have underestimated the costs of its contractual compliance programs.
The Non-Commercial Stakeholders Group had some strong words:

The organisation’s headcount, and personnel costs, cannot continue to grow. We feel strongly that the proposal to grow headcount by 25 [Full-Time Employees] to 425 FTE in a year where revenue has stagnated cannot be justified.

With 73% of the overall budget now being spent on staff and professional services, there is an urgent need to see this spend decrease over time… there is a need to stop the growth in the size of the staff, and to review staff salaries, bonuses, and fringe benefits.

NCSG added that ICANN could perhaps reduce costs by relocating some positions from its high-cost Los Angeles headquarters to the “global south”, where the cost of living is more modest.
The ccNSO Strategic and Operational Planning Standing Committee was the only commentator, that I could find, to straight-up call for a freeze in staff pay rises. While also suggesting moving staff to less costly parts of the globe, it said:

The SOPC – as well as many other community stakeholders – seem to agree that ICANN staff are paid well enough, and sometimes even above market average. Considering the current DNS industry trends and forecasts, tougher action to further limit or even abolish the annual rise in compensation would send a strong positive signal to the community.

It’s been suggested that, when asked to find areas to cut, ICANN department heads prioritized retaining their own staff, which is why we’re seeing mainly cuts to community funding.
I’ve only summarized the comments filed by formal ICANN structures here. Other individuals and organizations filing comments in their own capacity expressed similar views.
I was unable to find a comment explicitly supporting increased staffing costs. Some groups, such as the Registries Stakeholder Group, did not address the issue directly.
While each commentator has their own reasons for wanting to protect the corner of the budget they tap into most often, it’s a rare moment when every segment of the community (commercial and non-commercial, domain industry and IP interests) seem to be on pretty much the same page on an issue.

Amsterdam refuses to publish Whois records as GDPR row escalates

Kevin Murphy, October 23, 2017, Domain Policy

Two Dutch geo-gTLDs are refusing to provide public access to Whois records in what could be a sign of things to come for the whole industry under new European privacy law.
Both .amsterdam and .frl appear to be automatically applying privacy to registrant data and say they will only provide full Whois access to vetted individuals such as law enforcement officials.
ICANN has evidently slapped a breach notice on both registries, which are now complaining that the Whois provisions in their Registry Agreements are “null and void” under Dutch and European Union law.
FRLregistry and dotAmsterdam, based in the Netherlands, are the registries concerned. They’re basically under the same management and affiliated with the local registrar Mijndomein.
dotAmsterdam operates under the authority of the city government. .frl is an abbreviation of Friesland, a Dutch province.
Both companies’ official registry sites, which are virtually identical, do not offer links to Whois search. Instead, they offer a statement about their Whois privacy policy.
That policy states that Dutch and EU law “forbids that names, addresses, telephone numbers or e-mail addresses of Dutch private persons can be accessed and used freely over the internet by any person or organization”.
It goes on to state that any “private person” that registers a domain will have their private contact information replaced with a “privacy protected” message in Whois.
Legal entities such as companies do not count as “private persons”.
Under the standard ICANN Registry Agreement, all new gTLDs are obliged to provide public Whois access under section 2.5. According to correspondence from the lawyer for both .frl and .amsterdam, published by ICANN, the two registries have been told they are in breach.
It seems the breach notices have not yet escalated to the point at which ICANN publishes them on its web site. At least, they have not been published yet for some reason.
But the registries have lawyered up already, regardless.
A letter from Jetse Sprey of Versteeg Wigman Sprey to ICANN says that the registries are free to ignore section 2.5 of their RAs because it’s not compliant with the Dutch Data Protection Act and, perhaps more significantly, the EU General Data Protection Regulation.
The GDPR is perhaps the most pressing issue for ICANN at the moment.
It’s an EU law due to come into effect in May next year. It has the potential to completely rewrite the rules of Whois access for the entire industry, sidestepping the almost two decades of largely fruitless ICANN community discussions on the topic.
It covers any company that processes private data on EU citizens; breaching it can incur fines of up to €20 million or 4% of revenue, whichever is higher.
One of its key controversies is the idea that citizens should have the right to “consent” to their personal data being processed and that this consent cannot be “bundled” with access to the product or service on offer.
According to Sprey, because the Registry Agreement does not give registrants a way to register a domain without giving their consent to their Whois details being published, it violates the GDPR. Therefore, his clients are allowed to ignore that part of the RA.
These two gTLDs are the first I’m aware of to openly challenge ICANN so directly, but GDPR is a fiercely hot topic in the industry right now.
During a recent webinar, ICANN CEO Goran Marby expressed frustration that GDPR seems to have come about — under the watch of previous CEOs — without any input from the ICANN community, consideration in the EU legislative process of how it would affect Whois, or even any discussion within ICANN’s own Governmental Advisory Committee.
“We are seeing an increasing potential risk that the incoming GDPR regulation will mean a limited WHOIS system,” he said October 4. “We appreciate that for registers and registers, this regulation would impact how you will do your business going forward.”
ICANN has engaged EU legal experts and has reached out to data commissioners in the 28 EU member states for guidance, but Marby pointed out that full clarity on how GDPR affects the domain industry could be years away.
It seems possible there would have to be test cases, which could take five years or more, in affected EU states, he suggested.
ICANN is also engaging with the community in its attempt to figure out what to do about GDPR. One project has seen it attempt to gather Whois use cases from interested parties. Long-running community working groups are also looking at the issue.
But the domain industry has accused ICANN the organization of not doing enough fast enough.
Paul Diaz and Graeme Bunton, chairs of the Registries Stakeholder Group and Registrars Stakeholder Group respectively, have recently escalated the complaints over ICANN’s perceived inaction.
They told Marby in a letter that they need to have a solution in place in the next 60 days in order to give them time to implement it before the May 2018 GDPR deadline.
Complaining that ICANN is moving too slowly, the October 13 letter states:

The simple fact is that the requirements under GDPR and the requirements in our contracts with ICANN to collect, retain, display, and transfer personal data stand in conflict with each other.

GDPR presents a clear and present contractual compliance problem that must be resolved, regardless of whether new policy should be developed or existing policy adjusted. We simply cannot afford to wait any longer to start tackling this problem head-on.

For registries and registrars, the lack of clarity and the risk of breach notices are not the only problem. Many registrars make a bunch of cash out of privacy services; that may no longer be as viable a business if privacy for individuals is baked into the rules.
Other interests, such as the Intellectual Property Constituency (in favor of its own members’ continued access to Whois) and non-commercial users (in favor of a fundamental right to privacy) are also complaining that their voices are not being heard clearly enough.
The GDPR issue is likely to be one of the liveliest sources of discussion at ICANN 60, the public meeting that kicks off in Abu Dhabi this weekend.
UPDATE: This post was updated October 25 to add a sentence clarifying that companies are not “private persons”.

Double-charging claims as registries ramp up new gTLD refund demands

Kevin Murphy, October 10, 2017, Domain Registries

Registry operators have stepped up demands for ICANN to dip into its $100 million new gTLD cash pile to temporarily lower their “burdensome” accreditation fees.
A new missive from the Registries Stakeholder Group to ICANN this week also introduces a remarkable claim that ICANN may have “double charged” new gTLD applications to the tune of potentially about $6 million.
The RySG wants ICANN to reduce the quarterly fixed fees new gTLD registries must pay by 75% from the current $6,250, for a year, at a cost to ICANN of $16.87 million.
ICANN still has roughly $96 million in leftover money from the $185,000 per-TLD application fees paid in 2012, roughly a third of which had been earmarked for unexpected expenses.
When Global Domains Division president Akram Atallah refused this request in August, he listed some of the previously unexpected items ICANN has had to pay for related to the program, one of which was “implementation of the Trademark Clearinghouse”.
But in last week’s letter (pdf), the RySG points out that each registry was already billed an additional $5,000 fee specifically to set up the TMCH.

Your letter states that registry operators knew about the fee structure from the start and implies that changes of circumstance should be irrelevant. The TMCH charge, however, was not detailed in the applicant guidebook. ICANN added it on its own after all applications were accepted and without community input. Therefore, ICANN is very much in a position to refund registry operators for this overcharge, and we request that ICANN do so. Essentially, you would be refunding the amounts we paid with our own application fees, which should have been used to set up the TMCH in the first place.

These additional fees could have easily topped $6 million, given that there are over 1,200 live new gTLDs.
Was this a case of double-charging, as the RySG says?
My gut feeling is that Atallah probably just forgot about the extra TMCH fee and misspoke in his August letter. The alternative would be a significant accounting balls-up that would need rectifying.
RySG has asked ICANN for a “detailed accounting” of its new gTLD program expenses to date. If produced, that could clear up any confusion.
Group chair Paul Diaz, who signed the letter, has also asked for a meeting with Atallah at the Abu Dhabi public meeting later this month, to discuss the issue.
The letter also accuses ICANN of costing applicants lost revenue by introducing policies such as the ban on two-letter domains, increased trademark protections, and other government-requested restrictions that were introduced after application fees had already been paid.
The tone of the letter is polite, but seems to mask an underlying resentment among registries that ICANN has not been giving them a fair chance to grow their businesses.
UPDATE: This story was updated October 12 to correct the estimate of the total amount of TMCH setup fees collected.

Pilot program for Whois killer launches

Kevin Murphy, September 7, 2017, Domain Tech

ICANN is to oversee a set of pilot programs for RDAP, the protocol expected to eventually replace Whois.
Registration Data Access Protocol, an IETF standard since 2015, fills the same function as Whois, but it is more structured and enables access control rules.
ICANN said this week that it has launched the pilot in response to a request last month from the Registries Stakeholder Group and Registrars Stakeholder Group. It said on its web site:

The goal of this pilot program is to develop a baseline profile (or profiles) to guide implementation, establish an implementation target date, and develop a plan for the implementation of a production RDAP service.

Participation will be voluntary by registries and registrars. It appears that ICANN is merely coordinating the program, which will see registrars and registrars offer their own individual pilots.
So far, no registries or registrars have notified ICANN of their own pilots, but the program is just a few days old.
It is expected that the pilots will allow registrars and registries to experiment with different types of profiles (how the data is presented) and extensions before ICANN settles on a standard, contractually enforced format.
Under RDAP, ICANN/IANA acts as a “bootstrapping” service, maintaining a list of RDAP servers and making it easier to discover which entity is authoritative for which domain name.
RDAP is basically Whois, but it’s based on HTTP/S and JSON, making it easier to for software to parse and easier to compare records between TLDs and registrars.
It also allows non-Latin scripts to be more easily used, allowing internationalized registration data.
Perhaps most controversially, it is also expected to allow differentiated access control.
This means in future, depending on what policies the ICANN community puts in place, millions of current Whois users could find themselves with access to fewer data elements than they do today.
The ICANN pilot will run until July 31, 2018.

No $17 million rebate for struggling new gTLDs

Kevin Murphy, August 31, 2017, 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.

Crocker: no date on next new gTLD round

Kevin Murphy, July 27, 2017, Domain Policy

ICANN will NOT set a date for the next round of new gTLD applications, despite recent pleas from registry operators.
That’s according to a letter (pdf) from ICANN chair Steve Crocker to the Registries Stakeholder Group published today.
The RySG had asked (pdf) last month for ICANN’s leadership to set a fourth-quarter 2018 deadline for the next application window.
It said that that drawing a line in the sand would allow potential applicants to plan and would prevent current policy-development processes from being abused to delay the next round.
But Crocker says in his letter that it is up to the ICANN community, not its board of directors, to determine if and when a new round should commence. He wrote:

Once the community completes its work, the Board will consider the community’s recommendations to introduce additional new gTLDs. Without the final findings and recommendations from the review and PDP, the Board won’t be able to determine what needs to be done prior to the opening of another application process…
The Registry Stakeholder Group’s letter suggests that by setting a date for the opening of another application process, the Board will provide the community with a target date to work toward. Although the Board setting a date would achieve this, doing so might contravene the multi-stakeholder process that allows for the community to have the necessary discussions to arrive at consensus, and to determine the timing of their own work

It seems this is an instance in which the board does not like the idea of setting policy in a top-down manner.
Crocker said the two remaining gating factors for a next round are the consumer choice and competition review of the first round, which is ongoing, and the GNSO’s New gTLD Subsequent Procedures Policy Development Process (PDP).
The PDP has now been going on for 18 months and yet discussions remain at a very early stage, with hardly any preliminary recommendations being agreed upon.
There’s not even agreement on foundational issues such as whether to carry on dividing the program into discreet application rounds or to start a first-come, first-served process.
The RySG had suggested in its letter that the next window could open after certain threshold issues had been resolved but before all policy work was complete, and that at the very least ICANN staff should get to work on a new version of the Applicant Guidebook while the PDP is still ongoing.
But Crocker again responded that the staff cannot get to work on implementation until the board has considered the community’s final recommendations.
ICANN’s most recent estimates for the opening of the next round would see applications accepted in 2020, eight years after the last round.

New gTLD registries want a $17 million ICANN rebate

Kevin Murphy, March 24, 2017, 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.