ICANNs Bid to Double Budget Raises Ire

Registrars criticize the Internet governing body's budget for putting too much burden on them to pay for spending increases, while others say the boost is justified given increased demands on ICANN.

The Internets domain-name oversight body is proposing to double its budget and raise fees for the companies that register Web addresses—a move that is unleashing criticism about who will pay for the heftier spending.

The Internet Corporation for Assigned Names and Numbers (ICANN) this week publicly posted its budget plan for fiscal year 2004-05, here in PDF form, in which it seeks to spend $15.8 million, almost twice the $8.7 million being spent this fiscal year.

The bulk of the revenue to fund the increase—about 80 percent—would come from registrars, the companies accredited by ICANN to sell domain names to businesses and individuals, and that has led some to cry foul.

"Its a huge increase, and theres not much justification for it that they can offer," said Champ Mitchell, chairman and CEO of Network Solutions Inc., one of the largest registrars.

"Most of this [increase] is to spend money in places where they hope to guarantee the existence of ICANN and that, to me, is not a good basis on which to double your budget," Mitchell said. "We dont see these increases having a real advantage to registrants, who are people we all ought to be serving."

ICANNs board of directors is expected to consider the proposed budget, which is open for public comment, at its July 23 meeting in Kuala Lumpur, Malaysia. ICANN officials could not be reached Thursday for comment on the proposed budget.

Mitchell said he views most of the increase as ICANNs attempt to counter efforts within the United Nations to play a bigger role in the domain name system, particularly overseas.

The UNs World Summit on the Information Society has been holding meetings to discuss playing a larger role in the Internets addressing system.

Among the biggest increases proposed in ICANNs budget are to increase staffing from 33 to 59 positions and to double the amount of spent on travel to $2.4 million. ICANN mentions the UN process along with demands from the domain-name community and from the U.S. Department of Commerce as reasons for an increase.

Litigation also played a role, responsible for $2 million of the increase, the budget proposal states. For example, ICANN faces a lawsuit challenges its role and authority from VeriSign Inc., the registry that manages the Internets largest domains.

/zimages/4/28571.gifClick here to read more about an ICANN win earlier this week in the VeriSign lawsuit.

According to ICANN, the budget proposal "is intended to enable the organization to move forward on a number of fronts and reach goals heretofore unattainable due to a lack of staff, planning and resources."

Not all registrars are critical of ICANNs move to expand the size of its budget. Go Daddy Software Inc., another large registrar, supports the move because ICANNs role has grown rapidly with the rise of the Web, and it needs more money to fund enforcement and meet new demands, said Bob Parsons, founder and president of the Scottsdale, Ariz., company

"The $15.8 million that theyre looking for, when you consider what they do and the size of our industry, its a deal," Parsons said. "Were expecting ICANN to be a regulator and a quasi-public company and to also police the registrar industry, and they simply dont have the funds to do that."

Next Page: The proposal also adds a new per-registrar fee.