ICANN Settles Budget Battle

The Internet's domain-name body clears the last hurdle for its $15.8 million budget, which will double its spending.

After months of debate and negotiations, the overseer of the Internets domain-name system has gained approval for a budget that doubles its spending.

The Internet Corporation for Assigned Names and Numbers announced Tuesday that its $15.8 million budget for fiscal year 2004-05 had garnered the necessary support from the 359 registrars who are authorized to sell domain names to businesses and individuals.

When it was first proposed in May, ICANNs budget raised concerns among some registrars who were upset that it funded the bulk of its spending with increased fees on registrars.

ICANNs board of directors adopted the budget during its July meeting in Kuala Lumpur, Malaysia, but ICANN still needed to receive support from two-thirds of the registrars for its funding plan. This week, ICANN crossed that mark with 68.6 percent of registrars voting in favor of the budget, said Kurt Pritz, vice president for operations at ICANN.

Each individual registrar doesnt receive an equal vote, though. The votes are weighted based on the level of funding each is projected to contribute in the budget, meaning the largest registrars have the biggest impact.

Ten of the 11 largest registrars supported the budget after a series of negotiations, Pritz said. While the overall funding model didnt change as a result of the talks, ICANN did focus more on enforcing registrar and registry contracts by increasing from one to three the number of staff dedicated to it in the revised budget, Pritz said.

ICANN also agreed to seek outside support to fund part of its plans to open and staff additional global offices. The Marina del Rey, Calif.-based nonprofit corporations plans to expand its reach had drawn the ire of some registrars, who viewed the growth as a way to ensure its existence as the United Nations and other organizations consider playing a bigger role in the Internets addressing system.

"Im sensitive to size of the contribution the registrars are making to ICANN, and ICANN wants to make very good use of the money," Pritz said. "The benefit thats evolved from this is the establishment of working relationships that we can springboard off of in the future."

/zimages/1/28571.gifRead more here about the latest in VeriSigns legal challenge of ICANN.

In the revised budget, registrars pay a transaction fee of 25 cents per annual domain-name registration, as well as the annual $4,000 accreditation fee.

Registrars also must pay a portion of the $3.8 million that ICANN plans to raise. Today, that comes out to $10,585 per registrar. The per-registrar amount could vary, ICANN points out in the revised budget, because the number of registrars could shift and because smaller ones can ask to have a portion of the fee waived.

Network Solutions Inc., whose chief executive vocally criticized the original budget for being too bloated, was among those deciding to support the revised budget.

Network Solutions CEO and chairman Champ Mitchell was unavailable for comment on the approved budget, but spokeswoman Susan Wade said the Herndon, Va., company decided to support the budget after negotiations.

"It was a compromise, and we decided to vote for it," she said.

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