Bob Parsons, CEO of Go Daddy Software Inc said yesterday he strongly supports the budget, while Register.com Inc’s CEO Peter Forman said he was disappointed with the size of the increase and unhappy with where the funding burden lies.
ICANN is proposing a $16m 2004-2005 budget, almost double last year’s figure. The majority of the money is pegged to come from domain name registrars, mainly from a $0.25 per-transaction fee they will be asked to pay.
We strongly support it, said Parsons. ICANN will finally be able to do its job. It will have the funds to become a good enforcement mechanism. The registrar market has never had a cop and ICANN, in order to do that, needs money.
ICANN says it needs that much cash to fulfill the requirements of its deal with the US Department of Commerce, and also to provide a more effective oversight mechanism for the many companies it has contracts with.
The budget calls for $14m to come from registrars, through transaction fees and flat support fees. That’s up from about $7.5m last year. ICANN estimates there will be about 250 registrars when the budget comes into effect.
Register’s Forman said that he favors a funding model that taps the registries – the companies that maintain the master directories of domains, regardless of which registrar sold them – for a greater portion of the funds.
It’s irrational that the registrars, which are competing with each other, are paying most of the money, and that the registries, which are the monopolies, are not, Forman said. He supports ICANN, he said, but thinks the increase is too much.
He added that he hopes the forthcoming bidding process for the .net contract keeps this in mind. VeriSign Inc’s contract to run .net expires soon, and ICANN is currently determining the best way to run the bidding process for a successor.
ICANN itself says it expects to realize new sources of revenue from some the new registries that may or not coming into being following the current sponsored top-level domain application process.
ICANN’s business operations director Kurt Pritz said that new sTLDs will provide new revenue streams, and that the revenue provided will be based upon the business model of the sTLD. For example, fees from for-profit TLDs could be different from not-for-profits.
NSI’s Mitchell said Tuesday that the newly levied registrar fees look like a tax, and that the costs will be passed on to buyers and would prove burdensome to small business customers and individuals.
Go Daddy’s Parsons said he’s suspicious of NSI’s position, given NSI is among the most expensive registrars, and reckons that VeriSign, which has a 15% stake in NSI and, Parsons says, wants to keep ICANN weak, may have something to do with it.
