ICANN defends the new levy as a way to expand and stabilise its annual budget, which was thrown into turmoil when scores of domain name registrars banded together this year to protest a near-doubling of the organisation's spending. Targeting domain name owners may result in less organised opposition, ICANN seems to have concluded.
In a document released Friday, ICANN said that funds collected from the new domain name levy will be carved into three slices. One-third of the money will go to "developing country stakeholders," one-third will "facilitate the security and stability" of the Internet's naming system, while the remainder can be spent freely by ICANN without restriction.
Currently about 75 percent of ICANN's $15.8m budget comes from domain name registrars such as Register.com and GoDaddy.com that pay fixed annual fees. In a response to last summer's budgetary outcry from registrars, ICANN is hoping to increase money it collects from so-called registries, which are individual companies that maintain the master database for each global domain name suffix. The 75-cent fee would be levied on registries, but as a per-domain charge instead of a flat rate.
"The intent of the fee is to ease the burden of [registrars] paying a higher percentage of the fees in the long run," said Kurt Pritz, ICANN's vice-president for business operations. "We have to spread out our sources of funding... This is one way to make our source of funding more stable."
Because VeriSign's contract to operate the master database for the .net top-level domain expires in June 2005, ICANN took the opportunity to insert the 75-cent fee in the bidding process that solicits proposals to run the .net database in the future.
Sonia Arrison, director of technology policy at the free-market Pacific Research Institute, slammed the concept, saying: "These guys don't need any more power. They're already unaccountable."
Susan Crawford, a professor at Cardoza School of Law, said she believes that ICANN is searching for additional sources of funding in its power struggle with the International Telecommunications Union, a United Nations agency that's seeking to expand its authority over how the Internet is run.
