The launch of the ‘next’ round of new generic top-level domain (gTLDs) program has experienced significant delays since the 2012 round, resulting in frustration for prospective applicants and undermined trust in the multistakeholder governance model.

Over the last few years, the Brand Registry Group (BRG) has been vocal in our support of the multistakeholder model, whilst simultaneously pushing ICANN to expedite the launch of the next round for both .brand and community/commercial applicants. This includes active involvement in the Subsequent Procedures Working Group (SubPro) Report and reviews of ICANN’s Operational Design Analysis (ODA).

In advance of the upcoming ICANN76 meeting in Cancun, the BRG has today launched a report in collaboration with industry veterans Tony Kirsch (GoDaddy Registry) and Michael Palage (Pharos Global).

Entitled “Option 2a – SubPro Implementation Proposal”, the report challenges some of the underlying assumptions of the ODA and outlines a detailed, yet simple implementation framework that builds on ICANN’s proposed Program Implementation Option 2. The report contains five key pillars and six key recommendations that are designed to stimulate community discussion and provide ICANN with the necessary confidence for timely and successful implementation of the program.

The report will be presented to the community on Saturday, 11^th March at 10.30 a.m. (Local Time) in the session: Brand Registry Group—SubPro ODA Implications for Prospective Future TLD Applicants. All interested parties are invited to join the meeting in Cancun, and virtual participation is also available for the session for those unable to attend in person. Please note that registration is still required here due to ICANN’s policy.

The BRG is pleased to provide an excerpt of the report below to stimulate community engagement during the Cancun meeting and a full version of the report is available for download at brandregistrygroup.org/nextround.

Excerpt: Option 2a – SubPro Implementation Proposal

Substantial work has been undertaken by the community and ICANN to date, however further agreement on the deeper points of implementation is required to provide the Board with the necessary comfort to move forward with this program.

In the Subsequent Procedures (SubPro) Operational Design Assessment (ODA) published on 12 December 2022, ICANN provided two options for moving forward with the next round;

• Option 1 – a five-year implementation plan costing $457 million in which an unlimited number of applications would be processed in a largely automated manner at a fixed cost of $270,000 per application
• Option 2 – an 18-month implementation plan costing $407 million in which applications would be processed in annual batches of 450 in a largely manual process at a fixed cost of $240,600 per application

In both options, ICANN has proposed a significant increase to the 2012 application fee ($185,000), surprising many in the community who had anticipated a similar or lower cost for applicants in the next round. Similarly, the $400 million cost to implement either option appears to be an immense amount of money for a program such as this and is seemingly lacking agility or justifiable value for money.

Option 1 is widely regarded as unviable due to the further significant delays proposed. Option 2, whilst more reasonable in terms of timing, is also impractical due to the costs associated with the application fees and concerns regarding the proposed implementation plan.

The following outline proposes five core pillars that will allow the program to launch expeditiously with enhanced predictability for applicants and ICANN. These pillars are:

Pillar #1 – Restructure the Application Review Process

Historically, ICANN has required applicants to submit their entire application at the beginning of the application process with questions within three segments—Administrative, Technical and Financial. This Option 2a proposal recommends that applicants only provide the responses to the Administrative segment of the application (effectively the answers to questions 1-22 in the 2012 Applicant Guidebook) along with a base application fee in their initial submission and defer the technical and financial segment responses until required later in the process by ICANN.

Pillar #2 – Expedited Pre-Evaluation for Registry Service Providers

In the 2012 round, approximately half of the application questions related to the intended technical services that would be utilized, and ICANN’s approach of reviewing full technical responses for each application was a prohibitively expensive and resulted in significant delays and costs for applicants.

Option 2a recommends that ICANN immediately commence the Registry Service Provider (RSP) Pre-Evaluation Program outlined in the SubPro Policy Development Process (PDP). This will enable streamlined application reviews for all applications and significantly reduce the amount of effort required by ICANN and consequently, the base application fee.

Pillar #3 – Structured Application Prioritization Review

With the number of applications likely to surpass the batch thresholds (450 TLDs) provided by ICANN in the ODA, Option 2a recommends that ICANN;

1. Undertake a Prioritization Draw shortly after making the applications public
2. Allow for applicants to decide whether they want to proceed as fast as possible with their application review or elect to delay
3. Undertake the draw under three separate sub-categories
   1. Category 1 – IDNs that wish to proceed
   2. Category 2 – Non-IDNs that wish to proceed
   3. Category 3 – All applications that did not respond or elected to wait
4. Subsequently order all applications in order of category above into batches of 450 applications for processing

Pillar #4 – Implement a Tiered Pricing Model

Historically, ICANN has primarily imposed fixed fee pricing for applicants which has the unfortunate consequence of creating inequitable fees for applicants with simple (non-contentious) applications.

Option 2a recommends a “tiered” pricing structure for applicants, with a base application fee of USD 100,000 payable at the time of application submission. Additional fees for applications that associated with formal objections and/or applicant elected designations would be payable by the applicant before they can proceed, preserving ICANN’s ability to maintain a cost recovery structure.

Pillar #5 – Utilize Existing Systems and Off-The-Shelf Tools to Create a Simple and Effective Platform

Whilst there is significant work to be done by ICANN to facilitate the next round, a cost base of over $400M to deliver this is unacceptable and requires a detailed analysis of opportunities to rationalize requirements and/or costs. This Option 2a Proposal recommends a range of agile approaches to system development for the program that will increase speed to market and reduce unnecessary program/infrastructure costs.

Summary

As stated by ICANN’s new Interim CEO, Sally Costerton in her first address to the GNSO Council, we should we be aware of “perfect being the enemy of good”. To that extent, this Option 2a Proposal is focused on providing concrete steps that ICANN can take to expedite the next round, adhering to the following principles: enhancing the predictability for new applicants; minimizing the financial obligations for applicants, supporting applicants from developing or underserved communities; and ensuring the security and stability of the internet.

Read the full report at brandregistrygroup.org/nextround