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ICANN’s Picture of Itself

ICANN has released its draft new budget [PDF]. The document gives us a good look at how ICANN sees itself. It’s arguably an internally inconsistent view.

ICANN is growing. This budget calls for ICANN to have almost 60 staff members by the end of the next fiscal year. Expenses under this budget are predicted to be twice those of last year ($16 million v. $8 million).

2001-2002: $5m
2002-2003: $6m
2003-2004: $8.3m
2004-2005: $15.8m

ICANN is providing value by providing services. “Compliance” efforts affecting registries and registrars will be much greater under this budget. There are rumors that new registry services will trigger new fees paid to ICANN (see p. 17). ICANN continues to work towards a process “for evaluation of proposed changes in registry operations.” (Not new Registry Services, a defined term under the contracts, but “registry operations.”) ICANN intends to provide better IANA services. The budget calls for ccTLDs to recognize the value of these services and others and pay 25% more to ICANN this coming year; notes following the budget indicate that ICANN’s “internal goals [for raising money from ccTLDs] are greater.”

ICANN is under attack. The budget lists as one of ICANN’s programmatic areas “managing developments springing from the UN’s WSIS.” Although there’s no line item given for this effort, it’s clear that ICANN feels it is important to explain “the value ICANN provides to the worldwide Internet community.”

Each budget of ICANN’s for the last few years has been remarkable, and this one is no exception. There is a great deal of emphasis on process in this document - the budgeting process itself is described three or four times, in various levels of detail. By focusing on process, it’s easy to sidestep what ICANN’s actual role in the world is. ICANN can say, “we do this, and this, and this, and publish this, and we need much more money to do it.” ICANN’s vision is to monetize all transactions by every link in the chain (registries, registrars, and registrants) in order to fund its growth.

But what’s ICANN’s basis for taking all these steps? What is ICANN? It’s clear that it sees itself as legislature, prosecutor, and executive all at once—a pronouncer of policy and a compliance officer; an operational IANA service provider/customer service representative for registrants, and also a controller of registry “operations.”

This is the internal inconsistency that the budget reveals: ICANN is under attack precisely because it believes itself to be (and appears to be) important. ICANN should remember what it is:

  • ICANN should go back to the use of a thin contract that contains only the essential elements of the consensus policy bargain.  With a thin contract, ICANN wouldn’t need all this staff to scrutinize each step taken by a registry or registrar, and wouldn’t be appearing to compete with the ITU.  The model proposed is clearly unworkable.
  • ICANN should refrain from using the leverage it has as a gate-keeper of new entries into the root zone file to impose complex regulatory policies (and fees) on new tlds.  ICANN should not see each new TLD and registrar as another revenue opportunity.  That it does so makes other countries wonder whether ICANN is indeed “doing Internet governance.”  Paul Twomey is very good indeed at explaining ICANN’s role as a forum for discussion of minor coordination issues.  That explanation doesn’t fit this budget.

I’ve said this before. And there’s no limiting principle that would clarify the internal inconsistency dogging ICANN. There is a feeling of inevitability in the air. Nothing is the last straw, apparently.

By Susan Crawford, Professor, Cardozo Law School in New York City

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Steven Forrest  –  May 20, 2004 1:13 AM

Susan Crawford has absolutely nailed it. As I said on my blog, “The budget also includes $2.38 million for ICANN’s travel bills, most of which is the cost for ICANN’s three planned globe-hopping meetings in the coming fiscal year. This year, ICANN has managed to scrape by with just two meetings in fancy resorts around the world.

So how does ICANN propose to pay for all of this? Why, by taxing new “registry services.”

Perhaps now we understand a little better why ICANN tries to define almost anything a registrar does as a “registry service.”

Peter Forman  –  May 20, 2004 5:44 PM

We support ICANN. While imperfect, it is the best institution that we have come up with to protect competition and ensure compliance and stability ? all critical for consumers.

ICANN must broaden its sources of funding to create a more equitable distribution of costs. Registrars can not continue to support over 80% of the budget - $13.2mm all told. ICANN benefits many additional constituencies: including gTLD and ccTLD registries, ISPs, users. For example, ICANN will be authorizing new TLDs, re-negotiating the .net registry contract, and authorizing new registry services. ICANN should look to these new industry opportunities to share the funding burden.

While we applaud ICANN’s move to separate core and discretionary expenditures, the community’s displeasure clearly indicates that ICANN needs to take another hard look at its priorities. The proposed almost doubling of the budget from $8.6mm to $15.8mm is too high. We believe ICANN should focus on its core mission and cut its budget accordingly.

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