ICANN -- Or Can I?

27.06.2000

ICANN will regard growing opposition to its inappropriate and unwarranted billing practices

Raising money can be a frustrating affair. For Esther Dyson and friends, it seems summer is the season of begging and bullying for bucks. Unfortunately for the people at the Internet Corporation for Assigned Names and Numbers (ICANN), this seemingly annual event somehow always ends up not only raising controversy and blood pressure, but winds up adding more fuel to the fire, the center of which is the burning issue of privatising the main controlling components of the Internet.

In the beginning of June this year, the Council of European National Top-Level Domain Registries (CENTR), a coalition of companies and nonprofit groups that run 30 country-code top level domains (ccTLDs) in Europe, met in Norway and voted to ignore the nearly 1 million USD in bills they have been sent by ICANN. Members of the coalition said they objected to the way ICANN was levying the fees and also to the lack of any formal agreement about what control it will ultimately have over their domain-name registration businesses.

Of course, this isn't the first time ICANN has tried to squeeze money out of the Internet "community" in order to fund itself. In July of last year, ICANN tried the same trick by attempting to establish a 1 USD fee for every domain name registered. This fee was expected to raise more than 5 million USD dollars in desperately needed cash. The plan, however, was eventually scrapped due to opposition. Indeed, the chairman of the US Commerce Committee, Republican Tom Bliley, went so far as to accuse ICANN of "imposing a tax on the Internet behind closed doors."

In her defense, Dyson retaliated that the fee was needed. "ICANN must have a stable source of income," she said in prepared written testimony. "The United States Government has asked ICANN to do an important job, but it has not provided the means by which to carry it out, leaving the job of providing funds to the Internet community itself." Meanwhile, in her pitch to the venture capital community when asked for contributions, the cryptic warning was if ICANN failed to get much needed funds then the future of e-commerce would be at risk.

Given the amount of money the Internet is supposed to generate for multinational corporations, it's surprising why ICANN has such financial difficulties. Jay Hauben, administrator of the Netizen list which, among others, raised the issue, explains:

"ICANN wants money to use in its capture of the crucial central functions and therefore the direction of the Internet. If it got that money from its corporate sponsors the nature of its service to them would be too obvious and its capture would be overwhelmingly opposed. Instead it is trying to get that money by taxing the domain name registries. But will they let themselves be taxed without representation?"

Thus, instead of the old dollar-per-name scheme, ICANN have decided to bill registries and registrars for undefined services stretching from the period July 1st, 1999 to June 30, 2000. According to ICANN statistics, a somewhat arbitrary figure of 35% of their annual budget, attributable to the ccTLD registries/registrars, is being requested, amounting to one and a half million USD.

ICANN, for its part, maintains the tax (or fee) is justified, for it claims that its financial structure is based on proportionate contributions to its policy making activities from registries and registrars. Furthermore, they stress that the current contribution shares were worked out last year by a task force composed of members of the registries and registrars and publicly discussed and adopted by the ICANN Board last November.

Yet many are up in arms not because they have to pay per se, but that the way in which they are being billed by ICANN is inappropriate. "We just feel that they shouldn't send out invoices without agreements," said Fay Howard, general manager of the CENTR, cited in a New York Times report. "There are two sides to any contract. We feel before any authority is ceded to ICANN, we need to have something in place."

There is continued disappointment -- in fact, ever since the creation of ICANN almost two years ago -- that those involved with the day-to-day functioning of the Internet have no voice in ICANN's decision-making processes. For instance, CENTR is a member of the Domain Name Support Organisation (DNSO) within ICANN, the latter of which has only 3 seats on a board of 19. Unfortunately, of these 3 seats not one represents a ccTLD organisation. Thus, with very little influence in decision-making processes, but expected to pay a large proportion of ICANN's total budget, it is understandable why most of these people are very unhappy.

"In my opinion the proportion for ccTLDs is really unfair," complains one registrar. "I see a large proportion to pay to ICANN but on the other hand very little influence on the Board and on the decisions." What further disappoints him is the noticeable decline in technical competence and lack of general interest in the effective functioning of the Internet among ICANN's top-level decision-makers. Indeed, most feel that ICANN is now dominated by the influence of high-priced lawyers and businessmen as opposed to technical specialists.

In addition to the lack of power and influence over decision-making and policy, some also question ICANN's claims for why they need the cash. Many registrar's see no clearly defined benefit to the tax being imposed, nor do ICANN's documents spell out any such benefit. "I don't regard vague terms like 'build sensible policies and structures to promote the growth and stability of the Internet' as being of direct value to the .ZA administration," opines Mike Lawrie, a registrar from South Africa. While he naturally supports the concept to "build sensible policies and structures to promote the growth and stability of the Internet", at the moment these are merely words, with little substance behind them.

While for most industrialised nations the amount being requested by ICANN may not seem overly excessive, for many of the poorer countries it is, for they don't have that kind of money simply lying around in a ccTLD budget. The amount being requested from the South African ccTLD registrar, for example, comes out to 17,500 USD for what they consider negligible, almost non-existent, services.

"The principle of paying the true costs of services received by the .ZA admin, agreed in advance in a contract, is acceptable to me, and I'd be willing to negotiate along these lines," Lawrie explains in an exchange with Mike Roberts from ICANN. This exchange was initially posted on a public list and cross posted on various others, such as the Netizens. "It may well be that .ZA would prefer to return services in kind, eg run a root-level nameserver, rather than pay the amount that ICANN is suggesting. I trust that your minds will be open to this."

Finally, what has some people annoyed is the way in which ICANN is trying to introduce fees in retrospect. To let ICANN get away with such an attempt is tantamount to standing on a slippery slope, as illustrated by Lawrie: "I must reject out of hand any attempts by anyone to introduce a charge in arrear - were I to accept that principle, then who knows who would demand payment for all kinds of services dating back to 1990 when .ZA first came into use."

What can be expected from all this is that ICANN will regard opposition to its inappropriate and unwarranted billing practices with a certain amount of insular paranoia, in that they will denounce those opposed to ICANN's financial plans and decision-making processes as "crazy" people with their own hidden agenda who would like nothing more than to see ICANN fail. This, of course, is ridiculous. In fact, many registries and registrars do see the need for such an organisation. "My feeling is that ICANN is a good idea," says Balazs Martos, in charge of the the ccTLD in Hungary, "but the realization of it is not optimal."

Dyson et al will continue to maintain that what the US government previously sponsored Jon Postel to do is now the responsibility of the "community", including the responsibility to fund the expenses necessary to carry out ICANN's mission. Some have noted, however, and not with a little irony, that perhaps ICANN can get out of its financial bind by not globetrotting around the world in a vain attempt to make it appear that their "work" is global in nature. Indeed, such trips actually have the opposite effect, since most normal, working people (who make up the majority of Internet users, and hence the "Internet community") don't have either the time nor the money to fly around and attend meetings in various foreign locations.

In the end, ICANN will indubitably be put to an important test. As one observer noted on the Netizen list: "it will be interesting to see what happens if in response to the ccTLDs refusing to pay ICANN fees, ICANN removes those domains from the roots." If so, would this mean the end of the Internet -- or ICANN?

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