ICANN is Smoking!

February 13, 2007 on 4:08 pm | In Business, Funnyish, Insider View, Rants, Tech News by Josh Jones |

…something.

Last Thursday I got an email from the Internet Corporation for Assigned Names and Numbers asking for our approval of their 2006-2007 budget. The link they included, as well as all the text of the message, actually referenced their 2005-2006 budget.

Last Friday I got another email apologizing for that silly email, with updated info to the 2006-2007 budget. This was the first evidence of possible illicit behavior.

The (corrected) email mentioned that their registrar fees were changing this year, from 25c per domain plus $3.8MM shared among all registrars (based on their size), DOWN to just 22c per domain and $.8MM shared!

I almost choked! ICANN was actually lowering their fees?! For the first time in recorded history? Amazing!

After regaining consciousness, I started to contemplate it a little more. Why shouldn’t they lower their fees, man?

If ever there was a business with huge economies of scale, ICANN’s is it. Their basic job is hang out, maybe eat some brownies, and talk about domain names and IP addresses. The cost of those meetings should change very little depending on whether there are 50 million domains registered, as there were two years ago, or over 80 million domains, as there are now.

I dunno, it definitely feels like the the Internet works already. All the kinks with IP addresses and domain names have already been baked out. It almost seems like ICANN’s new mission is to keep thinking of things for themselves to do to justify an ever-increasing budget!

After approving the creation of the .info, .museum, .biz, .coop, .aero, .name, and .pro “generic” Top-Level Domains a few years ago (and we all know how important they turned out to be) in 2006 ICANN approved the creation of five more gTLDs: .travel, .jobs, .mobi, .tel, and my personal favorite, .cat!

.dogs everywhere were incensed.

I don’t mean to be blunt, but the only purpose to ANY new gTLD these days is the transfer of wealth from trademark holders to domain squatters, registry operators, and ICANN. After all, the ONLY people who get domains in all these TLDs are large companies who just absolutely need to own every TLD for every brand they oversee!

Nobody, and I mean nobody is going to prefer a domain like “losangeles.travel” over even something super-retarded like “josh-joneses-la-travel-site.com”. Why?

People already barely grasp .NET! Good luck getting them to blaze a path to your “.aero!”

But I digress..

As I said, I was pleasantly surprised that our ICANN fees would be going down this year! I was just about to vote to approve their budget and go get some munchies, when I decided to take a second to actually read the pdf. Bong… I came to a sudden realization!

I couldn’t find the part in the actual budget that mentions any decrease in their fees… can you? (In fact, I also noticed that the fiscal year we’re being asked to approve runs from July 2006 through June 2007.. it already began seven and a half months ago! Has somebody been just laying about on the grass instead of getting their budget approved?)

Here’s the exact text of the email:

For this fiscal year (July 2006 through June 2007), ICANN agrees to maintain
the same two-part variable registrar-level fee structure used last year, but
will reduce the transaction fee to US./upd.22 per transaction. The second part
includes the per-registrar variable fee totaling US.8 million divided
among all registrars.

Okay, so maybe the .8 million is a typo and was meant to say “3.8 million” like before? Or maybe they’ve raised it to $8 million? I sure hope not, we wouldn’t be able to toke that! But the rest of that passage seems to pretty clearly indicate a price drop to 22 cents a domain, n’est pas? Alas, everything in the pdf still says $.25!

Looking through that budget, I found some other beautiful reefers of government-granted monopoly largess..

1. Even though the number of domains has only risen about 30% in the last year, ICANN’s total budget is rising from $23MM to $34MM, almost 50%!
2. Their payroll for 2000-2001 was $1.2MM for 15 people, an average of $80,000 a person. In 2005-2006 it was $7.3MM for 59 people, an average of $124,000 a person! And for 2006-2007 it is $12.4MM for 89 people, an average of over $140,000 a year each! Which is why I’m quitting my day job and going to become an intern at ICANN!
3. Their budget for board meetings and travel went from $3.8MM in 2005-2006 up to $5.9MM for 2006-2007! That’s $500,000 a month! Now, it does look like they have a lot of meetings… but maybe they could combine just a few of those and just have say, one a quarter? Also, instead of having all their meetings in crazy international locales (San Juan, Lisbon, São Paulo, Marrakech, Amsterdam, in the car, their parent’s basement, frat houses), they could save money by just getting tickets for the same flight on Space Ship One. That’d also save them money on getting high!

So, in reality, it sort of seems like they’re not lowering our fees at all. In fact, somehow, they’re increasing their budget another $11 million this year!

Looking at the pdf, it seems like all of that is coming out of VeriSign’s pocket. Which is nice, because they are the ones making the REAL killing, charging $6 per .com and .net domain per year. The good thing is, under their current agreement with ICANN they can’t increase that price by more than 7% a year, even if ICANN keeps rolling them for more paper.

The bad thing is, VeriSign has other ways to charge for things. Whether it’s flat per-registrar fees, domain redemption fees, or even unrelated businesses like secure certificates, I have no doubt VeriSign will pass this $11 million on to hosts like us. Whether we pass it on to shmoes like you is anybody’s guess..

But don’t worry!

I’m not voting for this budget!

(You can’t actually vote against the budget.. you can only abstain!)

If only ICANN would abstain a little…