Domain Name Registrar Defends Planned Fee Increase

Under fire for its plan to charge domain name registrars a fee for each name they register, the Internet Corporation for Assigned Names and Numbers (ICANN) is sticking by its argument that private donations are not enough to fund U.S. government efforts to increase competition in that business. ICANN’s plan to charge registrars $1 per new domain name has drawn criticism from House Commerce Committee Chairman Tom Bliley (R-Virginia) and last week from the Department of Commerce.

ICANN issued its comments in a letter in response to an inquiry from Bliley’s committee in late June. In what may also be a bit of home-state politicking, Bliley blasted ICANN for taking over the duties of Network Solutions Inc. (Nasdaq: NSOL), a company based in Herndon, Virginia, that had the exclusive domain name registration authority from 1993 until late last year.

“Rather than promote the Internet’s evolution, ICANN’s policies actually may jeopardize consumers’ abilities to use, enjoy and transact business on the Internet,” Bliley said in letters to U.S. Department of Commerce Chairman William Daley and ICANN Interim Chairman Esther Dyson.

Bliley also complained about ICANN’s apparent eagerness to take on unauthorized regulatory duties. The Commerce Department is the agency that gave ICANN the responsibility last November for shifting the domain name registration process from the government to the private sector. According to ICANN, NSI has not applied to become an accredited registrar under ICANN’s new agreement with the Commerce Department.

Nevertheless, ICANN is standing by its plan. In a letter responding to Bliley, Dyson said, “ICANN hopes that the Committee’s efforts to inform itself and the general public will increase the understanding of the somewhat obscure but important tasks that ICANN has before it.”

Progress Costs Money

According to Dyson, ICANN has made significant progress toward increasing competition in the domain registration field, accrediting 57 new registrars since last November. “Once competition is fully introduced, the cost to consumers of domain name registrations and renewals will likely be significantly reduced,” she said in her letter. “Until now, ICANN has relied on private donations from individuals and companies, but that financing method is obviously not a viable long-term approach.”

All of ICANN’s interim board members are unpaid and, thanks to ICANN’s revenue shortfall, have forgone most of their expense reimbursements as well, Dyson added.

ICANN says the registrars have agreed to pay a volume-based fee to help ICANN partially recover its costs, but the organization remains open to other suggestions as well. Dyson argues the organization has been charged with an extensive list of tasks that will require ongoing funding. Beyond authorizing domain name registrars, those tasks include studying and reporting on policy domain name and trademark issues and expansion of the so-called Top Level Domain name space. In that area, ICANN has only assumed authority over registrars of .com, .net and .org domains, “which are by far the most significant commercial domains,” the group says.