Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 1 Issues on ICANN FY Budget 18 July 2004 Hiro Hotta & Yumi Ohashi Japan Registry Service Co.,Ltd. (JPRS)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 2 FY Budget Proposed Posted on 17 May 2004 for public comments Comments on the Proposed Budget 29 June 2004, Board Meeting Resolved [04.49], that the President is authorized and directed to implement and carry out the activities of ICANN at substantially the same budget and expenditure levels pursuant to the ICANN Budget approved in Resolution and is directed to inform the Board of material variances from the Budget during an interim period commencing on 1 July 2004 and ending upon formal Board approval of the new budget for fiscal year ending on 30 June 2005.

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 3 Comments Posted 2004 Jul 15 NRO comments on ICANN´s budget proposal. raul 2004 Jun 30 ICANNBudget.ORG's Alternative Budget Proposal to ICANN's Budget Bhavin Turakhia 2004 Jun 25 RE: Comment from TWNIC regarding the ICANN 2004~2005 budget proposal Ching Chiao 2004 Jun 16 Comments on Budget Proposal HiroHOTTA 2004 Jun 11 Links edwardbnewman 2004 Jun 10 Possibly the FINAL WORD on the budget - how could I have missed this Bhavin Turakhia 2004 Jun 08 Dear sirs, ask You to inform, can we prolong the registration of the domain name industriya.com and that for this it is necessary to do? Some problems appeared at our recorder with prolonging of the registrations AVK 2004 May 26 Letter to ICANN on Budget Paul M Kane 2004 May 25 Re: [registrars] ICANN budget. Rick Wesson 2004 May 20 Budget concerns, financial support, and industry health and diversity Mike Lampson 2004 May 20 How will ICANN hold itself accountable? tbarrett 2004 May 19 Reply to Kurts - 2nd Appeal to ICANN Finance committee to modify ICANN Budget proposal Bhavin Turakhia 2004 May 19 Response to letter from Bhavin Turakin Kurt Pritz 2004 May 19 Appeal to ICANN Finance committee to modify ICANN Budget proposal Bhavin Turakhia

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 4 Aspect of comments 1.Basis of budget 2.From ccTLD registries’ viewpoint 3.From gTLD registrars’ viewpoint Basically we support ICANN but… - More accountability needed - Focus on core value - Doubling the budget? - Fair burden?

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd Basis of budget

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 6 (1)As a premise: Support for ICANN Support to build a stronger ICANN, and with no doubt, to be responsible for a fair share to the cost of running a stronger ICANN. (TWNIC, 2004/06/25) […] happy to contribute to ICANN's operation and ccTLD related services as long as ICANN continues to commit itself to serve the Internet community following its charter. (JPRS, 2004/06/16)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 7 (2)Minimizing ICANN’s mission Additional effort to elevate ICANN’s role in international Internet management, although important, shall be minimized as much as possible and shall coordinate with the relevant entities such as ccNSO or related regional Internet organizations (TWNIC, 2004/06/25) ICANN's activities should be limited to only those with guarantee of their cost effectiveness, and its budget should be developed under the condition that the expense is the minimal amount of money to accomplish such minimal activities. (JPRS, 2004/06/16)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 8 (2)Minimizing ICANN’s mission […] ICANN needs to focus its core mission and address key and priority issues. (CENTR, 2004/05/26) In the Proposed Budget, ICANN appears to try to address things that should be handled by market or local Internet community, which is beyond its initial mission of global technical coordination. (JPRS, 2004/06/16)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 9 (3)Budget increase unacceptable In a market where we expect revenue streams to be drying up and margins to shrink further, this is unacceptable. (The Registry at Info Avenue, LLC, 2004/05/20) ICANN's total budget figure should reduce in whatever cost- cutting manner that is possible (ICANNBudget.ORG, 2004/06/30)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 10 (4)Difficult to justify the account -1 The budget plan for lacks clarity and transparency to how each budget item is to be spent and what will be accomplished. (TWNIC, 2004/06/25) The primary concept of the budget development is not well-defined. That is, whether the budget is to fund to complete ICANN's critical activities pursued so far, or to invest in developments of new value added services. (JPRS, 2004/06/16) […] we feel regret that neither a retrospective nor forward-looking view in 2004~2005 budget plan is provided. Thus we found limited capability to evaluate how we could accept a 2-cent raise per domain. (TWNIC, 2004/06/25)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 11 (4)Difficult to justify the account -2 Statements of Cash-Flow, Profit/Loss and Balance sheet are missing in all budget discussions, just what ICANN costs and how well it fulfills its mission are never discussed. (Rick Wesson, 2004/05/25) […] ICANN should provide a 1, 3, 5 year financial plan prior such budget plan approved by the Board. (TWNIC, 2004/06/25) ICANN should also give an idea of its approximate projected budget for the next 3 years […] (ICANN Budget.ORG, 2004/06/30)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 12 (4)Difficult to justify the account -3 […] publicly disclose your Strategic Plan so that we, […], can be assured that your budget requests are well thought out. (The Registry at Info Avenue, LLC, 2004/05/20) […] ICANN shall study its operational advantage and disadvantage, and inform all stakeholders of how ICANN plans to perform more effectively. (TWNIC, 2004/06/25) The document contains neither evaluation of the last year's budget in light of cost effectiveness, nor specific explanation of basis for this year's budget calculation. (JPRS, 2004/06/16)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 13 (5)Neutrality in budget development required There must be a provision in the budget to allow for an audit process. (ICANNBudget.ORG, 2004/06/30)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd From ccTLD registries’ viewpoint

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 15 (1)IANA function We encourage ICANN to remove the unrealistic targets from their budget and ensure equitable funding for the IANA funding remembering the work load placed on the IANA staff is not proportional to the size of the Registry. (CENTR, 2004/05/26) GAC Members have said […], the distinction between IANA and ICANN should be clearer, suggesting a separation of the two entities, and many in the ccTLD Community agree with this view…. (CENTR, 2004/05/26)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 16 (2)What we pay for? -1 A forum whereby there can be an exchange of information between ccTLD Registries and gTLD registries is a useful contribution but not one that should be funded by a compulsory levy. (CENTR, 2004/05/26) […] many ccTLD Registries feel they should not be forced to pay for activities that do not concern them or that are already well catered for at a local level. (CENTR, 2004/05/26) I believe many ccTLD Registries would be willing to contribute towards more general ICANN services (such as a forum for discussion of industry Best Practice) provided there is a request from the community […]. (CENTR, 2004/05/26)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 17 (2)What we pay for? -2 […] many CENTR members feel strongly ICANN should not cross subsidise its operations by proposing such an overarching budget, indicating a lack of financial prudence. (CENTR, 2004/05/26) Per domain name fee applied for Tier 3 ccTLD registries has been raised year after year, however we are not convinced that ICANN's services for the Tier 3 registries have been proportionally expanded so far. (JPRS, 2004/06/16) ICANN, first of all, should clearly define its services to ccTLD. ccTLDs should be well accounted for to understand what they receive in return for the amounts they are paying. (JPRS, 2004/06/16)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd From gTLD Registrars’ Viewpoint

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 19 (1)Against increased financial burden -1 In this budget $11 million of $15.8 million is funded by Registrars - which accounts for 70% of ICANN's budget. ICANN must take proactive steps to ensure that this contribution percentage to ICANN's budget must reduce to reasonable levels in the next budget round and thereafter. (ICANNBudget.ORG, 2004/06/30) In a market where we expect revenue streams to be drying up and margins to shrink further, this is unacceptable. […] this appears to be counter to ICANN's goals of supporting a large and diverse market of domain registration providers. (The Registry at Info Avenue, LLC, 2004/05/20)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 20 (1)Against increased financial burden -2 By raising the fixed fee component from $4k to $23k, ICANN has straight away increased the barrier to entry. (Directi, 2004/05/20) It is reducing the per domain tax for larger Registrars and increasing the per domain tax for smaller Registrars. (Directi, 2004/05/20) The $19K accreditation fee is a regressive tax, the more you earn the lower your tax rate. (Rick Wesson, 2004/05/25)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 21 (2)Equal allocation of burden desired ICANN must revert to a simple per domain year variable fee. […] it is applicable to all Registrars and will thus enable unencumbered free competition. (Directi, 2004/05/20)

Japan Registry Service Copyright © 2004 Japan Registry Service Co., Ltd. 22 (3)Against concept of forgiving fees The concept of forgiving fees for some Registrars and not for others in itself seems so shaky as a model […] (Directi, 2004/05/20) The $19K accreditation fee is a penalty for a business model, the penalty, judgment and forgives have no objective criteria defined to measure who gets forgiveness and who does not; nor is an appeals processes outlined. (Rick Wesson, 2004/05/25)