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ICANN Adopts Budget But Work Remains

Executives at the Internet Corporation for Assigned Names and Numbers (ICANN) adopted its fiscal year 2004-2005 budget at the close of its tri-annual meeting in Kuala Lumpur Friday.

The board of directors will have a hard time, though, convincing its members how much they pay into a budget that increased nearly two-fold in 12 months, from $8.3 million to $15.8 million.

Adoption doesn't mean its budget goes immediately into effect; the ICANN board of directors still needs final approval from its members before enacting the budget plans.

"The important thing from the board's perspective is that we adopt the 2004-2005 budget today. That's now fixed and the only issue remaining, although it's complex, is to finalize details of how that money will be contributed by the various constituencies," Vint Cerf, ICANN chairman, said in a press conference following its board of directors meeting Friday.

The biggest holdouts on the annual budget are the global top-level domain (gTLD) registrars -- the companies that buy and sell domain names for gTLD extensions like .com and .net -- who will pay for approximately $11.4 million of the $15.8 million budget.

This year, ICANN went with a new budgeting model for registrar dues that significantly increases their burden and has drawn plenty of criticism from smaller registrars. This year, under the proposed budget mechanism, registrars will pay a flat fee of $4,000 each annually for the right to be an accredited registrar within ICANN. Every transaction they conduct (buy, sell or edit domain name information) will cost 25 cents, up from 12-18 cents last year. On top of that, each pays an equal portion of the $3.8 million ICANN officials say are costs incurred by registrars regardless of size.

The board of directors worked throughout the week to gain consensus with a group of smaller registrars holding out on the budget plans. The only thing agreed upon, however, was a three-year price caps on the fees. At the press conference, Paul Twomey, ICANN CEO, said further talks between the two groups resulted in applying increased pressure on funding relief from alternate sources, like country code TLD (ccTLD) registrars, who have so far escaped much of the funding requirements.

Twomey said the board's concessions are bearing fruit and expects gTLD registrars to bless the adopted budget soon, an almost annual event.

"We're within a whisker of having the full number [of gTLD registrars] agreeing, which is well ahead of where we were last year at this time," he said.