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ICANN’s Missing Picture: The Domain Registrant

The main source of funding for Internet Corporation for Assigned Names and Numbers (ICANN) doesn’t get the attention it deserves.

In my open letter to new ICANN CEO Rod Beckstrom, I made made a key point with regards to domain registrants:

“Remember that domain owners ultimately fund your organization. Registries and registrars merely funnel domain owners’ money to ICANN.”

It’s a fairly simple idea, but here’s a flow chart.

icann-money-trail

The orange line are registration fees. Registrants pay the fee to a registrar, such as GoDaddy. GoDaddy then takes some of it as a profit and passes the rest to the registry, such as VeriSign. VeriSign then keeps some of this as a profit and passes the rest on to ICANN. In practice, some registries have fixed fee agreements with ICANN, which only bolsters the amount they keep in their own pocket.

The blue line represents the ICANN fee charged directly to registrants and passed on from the registrar to ICANN. Some registrars include this in the registration fee; others break it out.

The red line represents accreditation and annual fees paid by the registrar to ICANN. Some of these fees correspond to the number of domains registered. Ultimately, it comes out of the registration fees (blue line) paid by registrants.

As you can see, all of the money comes from the domain registrant. The middlemen take a cut and pass the rest along to ICANN. If the registrant goes away, ICANN basically has no money.

But domain registrants often feel like they are an unheard voice at ICANN. One example could be found at yesterday’s ICANN new gTLD/trademark event in New York City yesterday. Phil Corwin, general counsel for Internet Commerce Association, noted a missing check box on an evaluation form distributed at the event:

…at the bottom of each page was a line reading “my interest in this matter is defined by my work as/with a:” followed by a long list of possible connections, such as registry, registrar, or large corporation – but, remarkably, with no listing for “registrant” (other than the catch all “other”). ICANN thus continues its tradition of failing to perceive the existence of registrants, as is demonstrated by its finance dashboard which shows in bar graph form that ICANN receives the vast majority of its funding from registrars and registries, but apparently not a single dollar from registrants who fail to get any bar (even though they supply nearly all the money that flows through ICANN’s contract partners). Registrants to ICANN are seemingly like plankton to Moby Dick.

To be fair, domain registrants in general have failed to form a cohesive voice, save for the business constituency and an under-funded Internet Commerce Association. But that doesn’t mean ICANN should push forward policy that ignores the registrant community’s voice.

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Comments

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  1. Rob Sequin

    Rick Schwartz always says follow the money. In this case, follow the money to the original source and it’s the registrant!

    Beautiful chart!

    Break those first two arrow down and there is NO MONEY to follow.

  2. JMB

    Interesting article, and you make several good points.

    But don’t assume that commercial groups are working against registrants. Any registrar that isn’t looking out for the interests of customers won’t be a registrar for long.

    • Andrew Allemann

      JMB – indeed, many people on the IP constituency are also registrants. There’s carryover amongst groups. But the individual registrants fight to be heard at the table, while the big companies get a seat.

  3. Philip Corwin

    Thanks for writing about my ICA post on yesterday’s Broadway opening.

    We had a good turnout for our side of the debate. I know Saul Hansell from past work and alerted him to the meeting and invited him to a breakfast where those opposed to the URS and other parts of the IRT report had a chance to give him our perspective. I think that shows in his balanced reporting.

    I don’t know what ICANN will do about the proposed URS. It’s so clear that it is a major new policy that needs a formal PDP review that ignoring that and shoving it forward risks destroying their own remaining credibility about a bottom up policy process. Rod Beckstrom has a chance with all of this to show that we have real regime change and not just a new CEO, so let’s not prejudge their future decision.

    That said, we are making great strides in having a cohesive voice and forming strategic alliances on critical issues for all domain investors. We plan to keep pushing in that direction.

    PS–We need registrars that serve domainers to give us some backing. If your registrar is not providing any support to ICA we would appreciate it if you would encourage them to reexamine that position and provide some financial backing to the group that is working to protect your rights so that you can afford to remain their customer. What goes around comes around.

  4. Peter

    Hi,

    It appears that the Registrant has zero rights or representation where ICANN are concerned.

    The Reseller process is extremely dangerous for domain registrants as most are nothing more or less than one man / woman and a home P.C.

    The Registrar eg Wild West Domains, accepts no responsibility for the actions or lack of service by their Agents / Resellers.

    Take extreme care if you have domains registered through a reseller because you have no rights to recover your domains if they stop doing business for any reason.

    The serious conflict of interest between Wild West Domains, Go Daddy and Auctions or Back Order services mean the Registrant is well down the food chain especially if they depend on the so called “Support” services of the Regstrars.

    Based on experience I advise :

    Never use the servics of a Reseller

    Never use Go Daddy or any of the affiliated Registrars.

    Do Not depend on ICANN to support the Registrant (domain owner).

    Use the services of a small professional Registrar where your business is appreciated.

    Learn about the process and see for yourself how poorly the Registrant is served despite their important role as outlined in the graph above.

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