[council] Regarding funding model via registries/registrars

["Bruce Tonkin" <Bruce.Tonkin@xxxxxxxxxxxxxxxxxx>]

Hello All,

I have been reviewing the funding provisions in the registry agreements.

I have checked the existing .com and .biz agreements.

If registrars don't approve being invoiced directly, then ICANN may
charge registry operators.  But there is a fee cap as follows:

"The Total Registry-Level Fee Cap shall be US$ 5,500,000 for the fiscal
year ending June 30, 2002; shall increase by 15% each fiscal year
thereafter; and may be increased by a greater amount through the
establishment of Consensus Policies as set forth in Definition 1 and
Section 3 of this Agreement."

(From
http://www.icann.org/tlds/agreements/verisign/registry-agmt-com-25may01.
htm , Section II, 7 D )

The current .net agreement caps the fees to:

"The per-registrar component of the Variable Registry-Level Fee shall be
specified by ICANN in accordance with the budget adopted by the ICANN
Board of Directors for each fiscal year, but the sum of the
per-registrar fees calculated for all registrars shall not exceed the
total Per- Registrar Variable funding established pursuant to the
approved 2004-
2005 ICANN Budget" and a maximum transaction fee of 15 cents per year.

The proposed .com agreement would effectively result in an amount well
above the total cap in the current .com, .biz, .net agreements, and it
is permissible for the registry operator to pass on the ICANN
transaction fees to registrars.

Based on the current .com and .biz agreements, you could argue that
increasing the cap should be subject to a policy process related to
funding.

Regards,
Bruce Tonkin