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RE: [registrars] HELP - ICANN FEES !

  • To: "'Bhavin Turakhia'" <bhavin.t@xxxxxxxxxxxxxx>, "'Patricio Valdes'" <valdes@xxxxxxxxxx>, <registrars@xxxxxxxx>
  • Subject: RE: [registrars] HELP - ICANN FEES !
  • From: "Tim Cole" <cole@xxxxxxxxx>
  • Date: Thu, 24 Mar 2005 16:35:08 -0800
  • Cc: <schroeder@xxxxxxxxx>, "'Kurt Pritz'" <pritz@xxxxxxxxx>
  • In-reply-to: <200503220913.j2M9Dwv05689@pechora.icann.org>
  • Sender: owner-registrars@xxxxxxxxxxxxxx
  • Thread-index: AcUuaoag2Sgk/CwiRcuzubTyjRs+eAAGNrDwAA7c4BAAEuHGcA==


Your message indicates that there continues to be some misunderstanding
about the revenue section of the 2004-2005 ICANN budget.  To clarify, it is
being applied from the date adopted forward, not as you suggest, applied in
part from July and in part from November.  The 2004-2005 budget calls for a
new Per Registrar Variable Fee in the aggregate total amount of $3.8MM to be
collected "this fiscal year" and sets out the formula for calculating each
registrar's portion of the fee.  It is not retroactive to July, but simply a
total sum of what is to be collected during the year.  In fact, the language
in the adopted budget suggests that ICANN could have collected the entire
$3.8MM in a lump sum on the first invoice sent out after adoption of the
budget.  Nevertheless, ICANN is spreading the collection of it out over the
invoices for the remainder of the fiscal year.  Of course the annual fee cap
of $20,000 for this fee applies as does the total fee cap (of all fees
collected throughout the fiscal year) of $2MM.

Each revenue item in the budget went into effect when the budget was
adopted.  They are inter-related.  There is no provision in the budget
language for any of the revenue formula to be retroactive, which is why
there is no provision made to charge the $0.25 per transaction fee prior to
November or any provision to change the amount of the annual accreditation
fee prior to the budget's adoption.  Since it can be argued that the
implementation of one is designed in part to offset the other, to suggest
that some of the formula should be retroactive but not the rest would be
inconsistent.  ICANN believes the implementation of the current revenue
model is best understood and is the most fiscally sound with one common
effective date for all of its elements.  This is what the current invoices

I certainly did not intend to make any statement in my earlier
correspondence on this matter that could have been interpreted to imply that
any of the fees were being pro-rated for the year over 8 months.  If that is
how you read it, I apologize.

Tim Cole
Chief Registrar Liaison
Internet Corporation for Assigned Names and Numbers

-----Original Message-----
From: Bhavin Turakhia [mailto:bhavin.t@xxxxxxxxxxxxxx] 
Sent: Tuesday, March 22, 2005 1:22 AM
To: 'Tim Cole'; 'Patricio Valdes'; registrars@xxxxxxxx
Cc: schroeder@xxxxxxxxx; 'Kurt Pritz'
Subject: RE: [registrars] HELP - ICANN FEES !

Hi tim,

Thanks for the clarification - however there are a few discrepancies I must
point out

> November and December portion of the annual budget, which 
> will be collected over the 8 months remaining in the fiscal 
> year (November through June).  Hence, $3.8MM is being 
> collected during this shorter period.  This current set of 

To my mind if the budget is applicable from nov to june then the 3.8 million
should be pro-rated for that period.

If however on the other hand we assume that the budget was approved for the
entire fiscal year and the entire 3.8 million should be collected - in that
case you MUST refund the excess fees collected for the annual ICANN
Accreditation component (over and above USD 4000). So if you believe the
budget is applicable from July onwards in that case after july for every
registrar who paid USD 4500 or more in first year annual fees should get a
credit for that excess paid for the remaining TLDs

It would be unfair to have a situation where on one hand because the budget
was delayed in approval you collect excess fees on the annual accreditation
component, and on the other hand despite it being delayed you collect the
entire 3.8 million component in just 8 months.

Infact this may get even more confusing because I am certain you cannot go
back and charge 25 cents for every domain name in the last 4 months.
Therefore I am confused as to how this budget is being applied - part of it
is being applied as if from july, and part of it is being applied as if from

> invoices covers $950,000 of the amount to be collected for 
> the year (2 of 8 months).  However, the variable fee amount 
> collected from each registrar is recalculated each quarter 
> based on the number of operational registrars and the number 
> of registrars requesting (and eligible) for partial 
> forgiveness of the fee (since the combination must cover the 
> full amount).

You are partly incorrect here. The combination must not necessarily cover
the full amount. There is a situation in which case it would NOT cover the
full amount. That situation would be in the cirumstance that no registrar is
using the batch pool. In this circumstance only those registrars who have
more than 350,000 names will be charged USD 20,000 and the remaining will be
charged 1/3rd of tht which is USD 6667. This may result in a circumstance
where the total amount collected would not fulfill USD 3.8 million.


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