Original URL: http://www.theregister.co.uk/2004/07/19/icann_crunch_meeting/

ICANN crunch meeting begins

Budget battle to define future of Net body

By Kieren McCarthy

Posted in Media, 19th July 2004 18:12 GMT

The Internet Corporation for Assigned Names and Numbers (ICANN) has completed the first day of its crunch meeting in Kuala Lumpur that will decide the overseeing organisation's fate.

ICANN head Dr Paul Twomey confessed to feeling a little tired in a conference call at 6pm local time but otherwise sounded quietly confident that he will be able to resolve the fundamental issues that are blighting its efforts to become the world's Internet authority.

And chief among these is the issue of ICANN's budget for 2005. Coming in at $15.8m, it is an 91 per cent increase on last year's $8.27m. Needless to say, this has raised a few eyebrows and even more hackles.

First there was the Council of European National Top Level Domain Registries (CENTR) - an organisation which represents the registries of 39 countries - whose head, Paul Kane accused ICANN of a "lack of financial prudence" and refused to support it "financially or otherwise". And then came an alliance of 75 registrars, which said ICANN's method of getting the extra funding was going to put smaller registrars out of business. They stated emphatically in a letter: "We therefore DO NOT support the current budget."

However, the man behind drawing up the budget - head of Business Operations, Kurt Pritz - spoke to us to defend the package. And Paul Twomey claimed today that their model, following "some minor changes" was "getting close support" from registrars.

Goals Galore

The line taken by Twomey and Pritz is one of obligations. Under the Memorandum of Understanding (MoU) signed between the US government's Department of Commerce and ICANN in September 2003, ICANN signed up to meet 24 objectives . It has achieved seven of them to date (Organizational Structure Review, Administrative Structure and Personnel Review; Corporate Responsibility Review; First InterNIC WHOIS Data Problem Reports System Report; Status Report; Strategic Plan, Contingency Plan; and Financial Strategy Development Review, Corporate Compliance Program Review).

It needs to complete the rest of them within the next two-and-a-half years and the budget has been formulated around this exact need - no more, no less.

Few, if any, of those that have been called upon to provide funds to meet the vastly increased budget will be able to argue with these stated aims. ICANN still provides the Internet community with a theoretical, if not always practical, decision-making power. If it fails to meet the terms of the MoU with the US government, its entire future is at risk, and the International Telecommunications Union (ITU) will step in in its place. The ITU, on however, will always hold governments' opinions in higher regard than Net communities.

Pritz told us: "We have to accomplish goals - 15 goals, many with sub-goals and many have due dates." The budget was created by writing the objectives down and working what was needed to do them in time. "After we had done that, we took 25 to 30 per cent out of budget, and then met with ccTLDs and registrars, representatives of RIRs to explain it," he said, adding: "I recognise there is some frustration, but we have to meet our obligations."

Twomey reiterated the same view, adding that many of the remaining "steps" were due diligence steps and that ICANN was now in a strong position to meet them - the implication being that without the full budget that won't be the case. The budget was moving ICANN to a more "business-like approach" where there would be a better "alignment of revenue streams".

But is that really the case? Does ICANN really need that extra money or is it just trying to grab as much as it can?

Time and management

Pritz responded robustly to Centr's allegations that it is hoplessly inefficient (it has a huge per-capita cost): "That is a reaction to an increase in the budget. I challenge anybody to find an inefficiency." He said a lot of things were currently not getting done because the resources aren't there. "ICANN keeps have the same meetings with the same people." Everyone knows what the problems are, but they don't have the time or resources to get on with them.

He lists such issues. Proactive compliance - making sure that registrars act in compliance with their contracts. Allowing for a complaints procedure. Making all ICANN documentation and aims available in different languages. Setting up offices across the world. Few can argue with such aims.

Then there is adding IPv6 - a vital change to the Internet infrastructure to allow more devices to attach to the Internet. And the issue of new top-level domains. On both of these subjects ICANN has been forthcoming, rather than its usual reticent self. ICANN, Pritz reiterates several times, is "not increasing or expanding our role" - it is simply getting things done. And that's going to cost a bit exta.

Centr isn't exactly sure it needs to cost that much extra however. The actually listing and changing of the Internet main servers has gone from costing $250,000 in 1996 to $5m under the new budget, it stated - where is the justification? Pritz responded that the part of ICANN that deals with that aspect, IANA, had more on its plate that just changing servers: "IANA also has a technical operations department with several intiatives. The Department of Commerce requires a contingency plan for a natural disaster. Plus it need some new hardware, it is moving some systems."

What about the assertion that IANA shouldn't have anything to do with ICANN in the first - that it exists a purely functional entity that could be separately funded and run? Pritz is having none of it: "IANA is intrinsically bound up with ICANN - they have their technical operations here. If IANA was on its own, we would have to hire them." And that, Pritz says, would be very expensive.

Other things that the money will be spent on: an improved redelegation process, target waiting times for changes to made to the Net infrastructure (which ICANN will publish). A Whois reporting system; $175,000 will go in new computers for staff; the third annual meeting budgeted for is just an overlapping issue and there will still only be two main meetings a year.

Proportional representation

Pritz promised that each part of the budget was seen as a separate project and possessed its own project leader. However, that is as far as we were allowed to dig down into the figures. ICANN does not track the costs associated with each project, Pritz said. And while he agreed with our suggestion that a New Labour-style targets regime would be very useful is demonstrating to people that ICANN had changed its spots and was now working for the Internet community as opposed to itself, he failed to provide a single target that the organisation would meet.

But this will all be beside the point and academic by the end of the week. The big question, the only question, is will ICANN's budget get approved? And when it comes to approval, there is only one figure that you need to remember: two-thirds.

Registars - the people you buy domain names from - will pay two-thirds of the increased budget (70 per cent). The smaller registrars say the new fees will ruin them. But ICANN only needs a two-thirds majority vote to get it past them. And the big registrars - who stand to gain - account for that magic two-thirds, because voting rights are ascribed according to the number of domains sold.

The other problem - the country-code domain managers who don't like ICANN trying to impose its approach - well they remain in a minority on the Internet. Exactly two-thirds of the domains in existence are non-ccTLDs (country code top level domains). The problem however is that the UK and Germany account for two-thirds (59.4 pe rcent) of all those other domains and they refuse to play along with ICANN on any level.

But the one area where it works in ICANN's favour is that ccTLDs will contribute just five percent of the new budget. It can live without them - financially anyway. And for the moment. What ICANN is hoping is that the new money will enable it to persuade the rest of the world that it can get things done. Once it has done that, there remains no obstacles. At the end of the week, we will be able to see how much further down that path it has got. ®

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