[council] Registrar Licence Fees to ICANN

[Bruce Tonkin <Bruce.Tonkin@melbourneit.com.au>]

Hello All,

In the last namescouncil teleconference I was asked a question about the
fees paid by gltd registrars to ICANN.

I stated that the licence fee consists of a fixed component and a variable
component.

The contract between a gtld registrar and ICANN is found at:
http://www.icann.org/registrars/ra-agreement-17may01.htm

********************

Clause 3.9 states:
3.9 Accreditation Fees. As a condition of accreditation, Registrar shall pay
accreditation fees to ICANN. These fees consist of yearly and variable fees.

3.9.1 Yearly Accreditation Fee. Registrar shall pay ICANN a yearly
accreditation fee in an amount established by the ICANN Board of Directors,
in conformity with ICANN's bylaws and articles of incorporation. This yearly
accreditation fee shall not exceed US$4,000 for the first TLD for which
Registrar is Accredited plus US$500 for each additional TLD for which
Registrar is Accredited at any time during the year. Payment of the yearly
fee shall be due within thirty days after invoice from ICANN.

3.9.2 Variable Accreditation Fee. Registrar shall pay the variable
accreditation fees established by the ICANN Board of Directors, in
conformity with ICANN's bylaws and articles of incorporation, provided that
in each case such fees are reasonably allocated among all registrars that
contract with ICANN and that any such fees must be expressly approved by
registrars accounting, in the aggregate, for payment of two-thirds of all
registrar-level fees. Registrar shall pay such fees in a timely manner for
so long as all material terms of this Agreement remain in full force and
effect, and notwithstanding the pendency of any dispute between Registrar
and ICANN.

3.9.3 On reasonable notice given by ICANN to Registrar, accountings
submitted by Registrar shall be subject to verification by an audit of
Registrar's books and records by an independent third-party that shall
preserve the confidentiality of such books and records (other than its
findings as to the accuracy of, and any necessary corrections to, the
accountings).

***************************

The variable component is currently based on registry size and registrar
size.  There is not a direct relationship with revenue received from a
registrant in any year - ie it is not set as a per registrant fee.  For
example if a registrar registered a set of domains for 10 years, and did no
more registrations for the next 9 years - it would still pay an annual
registry fee that varied according to ICANN's budget.  An increase in the
licence fee would not be charged to the registrants that already have a 10
year licence.  The size is determined by total number of domains (there is
no account taken of length of registration, which can vary from 1-10 years).
A registrar that has 1 domain name registered for 10 years, would pay a
tenth of the variable component of the licence fee to ICANN as a registrar
that has 10 domains registered for 1 year (whereas the registry fee paid by
the registrars to the registry would be the same in both cases, and the
revenue could be similar).

I checked our invoice for the quarter ending 31 Dec 2001.

It states the following:
"ICANN's Fiscal Year 2001-2002 budget calls for Tier 3 (large) TLDs (ccTLDs
and unsponsored TLDs) to pay $3,681,000.  The budget states that the Tier 3
uTLD's share of this is $2,669,000.  Presently this includes .com, .net, and
.org.   The allocation among TLDs is to be made based on registry size (ie
on 1 July 2001).  This results in the following allocation of contributions
by TLD for FY 2001-2002.

.com
size: 24,259,699
Yearly allocation: $2,022,253.92
Quaterly allocation: $505,563.48
Registry share: $25,000.00
Registrar share: $480,563.48

.net
size: 4,720,354
Yearly allocation: $393,481.98
Quaterly allocation: $98,370.49
Registry share: $25,000.00
Registrar share: $73,370.49

.org
size: 3,038,249
Yearly allocation: $253,264.10
Quaterly allocation: $63,316.03
Registry share: $25,000
Registrar share: $38,316.03

Each gtld registrar received an invoice in proportion to the total number of
its registrations as of 31 Dec 2001.

Regards,
Bruce Tonkin