Is the ICANN $50,000.00 TLD Application Fee a Scam?
The Internet Corporation For Assigned Names and Numbers (ICANN)
is accpeting proposals from sponsors and organizations for new
Generic Top Level Domains (gTLDs) for possible addition to the
Global Domain Root so users worldwide can register and access
internet sites worldwide with domain names such as "new.world"
or "bargain.shop" and others, in the same way that they can access
"shopping.com" or any other ".com" address.
The application fee for sponsors of a new gTLD is non-refundable
$50,000, payable to ICANN. The deadline for all applications is
October 2, 2000.
In November, 2000 ICANN will select the "winning" proposals
and recommend to the US Department of Commerce NTIA to activate
the new gTLDs by adding them to the Global Domain Root, physically
under the control of Network Solutions, Inc.
Many have expressed concerns over the amount and the validity
of the non-refundable fee, especially non-profit groups and
small entrepeneurs who feel that the fee is excessive and
raises the barrier of entry for becoming a TLD operator beyond
their means while unfairly favoring large corporations with
little or no interest in protecting the values of free speech
and civil society.
To add to the controversy, such an application process and
fee has never been imposed before for new TLD registries,
including in the cases of new "country code" TLDs now marketed
for commercial purposes such as ".cc" ".nu" ".ws" ".tv" and others.
Rights to those and other so-called "ccTLDs" were granted to private
corporations free of charge and absent due diligence review of their
capabilities and business plans. In most cases, the granting of ccTLDs
in 1997 and 1998 were the result of "insider" connections to the
IANA (Internet Assigned Numbers Agency) by the late Dr. Jon
Postel, the predecessor of ICANN, without any open solicitation,
review or competitive bid. Since Dr. Postel's untimely
death in October, 1998 at the moment ICANN was called before
the House Commerce Committee for review, ICANN has assumed the
functions formerly carried out by the IANA under Dr. Postel.
ICANN has been widely criticised for operating in secret with
no public oversight or review of their decisions and policies,
which in the end affect all internet users worldwide.
Legitimacy and precedence aside, critics of ICANN are likely
to question the chances that ICANN, whose board is dominated
by corporate interests such as IBM, MCI-Worldcom, ATT, AOL,
Network Solutions, British Telecom, and various intellectual
property and trademark interests, will select any new TLDs
at all from the paid applications. In any event, the possibility
that a majority of the applications will be rejected by ICANN
causing most applicants to each lose $50,000.00. If ICANN
receives a large number of applications but only activates
1 or 2 new gTLDs most of the applicants will lose their
money and be kept out of the registry business.
This is not the first time that ICANN has tried to extract
fees from domain companies. In 1999 ICANN attempted to impose
a $1.00 per domain per year "tax" on every ".com" ".org" and
".net" domain registered. After review and hearings before
the US House Committee on Commerce, ICANN was forced by Congress
to witdraw the "dollar-per-domain tax". A source inside the
House Commerce Committee (who asked not to be named) commented
that if the issue of the $50.000.00 non-refundable fee is
brought before the Commerce Committee it is likely that, just
as in the "dollar-per-domain tax", the fee would be overturned.
The majority of members on the House Commerce Committee are
opposed to any form of regulation or taxation of the internet.
How much will ICANN get away with is a big question. It's
probably no coincidence that the solicitation of applications
and fees was timed when the Congress went on break in August.
Although Congress is back in session, many members are up for
re-election and are spending most of their energies on their
campaigns and not on legislation. Whether or not there will
be hearings or review before the elections is unknown, as is
the possibility that Congress will order ICANN to refund the
fees after the fact.
It is not yet known how many companies will apply for gTLD
registry status and pay the non-refundable fee. It is also
important to note that the ultimate order to add new gTLDs
to the Global Domain Root comes not from ICANN, but from
the NTIA, as a written directive pursuant to "Amendment 11"
of the cooperative agreement between the NTIA and NSI.
Such a written directive would then give Network Solutions
the green light to make the necessary additions to the
"root.zone" file that runs on "root-server A" that would
activate the new gTLDs to the entire internet. One letter
and a simple text edit will change the world.
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