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.