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How ICANN will spend $12 million more of your money next year

May 2, 2012Domaining, Domainnamewire, icann, icann budget, Policy & LawComments Off on How ICANN will spend $12 million more of your money next year

…and that doesn’t include new TLD costs.

ICANN’s latest proposed budget segments out the core ICANN functions and the new top level domain program.

But even its core functions budget are slated to grow by nearly $12 million next financial year compared to what it expects to spend in the current year (FY 12). Here’s why.

Contractual Compliance: $2.4 million increase

Let’s face it, ICANN’s contractual compliance has historically sucked. Fixing the problem is welcome, and the money will be well spent if it resolves the problems. Here’s how ICANN breaks down and extra 62% in expenses for next year:

- headcount increase from an average of 9 FTE in FY12 to 15 FTE in FY13 for approximately $1.1
million
- Compliance audit for $0.5 million
- Legal allocated costs increase for $0.4 million
- other overhead increases for $0.3 million

Meeting Logistics: $0.9 million increase (or $2.6M)

The cost of meeting logistics will go up next year despite a reduction in the number of meetings. ICANN saves about $1.5 million from the lack of a third meeting, yet still spends $0.9M more than last year. So it’s really a $2.6 million increase if the number of meetings were held constant. Here’s why:

- increase in headcount from 11 FTE to an average of 15 FTE to allow an increase in the size and complexity of the meetings (1 FTE) and the implementation of the language policy
(3 FTE) for a total of $0.5 million,
- increased IT costs related to audio-visual infrastructure at the meetings for $0.3 million
- increased language services costs due to the increased volume of translation and interpretation for approximately $1.2 million
- a meeting costs contingency of $0.3 million

Community Support: $0.8 million increase

This increase is basically due to community requests. It includes more money for travel/sponsorship, meetings, etc.

Global Engagement: $1.4M increase

Keep in mind this is on top of added expenses at ICANN meetings for language services.

- $0.2M increase in publications and information materials
- $0.4M increase in sponsorship contribution and outreach materials
- $0.8M in travel, outside providers and equipment to enhance its multilingual programs.

Ombudsman: $0.1M increase

The Ombudsman’s office is going to cost about $100,000 more in 2013 than in 2012. And when I say office, I mean it. The added costs are primarily attributed to “the additional administrative cost for renting an office and the associated expenses.”

I’d really like to see that office.

Board Support: $0.7M increase

Here’s how it breaks down:

- $0.3M for Board compensation
- $0.2M for additional Board training , communication tools and self assessment,
- $0.2M for an additional Board workshop

Organizational Reviews and Implementation: $0.7M increase

ICANN will spend $3.7M in FY 2013 mainly to comply with the Affirmation of Commitments. That includes implementing some of the recommendations from the Accountability & Transparency Team,
WHOIS policy, etc.

Of course this is just part of the budget difference. See more in the full draft budget.


© DomainNameWire.com 2011.

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Why is ICANN still only budgeting for 500 new TLD applications?

May 2, 2012Domaining, Domainnamewire, icann, icann budget, new top level domains, Policy & LawComments Off on Why is ICANN still only budgeting for 500 new TLD applications?

Main ICANN budget still assumes 500 applications.

In January ICANN released its framework for the FY 2013 budget (which begins in July). Its framework for new TLD revenue was based on 500 applications for new top level domains.

ICANN just published its draft budget and now it’s budgeting for…

only 500 applications.

I realize these things have a long lead time, but this is ludicrous. It’s quite clear there will be over 1,000 applications for new top level domains.

Releasing a budget based on less than half of that makes no sense.

To be fair, ICANN has also released variance analysis showing what the numbers would look like with 1,000 and 2,000 applications. But I would think they’d go ahead and put at minimum the 1,000 scenario as the crux of its budget.

And in the magic of ICANN finance, the historical costs of the program increase when you add in more domain applications.

Under the 500 application scenario, the historical costs of the program are $12.5 million. Under the 1000 application scenario the historical costs are $25.0 million, so it appears on paper that the program is still cost-neutral. If there are 2000 applications then the historical costs are $29.9 million.

What’s really going on here is ICANN says the total historical costs are $29.9 million. It has budgeted $25,000 per application in historical cost recovery. So if there are fewer than 1,196 applications then it will just eat some of these historical costs.

Regardless, it’s all funny money because the historical costs component will be transferred back to the “core” of ICANN and placed into its reserve fund.

By the way, if ICANN ends up making excess money from the program due to more applications than expected or lower legal costs, it will ask the community what it should do with the extra money.


© DomainNameWire.com 2011.

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How ICANN Will Spend $67 Million of Your Money

May 18, 2011Domaining, Domainnamewire, icann budget, Policy & LawComments Off on How ICANN Will Spend $67 Million of Your Money

ICANN expects to spend $67 million in the year starting July 1. That’s if the new gTLD program doesn’t kick off.

Since you, the readers of this blog, ultimately provide ICANN’s funding, it’s important to know how your money is being spent. So you should take some time to look through and comment on the FY12 Operating Plan and Budget (pdf). FY 2012 starts July 1, 2011.

ICANN plans to spend $69.7 million in FY 2012 (including depreciation and bad debt expenses), up $7.7 million from FY 2011′s budget. That’s a 12.4% annual increase. It expects revenues of $69.758 million.

The expense increase can be attributed as follows:

1. $3 million increase in compensation including 4% merit increases, more staff for Global Engagement and Increasing International Participation, and more compliance resources.

2. $1.9 million increase in travel, including paying airfare, lodging, meals, and other expenses for 20 selected community members (more on that later).

3. $2.1 million increase in professional services.

Oh, wait. There’s one thing I forgot to mention. These numbers assume the new gTLD program doesn’t get off the ground in FY 2012.

If it does, and 500 applications are received, ICANN’s revenue is expected to be nearly $154 million. Its expenses will soar, too, but it expects a healthy operating income.

Here are some other interesting new allocations planned for FY 2012:

- $30,000 for two members of the intellectual property constituency to travel to three meetings. So $5,000 per member per meeting.

- $210,000 additional money so the Governmental Advisory Committee can provide travel support to ICANN meetings to 20 of its members instead of the current 6.

- $1,000 for the At-Large Advisory Committee to produce an outreach video for YouTube

- $80,000 for a Security and Stability Advisory Committee retreat

You can read more and comment here.


© DomainNameWire.com 2011.

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How ICANN Plans to Spend $60 Million of Your Money This Year

May 18, 2010Domaining, Domainnamewire, icann, icann budget, Policy & LawComments Off on How ICANN Plans to Spend $60 Million of Your Money This Year

New TLDs are top budget item — but also the only line item to decrease.

ICANNIf you’re reading this blog, you are probably one of the many people that funds ICANN’s operations. You pay the registrar, which in turn pays ICANN and the registry. The registry also pays ICANN. In short, without domain registrants, ICANN has very little money.

So how ICANN spends its money should be important to you. The non-profit has released its draft proposed 2011 financial year budget for July 2010 to June 2011 and is currently accepting comments.

The 2011 budget includes a record $60 million in operating expenses. Here’s a breakdown of the budget items over $5 million:

1. New TLDs and IDNs – $8.048 million (the only budget item to go down from 2010 to 2011, $6.683 is for new TLDs and the rest is for IDNs)
2. Security, Stability, and Resiliency $7.087 million
3. Global engagement and increasing international participation $6.792 million
4. Policy development support $6.421 million
6. Constituency support $6.216 million
7. IANA function and technology operations improvements $5.804 million
8. Core meeting logistics $5.255 million


© DomainNameWire.com 2010.

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