Domain firm looks to competition for cash

The nonprofit Internet Corporation for Assigned Names and Numbers is hoping that new competition in the market for ".com" addresses will bring it a much-needed infusion of cash.

Jan. 2, 2002 4:43 p.m. PT

3 min read

The group responsible for turning over administration of the Internet to private industry is hoping that new competition in the market for ".com" addresses will bring a much-needed infusion of cash into its coffers.

To date, the nonprofit Internet Corporation for Assigned Names and Numbers has raised about $700,000, said interim chief executive Mike Roberts, who added that not all of it has been collected yet. That figure, which includes about $500,000 raised by the Global Internet Project, is less than half of what ICANN expected to need during its first eight months of operation.

The GIP is a group whose 13 members include AT&T Worldnet, Netscape Communications, and other companies whose businesses are based around the Internet. It has raised funds by soliciting them from its members.

But Roberts shrugged off the deficit, saying that a plan to bring dozens of new registrars on board will funnel more than $5 million to his organization.

Until recently, Network Solutions held sole authority to register domain names ending in ".com," ".net," and ".org," which grace between 50 percent and 75 percent of the world's Internet addresses. Last year, the Commerce Department appointed ICANN to open up competition and to oversee the privatization of the Net's daily upkeep.

Last month, ICANN appointed five registrars to begin selling domain names during a "test bed" phase. The group is expected to authorize dozens more by the end of the summer. Under terms put in place by the Commerce Department, ICANN will charge each registrar $5,000 per year and $1 per year for each domain name registered.

Under current demand for addresses, the fees are expected to generate more than $5.9 million in revenues for its 1999-2000 fiscal year, well over the $4.2 million in expenses ICANN expects to face, according to ICANN's proposed budget.

The budget also has provisions allowing for deficits and surpluses to be rolled over to the following fiscal year. "If there's a negative number [at the end of June], it just carries forward to the next budget," Roberts said.

Roberts acknowledged that funds from registrars, scheduled to begin being paid in July, might be delayed, but said ICANN would continue operating anyway. "I would expect the same people who have supported us up to now would continue to support us," he said. "The business community has a big stake in ICANN succeeding and the Internet continuing to scale."

Now that ICANN oversees administration of the Internet, companies whose bottom line depends on the Net running efficiently are likely to take a keen interest in the nonprofit.

So far, about 20 companies have donated to ICANN's start-up fund, according to a list of donors on ICANN's Web site. The biggest donors include Ascend Communications, Microsoft, MCI WorldCom, America Online, Cisco Systems, Compaq Computer, and France Telecom.

ICANN's expenses include salaries for its own staff, employees at the Internet Assigned Numbers Authority, technical upkeep, and travel costs. Previously, many of these expenses were covered by the government, which has been trying to get out of its role of administering the Net.

"All of those administrative functions are vital to the operation of the Internet," said Vint Cerf, an early architect of the Net who now is an executive at MCI WorldCom. Funding for ICANN "is just one natural step in the direction of extracting the U.S. government from the support function and placing the it where it belongs."