An Unfinished Budget
ICANN approved a $15.8 million budget at their meeting in Kuala Lumpur, the same spending level that the organization initially proposed. However, despite the approval by ICANN's Board, a crucial aspect of the budget remains unfinished, obtaining the revenues to match planned expenditures.

Although ICANN has decided to almost double their spending in one year, they have yet to secure agreement to obtain commensurate revenues. As ICANN Chairman Vint Cerf explained, "the only issue remaining, although it's complex, is to finalize details of how that money will be contributed by the various constituencies."

ICANN's approval of drastically increased spending without reaching agreement on how to obtain matching revenues raises serious questions about the organization's budget process and about the integrity of the budget itself, i.e. whether ICANN will be able to spend as much as intended. If ICANN fails to obtain the planned revenues, the organization could find itself either deeply in debt or undertaking emergency spending cuts. Both possibilities could have serious consequences for diverse internet stakeholders that rely on ICANN.

InternetNews.com reports that the "biggest holdouts" on the budget are the generic Top Level Domain (gTLD) registrars, "the companies that buy and sell domain names for gTLD extensions like .com and .net -- who will pay for approximately $11.4 million of the $15.8 million budget."

ICANN has also faced serious objections to the budget from smaller registrars who believe that the ICANN's budget proposal would place them at a substantial competitive disadvantage to the larger registrars. ICANN and the smaller registrars did agree to a three year price cap on fees. ICANN CEO Paul Twomey was quoted as saying that "further talks between the two groups resulted in applying increased pressure on funding relief from alternate sources, like country code TLD (ccTLD) registrars, who have so far escaped much of the funding requirements."

Despite Dr. Twomey's intentions, there is no indication that ccTLDs will agree to pay increased funding. As previously noted, the Council of European National Top Level Domain Registries (CENTR) has already informed ICANN that the "budget figures and the contribution asked from ccTLDs is unrealistic and inappropriate."

When asked what ICANN would do if they had problems collecting contributions, Vint Cerf said, "I would encourage public flogging." Although such witty quips may be amusing, ICANN's stakeholders deserve a more substantive answer.