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Auditing ICANN: An Essential Element for an Alternative ICANN Budget Proposal

A coalition of over 50 domain Registrars from around the world have recommended an alternative to ICANN's proposed 2004-2005 budget. The alternative proposal from the ICANNBudget.org Registrars would cap Registrar contributions at $11 million per year for the next three years. Although this proposal represents a significant expansion beyond ICANN's 2003-2004 budget of $8.6 million budget, it is still slim compared with ICANN's own $15.8 million budget proposal. Of potentially greater importance, the alternative budget differs significantly from ICANN's proposal in the structure of the Registrar fees.

There is no question that the size of ICANN's budget and how the fees are structured makes an enormous difference to many Registrars. The ability of smaller Registrars to survive and continue to compete against the industry's largest participants could be potentially threatened by ICANN's budget proposal. Thus, the future of competition for Registrar services will be significantly affected by ICANN's final budget. However, the real importance of the alternative budget proposal goes far beyond the actual dollars at stake.

Specifically, the coalition of Registrars has stated that the ICANN budget "must" include "a provision...to allow for an audit process. This audit maybe carried out by a task force or an audit committee with representatives from various constituencies in the proportion of contribution from those constituencies. The audit committee would NOT engage in micro management of the budget. However the audit committee would be able to ascertain that the fund allocation required for each specific macro objective was appropriately allocated and well-spent. It would also give intelligent inputs on the amount of funds that would be required to be allocated to such objectives in future years. This audit committee should have appropriate representation from the cross section of the community."

The need for oversight of ICANN's spending to ensure that funds are appropriately spent on specific, publicly accepted objectives is, in the long run, far more important to diverse internet stakeholders than is the size of ICANN's total budget in any given year. Ultimately, the proposed audit process could be used to guide ICANN back to its mission of functioning as a technical manager, rather than a regulator, of the internet. Furthermore, the audit process envisioned by the ICANNBudget.org Registrars could help provide the openness and accountability that is essential to ICANN's long-term survival.

By Bruce Levinson, SVP, Regulatory Intervention - Center for Regulatory Effectiveness
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