The planned 75-cent fee add-on for .net domain name registrations may provoke a backlash on Capitol Hill similar to concerns raised in 1999, when ICANN first conceived then abandoned a $1 fee.
That's the call from Internet columnist Declan McCullagh, who wrote December 20 that the fee proposal has some federal lawmakers alarmed and ICANN under new criticism.
"Everyone from presidential perennial Ralph Nader to Republican insider Grover Norquist castigated ICANN for levying an 'illegal tax' on domain name holders," McCullagh wrote.
Nader at that time wondered just whether ICANN had the legitimate authority and where the money would end up, while Norquist accused ICANN of wanting to lay the world's first known global tax on unsuspecting Netizens.
"Perhaps at first glance, a $1 tax may not seem like much, but that’s just the tip of the iceberg," Norquist testified on Capitol Hill in 1999. "Complying with ICANN’s regulations and participating in the organization’s bureaucratic processes will cost governments and corporations (and thus taxpayers and consumers) around the world at least another $20 million to $30 million annually. Of course, to cover these costs ICANN can always decide to hike the tax or impose more regulations in the future."
"[W]hat are the legally binding limits on the use of funds from those fees by ICANN?" Nader had asked. "Under any circumstances will the ICANN be permitted to use these funds to promote public policy objectives on broader internet governance issues?"
McCullagh said that if "official Washington" begins paying attention, ICANN will have a far more difficult time defending a 75-cent .net registration fee than they had defending the soon-abandoned $1 fee idea.
"Between 2000 and 2003, ICANN's budget totaled between $5 million and $7 million," he wrote. "But for the fiscal year ending in June 2004, the budget zoomed upwards to $8.3 million. Then, for the current 2005 fiscal year, it nearly doubled to $15.8 million. ICANN's current 75-cent levy would add millions more to that figure, and that's not even counting extending the fee to .com, .org and newer suffixes."
He called for ICANN revising how it informs the public about new fee proposals, including more prominent postings on the ICANN Website, and for "more checks and balances," meaning ICANN has "virtually unchecked" power to levy fees like this. He also suggested ICANN consider funneling a third of the fee revenues – assuming the fee survives – toward stakeholders in developing countries.
