ICANN's $12M travel budget: Goodwill move or influence buying?

Is the group responsible for managing domain names buying influence?

The group responsible for managing the Web's domain name system, the Internet Corporation for Assigned Names and Numbers (ICANN), has grown in the 11 years since its inception to become a powerful organization with a nearly $55 million budget built on the domain registration fees it receives.

And it now spends 22% of that budget on travel and meetings in far-flung locales that would likely make a globetrotter's must-see list.

ICANN, formed in 1998 after the U.S. decided to privatize domain name management, holds three international meetings annually and has met in a variety of places over the years. Those locales include Cairo, Paris, Dubai, New Delhi, San Juan, Lisbon, Sao Paulo, Marrakech, Cape Town, Kuala Lumpur, Rome, Carthage, Montreal, Rio de Janeiro, Amsterdam, Shanghai, Bucharest -- and its home city of Marina Del Ray, Calif.

Management of the domain name system brings ICANN much clout and controversy. Its decisions, such as expanding generic top-level domains (gTLD), can create opportunities for firms that sell and market those domains -- and can disappoint advocates who want domains that ICANN rejects.

ICANN, incorporated as a nonprofit in California, has a global reach, which is why it meets in various places worldwide in a bid to foster broad-based participation in its decisions.

Travel can be either a hardship or perk, depending on perspective, but many of the locations ICANN chooses can be expensive to reach and pricey places to stay -- especially as the number of people for whom it is picking up the tab increases.

At its most recent conference in Sydney, Australia, ICANN, which has approximately 100 staff members, paid the travel costs of 233 people. More specifically, it paid to bring 81 staffers on the trip, as well as 20 board members and more than two dozen contractors to help with the session. ICANN also paid the travel costs of another 103 people from the various constituency organizations, as part of its efforts to insure grass-roots, consensus-building legitimacy.

About 1,200 people have attended the group's recent conferences, and those who play the most active role in ICANN's decisions are those who show up for the meetings. That raises this question: If ICANN pays for your travel to attend a weeklong meeting to an interesting location, are you more likely to be sympathetic to recommendations put forward by its staff?

It's not a new question for ICANN. In a letter last year to the organization, the constituency that represents domain registries warned that directly reimbursing individuals for travel expenses could be seen as subsidizing special interests. It said: "There is the possibility that the independence of individuals could be compromised because they are dependent on ICANN for funding." Instead, it urged more investment in remote-participation tools. That "should be [a] higher priority than reimbursing travel expenses," the group said.

ICANN's response was delivered in its budget for the 2010 fiscal year, which began this month. It increased spending to support constituency member travel by 19% from the prior fiscal year, to $1.72 million. That money pays for airfare, lodging, meals and incidental expenses. In the budget, ICANN said the increase "is largely a result of the community feedback on travel support."

Paul Levins, ICANN's vice president of corporate affairs, rejects any suggestion that community members who get travel support are in any way muzzled or beholden to ICANN. "You only have to look at the ferocity of the debate to understand that's not true," he said.

The large number of ICANN staff members who attend these meetings raises other issues. Milton Mueller, a professor at the School of Information Studies at Syracuse University and who also writes for ICANN Watch, believes the staff can have too much influence. "ICANN is supposed to be a 'bottom up' policy development organization in which the affected constituencies -- not the staff -- actually make policy," Mueller said.

A similar concern has been raised by Karl Auerbach, a former ICANN board member and CTO of InterWorking Labs Inc., a maker of network test and emulation products in Santa Cruz, Calif. He said there "is no doubt that many ICANN employees are tremendously talented people. But those talents inspire them to lead and create when their role is merely to support others."

In May, ICANN officials sent out a letter seeking community input to assess its meetings, including the frequency and choice of locations, with any changes affecting the 2011 schedule. Although concern has been raised about some of the meeting locations, in-person meetings and the need to meet at various places around the world, the organization appears have broad support.

Paul McGrady, an attorney at Greenberg Traurig LLP in Chicago, and author of a three-volume treatise on domain name law, McGrady on Domain Names, attends many of ICANN's meetings, pays his own way and says the global meeting locations are needed. "They are truly trying to be a global organization, and they want to encourage participation," he said.

McGrady also believes that the face-to-face interactions can't be replaced by remote technology tools. "There is just something different about interacting with people in person," he said.

A question that ICANN is now investigating is whether it can do more with virtual tools to increase participation. It has begun testing Adobe Connect, a conferencing tool for meetings, and is happy with the results, said Levins. "There will always be a need for face-to-face discussions. Having said that, we have invested and are continuing to invest money in remote tools," he said.

ICANN's $12 million travel and meeting budget has doubled in recent years as host countries have ended contributions to help cover the cost of meetings. Even with that growth, ICANN has the money to support itself. While the economic downturn has trimmed revenue growth projections from domain registrations, ICANN's budget is still increasing by 5%. ICANN has opened offices in Brussels, Sydney and Washington and is considering a proposal to begin paying board members who now volunteer. Adding new gTLDs increases the need for more people to manage them.

ICANN "seems to be growing for the sake of itself," said Jeremiah Johnston, president of the Internet Commerce Association, an industry group, and head of the domain firm Sedo LLC in Cambridge, Mass. He noted that ICANN is considering a major expansion of the domain name system by allowing private entities to create new gTLDs, such as a .tech, .soap, .location, .paris, or .corporate name.

"This is about to turn into a very confusing Web," Johnston said.

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