As we come to the close of the New Generic Top-Level Domains (gTLD) Subsequent Procedures (SubPro) Operational Design Phase (ODP), we are focusing extensively on the overall financial analysis. This is an important part of the assessment because strong financial support is vital to any program's success. Work Track 8 is dedicated to assessing and planning for the financial resources necessary to build around that addresses community recommendations, supports qualified applicants, and is cost-neutral.
We are currently consolidating lessons learned from the 2012 gTLD round, the affirmations, recommendations, and implementation guidance included in the Final Report on the new gTLD Subsequent Procedures Policy Development Process, and other data sources. Together, these inputs will support a general assessment of how to financially manage the next rounds of the New gTLD Program.
This work track team is coordinating closely with departments across the Internet Corporation for Assigned Names and Numbers (ICANN) organization (org) to gather input on resources needed to launch and run the next round of the program. With this information, they are building financial models that include estimates for the costs associated with implementing the SubPro policy recommendations, developing the infrastructure to launch the round, evaluating applications, and delegating new top-level domains (TLDs) to the root zone.
As outlined in the SubPro policy recommendations, the work track team is designing a program that continues to be cost-neutral. Application fees will cover all of the costs to develop and execute the program. A business process design typically results in a process that makes or loses money; the real challenge faced here is designing a program that breaks even.
The Final Report states in the section, Affirmation with Modification 15.4, "The gTLD evaluation fee is set to recover costs associated with the new gTLD program. The fee is set to ensure that the program is fully funded and revenue neutral and is not subsidized by existing contributions from ICANN funding sources, including generic TLD registries and registrars, ccTLD contributions and RIR contributions."
Another challenge is trying to define and prepare for a multi-year program that accounts for all of the unknowns. It is challenging to predict and project costs over multiple years. That's why it is critical to get input from across the ICANN org to derive estimates based on considerations of the last round, new initiatives established since then, and improved systems and tools, all with inflation considered.
Another fundamental challenge is that there is no way to gauge the demand for new gTLDs. The program could have 10,000 or 1,000, or even less applications; no one knows because this has only been done once before. As a result, the project team has retained a "middle ground" assumption of 2,000 applications, which the work track team is using to develop cost estimates.
Some of the other key assumptions are that the number of applications will be approximately in line with the last round; that the Applicant Support Program will begin taking applications approximately 18 months prior to when the gTLD application submission period begins; that the Applicant Support Program will be enhanced (in terms of awareness and timing) to provide more opportunities for applicants seeking assistance and will include discounts across all types of application fees; and that financial and technical evaluation processes will be more efficient, based on lessons learned from the last round.