New top level domain applicants to get $41 million in refunds

ICANN budgeted its new top-level domain programme against 1,000 applications and received about 1,615. The excess implementation fees are going back to applicants, roughly $24,000 each. The refund is small against the cost of applying, but it says something about the size of the round and the price of entry into it.

The standard application fee was $227,000. Part of each fee was set aside to cover about $70 million in ICANN's implementation costs for the programme, and that figure was built on an assumption of 1,000 applications. When roughly 1,615 arrived, the fixed cost was spread across more payers than planned. ICANN collected about $41 million more for implementation than it needed.

The return is pro-rata, about $24,000 per application, or just under 10% of the fee. It is tied to an opt-in, so it reaches only applicants who took that step. ICANN has said it wants to pay promptly but has not attached a date. The per-application figure is approximate; the underlying arithmetic is rounded.

This is not a discount on getting a top-level domain. Application costs across the round ran past $350 million, and the implementation fee was one component of that. Applicants who withdraw will receive further refunds. Those who proceed still carry evaluation costs, and where two or more applicants seek the same string, the cost of settling that contest — ICANN resolves competing applications by auction — sits outside the refund entirely.

For someone holding or buying domain names, the direct effect is close to nil. The indirect effect is a demand signal: the round drew well over ICANN's own planning figure. More applications means more strings in contention and, if they delegate, more competing inventory at the second level in whatever categories those strings target. An application is not a registry, and which strings actually launch remains unknown.

Two things stay open. The payment date is unannounced. And it is not settled whether a surplus of this kind changes how ICANN sets fees for a future round; that would be a policy decision, and none has been stated. What the refund does establish is mechanical: the application price carried a volume assumption, the volume assumption was wrong in the applicants' favour, and the difference is being returned rather than retained.