Board opts for separation of registrars and registries for new top level domain names.
[Update: Minutes from board meeting emphasize pending plan from GNSO.] ICANN’s board resolved today that there will be “strict separation of entities offering registry services and those acting as registrars. No co-ownership will be allowed.”
However, the board left the possibility open for compromise, stating that if the Generic Names Supporting Organization (GNSO) comes up with a compromise, it will consider it.
This is bad news for companies such as Demand Media, which owns registrar eNom and hoped to apply for new top level domain names. It’s good news for incumbent registries VeriSign, Neustar, and Afilias.
The issue of registry/registrar separation has been a hot topic since the start of discussions on new top level domain names. The separation of the .com registry from the registrar business opened the door to massive registrar competition. Without it, it’s fair to wonder if behemoths such as Go Daddy, eNom, and Tucows would be around today.
But proponents of allowing integration — including some of these very same registrars that benefited to separation the first time around — argue that was a different time with a different set of circumstances.
Practically speaking, I don’t think prohibiting registrars from being registries will make that much of a difference in new TLDs. It will just create a headache for registrars as they create separate legal and financial structures to side step the prohibition.
Registrants of existing .com domain names are well positioned for coming release of IDN TLDs.
For years, domainers have been investing in Internationalized Domain Names (IDNs) that use non-Latin characters. But these have all been IDN at the second level only, as there currently aren’t any top level domain names in non-Latin characters. So an internet user has to type the second level domain using one character set and then append “.com” to the end.
But that’s about to change, beginning with a select number of IDN country code domain names. Then, if everything goes as planned, entities will be able to apply for generic top level domain names in different scripts as part of the new gTLD process.
So what does this mean for people who bought idn.com domain names? They were banking on .com registry VeriSign getting the rights to “.com equivalents” in other scripts and languages and offering those to the existing registrants of IDN.com. As of right now, that looks like a good bet.
“Nothing is in concrete yet,” said Chuck Gomes, Vice President of Policy and Compliance for VeriSign Information Services. “But I think it’s a pretty well agreed-to plan.”
Essentially, if you have a second level .com domain name, then you’ll get the right to “activate” that second level domain in any of the .com-equivalent IDNs that VeriSign gets. The same goes for .net.
“We want the .com name to be a unique experience for .com regardless of what script you do it in,” said Gomes.
Gomes said it’s too early to tell how many IDN equivalents of .com and .net VeriSign might apply for. “We can’t predict what ICANN will do in terms of the application process,” Gomes explained. “I can say that the business unit is considering applying for ’several’ IDN versions of .com in some of the scripts that are available.”
Owners of a .com that want to activate a .com-equivalent-IDN may need to pay a fee to do so. “The way I understand it right now, if you want to activate andrew.chinese-version-of-.com, there will be a fee, although that hasn’t been determined,” said Gomes.
However, domain registrants won’t be required to activate IDN TLDs just to keep them out of the hands of other people. The .com equivalent IDNs will always be reserved for whomever has the second level domain. This also means that, once IDN TLDs are released, if someone registers keyword.com-equivalent-IDN, no one else can register keyword.com.
The management of these activated IDN domain names will take place at the registrar. It likely won’t be possible to transfer ownership of one .com-equivalent IDN to another person while a registrant still has another .com-equivalent-IDN or .com of the same second level domain.
VeriSign’s current plan is that an activated IDN will work much like any other domain name, giving registrants full control such as nameservers. “If you want to create a web site around that [Chinese IDN TLD] you can, or you can point the Chinese version to your existing web site,” explained Gomes.
The idea of IDN equivalents of existing top level domain names could create some interesting situations, however. Although they have the presumptive right of renewal, registries such as VeriSign and Public Interest Registry merely have a contract to manage domain names such as .com and .org. If these registries get the IDN equivalents of these top level domain names and then lose the main contract, that would result in two different registries controlling what are essentially equivalent TLDs.
“How would that all happen, I don’t know that I know the answer to that, or if that would ever happen,” Gomes said, referring to the potential conflict. “It creates some complications that I don’t think anybody would want.”
A lot of the talk around new top level domain names is the lack of pricing controls on providers. A company that launches a new TLD can set prices however they wish, and owners of existing TLDs worry that this idea would then be applied to their domains. Have a successful domain? You could get hit with a $1,000 renewal bill.
But let’s look at the other side for a moment. My guess is VeriSign would like to offer variable pricing — on the downward side. There are literally millions of .com domain names that could earn pay-per-click revenue each year, but not enough to cover the $6.86 (plus 18 cent ICANN fee) to justify registering the domain name. As a result, instead of getting at least some of the value, VeriSign gets $0 from these unregistered domains.
What if VeriSign could offer some of these domains for less than $6.86 (or $7.34 starting in July)? It could capture the value from these millions of domains, even if it’s not the full amount. If a domain makes $4 a year, it could sell the registration for $2. It could even work out a revenue share deal with registrars.
Think this is crazy? Well, one domain name registrar (that has its sights on the registry market) has received a patent on this idea. Demand Media, owner of eNom, got a patent last year for such a system.
In Demand Media’s model, there would be multiple tiers of registration. So if I’m paying $2 for a low tier registration, and someone comes along willing to pay full price, they could get the domain. But in the mean time, the registry is earning $2 and I’m earning $2+ in pay-per-click.
Of course, the politics of this may make it difficult for VeriSign to pull this off. If they can offer one type of .com domain for $2, couldn’t they offer all domains for that price? More likely would be “volume” deals with certain registrars, as most registries offer today. Or perhaps another variation on this model would be less controversial.
The world’s biggest registrar, Go Daddy, has already announced it is not sending anyone to the ICANN meeting in Nairobi due to security concerns. Now you can add the biggest registry, VeriSign, to the list.
The company confirmed to me today via e-mail that it will not be sending anyone to participate in-person at the event:
VeriSign has decided to participate virtually in the upcoming ICANN meetings in Nairobi. We made this decision after a thorough review of the ongoing security concerns in the region, and join numerous other registrar and industry partners who have made a similar decision. Our full contingent of people will attend remotely – in as many meetings that are available. ICANN is working to ensure adequate capabilities for remote participation, and VeriSign will take full advantage of the tools that ICANN makes available.
Hopefully ICANN’s remote participate tools will be able to handle the added online load.
Patent describes system for providing alternatives to already registered domain names.
When you search for a domain name at any major registrar, and the domain isn’t available, the registrar will likely serve up a list of similar domain names that are available for registration. VeriSign just got a patent for part of that process.
U.S. Patent 7,664,831 (pdf) was applied for in 2001, based on a provisional patent application filed in 2000. Here’s the abstract:
A method, system, and computer-readable medium is described that determines alternatives to a specified textual identifier, such as a domain name, by identifying and using words and phrases that are related to the identifier. A variety of types of related words can be used, such as synonyms and translations, and the related words can be determined in a variety of ways. One situation in which alternatives can be generated is after a user has requested to use or acquire an unavailable textual identifier, such as a request to register an already registered domain name, and the determined alternatives can then be presented to the user as possibilities for use or acquisition. When multiple alternatives are presented to the user, they can also be ranked as to relevance and ordered in a variety of ways.
The patent describes a system where synonyms and substituted words help determine available domain name alternatives.
You’ll recognize one of the inventors of the system: Jothan Frakes. Frakes, currently with new gTLD consultancy Minds and Machines, worked for VeriSign at the time the application was filed.
The world’s biggest registrar, Go Daddy, has 
