Battle Erupts Between Domain Registries and Registrars

Existing registries fight registrars over registry-registrar separation.

Registries: In this corner we have three registry providers, Public Interest Registry, Afilias, and NeuStar. They provide the backend and management of domain names such as .org, .biz, and .info, that are sold to customers by registrars.

Registrars: In this corner we have domain name registrars hoping to profit from the release of new top level domain names.

Issue: Until now, there have been rules that separate registries from registrars. This prevents a registrar, which has market power to promote certain domains, from competing with registries which are required to give “equal access”. But these restrictions will be curtailed with the launch of new top level domain names.

The registries, in a letter and presentation to ICANN (pdf), argue that separation between registries and registrars is critical. They complain that registrars are already using their market power and ownership of the domain customer relationship and to sow up back end registry services in competition with existing registries. For example, Network Solutions partnered with Central Registry Services and issued this press release:

“Central Registry Solutions will guarantee distribution of domain names for its customers through Network Solutions one of the most trusted retail registrars. In addition, Central Registry Solutions will leverage CentralNic’s network of registrar partners to provide further distribution of domain names, which will help customers succeed in the marketplace. Finally, Central Registry Solutions will offer other retail services that will enable new registries to package domains with web sites, online marketing services and security services, as well as other value-added services.”

The registrars are fighting back and calling the registries hypocrites. Jonathon Nevett, Senior Vice President at Network Solutions, writes (pdf):

The Incumbent Registries advocate for a market that limits their competition by restricting new competitors from entering. Therefore, their arguments are completely self-serving and anti-competitive. Not only do they argue that registrars or registrar affiliates should not be permitted to be Registry Operators (the entities that have contracts with ICANN), they also go so far to argue that registrar or registrar affiliates shouldn’t even be permitted to supply Registry Operators with back-end registry services. In their protectionist letter, they seek to constrain the supplier model for New TLDs and thus merely advance their narrow self-interest at the expense of competition.

Nevett points out that Afilias already has an arrangement with GoDaddy to run .me. Demand Media, parent company of eNom, also wants to be a registry and registrar. It challenges the registries’ claims, too (pdf).

Get ready for a Battle Royale with millions of dollars at stake.