New draft guidebook doesn’t adequately address concerns that VeriSign could hike .com registration prices.
Over the weekend, ICANN released its latest New gTLD Applicant Guidebook with guidelines for the introduction of new top level domain names such as .eco and .shop. Unfortunately, the guidebook still holds a time bomb for owners of existing domain names, such as .com domains, that could force them to pay massive renewal fees for their domains.
What the guidebook allows: Registry operators for new TLDs can essentially choose whatever price they want to offer domain registrations. They must provide 30 days notice of price increases for new registrations and 180 days notice for renewal price increases. Domain owners would then be able to renew their domains for up to ten years at current prices.
How this could be applied to existing domains, such as .com: Existing registrants of domains such as .com mostly don’t care about pricing mechanisms for new top level domain names. The problem is that registry operators for existing domain names have a clause in their agreements with ICANN that says other registry agreements won’t include more favorable terms to other registries than their own contract. This means that VeriSign could push to remove pricing controls on .com domains, making them similar to new top level domain names.
Then they could announce variable pricing and massive price hikes, such as charging Google a billion dollars to renew Google.com. Google could renew at current prices for ten years, and then get hit with a big bill in the 11th year.
This violates an implicit guarantee: This isn’t fair to current domain owners, who registered their domains with the implicit guarantee that ICANN would manage registry contracts in a competitive manner. In other words, they would competitively bid registry contracts based, in large part, on the price registries would charge for their services.
ICANN isn’t listening. So far, people opposed to new TLD pricing have been fighting to restrict pricing in the new agreements. Although almost all comments provided to ICANN about pricing recommend price controls, it is becoming clear that ICANN does not intend to follow the wishes of the broader community, and is instead beholden to the registry operators who will profit from such pricing schemes.
What should be done: That’s OK for new domains, but violates the trust of existing domain owners. The battlefield should be moved to a different solution: force operators of existing TLDs, such as .com, .net, .org, .biz, and .info, to sign an updated registry agreement that adds an exclusion to the “most favored nation” clause. This exception would exclude pricing controls of other registry agreements from being applied to existing registry agreements.
On a brighter note, DAGv3 does not include the URS and the final trademark protections will require GNSO review and Board approval (see http://www.internetcommerce.org/ICANN_Releases_DAGv3 for full comments on this). So the opposition of ICA and others has had some positive effect — and of course ICA will continue to give key attention to and raise strong concerns regarding the potential blowback effects of pricing policy at new gTLDs to .com and other incumbents.
I’ve long advocated that registry services should be tendered via a competitive process for fixed periods of time to the lowest cost provider that meets the terms of the tender, as nearly every government contract is handled. That’s what the NTIA/DOC/DOJ meant by “competition”, not this perverted concept that ICANN has pushed forward over the objections of the public that 10,000 new gTLDs will “compete” with .com — they simply won’t, they simply attract new wanna-be monopolists, many of whom would be in it for a quick buck, to gouge consumers through defensive registrations, cause consumer confusion, etc..
That being said, the additional language that:
“[Registry Operator shall offer all domain registration renewals at the same price, unless the registrant agrees to a higher price at the time of the initial registration of the domain name following clear and conspicuous disclosure of such renewal price by Registry Operator.]”
which for some reason was added in square brackets, would be a step towards protection for registrants. However the language needs to be tightened up even further (e.g. handling of transfers, and other tricks registries would try, such as intentionally forcing domains to be deleted for “alleged” abuse, in order to resell the name to a higher bidder).
The need for hard caps is evident, though, as I can think of several ways around the current language already. A simple cap of twice the .com registry fees leaves ample room for real registry operators, while eliminating much of the potential for abuse of registrants.
George – that language in the pricing section is murky to me. It seems to contradict the price increase clause, so ICANN needs to clarify it.
Also, it’s important to note the 180 day advance notice for renewal price increases doesn’t apply if the increase is no more than the prior years’ increase.
It seems the .TV pricing model work for them. Now they are trying to apply this to other gTLD’s… this is bad business for us domaineer.
Regards,
EM
This one topic is the most infuriating of all the ICANN issues. It is so categorically abusive and wrong for global domain registrants to be threatened with discriminatory pricing.
ICANN continue to avoid voicing their position on this which undermines any and all confidence in their integrity.