Registry will prohibit direct auctions when domains expire.
This post has been updated with additional analysis about why .co might be instituting its policy.
The .co domain name registry is implementing a new rule that will prevent domain registrars from auctioning off expired domains unless they obtain permission from the registry, Domain Name Wire has learned.
Under the new policy, which will be implemented no later than October 1, “registrars will be required to adhere strictly to the .CO domain lifecycle and must not facilitate or execute changes in ownership of domain names that have expired and have not been renewed by the original registrant, unless expressly authorized by the .CO Registry.”
Currently, most large domain registrars either auction domains themselves or through a partner when a domain expires, and the registrant doesn’t renew it. For example, GoDaddy Auctions currently sells domains expiring at GoDaddy, Tucows, Squarespace, and dozens of other registrars.
The registrar captures the upside of the auction, and the registry gets domain renewal income.
But .co is putting an end to this practice, and there could be a couple of reasons.
First, .co introduced premium renewals after launching its name. Existing registrations are grandfathered in, so if they are directly transferred, the registry never gets the premium. If they fully delete and are then re-registered, the premium will apply.
Second, the registry could want to get a piece of the pie from auctions.
The registry is asking registrars to “contact the .CO Registry to discuss authorization and alignment with this policy.”
One would assume it will ask them to pay a portion of the proceeds to the registry in return for the authorization.
Alternatively, the registry may be planning to run its own expired domain auctions and wants to ensure high-quality inventory gets through the deletion cycle so it can sell it. For example, Anguilla’s .ai auctions expired domains through Namecheap.
As a country code top level domain, .co is not subject to ICANN rulemaking and can change policies as it wishes.
GoDaddy (NYSE: GDDY) will be the most affected by this change. It’s a bit ironic, since GoDaddy previously managed the .co TLD before losing the contract to a partnership between Team Internet (AIM: TIG, OTCQX: TIGXF) and CCI Reg last year.
GoDaddy may have some chips to play, however. As the largest domain registrar, it could demote .co in its search path.
Let the games begin.
Hopefully this doesn’t happen to .Com eventually. But I wouldn’t be surprised if it did happen to .Com someday.
The biggest racket that needs to end, from a business owner’s point of view, is the auctioning of names and then locking owners out of any chance to redeem their own name once auction bids have been placed.
I’ve had plenty of names redeemed out from under me after I won them at auction, and that’s fine, really. Sure, it’s a pain, but those are the breaks we get as domainers.
From what I understand, this also cuts against the whole spirit of ICANN’s redemption rules. ICANN built in a 30-day Redemption Grace Period — and a five-day pending-delete window after it — specifically so the original owner gets one last chance to recover a name after deletion. Killing redemption the moment an auction closes, while the name is still in the registrar’s own grace period, runs against exactly what that policy was designed to protect. Correct me if I’m reading it wrong.
If registrars claim that’s their biggest money maker, too bad. Find another product line to push. Registrars need to err on the safe side and allow redemptions all the way through to pending delete, even after an auction has been won, so original owners still get a chance to redeem their names.
Yes, domainers do play games — floating a name at auction to see how high it’ll go, then redeeming it. But like I said, we should live with that. Far more names never get redeemed at all. And there are countless cases where situations, accidents, medical emergencies, or billing failures the owner never saw coming cause a name to lapse just a little too long.
This is going to be interesting. More registries are likely lining up to institute their own rules for more than just expired name auctions. Granted, the registries for CCTLDs will likely lead the charge – but registrars are going to lose a lot of leverage as things inch forward. Once more registries embrace double-duty by acting as sole/official registrar for their own names, you can expect wholesale vs. resale fever to kick in fast.