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Domain overseer lifts all price caps on .Org domain names

by — Policy & Law 42 Comments

ICANN ignores community input and agrees to lift price restrictions on .org domains.

Circular shapes with .org in them and mouse pointers. Green, blue and pink colors.

As many feared, the comment period was just a formality.

ICANN has agreed to remove price restrictions on .org domain names, letting the domain’s manager, Public Interest Registry, charge as much as it wants for the domains. (It also agreed to let .info manager Afilias charge whatever it wants for .info.)

This is despite only six out of over 3,000 comments being in favor of removing price caps.

You can blame two things: ICANN wanting to make its life easier with a misguided attempt to make its registry agreements similar, and regulatory capture.

ICANN’s decision foreshadows that the organization will agree to .com price increases. Eventually, caps on .com domains could disappear.

10 million .org domains are currently registered and were registered under a system in which Public Interest Registry could not increase prices at will. Now, non-profits and other organizations that have been using these domains for years could face steep price increases.

The good news is that Public Interest Registry’s management is competent and well-guided. They will likely wait a while before making any major changes to avoid comments of “we told you so”.

But management changes. Boards change. And one day, it could get ugly.

It will be interesting to see if any parties consider antitrust challenges.

How ICANN uses the .Org registry to fund the Internet Society

by — Uncategorized 7 Comments

Editor’s note: this post is by Nat Cohen. I am publishing it because he provides a rich context for ICANN’s proposal to remove price restrictions on .org domain names. Any opinions in this post are those of the author.

Internet Society logo

Logo for the Internet Society, which benefits from registrations of .org domain names.

ICANN awarded the .org registry to the Internet Society (ISOC) in 2002[1] with the intention that the “profits from the registry will go to ISOC”[2] to provide a reliable source of funding for its mission.  ISOC has cumulatively received hundreds of millions of dollars in funding over the intervening years from the profits of the .org registry, allowing it to grow from 8 employees and a budget of a little over $2 million in 2001[3] to over 100 employees[4] and a projected 2019 budget of over $38 million, with $34 million of that generated from the .org registry.[5]

PIR (Public Interest Registry), the organization created by ISOC to manage the .org registry, is currently operating under an agreement that limits price increases to 10% per year.  ICANN staff is proposing that all price constraints be eliminated in the new .org agreement.[6]  If approved, PIR would be able, if it so chose, to sharply increase prices on .org domains with the result that revenues from .org registrants could increase by hundreds of millions of dollars annually, with much of that revenue coming out of the operational funds of non-profit organizations.

ICANN created an unusual structure in which one non-profit, ISOC, receives most of its revenue by extracting funds from other non-profits – the community of non-profits using .org domain names.  It might strike some as unseemly that one non-profit that is well-connected within ICANN was able to leverage those connections to extract funds from other non-profits around the globe whose focus is elsewhere than on building relationships within ICANN.

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Time is running out to reject unlimited .Org (and other) prices

by — Policy & Law 22 Comments

One week left to have your say on unrestricted registry prices for legacy TLDs.

Image of dollar sign and upwards arrow

Last month, ICANN dropped a bomb on the domain name industry with a proposal to lift all price restrictions on .org and .info domain names. It later proposed the same on .biz domains.

The community only has seven days left to comment on the .org and .info proposals, and three weeks to comment on .biz.

So far only nine people have commented on the .org proposal and one on .info. While larger companies will probably wait until the last minute to comment, this number is surprisingly low given the impact this could have on the industry. I suspect some domain name registrars will end up commenting.

One of the comments submitted so far is from the Internet Commerce Association. It delineates between older TLDs like .org and new ones in that were effectively purchased by the registries that run them.

Indeed, I don’t understand ICANN’s reasoning behind aligning legacy TLD contracts with those of new TLDs because they are fundamentally different.

Here are links to comment on each proposal: .org | .biz | .info

The problem with price hikes on legacy TLDs

by — Policy & Law 18 Comments

ICANN logoIt should not be a goal to align legacy TLD policies with new TLD policies.

ICANN dropped a bombshell yesterday: it’s planning to remove all price controls on .org and .info domain names.

The organization justified this move by saying:

This change will not only allow the [.org/info] renewal agreement to better conform with the base registry agreement, but also takes into consideration the maturation of the domain name market and the goal of treating the Registry Operator equitably with registry operators of new gTLDs and other legacy gTLDs utilizing the base registry agreement.

The proposed agreement also adds Uniform Rapid Suspension, a trademark rights protection mechanism that was created as part of the new top level domain program. It allows trademark holders to quickly take down domains that are alleged to be cybersquatting. ICANN has previously added URS to several other top level domain contracts as they have renewed.

ICANN’s justification seems to be that all registries should play by the same rules. But this ignores the environment in which these domain names were launched and registered by customers. It is, in effect, a retroactive change to policy.

It’s true that new top level domain registries can jack up their prices as much as they want. However, compared to legacy TLDs, these price increases were allowed from the start. The most recent .org and .info registry agreements had price controls baked in that only allowed prices to increase 10% per year. That’s a lot, but it’s not unlimited.

So people who have registered .org and .info domains with the understanding that price increases would be capped are suddenly using domains that could theoretically cost thousands of dollars to renew.

While I doubt that Public Interest Registry (.org) and Afilias (.info) will increase prices that much, history tells us that the existing customers are the ones that will end up paying the higher prices. Registries generally discount first-year registrations, not renewals. So it’s reasonable to expect that these registries will increase the base cost going forward but then offer specials on new registrations.

ICANN notes that “Protections for existing registrants will remain in place, in line with the base registry agreement.” These protections are just allowing existing registrants to renew their domains for up to 10 years at current prices before price hikes take effect. That just kicks the can down the road.

One of ICANN’s missions is the stability of the DNS. Allowing uncapped price changes adds instability to the market behind it.

ICANN proposes lifting price controls on .Org, .Info domains

by — Uncategorized 21 Comments

You might have to pay a lot more for your .org and .info domains in the future.

Image of dollar sign and upwards arrowDomain name overseer ICANN has proposed new contracts for the .Org and .Info registries that would eliminate price caps on the domain names. Under the terms of the new agreements, .Org operator Public Interest Registry and .Info operator Afilias could increase prices on registrations to an unlimited amount, provided that they give advance notice.

The terms are similar to those found in new top level domain name agreements that have resulted in some registry operators jacking up prices as much as 30x. While those cases were for little-used domains, .Org currently has 10 million domains under management.

In announcing the proposed contract, ICANN stated:

In alignment with the base registry agreement, the price cap provisions in the current .org agreement, which limited the price of registrations and allowable price increases for registrations, are removed from the .org renewal agreement. Protections for existing registrants will remain in place, in line with the base registry agreement. This change will not only allow the .org renewal agreement to better conform with the base registry agreement, but also takes into consideration the maturation of the domain name market and the goal of treating the Registry Operator equitably with registry operators of new gTLDs and other legacy gTLDs utilizing the base registry agreement

The protections for existing registrants are basically the right to renew their domains for up to 10 years in advance at current prices.

ICANN’s language will likely be cited by Verisign in future price increase requests.

The current contract allows Public Interest Registry and Afilias to increase wholesale prices by 10% per year.

ICANN also added Uniform Rapid Suspension to the contracts.

Both contracts are open to public comment until April 29: .Org comments .Info comments

Read more here