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|Tiered / Variable Pricing By Domain Not Forbidden in New .BIZ/INFO/ORG contracts|
Vint Cerf/ICANN confirm member's interpretation of new proposed contracts
Vint Cerf/ICANN confirm my interpretation of .biz/info/org proposed contracts -- tiered/differential domain pricing would not be forbidden
I finally got the "official" word from Vint Cerf of ICANN, "on the record", who confirmed that my interpretation is correct, that differential/tiered pricing on a domain-by-domain basis would not be forbidden under the .biz/info/org proposed contracts. This means that the registries could charge $100,000/yr for sex.biz, $25,000/yr for movies.org, etc. if they wanted to -- it would not be forbidden the way the proposed contracts are currently written. This would represent a powerful pricing weapon for registries, and a fundamental shift in possible domain name pricing, that could lead them to emulate .tv-style price schedules.
One can read the proposed contracts at:
Vint said it would be "suicide" for a registry to do it, because there'd be the 6-month notice period to raise prices and the ability for registrants to renew for up to 10 years at "old prices", that supposedly "protects" registrants. Personally, as a business, my time horizon is a lot longer than 10 years. I wonder if Vint felt introducing "SiteFinder" was suicide, too....history has shown registries will do whatever they can get away with, in order to maximize profits long-term and short-term.
I don't think Vint understands the business at all, to think that a lag of 10 years will deter a profit-maximizing registry, esp. VeriSign should it try to match this contractual precedent in .com (and history shows VeriSign will always try to get "more", especially if "another registry" is able to do something -- they used that tactic in .com renegotiations, saying various terms were already in the .net contract, for instance).
Just to show one possible future, if PIR feels pressure or has a desire to clean up porn from .org, it could announce that <snip/sex domain>.org (check its Alexa ranking) will have its renewal price be $1 billion/yr. If it takes 10 years to do it, many would wait, and it would not be considered "suicide" for PIR. Who will stand against that as "we're protecting the internet and children from porn", PIR might argue? Leaving this temptation in the contract will likely become a slippery slope, in my opinion, leading to profit-maximizing behaviour by registries to emulate .tv. Acting in the interests of their shareholders, registries are *compelled* to maximize profits.
It can be used as a political weapon, too. If a registry disagreed with the views or content of a website for which they were the registry, they could raise the renewal price to $100 billion/yr. 10 years later, that website would not exist at that address, and nothing in the contracts would forbid this pricing behaviour. More likely, it would be used for profit maximization (if Google.com is a $100 billion company, "certainly they are benefiting from their domain name, and can afford our $1 billion/yr renewal fee" one might say -- see the net neutrality debate and tiered pricing for websites that phone and cable companies are pushing....). How far away is tiered domain name pricing?
ICANN would be opening up a Pandora's Box through this contractual loophole, to not forbid .tv style pricing. The mistake would not be able to be corrected, as the contracts explicitly say that Consensus Policies do not apply to pricing issues. Since presumptive renewal exists in these new deals, the contracts are essentially going to live with ICANN forever, if approved.
If this pricing power eventually got extended to .com, nothing would prevent the renewal fee for Yahoo.com, GoDaddy.com, Google.com, Tucows.com, Business.com, Sex.com or any other domain in a registry with similar terms to reach $1 billion per year, or any other price that VeriSign or other registry operators wanted to maximize its profits (net-neutrality debate is similar, for bandwidth pricing to websites). You can imagine my VeriSignSucks.com won't last longer than 10 years, if VeriSign had the power to raise the renewal fee to $1 billion/year. :)
I believe that it is very important that this loophole be closed, in order to not create the precedent that VeriSign could later exploit for .com, and to protect registrants of .biz/org/info. If it is "suicide", as Vint suggested, then surely a registry that would supposedly never use the power would agree to remove the temptation by adding an appropriate term to the contract. A registry not willing to add that term....well, you know what they might be tempted to do later. If your business horizon is the next quarter, this won't impact you. If it's beyond 10 years, it could impact you. Can you live with that uncertainty?
ICANN went even further than the .com proposed settlement with VeriSign, and gives these registries removal of price caps "following extensive consideration and discussion" (I don't recall any such public discussion or consultation with the ICANN community and stakeholders). However, take note of ICANN's statements in the CFIT litigation regarding pricing caps on May 26th:
"in a single supplier market, price caps are, if anything, procompetitive (Mot. at 13-14);" [page 1 of the document, line 13, page 6 of all 15]
"Nowhere does CFIT address the fact that, at this point in time, all that ICANN and VeriSign have done is propose future price **limits** for .COM domain names, which cannot be implemented until the DOC approves the .COM Extension. (Mot. at 20-22.) And, as ICANN explained in its opening brief, price caps in a single supplier market are considered pro-competitive. (Mot. at 13-14.)" [page 8 of the document, line 14, page 13 of all 15]
So, you have ICANN lawyers telling the court that price caps are pro-competitive in these single supplier markets (i.e. where registries are the single suppliers for each TLD). Indeed, it is part of ICANN's mission to promote competition.
Yet, we have ICANN removing all price caps entirely on .biz, .info and .org with these proposed new contracts. Something is amiss. Wouldn't that contradict everything their lawyers said to the court?
Feel free to spread the word on the mailing lists or media, and contact Vint (vint AT google.com) or John Jeffrey (jeffrey AT icann.org) or other ICANN staffers if you want to confirm things and voice your concerns. Time is of the essence, as the public comment period ends next Monday. Registrants DO NOT know what is coming (the public comment board is almost empty), as it's the summer holidays! (typical ICANN tactic, introduce 500+ page contracts for public comment when everyone is on holiday)
Public comments can be sent using the addresses at:
(be sure to send to all 3 email addresses for all 3 contracts, and also click the link in the email ICANN will send you to authenticate your email address, otherwise your comment doesn't get received)
There are a lot of other reasons to be opposed to the proposed contracts, such as the presumptive renewal, the ability to sell traffic data, the removal of price caps, etc. I will be writing a longer document soon, but wanted to give everyone a heads-up, so that you can take appropriate action on your own now, and corroborate things independently with Vint Cerf, John Jeffrey or other ICANN people.
These are fundamentally flawed contracts, and should not be approved by ICANN. The precedents these contracts would create are ominous, even worse then the .com proposed settlement agreement (that the DoC has yet to approve). Why is ICANN even renegotiating these registry agreements, when the existing terms don't expire for several years in some cases, and the GNSO PDP process for registry services is ongoing?
[edited by: Webwork at 1:49 am (utc) on Aug. 25, 2006]
|Because of that the big firms would lobby heavily against open-ended renewal fees on com and I feel confident with their immense muscle and politics it will not be approved for com's, even if it goes thru for org and others. |
I sure hope so. I think that's a battle we'll see happen.
If you're right, a move like this makes existing and future .coms more valuable.
I think it's an issue of principle and would personally rather see it knocked out right now.
I know what the Registries want. They are greedy and they want to come after our money.
In the beginning, when a domain expires, then it is deleted and put up for registration again.
Then later, when good domain names become more and more expensive, and when a good domain name expires instead of putting it up for registration, these registries put them up for auction. So instead of getting $9 for the new registration, they are may now get up to thousands for a domain name. This is against ICANN's rules.
Now... the registries have gone a step further. They have been eyeing your good domain name for a long time, but every year you never fail to renew your domain name. So they cannot get their hands on your good domain name to make money in the auction market. So they get frustrated. So they come up with this idea to make your renewal fee so expensive (eg. $1 million) that you won't renew anymore. Then they take your domain and auction it of for thousands of dollars instead of making $9 from your renewal fee.
This is the REAL motive of the registries.
Just in case anyone is not fully getting this here is an example of how variable domain pricing will wokr, if permitted, across other domain registries.
Here's a sample of unregistered .tv domains and the annual - that's yearly - price to register them (or renew them):
Import.tv - $1000/year
Export.tv - $2000/year
Doll.tv - $1000/year
Home.tv - $50,000/year
Webmaster.tv - $5,000/year
Dallas.tv - $10,000/year
Medical.tv - $20,000/year
Baby.tv - $30,000/year
That's the current, undeveloped, annual price. It's not a "pay this price and it's yours to keep" price.
I'm not sure where they're getting their "this is what we should charge" information but I guess in the future you may all be facing this reality.
If you sit on your hands.
Won't this affect the registrars as well? If the .BIZ registry, for example, can set the minimum renewal rate variably, could they not also vary the rate charged to each registrar? If so, they could drive certain registrars out of business by making them pay higher renewal rates than other registrars.
Has anyone set up a MySpace page for this? Maybe hook up with the SaveTheInternet people, since this is rather closely related? Maybe somebody with a video camera could do a humorous video and post on YouTube?
|Following extensive consideration and discussion, each of the proposed new .BIZ, .INFO and .ORG registry agreements provide for the lifting of price controls formerly imposed on the pricing of registry services. |
Extensive consideration? Screwing millions of people is not considerate by any measure.
Good grief! Wheres a good senator when you need one.
[edited by: walrus at 5:47 pm (utc) on Aug. 26, 2006]
OK, I'm trying to work up a snappy story to submit to one or two sites, and I'm still not clear: does this mean a registry such as tucows.com can decide registration / renewal fees at will? Do they get the money, or ICANN?
This reminds me of days of the old .US domains. They used to be issued in the form of business-name.city.state.us and were supposed to be FREE to US residents.
But - anyone could apply to become a Delegated Manager - a Registrar for a City (control the 3rd level of the domain). A city registrar could charge whatever he wanted to issue domains to applicants that wanted the domain at the 4th level. You had no way to get around a City registrar if you wanted a domain in that city.
The major cities (New York, Philadelphia, etc.) got gobbled up by Delegated Managers/city registrars and would charge high fees for the domains. Some managers gobbled up entire STATES! (They applied as the registrar for every city in a state.)
It seems that many of the Delegated Managers/city registrars were individuals who were "insiders." Lets say - they were members of "certain boards" who controlled the .US domain at the time.
Thats why the old style .US domains did not develop much. (GREED)
The people who sit on Boards are not all "white knights."
Who would be interested in buying property that is taxed randomly and unlimited? As soon as they start charging domain owners high annual fees at will, domain owners will think of ways to have their message online in a cheap manner and this whole ridiculous scheme will collapse.
A random thought: if key TLDs suddenly become extortionately priced, would this not make alternative DNS systems suddenly more attractive? Particularly if some of the bigger names, (like Google or Microsoft) threw their weight behind one?
Direct link to ICANN public comment into page here:
From the ICANN intro page:
|Lifting of Price Controls on Registry Services. Following extensive consideration and discussion, each of the proposed new .BIZ, .INFO and .ORG registry agreements provide for the lifting of price controls formerly imposed on the pricing of registry services. However, in order to protect incumbent domain name registrants and allow time for planning by those in the registry and registrar communities, the form of registry-registrar agreement proposed with each of the new registry agreements requires six months advance notice by the registry operator of any price increase in registry services. This is consistent with the notice period required under the registry-registrar agreement implemented with the 2005 .NET registry agreement, and the registry-registrar agreement included with the proposed new .COM registry agreement. |
Fees Payable to ICANN. The proposed new .BIZ, .INFO and .ORG registry agreements provide for a sliding scale of transactional fees payable to ICANN per annual increment of a domain name, starting with $0.15 in 2007 and 2008, $0.20 in 2009 and 2010, and increasing to $0.25 in 2011 and 2012* (*the proposed new .ORG registry agreement has a fee schedule implementation date of July 2007, and will continue through June 2013). (My favorite) The per name transaction fees, however, are subject to adjustment depending on the average price of domain name registrations during each calendar quarter throughout the term of the agreement. Each of the proposed new agreements provide only for a transactional fee component payable to ICANN, with no fixed fee. This is a markedly different approach from the fixed fee established in the 2001 .BIZ and .INFO registry agreements, and 2003 .ORG registry agreement, and is intended to appropriately scale the fees payable by each registry to ICANN to the success or decline of the registry business.
Ya, lots of input and "extensive" public commentary for sure. Put the issue out during what time of year? Summer vacation for most of Europe and the USA?
ICANN cannot wait to get their cut of the "increased fees". That likely explains their willingness to rewrite the contracts before they expire.
More jobs for friends and family and more conferences in Tahiti no doubt with all that new ICANN revenue.
[edited by: Webwork at 6:07 pm (utc) on Aug. 26, 2006]
Here's a sample of unregistered .tv domains and the annual - that's yearly - price to register them (or renew them):
Does anyone have any examples of anyone who has registered a .TV domain (or any other domains with variable pricing), and paid $x to register, but were then asked to pay $(x+y) to renew?
|Whose to say that, in an unrestricted pricing market of a monopoly service provider - one with whom you have no bargaining power |
Exactly which makes me think that the best thing is an anti-trust suit.
Tucows is a domain registrar. They offer domain registration and related services. Other examples of registrars are godaddy, moniker, enom and dotster. A domain registrar publishes to a domain registry. A domain registry is the organization responsible for the administration and maintenance of a top-level domain. Some examples of registries are Afilias - the .info registry, PIR, the .org registry, Neulevel, the .biz registry, Eurid, the .eu registry, Verisign, the .com and .net (and .tv) registry and Neustar, the .us registry.
It's the registries that could raise the prices.
As point of further clarification, as a domain name registrar Tucows can charge basically whatever they want for a domain name registration. If you don't like what they charge, you can go somewhere else.
Under these new proposals, the TLD registries can charge whatever they like for a domain name registration. If you don't like what they charge, you can't go anywhere else if you want that TLD.
For example, if you want example.biz, Tucows might ask $15 and NetSol might ask $35. You can choose whichever one you like. Both registrars pay the same price (say $5) to the .BIZ registry, regardless of domain name.
But, if the .BIZ registry is allowed variable pricing, it might decide that example.biz isn't worth $5, it is worth $5,000.
In that case, your only choice will be whether you want to pay Tucows $5,010 or NetSol $5,030.
I could be wrong but I seem to recall there was a .tv name that was registered for reg fee (maybe like $50 bucks) but then was determined to be very premium after registration, and there was some sort of action. Was it broadband? Maybe I'm mixing something up. This was a while ago.
Does anyone know the specific dates (or at least years) when the current agreements with the .BIZ, .INFO and .ORG registries expire?
I thought I saw that .ORG commenced December 22, 2002, but maybe it didn't commence then.
On .BIZ and .INFO, the problem there is that the agreement lasts five years from commencement, but if they have registered 19,#*$! domain names prior to the end of the five years, they get a sixth year. So, did they register that many? I don't know. Would be nice to find something that says the term of the agreement is xx/xx/#*$!x to yy/yy/yyyy. :)
I'm also trying to find an example (with URL) of someone who had a domain (.TV, .MD, whatever) that they registered for $x but were asked for $(x+y) for renewal. Looked for that on Google, and this thread was the first result!
edit: Okay, .ORG was signed December 2, 2002, but was effective January 1, 2003.
[edited by: ccDan at 2:39 am (utc) on Aug. 27, 2006]
I'm pretty sure something happened like what I described but I can't find it in the SE's which is weird. Maybe some domainer with a long memory recalls it..
Actually, with regards to what you are asking, I think .TV had a standard 5% yearly fee increase a while back. So, if you regged a name and it was $1,000 for the first year, next year would be $1,050.
[edited by: Tomseys at 3:05 am (utc) on Aug. 27, 2006]
The existing expiration dates of 2007 and 2009 for the registry agreements are irrelevant. By terms of the new proposed agreements the old agreements - with expiration dates of 2007 and 2009 - shall no longer apply. Interesting, isn't it, that there should be a rush to rewrite an existing deal?
The EFFECTIVE DATE of the new agreements between ICANN and PIR.org will be whatever date the two parties to the current gTLD management agreement agree to be bound by. In other words the 2 parties to the existing agreement can agree that the existing agreement is over and that "we've got a new deal".
Although the existing agreement between PIR and ICANN does not expire until 2009 that contract does not preclude the existing parties from agreeing to new terms. That is exactly what is happening.
Note the terms of the proposed new agreement concerning .Org:
|This REGISTRY AGREEMENT (this “Agreement”) is entered into as of _______, 2006 by and between Internet Corporation for Assigned Names and Numbers, a California nonprofit public benefit corporation (“ICANN”), and Public Interest Registry, a Pennsylvania non-profit corporation. |
|Section 1.1 Effective Date. The Effective Date for purposes of this Agreement shall be |
Below here is the ICANN link for the "new" PIR.org agreement, providing for an effective date of 2006. There is no reason to believe that the date in the agreement is a typo.
[edited by: Webwork at 3:36 am (utc) on Aug. 27, 2006]
Just in case you still don't get the full flavor of what is going on you might want to read the following from Page 11 of the proposed agreement between ICANN and PIR.org.
|3. 1(f) Traffic Data. Nothing in this Agreement shall preclude Registry Operator from making commercial use of, or collecting, traffic data regarding domain names or non-existent domain names for purposes such as, without limitation, (examples removed) . . . promoting the sale of domain names, provided however, that such use does not disclose domain name registrant or end-user information or other Personal Data as defined in Section 3.1(c)(ii) for any purpose not otherwise authorized by this agreement. |
So, the central registry can collect domain traffic data - for commercial use - for the purpose of promoting the sale of domain names? Perhaps the resale of your domain name if you cannot afford to renew it?
PEOPLE: BE SCARED. Be very scared.
Traffic data for commercial use? What other use, besides sales of domains, might such data be used for/
What about your popular website? Might the traffic data find its way into the calculation of your renewal fees?
What's good for the goose will no doubt be good for the gander. If this data is going to be used for .Org then .Com will not be far behind. It's only a matter of ICANN striking a deal and ICANN very much wishes to be its own boss - so don't count on the DOC coming to your rescue in the future.
Again, I don't mean to sound alarmist. I AM alarmed. I would like to give ICANN the benefit of the doubt about all of this except I have a small problem. That problem is that ICANN has been busy working out the details of some rather dramatic changes to the domain registration system - some that I say will create dangerous precedents for ALL other gTLDs and even ccTLDs - and doing it in a manner reasonably calculated to attract the least public attention. For example, making the comment period a time when many people are on vacation in Europe. For example, despite the dramatic changes in pricing policies no press release making those changes clear was ever circulated to the media. BIG CHANGE. Little notification.
[edited by: Webwork at 3:30 am (utc) on Aug. 27, 2006]
I know that the proposed agreements will replace the current ones, but the expiration date of the current agreements is relevant as it pertains to the apparent rush of ICANN to get the new agreements implemented.
As has been mentioned (either here or at ICANN's site, or both), the timing of the public comments period appears suspicious, since a lot of people in North America and Europe are on vacation this time of year. If you look at ICANN's forum, the bulk of comments have been in recent days, which further leads me to believe that most people were unaware of this until recently. I think most of us here, and I think you yourself admitted, did not know of this until GeorgeK brought it up.
Given that the current .ORG agreement does not expire until January 1, 2009, what is the urgency for the new agreement? That's why I was looking for the dates. May 2007 for .INFO and .BIZ is closer, but it is not like the agreements are ending within the next few weeks or even months. There are 9 months (270+ days) remaining. Certainly, there is no urgency. Why open this up to public comment in the summer? Coincidence, or are they trying to get this through quietly?
If it was just coincidence, ICANN should consider extending the public comment period.
So, that's the reason I was looking for the dates of the end of the current terms.
Yes, excellent point gentlemen.
Thanks for pointing out the Traffic Data provision. I had read of the traffic data issue, but had missed the actual provision. I knew they were up to no good, but wasn't sure how!
That should be worrisome for anyone. Traffic is not a good indication of the amount of money you're making (if any) off a site. Just look at the discussions in the AdSense forum. Some earn a lot of money on little traffic while others earn little money with a lot of traffic.
A hobby site may get a lot of traffic but may not make (or even be designed to make) money.
Another thing on variable pricing... What if I want to buy your widget.dom domain name? You turn me down. I offer you $5,000. Still, you turn me down. So, I go to the .DOM registry, and say I'll pay Registrar A's $10 registration fee PLUS $5,000 (for the registry) if they'll let me have your domain when it comes up for renewal.
Now, when you renew, the registrar sends you a bill for $5,010 instead of the usual $10. Now, either I'll get your domain, or I'll cost you an additional $5,000.
What's to prevent that from happening?
Thread about ICANN's decision to collect domain traffic data as part of "the new deal". [webmasterworld.com]
Does anyone know if the ICANN Mission Statement was ever finished? Only stuff I can find is from a few years back, and no final product.
64.194.zzz.xx is where the Acme Widget website is hooked to the net. The domain name system is a handy way to point to that location. But if someone gets real greedy, they will create a huge incentive for the development of alternative domain systems. Some of those alternatives already exist, but no one want to mess with them if the main system basically works - which it does now.
The domain system is really just an electronic phone book. For years, the monopoly phone companies published the Yellow pages (with a nice profit). Now there are three such directories delivered to my house for free.
Ultimately, information providers will keep on hooking their servers into the net, while information consumers will keep hooking their browsers into the net. Who says that ICANN has the best way to name all the websites? Let a hundred start-ups bloom.
[QUOTE=zcat]A random thought: if key TLDs suddenly become extortionately priced, would this not make alternative DNS systems suddenly more attractive? Particularly if some of the bigger names, (like Google or Microsoft) threw their weight behind one? [/QUOTE]
Exactly. Sorry, but while this is interesting and, IMO, TLD fees do need to be increased to a realistic level to put off PPC speculators, this story above ain't gonna happen.
The key here is the "retroactive" application of the terms affecting existing domain leaseholders. Sure, a new you could try and charge $1 billion for a brand new registration. But when it coms to renewals pre-D-Day, a court is going to rule in favour of someone renting the TLD under a pre-existing agreement. And if they don't the first time, they will the 2nd or the 3rd. You really think the Internet community will simply accept and live with this?
In reality, should it happen, I think we'll see increases in new registrations, but not in renewals. Hell, even if they tried, the registrars will just compete with each other all the way back down to your existing payment to keep your business! Be a bit like getting Car Insurance all over again :)
ICANN may get their fair share of criticism, but they ain't THAT stupid. (Famous Last Words?!)
[edited by: Simsi at 3:54 pm (utc) on Aug. 27, 2006]
Seems a neat way to kill the domain name forever.
Incentive to buy a name (any name suich as 34hg2kt.com) for ten years, buy a new domain (eg ddn43kuyr.com) at year nine for a further ten years, shopping arond for the cheapest, and then 301 for a year.
This would, of course mean relying totally on the search engines to find the required content, and send visitors.
A painful transition - but a level playing field, so people would soon learn that a domain name would be like a car registration mark - useless as a brand, but unique. Unless they pay extra for a personalized plate.
So ICANN will become public enemy number one - and Google (sorry, srkfrjui34hk.com) will be the people's friend.
So long as the rules applied to all, it's just one of those things; question is if ICANN have the guts to turn the world upside down just for their own profit. I reckon they may find it not so easy.
|Hell, even if they tried, the registrars will just compete with each other all the way back down to your existing payment to keep your business! Be a bit like getting Car Insurance all over again :) |
And you've missed the point ..if the monopoly registry governing .org increases it's price on your .org domain renewal to your registrar..it will be passed onto you ..and no other registrar will be able to compete on price as they will have to pay the monopoly registry the same price ..
godaddy isn't going to take a $10,000.oo loss on adomain that they have to give the .org registry £10,010.oo for at renewal ..just to try to compete with netsol ..they'd be competeing their way into fastrack bankruptcy ..
monopolies dont do competition ...and public outcry doesnt phase them at all ..they are too busy hearing the sound of the money to hear the shouts ..
registrys do not compete with each other ..they cannot ..they have exclusive monopoly rights to their own suffixes ..
To those who think that "it's Ok ..it could be challenged in the courts "...what would the domain owner be doing for revenue whilst it was being challenged and stalled by the registrys deep pockets and their lawyers in the courts?..how many people who are or were "in the right" just had to give up and let the big guys win in the courts due to lack of funds to continue ..?
Alternative handling of DNS ..pipedreams ;-))
..every ISP worldwide would have to agree to use it to make it an alternative ..many of these and the carriers are owned or part owned by those companies who sit on the board of the ICANN ..the attempt here is to use the ICANN ( operating away from genuine public scrutiny ) to try to steal and hi-jack what couldn't be gotten by other ( easier to see in the light of day ) methods ..
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