New gTLD Guidebook v2 released -- threat of tiered pricing continues

[GeorgeK]

As predicted, the New gTLD Applicant Guidebook (version 2) has been released at:

http://www.icann.org/en/topics/new-gtlds/comments-2-en.htm (scoll down)

and an analysis of the comments to the prior version has been posted at:

http://www.icann.org/en/announcements/announcement-3-18feb09-en.htm

The documents are voluminous.

I glanced at the revised draft Base Agreement, and it's clearly unacceptable as there continue to be no price caps in place to protect registrants, see section 2.9 of

http://www.icann.org/en/topics/new-gtlds/draft-agreement-redline-18feb09-en.pdf

This is a backdoor way of allowing existing registry operators (e.g. com/net/org/biz/info) to get unlimited pricing power of existing domain names through .tv-style tiered pricing. Obviously it seems ICANN is only listening to registry operators and prospective registry operators, given they've even LOWERED fees for registry operators (see Section 6.1) Note that price controls were a major source of comments by the public, see the bottom of page 121 to 123 of:

http://www.icann.org/en/topics/new-gtlds/agv1-analysis-public-comments-18feb09-en.pdf

Note in particular that Neustar (operator of .biz) is on public record (page 123) stating they want elimination of price caps for .biz under the "equitable treatment" clause of existing registry agreements if
other registries get it:

"Any material changes for the newer, no-price capped TLDs regarding vertical separation and equal access in general must be applied to NeuStar – this is required under the .biz Registry Agreement and ICANN's Bylaws. Price caps are appropriate for larger TLDs that have a much higher percentage of the market and are not appropriate for gTLDs that do not have any real market power."

If you are existing registrant, even the smaller TLDs have market power over you, as you are "locked in" to that domain name and face high switching costs (e.g. if you had operated abc.biz for 5 years, and Neustar suddenly decides to raise the renewal price to $1 million/year, that will definitely affect you, and is not something where "competitive forces" are at play).

I'll have more detailed comments once I finish reading all of the documents.

Addition:I submitted a longer article at CircleID:

http://www.circleid.com/posts/20090219_tiered_pricing_continues_in_new_gtld_guidebook/

Given that the new draft expressly went against NTIA/DOJ's 2 specific recommendations, I believe it's time for them to take decisive action to rein in ICANN.

 

[FuseFX]

Chuck Gomes of Verisign really loves you George. =)

 

[David G]

As I have been saying for a long time open-ended variable pricing could easily destroy the domaining business as we know it.

If the registry knows that a website/domain is successful selling things, gets ppc revenue or has traffic, they can peg the renewal fee at say (example) 10k a year or whatever, possibly even more. Maybe it will still be renewed even at that price, or if the registrant lets the name expire due to the cost the registry may then ask that same 10k to re-register it (.TV style pricing), or 5k or 15k or whatever they can get, and could even promote the fact it was a prior successful site with traffic to justfy the high reg fee.

The above quite potential scenario (along with ever increasing regular renewal fees) are reasons I have trimmed my (too large) portfolio by 1,100 names in the past year.

 

[Meridian66]

Here's an extreme example: Does this mean that the registrar of the google.com domain could decide that the name is worth more to itself than the $7/year Google might be paying due to the huge traffic volume built up by Google's marketing of its service and its reputation, so they raise the renewal fee to USD$10 billion and if Google doesn't pay, they get the name and can exploit the traffic, and if Google does pay, they get a huge windfall?

 

[David G]

From what I understand it is possible the registry could ask millions of $ for big corporate names like Google Facebook MySpace Yahoo Ford IBM and hundreds of other high traffic sites.

However, big companies need not be too concerned because I feel certain they will simply register their very own extension such as dot-google dot-facebook etc when that capability is allowed.

 

[GeorgeK]

Here's an extreme example: Does this mean that the registrar of the google.com domain could decide that the name is worth more to itself than the $7/year Google might be paying due to the huge traffic volume built up by Google's marketing of its service and its reputation, so they raise the renewal fee to USD$10 billion and if Google doesn't pay, they get the name and can exploit the traffic, and if Google does pay, they get a huge windfall?

Not the registrar (e.g. Markmonitor, Tucows, NSI, GoDaddy, eNom, etc. who are subject to competition), but the monopolist registry, e.g. VeriSign for .com. And yes, with no pricing caps in place for the registry operator, they can set the price to anything they desire, to maximize profits, even on a domain by domain basis. So, cars.com, hotels.com, yahoo.com, Google.com, etc. would cost a lot more to renew than kghgkjhskh.com.

And even if kghgkjhskh.com became a hugely successful site, they could jack up the renewal fees on you later!

 

[keyser]

In such a case there is room for a legal move (anticompetitive/ monopoly practices).
Should be an easy win regarding legal standards.

 

[GeorgeK]

The deadline to submit comments for version 2 of the new gTLD guidebook is April 13, 2009 (this coming Monday). Due to the upcoming Easter and Passover holidays, that's not a lot of working time for those waiting until the last minute. See:

http://www.icann.org/en/topics/new-gtlds/comments-2-en.htm

for the relevant documents and comment email addresses. Most of the comments are being submitted to the "Full Guidebook" section via the email address [email protected] and that archive of comments is at:

http://forum.icann.org/lists/2gtld-guide/

Our own comments are at:

http://forum.icann.org/lists/2gtld-guide/msg00014.html

For those pressed for time, you might want to endorse the comments of others. I'd suggest endorsing the past comments of the NTIA/DOC/DOJ at:

http://www.ntia.doc.gov/comments/2008/ICANN_081218.pdf

if you agree with them. Similarly, MarkMonitor is also seeking endorsements, see:

http://www.markmonitor.com/cta/TLDcomment/index.php

We would not object to those who wish to endorse our own comments, or borrow language from them.

The deadline for comments regarding ICANN's so-called "economic study" is also next week, namely April 17th. See the "study" at:

http://www.icann.org/en/announcements/announcement-04mar09-en.htm

with the comments submitted via the info at:

http://www.icann.org/en/public-comment/#compri

(i.e. via [email protected] ) with comments archived at:

http://forum.icann.org/lists/competition-pricing-prelim/

Our own comments were the first 3 in that archive (although we might add one more). Like all ICANN comment submissions, you will be sent back a confirmation email, and need to click the link in that email and submit "Yes" as your answer for verification, as an anti-spam measure.

 

[GeorgeK]

It's nice to see that even INTA recognizes the importance of price caps in new gTLDs. See their comments at:

http://forum.icann.org/lists/2gtld-guide/msg00016.html

and in particular the bottom half of page 14 of the PDF.

 

[Albert Tai]

Google definately would sue them if they make their renewal price a billion...

 

[GeorgeK]

Today is the last day to submit comments on the 2nd guidebook for new gTLDs. If you don't have time to submit original thoughts, you can endorse other people's comments, see:

http://forum.icann.org/lists/2gtld-guide/

for the current list of comments. See the page at:

http://www.icann.org/en/topics/new-gtlds/comments-2-en.htm

for the relevant documents and comment email addresses. Most of the comments are being submitted to the "Full Guidebook" section via the email address [email protected]. Like all ICANN comment submissions, you will be sent back a confirmation email, and need to click the link in that email and submit "Yes" as your answer for verification, as an anti-spam measure.

 

[keyser]

Comment sent

 

[VanguardDomain]

Hello:
This is a brand new topic for me - but I do not think that this would happen to google.
With Goog about to jump into Medical records online - they have the gov in their pocket on most everything. The gov wont let goog get screwed like that. Goog has and will have far too much power to let this happen. IMO.

Neil

 

[dominator]

s.h.i.t.
i hope it never happens