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ICANN throws lifeline to flopping new gTLDs

Kevin Murphy, September 16, 2015, 10:00:26 (UTC), Domain Registries

New gTLD registries with lower than expected sales will now be able to reduce the amount of their “failure bond”.

ICANN has introduced a new Continued Operations Instrument Amendment Service, which will enable registries to raise or lower the amount of their COI depending on how business is going.

A COI is a letter of credit or cash in escrow that registries must secure in order to fund three years of emergency operations in the event that their businesses fail.

The amount of the COI is calculated from sales projection and ranges from $18,000 (for under 10,000 names) to $300,000 (over 250,000 names).

Let’s face it, at the moment the amendment service must surely be targeted largely at companies that over-estimated their future sales and secured a COI much larger than they needed.

If they’ve escrowed cash, the new service will allow some of that money to be freed up to spend on more useful activities.

ICANN said that if it determines that a registry has under-projected its sales, it will be able to refer it to the new service in order for the COI to be increased.

Currently, only four new gTLDs have over 250,000 names under management, judging by zone files.

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Comments (2)

  1. Don says:

    If I read the details right, not only will ICANN let underperforming registries lower their COIs but over performing ones would have to increase their COIs as well. So those in the top ten or so who have amassed hundreds of thousands of domains by either giving them away or practically giving them away for $1 or less may have to dig deeper for ICANN? (Assuming they under estimated their success in their application.) How is ICANN going to enforce this?

  2. Stuart Lawley says:

    Surely A*** over t** as we call it.

    $18,000 for a Back up provider to take over a registry that cant seem to wipe its own nose in terms of profitability seems punitive to the BRO and $300,000 for a registry with over a quarter of a million names that a BRO would likely be salivating to inherit and would likely even pay for the privilege.

    I suspect ICANN are getting lobbied to reduce registry minimum fees for these underperforming new gTLDs (which goes straight into their coffers) and this may be a “sop” to give some $$$ back to these providers without it costing ICANN anything .

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