Latest news of the domain name industry

Recent Posts

Can NameCheap reverse .org price cap scrap?

Kevin Murphy, July 25, 2019, 11:08:27 (UTC), Domain Policy

NameCheap has taken it upon itself to fight ICANN’s decision to remove price increase caps on .org. But does it stand a snowball’s chance in hell of winning?

The registrar has filed a Request for Reconsideration with ICANN, appealing the organization’s signing of a Registry Agreement with Public Interest Registry that allows PIR to raise prices by however much it wants, more or less whenever that it wants.

NameCheap, which had over 390,000 .org domains under management at the last count, says it is fighting for 700-odd of its customers whose comments, filed with ICANN, were allegedly not taken into account when the decision was made, along with registrars and everyone else that may be adversely impacted by unfettered .org price increases.

NameCheap thinks its business could be harmed if price increases are uncapped, with customers perhaps letting their domains expire instead of renewing. It’s RfR states:

The decision by ICANN org to unilaterally remove the price caps when renewing legacy TLDs with little (if any) evidence to support the decision goes against ICANN’s Commitments and Core Values, and will result in harm to millions of internet users throughout the world.

Unrestricted price increases for legacy TLDs will stifle internet innovation, harm lesser served regions and groups, and significantly disrupt the internet ecosystem. An incredible variety of public comments was submitted to ICANN from all continents (except Antarctica) imploring ICANN to maintain the legacy TLD price caps — which were completely discounted and ignored by ICANN org.

Before the new contract was signed, PIR was limited to a 10% increase in its .org registry fee every year. It didn’t always exercise that right, and has said twice in recent months that it still has no plans to increase its prices.

The new contract — which has already been signed and is in effect — was subjected to a public comment period that attracted over 3,200 comments, almost all of them expressing support for maintaining the caps.

Despite not-for-profit PIR’s protestations, many commenters came from the position that giving PIR the power to increase its fee without limit would very possibly lead to price gouging.

That ICANN allegedly “ignored” these comments is the key pillar of NameCheap’s RfR case.

The public comment period was a “sham”, the registrar claims.

But is this enough to make ICANN change its mind and (somehow) unsign the .org contract?

There are three ways, under ICANN’s bylaws, to win an RfR.

Requestors can show that the board or staff did something that contradicts “ICANN’s Mission, Commitments, Core Values and/or established ICANN policy(ies)”

They also win if they can show the decision was was taken “without consideration of material information” or with “reliance on false or inaccurate relevant information”.

It’s quite a high bar, and most RfRs are rejected by the Board Accountability Mechanisms Committee, which is the court of first instance for reconsideration requests.

Requestors rarely show up with sufficient new information sufficiently persuasive to kick the legs from under ICANN’s original decision, and the question of something contradicting ICANN’s core principles is usually a matter of interpretation.

For example, in this case, NameCheap is arguing that failing to side with the commenters who disagreed with the removal of price caps amounts to a breach of ICANN’s Core Value to make all decisions in consultation with stakeholders:

The ICANN org will decide whether to accept or reject public comment, and will unilaterally make its own decisions — even if that ignores the public benefit or almost unanimous feedback to the contrary, and is based upon conclusory statements not supported by the evidence. This shows that the public comment process is basically a sham, and that ICANN org will do as it pleases in this and other matters.

But one of ICANN’s stated reasons for approving the contract was to abide by its Core Value to depend “on market mechanisms to promote and sustain a competitive environment in the DNS market”. It doesn’t want to be a price regulator, in other words.

So we have a clash of Core Values here. It will be pretty easy for ICANN’s lawyers — who drafted the contract and will draft the resolutions of the BAMC and the full board — to argue that the Core Values were respected.

I think NameCheap is going to have a hard time here.

Even if it were to win, how on earth does one unsign a contract? As far as I can tell, ICANN has no termination rights that would apply here.

Where the RfR will certainly succeed is to force the ICANN board itself to take ownership, on the record, of the .org contract decision.

As ICANN explained to DI earlier this month, while the board was very much kept in the loop on the state of negotiations, it was senior staff that made all the calls on the new contract.

But an RfR means that the BAMC, which comprises five directors, will first have to raise their hands to confirm the .org decision was kosher.

NameCheap will then get a chance to file a rebuttal before the BAMC decision is handed to the full ICANN board for a confirmatory vote.

While the first two board discussions of the .org contract were not minuted, the bylaws contain an interesting feature related to RfRs that I’d never noticed before today:

If the Requestor so requests, the Board shall post both a recording and a transcript of the substantive Board discussion from the meeting at which the Board considered the Board Accountability Mechanisms Committee’s recommendation.

I sincerely hope NameCheap invokes this right, as I think it’s pretty important that we get some additional clarity on ICANN’s thinking here.

Tagged: , , , , , , ,

Comments (3)

  1. Jack says:

    Yes, NameCheap can and they will win when other registrars bring their support (GoDaddy, Tucows…)

    If ICANN really wants to “promote and sustain a competitive environment in the DNS market” then they just need to put all legacy TLD contracts for bid.

    PERIOD

    • Rob says:

      Not sure I follow your logic.

      Why only legacy TLD’s ? Why would you not want all TLD’s to come up for bid ?

      And when you say “bid”, who gets the money ? ICANN ?

      For example, you would bid $40 million dollars to run .org ?

      I realize its simple to say, but in reality implementing it is a lot harder.

  2. Tim says:

    This is an interesting development on a very important topic. Thanks for taking the time to write it up. All domain investors need to be watching what happens and using the force of their spending dollars to give themselves a voice. At least Namecheap is willing to go public with this effort and lead the way. Even if ICANN shuts down the request, it will serve as notice that the domain community is engaged and watching what happens and what decisions are being made behind closed doors at ICANN. Decisions that often go against the interests of domain registrants.

Leave a Reply to Jack