New gTLD registry XYZ.com has responded to criticisms of its plan to auction .xyz and .college names with NameJet before they even have signed contracts with ICANN.
CEO Daniel Negari told DI that the plan to auction 40 names between now and the end of February, is “comfortably within the rules”.
The company seems to be operating at the edge of what is permissible under the new gTLD program’s rights protection mechanisms, which state that no domains may be allocated prior to Sunrise.
But Negari said in an email interview that nothing will be “allocated” before its Sunrise periods are done:
the buyers at auction are not buying the domain names as in a normal auction. They are buying an option to force us to allocate them the domain after the Sunrise Period for the auction price assuming various contingencies are met — such as us being able to allocate the name in the future, the name being available after sunrise, the name not being blocked-out because of name collisions and so on.
He went on to say that the 40 names being put to auction are being drawn from the 100 names the recently redrafted Registry Agreement says registries are allowed to allocate to themselves “necessary for the operation or the promotion of the TLD”.
There’s also the potential problem that neither TLD has yet received its list of name collisions, which are likely to contain thousands of strings that the registry must block at launch.
As we’ve seen with the gTLDs that already have their lists, many desirable second-level strings are likely to be blocked, which could clash with names XYZ is planning to auction.
But XYZ seems to have access to the Day In The Life Of The Internet data from which these lists are compiled, and Negari said that the names it is auctioning off do not appear.
“We think these auctions are a great way to both promote our TLD as anticipated by ICANN in the RA and to bring increased innovation to the space in line with ICANN’s stated goals for the new gTLD program,” Negari said.
Only one mass-market TLD used it, and it’s often considered a bad idea, but variable pricing for domain name renewals is making a comeback with the launch of new gTLDs.
What Box? and Plan Bee are the first two new gTLD registries to start selling domains with tiered renewal fees, in .menu and .build respectively, via Go Daddy.
If you pay Go Daddy $189.99 for a “Priority Rre-registration” in .build, your annual renewal fee if you secure the name will be be $149.99, instead of the $99.99 other pre-registrants will pay.
Similarly, a Priority Pre-registration in .menu will set you back $199.99 a year, forever, instead of $49.99.
I understand that the standard Go Daddy initial registration fee for these two TLDs during general availability will also be $99.99 and $49.99 respectively.
The other two new gTLDs with announced pricing, .uno and .luxury, do not appear to be charging tiered rates.
Go Daddy confirmed that the renewal pricing will be permanently higher in the .build and .menu, telling us:
The industry is starting to move toward a tiered pricing system. As such, some registries have elected to make renewals higher on domain names captured during the priority pre-registration period.
It’s actually permitted under ICANN’s standard Registry Agreement.
Generally, the RA prevents registries charging variable renewal fees. If you find yourself running a successful business in a new gTLD, the registry is not allowed to gouge you for higher renewals.
There’s a provision in section 2.10 of the contract that is designed to “prohibit abusive and/or discriminatory Renewal Pricing practices imposed by Registry Operator”.
But the rule does not apply if you’re told at the point of registration that your renewal pricing will be higher.
The contract states that “Registry Operator must have uniform pricing for renewals of domain name registrations”, but grants this huge exception:
if the registrar has provided Registry Operator with documentation that demonstrates that the applicable registrant expressly agreed in its registration agreement with registrar to higher Renewal Pricing at the time of the initial registration of the domain name following clear and conspicuous disclosure of such Renewal Pricing to such registrant
The only major TLD to try variable pricing before now was .tv, which Verisign currently operates.
The .tv registry held back thousands of desirable strings when it launched in 2000. Instead of auctioning them, it priced these names to sell, but with renewal prices matching the initial registration fee.
If you bought a premium .tv name 10 years ago for $10,000, you’ve been paying $10,000 a year ever since.
This proved very unpopular — especially with domain investors, who continue to moan about the high carrying cost of .tv names bought years ago — and Verisign scrapped the policy on new registrations in 2010.
Some say tiered renewal pricing is the main reason .tv isn’t nearly as popular as it arguably should be.
But will it work in 2014?
Tiered renewal fees seems like an excellent way to discourage domainers from participating in your launch.
Would you be willing to pay higher renewal fees ad infinitum just for the chance for first dibs on the new gTLD domain name you want?
Many registrars are already offering new gTLD pre-registrations, now NameJet has taken the idea one step further: it’s going to auction premium names months before the gTLDs even go live.
It’s just announced a deal with XYZ.com, which is on track to run the .xyz and .college registries, to sell 40 “premium” domain names this month. In fact, according to its press relase, the first auction started on Wednesday.
These two new gTLDs are uncontested but do not yet have Registry Agreements with ICANN, and have not passed pre-delegation testing or any of the other pre-launch prerequisites.
The companies said they due to go live next year.
Some of the domains to be auctioned include: loans.college, scholarships.college, vacations.xyz, insurancequotes.xyz, students.college, jobs.college, auctions.xyz and health.xyz.
NameJet said it expects the auctions to be wrapped up by the end of February.
ICANN has terminated the registrar Cheapies.com and is to transfer its registrations to Tucows.
Cheapies had fewer than 12,000 gTLD domains under management judging by the last available registry reports.
The registrar was terminated two weeks ago, having previously having its accreditation suspended for 90 days, for various violations of the Registrar Accreditation Agreement mainly related to records keeping.
ICANN said Cheapies’ customers should receive an email from Tucows instructing them how to proceed.
Donuts has had a batch of nine new gTLDs delegated to the DNS root today.
The nine strings are: .ventures, .camera, .clothing, .lighting, .singles, .voyage, .guru, .holdings and .equipment.
All belong to various Donuts subsidiaries that have signed Registry Agreements with ICANN over the last few months.
At this precise moment it does not seem that any have their basic “nic.” second-level domains active and resolving, but all are appearing in the DNS root zone.
Earlier today, Donuts announced the sunrise dates for the first seven gTLDs in its portfolio.
The company already has one gTLD delegated, the Chinese-script version of “.games”.