The domain drop-catching arms race is heating up, with budget player Pheenix this week acquiring 300 more registrar accreditations from ICANN.
According to DI records, the company now has almost 500 registrar accreditations in its family.
More accreditations means more registry connections with which to attempt to acquire expired domains as they return to the available pool.
It also means that Pheenix’s dropnet (a word I just made up that sounds a bit like “botnet” in a pathetic attempt to coin a term for once in my career) is now a bit bigger than that of Web.com, the registrar pool behind Namejet and SnapNames.
It’s still a long way behind TurnCommerce, owner of DropCatch, which two weeks ago added a whopping 500 new accreditations, bringing its total to over 1,250.
An extra 300 accreditations would have cost Pheenix over $1 million in up-front ICANN fees and will incur ongoing fixed annual fees in excess of $1.2 million.
Domain drop-catching service DropCatch.com has added five hundred new registrar accreditations to its stable over the last few days.
The additions give the company a total accreditation count of at least 1,252, according to DI data.
That means about 43% of all ICANN-accredited registrars are now controlled by just one company.
DropCatch is owned by TurnCommerce, which is also parent of registrar NameBright and premium sales site HugeDomains.
Because gTLD registries rate-limit attempts to register names, drop-catchers such as DropCatch find a good way to increase their chances of registering expiring names is to own as many registrars as possible.
DropCatch is in an arms race here with Web.com, owner of SnapNames and half-owner of NameJet, which has about 500 registrars.
The new accreditations would have cost DropCatch $1.75 million in ICANN application fees alone. They will add $2 million a year to its running costs in terms of extra fixed fees.
That’s not counting the cost of creating 500 brand new LLC companies — named in the new batch DropCatch.com [number] LLC where the number ranges from 1046 to 1545 — each of which is there purely for the purpose of owning the accreditation.
In total, the company is now paying ICANN fixed annual fees in excess of $5 million, not counting its variable fees and per-transaction fees.
Because the ICANN variable fee is split evenly between all registrars (with some exceptions I don’t think apply to DropCatch), I believe the addition of 500 new registrars means all the other registrars will be paying less in variable fees.
There’s clearly money to be made in expiring names.
Vox Populi, the .sucks gTLD registry, has terminated the accreditation of brand protection registrar Com Laude as part of an ongoing dispute between the two companies.
Com Laude won’t be able to sell defensive .sucks registrations to its clients any more, at least not on its own accreditation, in other words.
The London-based registrar is transferring all of its .sucks domains to EnCirca as a result of the termination and says it is considering its options in how to proceed.
The shock move, which I believe to be unprecedented, is being linked to Com Laude’s long-time criticisms of Vox Populi’s pricing and policies.
The registrar today had some rather stern words for Vox Pop. Managing director Nick Wood said in a statement:
We have always been critical of this registry and particularly its sunrise pricing model which we regard as predatory. We have advised clients where possible to consider not registering such names. We hope that all brand owners will think twice before buying or renewing a .sucks domain. After all, it is not possible to block out every variation of a trademark under .sucks. In our view, fair criticism is preferable to dealing with Vox Populi.
The termination is believed to be linked to controversial changes to the .sucks Registry-Registrar Agreement, which Vox Pop managed to sneak past ICANN over Christmas.
One of the changes, some registrars believed, would prevent brand protection registrars from openly criticizing .sucks pricing and policies. They called it a “gag order”.
Com Laude SVP Jeff Neuman was one of the strongest critics. I believe he was a key influence on a Registrar Stakeholder Group letter (pdf) in January which essentially said registrars would boycott the new RRA.
That letter said:
It’s ironic for a Registry whose slogan is “Foster debate, Share opinions” has now essentially proposed implementing a gag order on the registrars that sell the .sucks TLD by preventing them from doing just that
While the RRA dispute was resolved more or less amicably following ICANN mediation, with Vox Pop backpedaling somewhat on its proposed changes, Com Laude now believes the registry has held a grudge.
Its statement does not say what part of the .sucks RRA it is alleged to have breached.
Vox Pop has not yet returned a request for comment. I’ll provide an update should I receive further information.
Com Laude said in a statement today:
Jeff Neuman, our SVP of our North American business, Com Laude USA, led the effort in the Registrar Stakeholder Group to quash proposed changes to Vox Populi’s registry-registrar agreement, in order to protect the interests of brand owners and the registrars who work with them. Since then, Vox Populi has accused Com Laude of breaching the terms of the registry-registrar agreement, a claim we take seriously and refute in its entirety. We are now considering our further options.
We have informed our clients of the action being taken and all have expressed their support for the manner in which we have handled it. We are pleased to have received messages of support from across the ICANN community including other registry operators. Clearly there is strong distaste at the practices of Vox Populi.
NameVault, a registrar that once had over 75,000 domains under management, has been terminated by ICANN over multiple alleged contract breaches.
ICANN told (pdf) the Canadian company this week that its right to sell gTLD domain names will come to an end June 17.
The breaches primarily relate to its failure to provide records relating to the domain stronglikebull.com and its failure to provide ICANN with a working phone number.
NameVault belonged to domain investor Adam Matuzich, but I hear he may have sold it off to an Indian outfit several months ago (that may have been a surprise to ICANN too).
Back in 2011, it had over 75,000 names on its books. Today, it has fewer than 1,000.
The decline seems to be largely due to the departure of fellow domain investor Mike Berkens, who started taking his portfolio to Hexonet a few years ago.
ICANN will now ask other registrars if they want to take over NameVault’s domains.
It’s the fourth registrar to lose its accreditation this year.
Neustar, registry manager for the .biz and .us top-level domains, has put the wheels in motion to acquire an ICANN registrar accreditation as soon as possible.
It’s the first major gTLD operator to formally request permission to “vertically integrate” since ICANN announced last November that it was prepared to lift the ownership caps that have previously kept registries and registrars quite strictly separated.
Neustar’s .biz contract currently forbids it from owning more than 15% of an ICANN registrar.
In a letter to ICANN sent this afternoon, Neustar vice president of law and policy Jeff Neuman said the company wants this provision deleted:
We are asking for this language now to allow Neustar to compete fairly for new gTLDs on the same terms and conditions as registrars entering the new gTLD registry market.
It is critical to resolve this issue immediately to ensure that Neustar is able to compete on a level playing field with the new entrants into the marketplace and to promote the efficiencies and innovation for consumers as advocated by the ICANN Board.
ICANN shocked the industry last year when its board of directors decided to allow registries and registrars to own each other.
The decision meant that niche community and brand TLDs will be able to sell direct to registrants, without having to secure the support of reluctant big-name registrars.
It also meant that existing gTLD operators will be able to own registrars for the first time.
As a caveat, designed to protect consumers from gaming registries, ICANN proposed a Code of Conduct designed to limit the cross-pollination of data that could be abused.
Similarly, the Code calls for registries to treat all approved registrars equally, regardless of ownership stakes, to avoid competition concerns.
Neuman wrote that Neustar is prepared to have language along the lines of the current draft Code of Conduct, but “no more restrictive”, incorporated into the .biz registry contract.
Other incumbent gTLD registry operators, notably VeriSign and Afilias, are bound by similar contractual restrictions and will presumably also pursue their options along the same lines in future.