Afilias and Neustar will be soon able to sell .biz and .info domains direct, and may have to shut down registrars that refuse to sign up to the new 2013 Registrar Accreditation Agreement.
Those are two of the biggest changes proposed to the companies’ ICANN contracts, drafts of which were published this morning six months after their last registry agreements expired.
The new .biz and .info deals would allow both companies to vertically integrate — that is, own a controlling position in a registrar that sells domains in their respective gTLDs.
This would remove unwanted friction from their sales and marketing efforts, but would mean both registries would start competing with their own registrar channel in the retail market.
That’s currently not allowed in almost all gTLD contracts, but is expected to become commonplace in the era of new gTLDs, which have no such ownership restrictions.
These new vertical integration clauses were not unexpected; it’s been envisaged for a couple of years that the restrictions would be dropped in legacy gTLDs.
What is surprising are newly proposed clauses that would oblige Neustar and Afilias to terminate accredited registrars’ access to their TLDs if they don’t sign up to the 2013 RAA.
Under the process set out in the contracts, when registrars representing 67% of the domains in each given TLD have signed up to the 2013 RAA, all the other registrars would have between 270 and 330 days to also sign up to it or lose their ability to access the .biz/.info registries.
That would mean no selling new names and no accepting inbound transfers — a growth death sentence in the affected TLDs.
In the case of .info, in which Go Daddy has a 45% market share, it would only take the top four registrars to sign up to the 2013 RAA before the clock started ticking for the others.
However, this 67% rule would only kick in for Afilias and Neustar if Public Interest Registry and Verisign also voluntarily agree to the same rules for their .org, .com and .net gTLDs.
It’s a pretty aggressive move by ICANN to push the 2013 RAA onto registrars via its contracts with registries, but not the first.
In the separately proposed base New gTLD Registry Agreement, expected to be finalized in the next few weeks, registrars can only sell new gTLD domains if they’re on the 2013 RAA.
Other changes to the .biz and .info contracts include giving the registries the ability to block certain domains from registration to deal with security threats. Registries have been doing this since Conficker, but now they’ll be explicitly allowed to under their contracts.
They’ll also now be subject to the same emergency back-end transition provisions as new gTLDs, in the event of a catastrophic failure.
Both companies will also get to keep their ability to raise registry fees by 10% a year.
Presumably, given that the US Department of Commerce is not party to the .biz and .info deals, neither registry will get the same nasty surprise that Verisign got last year when Commerce froze its prices.
The previous contracts actually expired last December but were extended for six months due to ICANN’s focus on new gTLDs and the fact that it wanted to bring both agreements closer to the new gTLD contract.
Four new gTLD applications have been withdrawn so far this week, including the first to come from .info operator Afilias.
Afilias has pulled its bid for .mail — the second applicant to do so — due to the number of competitors for the string.
A spokesperson said in an email:
The company felt there were simply too many groups in contention for this domain and we’d rather focus our energy supporting and helping to grow the .POST domain, for which we are the [technical services provider].
There are now five applicants competing for the string, including Google, Amazon and Donuts, but they’re all facing objections from the United States Postal Service and the Universal Postal Union, which runs .post.
Elsewhere this week, Directi has ended its bid for .movie, a contention set with seven other bidders.
The company declined to comment on the reasons for the withdrawal, so we probably can’t entirely rule out some kind of partnership with one or more other applicants.
Today we’ve also seen the withdrawal of applications for .ltd and .inc, both belonging to a Dutch company called C.V. TLDcare. I don’t know much about these guys, other than it used OpenRegistry as its technical partner and that .inc and .ltd were its only two applications.
Interesting fact: not a single “corporate identifier” application (.llp, .corp, .ltd, .inc, .llc) has passed Initial Evaluation yet, but seven applications have been withdrawn.
It’s a controversial category, with many US state attorneys general very unhappy about any of these strings being delegated without safeguards.
The latest four withdrawals bring the total to 63.
Afilias says a new anti-abuse policy is responsible for .info losing almost a million domains in 2012.
The .info space ended the year down 914,310 domains, an 11% decline on 2011, the biggest gTLD shrinkage in actual domain terms and second only to .tel in percentage terms, according to DI’s TLD Health Check.
The TLD ended the year with 7,402,557 domains under management, still the runaway leader of “new” gTLDs in terms of total domains.
An Afilias spokesperson blamed the DUM decline on a crackdown on abusive domain use, which impacted sales. He said in a statement:
To fight the growing scourges of spam, phishing and other Internet problems, .INFO established an industry-leading anti-abuse policy and began aggressively working with its registrar partners to take down any and all sites that violated the policy, regardless of the sales impact. This approach reinforces .INFOs strong foundation of great sites and enhances the reputation of .INFO as the ‘home of information on the Web’.
Historically, .info was favored by bad actors due to the low cost of registrations. At some points over the last ten years, it’s even been possible to register a .info domain for free.
Afilias’ crackdown affected .pro too, as then-president Karim Jiwani told us in January, but .pro managed to double in size anyway, due to new registrar partners and lower prices.
Of the 18 gTLDs tracked by TLD Health Check, only .name, .tel and .travel also suffered significant declines in domains under management in 2012.
Afilias and Neustar have separately announced increased to the registry fees for .info and .biz domain names.
Afilias yesterday said the maximum wholesale price for a .info domain would increase to $8.16 effective September 1, a 10% increase on the current rate of $7.42 per year.
The last 10% hike, which the company is allowed to take under its ICANN registry agreement, came in July 2011.
Neustar last week also said it was taking its permitted 10% increase.
The maximum registry fee for .biz will go up to $8.63, also starting September 1. It last increased its prices in February 2012.
Karim Jiwani, president of Afilias unit RegistryPro, has quit to explore new opportunities in the domain name business.
Jiwani, whom we profiled in depth recently, joined Afilias when it acquired RegistryPro, the .pro registry, a year ago, so the move is not entirely surprising.
Prior to RegistryPro, he headed up Afilias’ business in Europe.
“Mr. Jiwani plans to pursue other opportunities in the expanding domain industry,” Afilias said.