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Dropping domains might get more expensive at Donuts

Kevin Murphy, August 23, 2021, Domain Registries

Donuts is planning to change the way its registry handles dropping domains and may charge additional fees for access.

According to a service request filed with ICANN, Donuts wants to migrate its hundreds of gTLDs to the “Dropzone” system originally deployed by Afilias, which the company acquired at the end of 2020.

Instead of domains separately dropping according to their expiry time, Dropzone sees them pooled together into daily batches for a more orderly release.

Registrars are still awarded dropping domains on a first-come, first-served basis, according to when they submit their EPP create requests to the Dropzone environment, according to Donuts.

Donuts reckons this system will allow it to better manage traffic load on its registry. Presumably, registrars won’t need to send so many creates, as the drop time is synchronized for all deleting domains.

It also thinks the process will help level the playing field for registrars trying to register expired domains.

But the ICANN request (pdf) also suggests that, unlike Afilias, it might add additional fees for registrars to access Dropzone:

In addition to the standard or premium registration prices of a given domain name, The Dropzone service can support additional application fees to be configured on a per TLD basis. Applications fees where applicable will be charged in addition to the standard registration price of a domain name.

Such charges would presumably be passed on to registrants.

Afilias’ original request for Dropzone approval stated that the fee to catch a drop would be the same as a standard registration fee.

Registrars will have to reconfigure their systems to use Dropzone, which exists on a separate host.

Afilias’ 21 gTLDs have been using Dropzone since ICANN approved the service last year.

Domainers at risk as EnCirca takes over deadbeat registrar’s customer base

Customers of defunct registrar Pheenix risk losing their domains because the company was not properly escrowing its registrant data, according to the registrar taking over their domains.

EnCirca, which is taking over up to 6,000 domains previously registered with Pheenix, says the registrar’s shoddy escrow practices mean some of these domains may not be reunited with their rightful owners.

Pheenix “failed to properly escrow domain ownership information for many of the domains utilizing WHOIS proxy services”, EnCirca recently wrote, adding:

We anticipate that many domains will remain unclaimed due to bounced emails or inoperable proxy services. Locating rightful owners will be problematic since the data escrow is often devoid of any identifying ownership information.

To try to mitigate the problem, EnCirca is offering affected registrants the chance to prove ownership by filling out a form and uploading other evidence, such as Pheenix receipts or bank statements.

EnCirca added that because Pheenix disappeared still owing money to registries, the registries may be forcing renewal or restore fees that will then be passed on registrants.

If your domains were at or near expiration, restoring them could be complex and pricey or impossible.

If you’re affected, you can find information here.

Most or all Pheenix customers are likely to be domain investors. It was a drop-catcher, which once had over 500 dummy registrars in its expansive dropnet, most of which it subsequently de-accredited.

But it went AWOL last May, not responding to ICANN or paying its dues, apparently disappearing from the face of the Earth.

ICANN terminated its accreditation in May this year, and initiated a bulk transfer to EnCirca a couple weeks ago (which it only disclosed this week).

EnCirca has experience handling this kind of problem, which is presumably why ICANN gifted it the bulk transfer. In 2018 it took on the domains 49 of Pheenix’s shell registrars, which it says were suffering from the same escrow problems.

Sav.com buys FIFTY new registrars

Who said competition in the domain drop-catching space was dying?

Domain registrar Sav.com, which has been emerging as a bit of a favorite among domain investors over the last year or so, has just formed 50 new registrars with ICANN accreditation to power its drop-catching service.

ICANN records show the creation of newly accredited registrars named “Sav.com, LLC – 1” through “Sav.com, LLC – 50” in recent days, each with the same contact information.

They’re no doubt there to increase Sav’s pool of registry EPP connections, increasing the company’s chance of successfully securing dropping domains.

The company has proven popular among domainers recently due to its no-win-no-fee back-ordering service and its habit of passing on registry wholesale discounts to its customers, resulting in very low first-year pricing.

Since its launch in late 2019, it’s been using its original accreditation, purchased from NameKing.com that year, to catch names. It’s grown from around 4,000 names under management to over 400,000 in that time.

Fifty new registrars means at least an extra $200,000 a year going into ICANN’s pocket for accreditation fees. ICANN’s budget for its current fiscal year predicted its registrar base decreasing by 380 accreditations.

The emergence of this new dropnet comes just days after ICANN canned former dropcatcher Pheenix, which used to have over 500 registrars in its network.

Formerly massive drop-catcher faces ICANN probe

Kevin Murphy, April 26, 2021, Domain Registrars

Pheenix, which used to operate a network of hundreds of accredited registrars, now faces potentially losing its last remaining accreditation, due to an ICANN probe.

ICANN told the US-based company in a breach notice last week that it faces additional action unless it fixes a bunch of problems related to domain transfers and Whois before May 14.

According to ICANN, for over a year Pheenix has been declining to provide data showing it is in compliance with the Expired Registration Recovery Policy and the Transfer Policy, related to dozens of domains.

Pheenix was told about at least one such disputed domain as far back as February last year, but ICANN says it’s been unresponsive to its outreach.

It’s also failed to implement an RDAP server, which ICANN has been nagging it about since October 2019. RDAP, the Registration Data Access Protocol, is the successor protocol to Whois.

A quick spot-check reveals that the disputed names are traffic domains once belonging to legitimate organizations, usually with inbound Wikipedia links, that were captured after the organization in question folded and its domains expired. Most were repurposed with low-quality content and advertising.

That fits in with Pheenix’s registrar business model. It was until a few years ago a huge drop-catching player, with over 500 shell accreditations it used to gain speedy access to dropping domains.

But it dumped almost 450 of these in November 2017, and another 50 the following April.

Since then, Pheenix’s primary IANA number (the coveted “888”) has been associated with fewer and fewer domains.

It had 6,930 domains under management at the end of 2020, down from a November 2017 peak of 71,592.

It hasn’t recorded any new domain adds in any gTLDs since April 2020.

According ICANN’s chronology of events, it’s sent dozens of emails, faxes and voicemails over the last year, related to multiple domain names, and it’s only received a single email in response. And that was in May 2020.

Told us so? Nominet ditches auctions plan, will charge drop-catchers higher fees instead

Kevin Murphy, August 31, 2020, Domain Registries

Nominet has ruled out auctioning off expired .uk domains names, after a member rebellion.

The .uk registry said last Thursday that it “will not pursue an auction model”, despite previously indicating that it was the best option for how to reform the dropping domains market.

This means the most likely model in future is going to be a huge increase in fees for registrars that aggressively engage in drop-catching.

A month ago, Nominet said that it was considering changing how it handles dropping domains, with either a system of registry-managed auctions or a system of increased fees for drop-catchers.

It appeared to many (yours truly included), based on a Nominet scoring system for each available option, that auctions were the preferred choice.

The registry originally denied that auctions were a shoo-in and now, apparently responding to critics, has ruled that option out completely.

Registry MD Eleanor Bradley wrote:

we will not pursue an auction model. While a proportion of responses from a wide range of sectors including the drop–catching market supported this approach, the prevailing view was this is not the role of the Registry.

Introducing a new approach for those that wish to drop–catch names where participants can purchase connections is the option we will pursue further.

Nominet says that some kind of change is “necessary” because currently .uk drop-catchers are sometimes in the habit of creating spurious Nominet memberships in order to increase the number of simultaneous EPP connections they can use, maximizing their chances of securing drops.

The registry calls this “collusion” and against its acceptable use policies.

In future, it seems drop-catchers will instead have to directly buy extra connections from Nominet. An annual price of £600 ($800) for a batch of six connections, up to a maximum of £6,000 for 60, has previously been floated.

Bradley said that the final details of the plan have yet to be determined.

The decision follows a consultation which received 107 comments and a member petition.

Drop auctions not a slam-dunk, says Nominet

Nominet has responded to criticism of its plans to introduce registry-level .uk drop auctions by saying it’s not about money-grabbing and is not guaranteed to even happen.

Registry MD Eleanor Bradley today blogged:

In some quarters the commentary suggests the driver for change is financial, or to make life more difficult for some business models. It is not.

As commercial gain was not our objective, we have suggested that any additional funds raised by changing the policy would be directed towards public benefit activity or used to provide specific services to registrars. Indeed, how to best spend additional funds that result from any policy change is part of the consultation.

The consultation referred to here was launched earlier this month. It suggests replacing the current drop-catching system, in which Nominet suspects some members “collude” to pool their EPP connections, with one of two new processes.

One would be a straightforward auction of desirable dropping names. The other would be to charge drop-catchers up to £6,000 a year for extra concurrent registry connections.

Bradley wrote that “the assumption in some quarters that an auction approach is our preferred option — a fait accompli –- are wide of the mark”.

As I’m one of the people who reported that auctions were Nominet’s “apparently preferred” option, I’ll note that my take was based on the company’s own consultation document, which scores auctions more highly than the alternative on a five-point scale of its own devising.

And a preferred option is not the same as a fait accompli, of course.

The consultation is open for a couple more weeks. A group of disgruntled members plan to petition the board to retain the status quo at its AGM in September.

Nominet members revolt over “deepest pockets wins” auction plans

A group of Nominet members and registrars have launched a petition to prevent Nominet from introducing registry-level auctions for dropping .uk domain names.

The petition, organized by Netistrar, reads: “We the undersigned members request that Nominet maintains equal registrar access to expired domain names on a first come first served basis.”

Nominet recently launched a policy consultation that lays out plans to essentially kill off the existing system of drop-catching expired domains and replace it with either registry auctions or a pay-to-play model asking fees of up to £6,000 a year.

The petition says that “these proposals technically and financially restrict a registrars ability to access expired domains”, noting that other ccTLDs “manage an expiry process without an expensive and centralized auction system.”

So far, 70 registrars and individuals (out of the about 3,000 Nominet members) have signed the petition, but they account for more than 400,000 .uk domains.

The petition will be presented at Nominet’s annual general meeting in September. The current policy consultation ends August 14.

Nominet wants to kill off the .uk drop-catching market

Nominet has revealed a sweeping set of policy proposals that would totally revamp how expired domains are deleted and could essentially kill off drop-catching in the .uk domains market.

The company is thinking about auctioning off expired domains at the registry level, or charging drop-catchers up to £6,000 ($7,500) a year to carry on more or less as normal.

Currently, expired .uk domains are deleted at an undisclosed time each day, leading drop-catch registrars to spam the registry back-end with availability checks on the best names.

Upon finding a desired domain has dropped, they then attempt to register it immediately by spamming EPP create commands.

About 0.7% of the domains deleted each year, about 12,000 of the 1.76 million names dropped in 2018, are re-registered within a second of release, Nominet says.

The system as it stands bothers the registry due to the technical load it creates and the fact that it means the most desirable names are snapped up by small number of domainers for resale.

It also does not like the fact the current system encourages collusion between Nominet members and the creation of dummy memberships by drop-catchers.

So it’s proposing two main options for rejiggering the economics.

The first and apparently preferred solution would be for Nominet to auction off the names, rather than deleting them. It would look a lot like auctions often seen in newly launching TLDs.

The second option is to charge drop-catchers extra fees for a greater number of simultaneous EPP connections.

Currently, each registrar gets six. Under the proposal, called “Economically controlled access to expiring domains”, they’d be able to buy additional batches of six for £600 a pop, up to a maximum of 10 batches or £6,000.

Regardless of which option is chosen, Nominet also wants to make drop times more predictable, by publishing a daily drop-list available to all.

Nominet knows there’s a pretty good chance it’s going to be accused of profiteering, and says in the paper:

If either of the options proposed are implemented, we envisage that any profits derived from the auction or economically controlled access models will be directed towards public benefit activity and/or ringfenced to provide specific services to registrars e.g. a training fund. However, we are also seeking ideas on how any profits would be best spent to benefit the .UK namespace in this consultation.

The consultation can be found here. Interested parties have until August 14 to submit comments.

Drop-catcher drops almost all remaining registrars

Kevin Murphy, April 23, 2018, Domain Registrars

Drop-catch specialist Pheenix has terminated almost all of its remaining registrar accreditations, leaving it with just its core registrar.

By my count, 50 shell registrars have terminated their ICANN contracts over the last few days, all of them part of the Pheenix dropnet.

Only Pheenix.com remains accredited.

That’s one registrar, down from a peak of about 500 at the end of 2016.

Almost 450 were terminated in November.

With registrars equating to connection time with the .com registry, it looks like Pheenix’s ability to catch dropping names through its own accreditations has been severely diminished.

By my count, ICANN currently has 2,495 accredited registrars, having terminated 524 and accredited about 40 since last July, when it said it expected to lose a net 750 over the coming 12 months.

Fifty registrars is worth a minimum of $200,000 in fixed annual fees to ICANN.

Is ICANN still over-estimating revenue from “stagnating” gTLD industry?

Kevin Murphy, March 11, 2018, Domain Policy

ICANN may have slashed millions from its revenue estimate for next year, but it has not slashed deeply enough, according to registrars and others.

Industry growth is flat, and below even ICANN’s “worst case” expectations for the fiscal year starting July 1, registrars told the organization in comments filed on its FY19 budget last week.

The Registrars Stakeholder Group said that “the FY 2019 budget fails to recognize that overall industry growth is flat.”

ICANN’s budget foresees FY19 revenue of $138 million, up $3.5 million on the projected result for FY18.

“These revenue projections presume growth in the domain market that is not aligned with industry expectations,” the RrSG said, pointing to sources such as Verisign’s Domain Name Industry Brief, which calculated 1% industry growth last year.

ICANN’s predictions are based on previous performance and fail to take into account historical “one-time events”, such as the Chinese domain speculation boom of a couple years ago, that probably won’t be repeated, RrSG said.

RrSG also expects the number of accredited registrars to decrease due to industry consolidation and drop-catching registrars reducing their stables of shell accreditations.

(I’ll note here that Web.com has added half a dozen drop-catchers to its portfolio in just the last few weeks, but this goes against the grain of recent trends and may be an aberration.)

RrSG said ICANN’s budget should account for reduced or flat accreditation fee revenue (which as far as I can tell it already does).

The comment, which can be read in full here, concludes:

Taken together, these concerns represent a disconnect between ICANN funding projections, and the revenue expectations of Registrars (and presumably, gTLD Registries) from which these funds are derived. In our view, ICANN’s assessment of budgetary “risks” are too optimistic , and actual performance for FY19 will be significant lower.

For what it’s worth, the Registries Stakeholder Group had this to say about ICANN’s revenue estimates:

Reliable forecasts, characterised by their scrutiny and realism, are fundamental to put together a realistic budget and to avoid unpleasant surprises, such as the shortage ICANN is experiencing in the current fiscal year. The RySG advises ICANN to continue to conduct checks on its forecasts and to re-evaluate the methodology used to predict its income in order to prevent another funding shortfall such as that which the organization experienced in FY18.

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