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Rules for registry-registrar mergers proposed

ICANN has revealed how it intends to enable incumbent domain name registries to also become registrars, ending a decade of cross-ownership restrictions.

The industry shake-up could allow companies such as VeriSign, Neustar and Afilias to become accredited registrars in their own top-level domains later this year.

Hypothetically, before long you could be able to go directly to VeriSign for your .com domains, to Afilias and Public Interest Registry for .info and .org, or to Neustar for .biz.

The changes could potentially also kick off a wave of consolidation in the industry, with registry operators buying previously independent registrars.

ICANN’s proposed process is straightforward, requiring just a few amendments to the registries’ existing contracts, but it could also call for governmental competition reviews.

Registries will have to agree to abide by a Code of Conduct substantially the same as the one binding on wannabe registries applying later this year under the new gTLD program.

The Code is designed to stop registries giving their affiliated registrars unfair advantages, such as lower prices or preferential access to data, over other ICANN-accredited registrars.

Registries would also have the option to adopt the registry contract from the new gTLD Applicant Guidebook wholesale, although I expect in practice this is unlikely to happen.

ICANN would be able to refer vertical integration requests to national competition authorities if it determined that cross-ownership could cause “significant competition issues”.

VeriSign would be the most likely to be hit by such a review, but it’s also the only registry that does not appear to have been particularly hamstrung over the years by the forced separation rules.

The proposed process for registries to request the contract changes has been posted to the ICANN web site and is now open for public comment.

.CO to accredit 20 more registrars

Kevin Murphy, April 26, 2011, Domain Registries

.CO Internet is looking for more registrars to start selling .co domain names.

The company has just released a request for proposals, saying it plans to accredit up to 20 new registrars over the next 12 months.

.CO’s registrar channel was limited by its agreement with the Colombian government to 10 registrars in its first year of business – the government had originally wanted only three, to limit gaming – but that restriction no longer applies.

While there are only 10 .co registrars currently, a few of them operate reseller channels or gateways that have enabled unaccredited registrars to also sell the domains, albeit on non-optimal terms.

According to the RFP, .CO is particularly interested in registrars that are willing to promote the .co TLD by either bringing it to new markets or making it the subject of special marketing campaigns.

While .co operates outside of ICANN control, the company is sticking to its policy of only accepting ICANN-accredited registrars into its channel.

Also, only registrars that are already accredited to sell .biz domains (as well as .com and .net) will be able to offer .co, presumably due to the fact that Neustar is the registry provider for both.

This effectively excludes about 115 registrars, many of which are shell or legacy accreditations used for drop-catching.

There are certain unspecified “special considerations” that apply to corporate-focused registrars, according to the RFP, presumably because they tend to be rather low-volume and generally focused on defensive registrations.

Registries could become registrars by summer

Kevin Murphy, April 24, 2011, Domain Registries

The big incumbent top-level domain registry operators could apply to also become registrars as early as June this year, according to a just-passed ICANN resolution.

Last November, ICANN decided to dump its longstanding policy of generally not allowing TLD registries to also own and operate registrars.

While the rule was designed primarily for TLDs won under the new gTLD program, it will also retroactively apply to operators of existing gTLDs.

Neustar (.biz) has already publicly stated its intention to vertically integrate, and is keen for ICANN to lift its current 15% registrar ownership restriction before the new gTLD program kicks off.

According to a resolution passed by ICANN’s board of directors on Thursday, Neustar is not the only registry operator to make such a request.

The board last week…

RESOLVED (2011.04.21.13), the Board directs the CEO to develop a process for existing gTLD registry operators to transition to the new form of Registry Agreement or to request amendments to their registry agreements to remove the cross-ownership restrictions. This process would be available to existing operators upon Board approval of the new gTLD Program.

ICANN currently plans to approve the gTLD program June 20 at its meeting in Singapore.

That gives CEO Rod Beckstrom and his team just two months to come up with a process for allowing the likes of VeriSign, Neustar and Afilias to either amend their contracts or move to the standard contract outlined in the new TLD program’s Applicant Guidebook.

I see a potential source of tension here.

The registry agreement template in the Guidebook has been described by some as an “adhesion contract” due to its heavy balance in ICANN’s favor.

Existing registries will very likely prefer to simply delete the cross-ownership restrictions in their current contracts and incorporate the new proposed Code of Conduct rules.

On the other hand, some have suggested that registries should be obliged to adopt the new Guidebook agreement in full, rather than amend their existing deals, in the interests of equitable treatment.

Registrars still signed up to ICANN’s 2001 Registrar Accreditation Agreement only get the option to upgrade wholesale to the 2009 agreement, it has been noted.

Neustar wants to be a registrar ASAP

Kevin Murphy, March 10, 2011, Domain Registries

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.

Neustar wins .gay contract

Kevin Murphy, February 9, 2011, Domain Registries

Neustrar has signed a deal to provide back-end registry services to DotGay LLC, one of the companies hoping to apply for .gay as a new top-level domain.

There are currently two companies planning to apply for .gay that I’m aware of. The other, the Dot Gay Alliance, has chosen Minds + Machines as its back-end partner.

The positioning is quite interesting. Scott Seitz, CEO of DotGay, played up the need for more security and stability in a TLD that may find itself the target of homophobic cyber-attacks.

In a press release due out tomorrow, Seitz says:

While security is always a concern for any gTLD, the GLBT community is at a higher risk of discrimination, making system integrity a critical component in the selection of a registry partner.

Neustar, which runs .biz and several other TLDs, has more experience running high-traffic registries than M+M. However, this fact will likely not be relevant to which company wins .gay.

Under the ICANN new TLDs program, applicants have to prove themselves capable of running a registry, but contested TLD applicants are not compared against each other based on technical prowess.

It’s much more likely that the two (or more) .gay applications will live or die based on community support or, failing that, how much money they are prepared to pay at auction.

The .gay TLD is likely to also be a flashpoint for controversy due to ongoing debates about governments’ ability to block TLDs based on “morality and public order” objections.

Recent mainstream media coverage has focused on .gay as a likely test case for governmental veto powers.