Who needs rounds? The idea of allocating new gTLDs on a first-come, first-served basis is getting some consideration at this week’s ICANN 57 meeting.
Such a move could have profound implications on the industry, creating new business opportunities while scuppering others.
Whether to shift to a FCFS model was one of many issues discussed during a session today of the GNSO’s working group tasked with looking at the next new gTLD round.
Since 2000, new gTLDs have been allocated in strict rounds, with limited application windows and often misleading guidance about when the next window would open, but it’s not written in stone that that is the way it has to be.
The idea of switching to FCFS — where any company could apply for any gTLD at any time — is not off the table.
FCSC would not mean applicants would merely have to ask for a string and automatically be granted — there’d still be multiple phases of evaluation and opportunities for others to object, so it wouldn’t be just like registering a second-level domain.
Depending on how the new process was designed, doing away with rounds could well do away with the concept of “contention” — multiple applicants simultaneously vying for the same string.
This would basically eliminated the need for auctions entirely.
No longer would an applicant be able to risk a few hundred thousand bucks in application expenses in the hope of a big private auction pay-day. Similarly, ICANN’s quarter-billion-dollar pool of last-resort auction proceeds would grow no more.
That’s potentially an upside, depending on your point of view.
On the downside, and it’s a pretty big downside, a company could work on a solid, innovative gTLD application for months only to find its chances scuppered because a competitor filed an inferior application a day earlier.
A middle way, suggested during today’s ICANN 57 session, would be a situation in which the filing of an application starts a clock of maybe a few months during which other interested parties would be able to file their own applications.
That would keep the concept of contention whilst doing away with the restrictive round-based structure, but would present plenty of new opportunities for exploitation and skulduggery.
Another consequence of the shift to FCSC could be to eliminate the concept of Community gTLDs altogether, it was suggested during today’s session.
In 2012, applicants were given the opportunity to avoid auction if they could meeting exacting “Community” standards. The trade-off is that Community gTLDs are obliged to be restricted to their designated community.
If FCSC led to contention going away, there’d be no reason for any applicant to apply for a Community gTLD that could unnecessarily burden their business model in future.
For those strongly in favor of community gTLDs, such as governments, this could be an unwelcome outcome.
Instinctively, I think FCSC would be a bad idea, but I think I’d be open to persuasion.
I think the main problem with the round-based structure today is that it’s unpredictable — nobody knows when the next round is likely to be so it’s hard to plan their new gTLD business ideas.
Sure, FCSC would bring flexibility, allowing companies to apply at times that are in tune with their business objectives, but the downsides could outweigh that benefit.
Perhaps the way to reduce unpredictability would be to put application windows on a predictable, reliable schedule — once a year for example — as was suggested by a participant or two during today’s ICANN 57 session.
The discussions in the GNSO are at a fairly early stage right now, but a switch to FCSC would be so fundamental that I think it needs to be adopted or discarded fairly quickly, if there’s ever going to be another application round.
ICANN ended its fiscal 2016 with just shy of $400 million on its balance sheet, according to its just-released financial report.
As of June 30, the organization had assets of $399.6 million, up from $376.5 million a year earlier, the statement (pdf) says.
Its revenue for the year was actually down, at $194.6 million in 2016 compared to $216.8 million in 2015.
That dip was almost entirely due to less money coming in via “last-resort” new gTLD auctions.
The growth of the gTLD business led to $74.5 million coming from registries, up from $59 million in 2015.
Registrar revenue grew from $39.3 million to $48.3 million.
Money from ccTLD registries, whose contributions are entirely voluntary, was down to $1.1 million from $2.1 million.
Expenses were up across the board, from $143 million to $131 million, largely due to $5 million increases in personnel and professional services costs.
The results do not take into account the $135 million Verisign paid for .web, which happened after the end of the fiscal year.
Auction proceeds are earmarked for some yet-unspecified community purpose and sit outside its general working capital pool. Regardless, they’re factored into these audited financial reports.
ICANN has to date taken in almost a quarter of a billion dollars from auctions. Its board recently decided to diversify how the money is invested, so the pot could well grow.
New gTLD portfolio player Radix has acquired the pre-launch TLD .fun from its original owner.
The company took over the .fun Registry Agreement from Oriental Trading Company on October 4, according to ICANN records.
Oriental is a party supplies company owned by Warren Buffett’s Berkshire Hathaway.
It won .fun in a private auction in April last year, beating off Google and .buzz operator DotStrategy.
It had planned to run it as a “closed generic” — keeping all the domains in .fun for itself — but those plans appeared to have been shelved by the time it signed its RA in January this year.
Evidently Oriental’s heart was not in it, and Radix made an offer for the string it found more attractive.
Radix business head Sandeep Ramchandani confirmed to DI today that .fun will be operated in a completely unrestricted manner, the same as its other gTLDs.
It will be Radix’s first three-letter gTLD, Ramchandani said. It already runs zones such as .online, .site and .space.
.fun is not yet delegated, but Radix is hoping for a December sunrise period, he said.
MarkMonitor has become the first accredited registrar to carry over 500 gTLDs.
Inspired by a recent Dynadot press release outlining its passing of the 500-TLD mark, I thought I’d put together a league table of gTLD registrars, ordered by which carries the most.
It will come as little surprise to most that brand protection registrars dominate the top end of the list.
MarkMonitor tops the league, with 504 gTLDs in its stable as of the end of June, up from 499 in May.
It’s closely followed by Ascio and CSC. Indeed, brand-focused registrars occupy many of the top 30 registrars, as you can see from this table.
There’s no real correlation between the number of gTLDs carried and the total domains under management for the registrar.
GoDaddy, with 53 million names, is way down in 28th position, for example.
The list was compiled from the latest gTLD registry reports, which show how many domains were registered to each accredited registrar at the end of June.
The data does not not include ccTLDs, nor does it account for situations where registrars may retail a TLD via a gateway or as a reseller of another registrar.
Google has muscled in to the registry service provider market with the launch of Nomulus, an open-source TLD back-end platform.
The new offering appears to be tightly integrated with Google’s various cloud services, challenging long-held registry pricing conventions.
There are already indications that at least one of the gTLD market’s biggest players could be considering a move to the service.
Donuts revealed yesterday it has been helping Google with Nomulus since early 2015, suggesting a shift away from long-time back-end partner Rightside could be on the cards.
Nomulus, which is currently in use at Google Registry’s handful of early-stage gTLDs, takes care of most of the core registry functions required by ICANN, Google said.
It’s a shared registration system based on the EPP standard, able to handle all the elements of the domain registration lifecycle.
Donuts contributed code enabling features it uses in its own 200-ish gTLDs, such as pricing tiers, the Early Access Period and Domain Protected Marks List.
Nomulus handles Whois and likely successor protocol RDAP (Registration Data Access Protocol).
For DNS resolution, it comes with a plug-in to make TLDs work on the Google Cloud DNS service. Users will also be able to write code to use alternative DNS providers.
There’s also software to handle daily data escrow to a third-party provider, another ICANN-mandated essential.
But Nomulus lacks critical features such as billing and fully ICANN-compliant reporting, according to documentation.
So will anyone actually use this? And if so, who?
It’s too early to say for sure, but Donuts certainly seems keen. In a blog post, CEO Paul Stahura wrote:
As the world’s largest operator of new TLDs, Donuts must continually explore compelling technologies and ensure our back-end operations are cost-efficient and flexible… Google has a phenomenal record of stability, an almost peerless engineering team, endless computing resources and global scale. These are additional potential benefits for us and others who may contribute to or utilize the system. We have been happy to evaluate and contribute to this open source project over the past 20 months because this platform provides Donuts with an alternative back-end with significant benefits.
In a roundabout way, Donuts is essentially saying that Nomulus could work out cheaper than its current back-end, Rightside.
The biggest change heralded by Nomulus is certainly pricing.
For as long as there has been a competitive market for back-end domain registry services, pricing has been on a per-domain basis.
While pricing and model vary by provider and customer, registry operators typically pay their RSPs a flat fee and a buck or two for each domain they have under management.
Pricing for dot-brands, where DUM typically comes in at under 100 today, is believed to be weighted much more towards the flat-fee service charge element.
But that’s not how Nomulus is to be paid for.
While the software is open source and free, it’s designed to run on Google’s cloud hosting services, where users are billed on the fly according to their usage of resources such as storage and bandwidth consumed.
For example, the Google Cloud Datastore, the company’s database service that Nomulus uses to store registration and Whois records, charges are $0.18 per gigabyte of storage per month.
For a small TLD, such as a dot-brand, one imagines that storage costs could be reduced substantially.
However, Nomulus is not exactly a fire-and-forget solution.
There is no Google registry service with customer support reps and such, at least not yet. Nomulus users are responsible for building and maintaining their registry like they would any other hosted application.
So the potentially lower service costs would have to be balanced against potentially higher staffing costs.
My hunch based on the limited available information is that for a dot-brand or a small niche TLD operating on a skeleton crew that may lack technical expertise, moving to Nomulus could be a false economy.
With this in mind, Google may have just created a whole new market for middleman RSPs — TLD management companies that can offer small TLDs a single point of contact for technical expertise and support but don’t need to build out and own their own expensive infrastructure.
The barrier to entry to the RSP market may have just dropped like a rock, in other words.
And Nomulus may work out more attractive to larger TLD operators such as Donuts, with existing teams of geeks, that can take advantage of Google’s economies of scale.
Don’t expect any huge changes overnight though. Migrating between back-ends is not an easy or cheap feat.
As well as ICANN costs, and data migration and software costs, there’s also the non-trivial matter of shepherding a horde of registrars over to the new platform.
How much impact Nomulus will have on the market remains to be seen, but it has certainly given the industry something to think about.