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Non-coms say .org price cap should be RAISED

Kevin Murphy, April 30, 2019, Domain Registries

With the entire domain name community apparently split along binary lines on the issue of price caps in .org, a third option has emerged from a surprising source.

ICANN’s Non-Commercial Stakeholders Group has suggested that price caps should remain, but that they should be raised from their current level of 10% per year.

In its comments to ICANN (pdf), NCSG wrote that it would “not object to the price cap being raised by a reasonable level”, adding:

Rather than removing price caps from the agreement entirely, these should be retained but raised by an appropriate amount. In addition, this aspect of the contract should be subject to a review midway through the contract, based on the impact of the price changes on non-profit registrants.

The NCSG does not quote a percentage or dollar value that it would consider “reasonable” or “appropriate”.

The letter notes that Public Interest Registry, which runs .org, uses some of its registration money to fund NCSG’s activities.

The NCSG disagrees with the decision to remove price cap provisions in the current .org agreement. On the one hand, we recognize the maturation of the domain name market, and the need for Public Interest Registry to capitalize on the commercial opportunities available to it. Public Interest Registry, as a non-profit entity, supports many excellent causes (including, it is worth noting, the NCSG). On the other hand, as the home for schools, community organizations, open-source projects, and other non-profit entities that are run on shoestring budgets, this registry should not necessarily operate under the same commercial realities that guide other domains. Fees should remain affordable, with domains which are priced within reach of everyone, no matter how few resources they have. Consequently, we support leaving the price cap provisions in place. We would not object to the price cap being raised by a reasonable level.

Basically, the ICANN community group nominally representing precisely .org’s target market doesn’t mind prices going up, just as long as PIR doesn’t get greedy.

It’s slightly surprising, to me, to find NCSG on the middle ground here.

There are currently over 3,250 comments on the renewal of PIR’s registry contract with ICANN — coming from domainers, individual registrants, and large and small non-profit organizations — almost all of which are firmly against the removal of price caps.

The only comments I’ve been able to find in favor of the scrapping of caps came from the Business Constituency. Intellectual property interests had no opinion.

I don’t believe the registries and registrars stakeholder groups filed consensus comments, but Tucows did file an individual comment (pdf) objecting to the removal of caps.

Non-profits worth $2.6 billion a year say .org price caps should stay

Kevin Murphy, April 29, 2019, Domain Registries

Eight large US-based non-profits, several of them household names, have put their names to a letter demanding that Public Interest Registry should not be allowed to increase its .org registry fees beyond 10% a year.

Combined, these eight outfits have revenue of roughly $2.6 billion per year.

PIR’s fees are currently under $10 per domain per year. It has roughly 10.6 million names under management.

The organizations signing the letter are TV network C-SPAN, broadcaster NPR, conservation charity the National Trust for Historic Preservation, retired persons advocate the AARP, environmental groups the National Geographic Society, the Conservation Fund and Oceana, and disco legends YMCA of the USA.

In a joint letter, submitted as part of ICANN’s public comment period on the renewal of PIR’s .org contract, they write:

We agree with the current .org registry operator, the Public Interest Registry, that the .org gTLD “has assumed the reputation as the domain of choice for organisations dedicated to serving the public interest.” We have come to rely on this reputation to help distinguish the online presence of our organizations from the online presence of organizations that are not intended to serve the public interest. As nonprofit organizations, we also have come to rely on the certainty and predictability of reasonable domain name registration expenses when allocating our limited resources.

Sourced from Wikipedia and tax returns, here’s how much revenue these non-profits bring in per year:

  • NPR — $208 million (2016)
  • C-SPAN — $73.2 million (2014)
  • YMCA of the USA — $169.5 million (2017)
  • National Geographic Society — $188 million (2017)
  • AARP — $1.6 billion (2016)
  • The Conservation Fund — $238 million (2017)
  • Oceana — $53 million (2017)
  • National Trust for Historic Preservation — $62.9 million (2017)

Limited resources indeed.

The deadline for comments is midnight UTC tonight, about two hours from the dateline on this post.

These people support scrapping .org price caps

Kevin Murphy, April 29, 2019, Domain Registries

The first examples of people supporting the scrapping of price caps in .org have emerged.

ICANN’s Business Constituency and Intellectual Property Constituency have both in the last few hours filed comments on the proposed renewal of Public Interest Registry’s .org contract, which includes the controversial removal of the current 10%-a-year price caps.

The BC expresses outright support for the end of caps — the first example I’ve seen of explicit support for the move — while the IPC utterly fails to address it.

A prominent US antitrust lawyer has also weighed in to claim that approving the new provisions would not raise competition concerns.

Both the IPC and BC seem happy to accept the proposed pricing regime, given that PIR’s new contract will also include new rights protection mechanisms, such as the Uniform Rapid Suspension process.

The BC wrote in its comment to ICANN:

Given the BC’s established position that ICANN should not be a price regulator, and considering that .ORG and .INFO are adopting RPMs and other registrant provisions we favor, the BC supports broader implementation of the Base Registry Agreement, including removal of price controls

Seemingly uninterested in price caps whatsoever, the IPC wrote:

The IPC applauds Public Interest Registry and other Registry Operators that choose to implement enhanced rights protection mechanisms for third party trademark owners, and to take on enhanced responsibilities for the Registry Operator to prevent use of registrations for abusive purposes, including but not limited to violations of intellectual property rights.

From outside the ICANN community, Washington DC-based antitrust attorney David Balto, a former Federal Trade Commission official, has submitted a brief analysis in which he finds little to be concerned about from a competition perspective. He writes:

An analysis of the .org gTLD under competition would likely find that it has little market power, and thus would be unable to unreasonably raise prices. Any attempt to do so should result in users defecting to alternative gTLDs.

Users have ample protections in the form of marketplace competition and contract provisions that allow users to be notified of price increases and lock in rates for up to ten years.

These arguments stand in stark contrast to those made by many in the domainer community, such as in Andrew Allemann’s post today.

Balto says that “market power” — a legal test under US competition law — starts to kick in at about 30% market share. But .org only has about 5.5%, he wrote.

The lawyer does not identify a client affiliation in his letter.

With just a few hours left on the clock before public comments close, there have been 3,129 submitted comments, the vast majority coming from domain investors.

Some non-profit groups have also registered their objections.

.org price anger comments top 3,000 as non-profits weigh in

Kevin Murphy, April 29, 2019, Domain Registries

The proposal to remove price caps from .org domains has now attracted more than 3,000 angry comments, and it’s not just domainers who are feeling the outrage.

Non-profit groups have now also submitted objections to the ICANN proposal, which would remove the 10%-a-year price increase limit that Public Interest Registry is currently subject to.

At least two organizations, which together claim to represent over 32,000 non-profits, have rejected the pricing plan since I first posted about it last week.

The National Council of Nonprofits is a support network for around 25,000 organizations in the US.

Its VP of public policy, David Thompson, told ICANN that price increases in .org would funnel money to PIR away from worthy causes:

Quite literally, the profits derived by this unwarranted change will ultimately be paid by the people nonprofits will not be able to serve. Every $1 in increased prices on the 10+ million .org domain users would generate more revenue each year than is utilized by all but the top one-percent of charitable nonprofits. Each one-dollar hike in costs per domain would divert more than $10 million from nonprofit missions for the enrichment of the monopoly. By anyone’s estimate, this money would be better spent delivering an additional 1,600,000 meals by Meals on Wheels to seniors to help maintain their health, independence and quality of life. Or $10 million could enable nonprofits to provide vision screenings for every two- and three-year-olds in California. Or pay for one million middle school students to attend performances of “Hamilton” or “To Kill a Mockingbird”. Nonprofits should not need to choose between paying for a domain name and helping people.

He said that ICANN should not treat .org the same way as commercial domain registries simply in order to normalize its registry agreements, when .org has a public-interest purpose.

It’s probably worth noting that even under the existing 10% price increase limit, PIR would be able to raise its prices by almost $1 in the first year anyway.

The American Society of Association Executives is a trade association that represents trade associations in the US. It says it has 44,000 individual members from 7,400 organizations.

Its president, John Graham, told ICANN that .org, as a legacy gTLD that PIR spent no money to acquire, should not have the same pricing flexibility as gTLDs that have gone live more recently:

It’s true that registry operators that won the right to sponsor new gTLDs can charge whatever price they see fit, but they also paid millions of dollars in some cases to acquire all of the value in their sponsored domain names, whereas the service contractors managing legacy domain names most assuredly did not. This is a crucial difference that ICANN should take great care to enforce.

Stating that nonprofit organizations can easily switch from one domain name to another if they don’t like the pricing structure ignores the reality that established nonprofits have a longstanding Internet presence built on a .org domain name — a name and online reputation that the organization (not the registry operator) has spent decades cultivating.

Ayden Férdeline, who sits on the GNSO Council representing non-commercial interests commented in his personal capacity to say that while he does not necessarily expect PIR to exploit the customers of its 10 million .org domains:

To exploit these organizations and to have them paying substantially more every year to maintain their domain names would have a detrimental impact on the public’s ability to obtain information and services, and could see smaller non-profit organizations either stop renewing their domain names altogether or moving away from the Domain Name System to proprietary platforms like Facebook.

These were some of the most significant voices from outside the domain investment community that I’ve been able to find from my trawl of the 3,105 comments that had been submitted as of time of writing.

At least 700 of these comments, likely hundreds more, were filed via a form-letter submission tool created by the Internet Commerce Association. Others seem to have been inspired by coverage in the domainer blogosphere and on social media platforms.

Please let me know in the comments or privately if you’ve seen any comments opposing or supporting the price increases from any other major non-domainer organizations.

Of the larger domainers, I spotted that Nat Cohen of Telepathy echoed the views of many, writing:

The legacy domain names, including .info and .org, were handed over to ICANN as trustee to manage for the public benefit. ICANN has betrayed that trust by turning .org over to an organization, that no matter how worthy its mission, will have the unchecked ability to extract vast sums from the base of .org registrants, many of which are non-profits with worthy missions in their own right.

The public comment period ends tonight at midnight UTC. That’s about seven hours from the timestamp on this post.

PIR declined to comment for this article.

ICA rallies the troops to defeat .org price hikes. It won’t work

Kevin Murphy, April 25, 2019, Domain Registries

Over 100 letters have been sent to ICANN opposing the proposed lifting of price caps in .org, after the Internet Commerce Association reached out to rally its supporters.

This is an atypically large response to an ICANN public comment period, and there are four days left on the clock for more submissions to be made, but I doubt it will change ICANN’s mind.

Almost all of the 131 comments filed so far this month were submitted in the 24 hours after ICA published its comment submission form earlier this week.

About a third of the comments comprise simply the unedited ICA text. Others appeared to have been inspired by the campaign to write their own complaints about the proposal, which would scrap the 10%-a-year .org price increase cap Public Interest Registry currently has in place.

Zak Muscovitch, ICA’s general counsel, told DI that as of this morning the form generates different template text dynamically. I’ve spotted at least four completely different versions of the letter just by refreshing the page. This may make some comments appear to be the original thoughts of their senders.

This is the original text, as it relates to price caps:

I believe that legacy gTLDs are fundamentally different from for-profit new gTLDs. Legacy TLDs are essentially a public trust, unlike new gTLDs which were created, bought and paid for by private interests. Registrants of legacy TLDs are entitled to price stability and predictability, and should not be subject to price increases with no maximums. Unlike new gTLDs, registrants of legacy TLDs registered their names and made their online presence on legacy TLDs on the basis that price caps would continue to exist.

Unrestrained price increases on the millions of .org registrants who are not-for-profits or non-profits would be unfair to them. Unchecked price increases have the potential to result in hundreds of millions of dollars being transferred from these organizations to one non-profit, the Internet Society, with .org registrants receiving no benefit in return. ICANN should not allow one non-profit nearly unlimited access to the funds of other non-profits.

The gist of the other texts is the same — it’s not fair to lift price caps on domains largely used by non-profits that may have budget struggles and which have built their online presences on the old, predictable pricing rules.

The issues raised are probably fair, to a point.

Should the true “legacy” gTLDs — .com, .net and .org — which date from the 1980s and pose very little commercial risk to their registries, be treated the same as the exceptionally risky gTLD businesses that have been launched since?

Does changing the pricing rules amount to unfairly moving the goal posts for millions of registrants who have built their business on the legacy rules?

These are good, valid questions.

But I think it’s unlikely that the ICA’s campaign will get ICANN to change its mind. The opposition would have to be broader than from a single interest group.

First, the message about non-profits rings a bit hollow coming from an explicitly commercial organization whose members’ business model entails flipping domain names for large multiples.

If a non-profit can’t afford an extra 10 bucks a year for a .org renewal, can it afford the hundreds or thousands of dollars a domainer would charge for a transfer?

Even if PIR goes nuts, abandons its “public interest” mantra, and immediately significantly increases its prices, the retail price of a .org (currently around $20 at GoDaddy, which has about a third of all .orgs) would be unlikely to rise to above the price of PIR-owned .ong and .ngo domains, which sell for $32 to $50 retail.

Such an increase might adversely affect a small number of very low-budget registrants, but the biggest impact will be felt by the big for-profit portfolio owners: domainers.

Second, letter-writing campaigns don’t have a strong track record of persuading ICANN to change course.

The largest such campaign to date was organized by registrars in 2015 in response to proposals, made by members of the Privacy and Proxy Services Accreditation Issues working group, that would have would have essentially banned Whois privacy for commercial web sites.

Over 20,000 people signed petitions or sent semi-automated comments opposing that recommendation, and ICANN ended up not approving that specific proposal.

But the commercial web site privacy ban was a minority position written by IP lawyers, included as an addendum to the group’s recommendations, and it did not receive the consensus of the PPSAI working group.

In other words, ICANN almost certainly would not have implemented it anyway, due to lack of consensus, even if the public comment period had been silent.

The second-largest public comment period concerned the possible approval of .xxx in 2010, which attracted almost 14,000 semi-automated comments from members of American Christian-right groups and pornographers.

.xxx was nevertheless approved less than a year later.

ICANN also has a track record of not acceding to ICA’s demands when it comes to changes in registry agreements for pre-2012 gTLDs.

ICA, under former GC Phil Corwin, has also strongly objected to similar changes in .mobi, .jobs, .cat, .xxx and .travel over the last few years, and had no impact.

ICANN seems hell-bent on normalizing its gTLD contracts to the greatest extent possible. It’s also currently proposing to lift the price caps on .biz and .info.

This, through force of precedent codified in the contracts, could lead to the price caps one day, many years from now, being lifted on .com.

Which, let’s face it, is what most people really care about.

Info on the .org contract renewal public comment period can be found here.

Nevett headhunts top execs from three rivals

Public Interest Registry has filled out its executive team by poaching senior staff from rivals Afilias, Donuts and Neustar.

Judy Song-Marshall of Neustar has joined as chief of staff, Joe Abley of Afilias is the new chief technology officer and Anand Vora has joined from Donuts as VP of business affairs.

They’re the first senior level appointments to be announced since Donuts co-founder Jon Nevett was appointed CEO three months ago.

PIR, the non-profit which runs .org and related gTLDs, has also let it be known that it’s looking for a chief financial officer. The job ad can be found here.

Nevett lands at PIR

Kevin Murphy, December 6, 2018, Domain Registries

Donuts alumnus Jon Nevett has been named the new CEO of Public Interest Registry.

Non-profit PIR, which runs .org and related gTLDs, said he will start in the role December 17.

Nevett was most recently executive VP at Donuts, the new gTLD registry he co-founded.

He left Donuts in October, not long after he cashed out when the company was sold to private equity firm Abry Partners.

The PIR corner office had been empty since May, after the unexpected and still unexplained resignation of Brian Cute.

Jay Daley, a member of the board of directors, was filling the role on an interim basis, but told us definitively in September that he was not interested in taking over permanently.

PIR chief: registries should stop stressing about volume

Kevin Murphy, September 11, 2018, Domain Registries

Public Interest Registry has announced some sweeping changes to how it markets .org and its other TLDs, with interim CEO Jay Daley telling DI that there’s too much focus on volumes in the industry today.

PIR is scrapping is volume discount programs after the current batch of incentives expires at the end of the year.

These are the programs that offer rebates to registrars if they hit certain performance targets, all based around newly created domains.

“They particularly favor large registrars, and we don’t think that’s appropriate going forward,” Daley told DI yesterday.

He said that when PIR removed some developed markets from its geographically-targeted discount programs, it saw creates go down but revenue improve.

He suggested that some registries have too much focus on volumes as a benchmark of success, failing to take account of important factors such as renews and abuse rates.

Part of the problem is that success is often measured (by folk including yours truly) by domains under management, rather than TLD health or revenue-per-domain.

“How many people are simply trying to get their numbers up without worrying about the underlying revenue, or taking a very low underlying revenue in order to get their numbers up?” Daley said.

“We’re not in any way somebody who is trying to get our numbers up at all costs, certainly not,” he said.

Another marketing program getting a makeover is pay-per-placement, where PIR would pay for prominent positions in the TLD drop-down menu of registrars storefronts.

These relationships have been based purely on new creates, Daley said, with appropriate “clawback” provisions when registrations turn out to be predominantly abusive.

In future, PIR intends to take a “longer-term, hygiene oriented view” of how its marketing money is used, making better use of data, he said.

“We need to be looking more at the quality of the registrations we get, the level of technical abuse generated by those registrations, looking at the renewal rates that come from those registrations,” he said.

PIR has a new four-strong channel services team that will be leading these changes.

“We are a public interest organization and need to take a public interest view on everything we do,” Daley said. “We need to be looking at our promotions for more than just commercial reasons, we need to be looking at public interest reasons as well.”

Daley, who ran New Zealand’s .nz registry from 2009 until this January, said that the big changes he is overseeing do not reflect an attempt to put his stamp on PIR and take over the CEO office on a permanent basis.

He does not want to run a registry and does not want to relocate to PIR’s headquarters in Virginia, he said.

“I’ve been a registry CEO for nine years,” he said. “I’ve done this and it’s time for me to look at other things.”

He also sits on PIR’s board of directors.

Cute abruptly quits PIR

Brian Cute unexpectedly resigned as CEO of Public Interest Registry late last week. No reason was given for his departure.

In a May 10 press release, the .org registry said that he’d left May 7.

He’s been replaced temporarily by board member Jay Daley until a permanent replacement can be found.

I asked a PIR spokesperson the reasons for the resignation and was told yesterday: “Brian has chosen to move on to pursue new challenges.”

Hmm.

Cute, a Verisign and Afilias alum, had been with PIR for seven years.

PIR promotes two senior execs

Public Interest Registry has promoted two people in its senior finance team.

Marc Saitta, previously chief financial officer, is now chief operating officer, a position that appears to have been empty for a few years.

Saitta joined PIR as CFO in 2014.

Kathy King, who was senior director of finance and accounting, is now vice president of finance, the company said.

PIR, which runs .org and other non-profit gTLDs, said the promotions “represent our commitment to integrate and unify our operational teams to deliver more effective business and financial strategies on behalf of Public Interest Registry and its stakeholders.”

Both Saitta and King originally came from outside the domain industry, both having stints at the American Association for Motor Vehicle Administrators and Smithsonian Business Ventures.