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New back-end approval program could reduce the cost of a new gTLD

Kevin Murphy, August 27, 2020, Domain Policy

ICANN will consider a new pre-approval program for registry back-end service providers in order to streamline the new gTLD application process and potentially reduce application fees.

The proposed “RSP pre-evaluation process” was one of the biggest changes to the new gTLD program agreed to by ICANN’s New gTLDs Subsequent Procedures working group (SubPro), which published its final report for comment last week.

The recommendation addresses what was widely seen as a huge process inefficiency in the evaluation phase of the 2012 application round, which required each application to be subjected to a unique technical analysis by a team of outside experts.

This was perceived as costly, redundant and wasteful, given that the large majority of applications proposed to use the same handful of back-end RSPs.

Donuts, which applied for over 300 strings with virtual cookie-cutter business models and all using the same back-end, had to pay for over 300 technical evaluations, for example.

Similarly, clients of dot-brand service providers such as Neustar and Verisign each had to pay for the same evaluation as hundreds of fellow clients, despite the tech portions of the applications being largely copy-pasted from the same source.

For subsequent rounds, that will all change. ICANN will instead do the tech evals on a per-RSP, rather than per-application, basis.

All RSPs that intend to fight for business in the next round will undergo an evaluation before ICANN starts accepting applications. In a bit of a marketing coup for the RSPs, ICANN will then publish the names of all the companies that have passed evaluation.

The RSPs would have to cover the cost of the evaluation, and would have to be reevaluated prior to each application window. ICANN would be banned from making a profit on the procedure.

SubPro agreed that applicants selecting a pre-approved RSP should not have to pay the portion of the overall application fee — $185,000 in 2012 — that covers the tech eval.

RSPs may decide to recoup the costs from their clients via other means, of course, but even then the fee would be spread out among many clients.

The proposed policy, which is still subject to SubPro, GNSO Council and ICANN board approval, is a big win for the back-ends.

Not only do they get to offer prospective clients a financial incentive to choose them over an in-house solution, but ICANN will also essentially promote their services as part of the program’s communications outreach. Nice.

Google could shake up the registry market with new open-source Nomulus platform

Kevin Murphy, October 19, 2016, Domain Registries

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.