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New gTLDs bring back tiered renewal pricing

Kevin Murphy, November 10, 2013, Domain Registries

Only one mass-market TLD used it, and it’s often considered a bad idea, but variable pricing for domain name renewals is making a comeback with the launch of new gTLDs.

What Box? and Plan Bee are the first two new gTLD registries to start selling domains with tiered renewal fees, in .menu and .build respectively, via Go Daddy.

If you pay Go Daddy $189.99 for a “Priority Rre-registration” in .build, your annual renewal fee if you secure the name will be be $149.99, instead of the $99.99 other pre-registrants will pay.

Similarly, a Priority Pre-registration in .menu will set you back $199.99 a year, forever, instead of $49.99.

I understand that the standard Go Daddy initial registration fee for these two TLDs during general availability will also be $99.99 and $49.99 respectively.

The other two new gTLDs with announced pricing, .uno and .luxury, do not appear to be charging tiered rates.

Go Daddy confirmed that the renewal pricing will be permanently higher in the .build and .menu, telling us:

The industry is starting to move toward a tiered pricing system. As such, some registries have elected to make renewals higher on domain names captured during the priority pre-registration period.

It’s actually permitted under ICANN’s standard Registry Agreement.

Generally, the RA prevents registries charging variable renewal fees. If you find yourself running a successful business in a new gTLD, the registry is not allowed to gouge you for higher renewals.

There’s a provision in section 2.10 of the contract that is designed to “prohibit abusive and/or discriminatory Renewal Pricing practices imposed by Registry Operator”.

But the rule does not apply if you’re told at the point of registration that your renewal pricing will be higher.

The contract states that “Registry Operator must have uniform pricing for renewals of domain name registrations”, but grants this huge exception:

if the registrar has provided Registry Operator with documentation that demonstrates that the applicable registrant expressly agreed in its registration agreement with registrar to higher Renewal Pricing at the time of the initial registration of the domain name following clear and conspicuous disclosure of such Renewal Pricing to such registrant

The only major TLD to try variable pricing before now was .tv, which Verisign currently operates.

The .tv registry held back thousands of desirable strings when it launched in 2000. Instead of auctioning them, it priced these names to sell, but with renewal prices matching the initial registration fee.

If you bought a premium .tv name 10 years ago for $10,000, you’ve been paying $10,000 a year ever since.

This proved very unpopular — especially with domain investors, who continue to moan about the high carrying cost of .tv names bought years ago — and Verisign scrapped the policy on new registrations in 2010.

Some say tiered renewal pricing is the main reason .tv isn’t nearly as popular as it arguably should be.

But will it work in 2014?

Tiered renewal fees seems like an excellent way to discourage domainers from participating in your launch.

Would you be willing to pay higher renewal fees ad infinitum just for the chance for first dibs on the new gTLD domain name you want?

Interview: Atallah on new gTLD objection losers

Kevin Murphy, August 16, 2013, Domain Policy

Filing a lawsuit against a competitor won’t stop ICANN rejecting your new gTLD application.

That’s according to Akram Atallah, president of ICANN’s Generic Domains Division, who spoke to DI yesterday about possible outcomes from new gTLD objection rulings.

He also said that applicants that believe they’ve been wronged by the objection process may have ways to appeal the decisions and addressed what happens if objection panels make conflicting decisions.

Lawsuits won’t stay ICANN’s hand

In light of the lawsuit by Del Monte International GmbH against Del Monte Corp, as reported by Domain Name Wire yesterday, I asked Atallah if ICANN would put applications on hold pending the outcome of legal action.

The GmbH lost a Legal Rights Objection filed by the Corp, which is the older company and owner of the “Del Monte” trademark pretty much everywhere, meaning the GmbH’s bid, under ICANN rules, must fail.

Atallah said lawsuits should not impact ICANN’s processes.

“For us it’s final,” Atallah said. “If they have to go outside and take legal action then the outcome of the legal action will be enforceable by law and we will have to abide by it. But from our perspective the [objection panel’s] decision is final.”

There might be ways to appeal

In some cases when an applicant loses an objection — such as a String Confusion Objection filed by an existing TLD or an LRO filed by a trademark owner — the only step left is for it to withdraw its application and receive whatever refund remains.

There have been no such withdrawals so far.

I asked Atallah whether there were any ways to appeal a decision that would lead to rejection.

“The Applicant Guidebook is very clear,” he said. “When an applicant loses an objection, basically their application will not proceed any further. We would like to see them withdraw their application and therefore finish the issue.”

“Of course, as with anything ICANN, they have some other avenues for asking for reconsidering the decision,” he added. “Basically, going to the Ombudsman, filing a Reconsideration Request, or even lobbying the board or something.”

I wondered whether the Reconsideration process would apply to decisions made by third parties such as arbitration panels, and Atallah admitted that the Guidebook was “murky” on this point.

“There are two mentions in the Guidebook of this, I think,” he said. “One mentions that it [the panel’s decision] is final — the application stops — the other mentions that it is advice to staff.”

That seems to be a reference to the Guidebook at 3.4.6, which states:

The findings of the panel will be considered an expert determination and advice that ICANN will accept within the dispute resolution process.

This paragraph suggests that ICANN staff have to accept the objection panel’s decision. That would make it an ICANN decision to reject the application, which can be challenged under Reconsideration.

Of course, the Reconsideration process has yet to see ICANN change its mind on any matter of substance. My feeling is that to prevail you’d at a minimum have to present the board with new information not available at the time the original decision was made.

What if different panelists reach opposite conclusions?

While the International Centre for Dispute Resolution has not yet published its panels’ decisions in String Confusion Objection cases, a few have leaked out.

(UPDATE: This turns out not to be correct. The decisions have been published, but the only way to find them is via obscured links in a PDF file buried on the ICDR web site. Way to be transparent, ICDR.)

I’ve read four, enough to see that panelists are taking diverse and sometimes opposing views in their decision-making.

For instance, a panelist in .car v .cars (pdf) decided that it was inappropriate to consider trademark law in his decision, while the panelist in .tv v .tvs (pdf) apparently gave trademark law a lot of weight.

How the applicants intend to use their strings — for example, one may be a single-registrant space, the other open — seems to be factoring into panelists’ thinking, which could lead to divergent opinions.

Even though Google’s .car was ruled not confusingly similar to Donuts’ .cars, it seems very possible that another panelist could reach the opposite conclusion — in one of Google’s other two .cars objections — based on trademark law and proposed usage of the gTLD.

If that were to happen, would only one .cars application find itself in the .car contention set? Would the two contention sets be linked? Would all three .cars applications wind up competing with .car, even if two of them prevailed against Google at the ICDR?

It doesn’t sound like ICANN has figured out a way to resolve this potential problem yet.

“I agree with you that it’s an issue to actually allow two panels to review the same thing, but that’s how the objection process was designed in the Guidebook and we’d just have to figure out a way to handle exceptions,” Atallah said.

“If we do get a case where we have a situation where a singular and a plural string — or any two strings actually — are found to be similar, the best outcome might be to go back to the GNSO or to the community and get their read on that,” he said. “That might be what the board might request us to do.”

“There are lots of different ways to figure out a solution to the problem, it just depends on how big the problem will be and if it points to an unclear policy or an unclear implementation,” he said.

But Atallah was clear that if one singular string is ruled confusing to the plural version of the same string, that panel’s decision would not cause all plurals and singulars to go into contention.

“If a panel decides there is similarity between two strings and another panel said there is not, it will be for that string in particular, it would not be in general, it would not affect anything else,” he said.

ICANN, despite Governmental Advisory Committee advice to the contrary, decided in late June that singular and plural gTLDs can coexist under the new regime.

First string confusion decisions handed down, Verisign loses against .tvs

Kevin Murphy, August 13, 2013, Domain Policy

The International Centre for Dispute Resolution has started delivering its decisions in new gTLD String Confusion Objections, and we can report that Verisign has lost at least one case.

ICDR expert Stephen Strick delivered a brief, five-page ruling in the case of Verisign vs. T V Sundram Iyengar & Sons yesterday, ruling that .tvs is not confusingly similar to .tv.

TVS is a $6-billion-a-year, 100-year-old Indian conglomerate, while .tv is the ccTLD for Tuvalu, which Verisign manages because of its similarity of meaning to “television”.

It’s impossible to glean from the decision (pdf) what Verisign’s argument comprised. The summary is just two sentences long.

But TVS, in response, appears to have relied to an extent on the “DuPont factors” a 13-point test for trademark confusion that came out of a 1973 case in the US.

That’s the same precedent that has been found relevant in many Legal Rights Objections in cases handled by WIPO.

The “discussion and reasons for determination” section of the .tvs decision, in which Strick found that confusion was possible but not “probable”, amounts to just four sentences.

Here’s almost all of it. Emphasis in original:

in order for the Objector to prevail, Objector must prove that the co-existence of the two TLDs in question would probably result in user confusion. Given the analysis of the thirteen factors cited by Applicant derived from the DuPont case cited above, I find that Objector has failed to meet its burden of proof regarding the probability of such confusion. I note that while the co-existence of the two TLDs that are the subject of this proceeding may result in confusion by users, Objector has failed to meet its burden of proof to establish the likelihood or probability that users will be confused.

In considering parties’ arguments, I was persuaded, in part, by Applicant’s arguments relating to the commercial impression of the TVS TLD, including the proof offered by Applicant as to the longevity of the TVS brand, the limited nature of the gTLD’s intended use, the dissimilarity of the goods or services associated respectively with the two strings, ie TVS’s association with automobile products, the fact that TVS’s brand is associated with capital letters (whereas Objector’s .tv is in lower case), the fact that TVS is well known and associated with its companys’ [sic] brands, the lengthy market interface and the long historical co-existence of TVs and tv without evidence of confusion in the marketplace.

The geeks among you will no doubt be screaming at your screen right now: “WTF? He thought CASE was relevant?”

Yes, apparently the fact that the TVS trademark is in upper case makes a difference, despite the fact that the DNS is completely case-insensitive. Bit of a head-scratcher.

I understand several more decisions have also been sent to applicants and objectors, but they’re not yet pubicly available.

The ICDR’s web site for new gTLD decisions has been down for several days, returning 404 errors.

More details on the Tuvalu-VeriSign deal

VeriSign offered Tuvalu an extra $1 million a year in exchange for the continuing right to run .tv, but the tiny island nation declined, according to a new interview.

The Australian Broadcasting Corporation has a short audio piece over here on the strained relationship between VeriSign and Tuvalu, including an interview with finance minister Lotoala Metia.

Tuvalu gets about $2.2 million a year from VeriSign, according to the piece, but the government thinks it’s being short-changed.

VeriSign offered the country another $1 million a year, on the condition that the deal would be extended for five more years. It currently expires in 2016. Tuvalu declined.

The company declined to comment to ABC, but AusRegistry chief Adrian Kinderis stepped up to defend the deal, pointing out that VeriSign took all the risk.

Kinderis also accepted the interviewer’s suggestion that the new TLD round could leave .tv “obsolete”.

Here’s a link to the stream.

Tuvalu not happy with VeriSign deal

The government of the Pacific island nation of Tuvalu feels it’s getting a raw deal under its current contract with .tv registry manager VeriSign.

According to Radio New Zealand International, Tuvalu finance minister Lotoala Metia said VeriSign pays “peanuts” for the right to run the .tv namespace:

We are negotiating but we are tied because of the agreement that was signed before us. We cannot negotiate for an increase until 2016. Counter offers have been made but they are not acceptable to the government of the day. So we have to stick to our guns now. They’re giving us peanuts.

VeriSign, and its predecessor registry, run .tv under lease as a generic TLD. It is of course Tuvalu’s country-code. By GDP, Tuvalu is one of the poorest nations in the world.

The RNZI article reports that Tuvalu receives $2 million per year from VeriSign. That’s possibly sourced from the CIA World Factbook, which estimated that amount for 2006.

Yet the CIA also says that Tuvalu receives $1 million per quarter, based on a 12-year, $50 million deal that started in 2000.

For all these facts to be true, the deal must have been renegotiated at some point since it was originally signed.

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