Afilias has applied to ICANN to have its ban on owning registrars in two of its own gTLDs, .mobi and .pro, lifted.
With requests to ICANN a few days ago (here and here), the company said it wants to be able to own more than 15% of an ICANN-accredited registrar that sells both TLDs, which is currently forbidden by the two Registry Agreements in question.
Afilias’ proposed new .info contract, which was renegotiated this year (because it expired) and closed for public comment last week, would also enable the company to vertically integrate with a .info registrar.
A process for relaxing the cross-ownership rules on a per-TLD basis was approved by ICANN’s board of directors last October.
The only registry so far to have its contractual ban lifted is puntCat, the .cat registry operator.
When an ICANN working group was discussing the vertical integration issue a couple of years ago, Afilias was one of the participants that held fast against any relaxation of the 15% ownership cap, eventually driving the working group into stalemate and forcing the ICANN board’s hand.
Registrars risk losing their right to sell .org domain names unless they sign up to the new 2013 Registrar Accreditation Agreement.
The change is among several proposed to Public Interest Registry’s .org Registry Agreement with ICANN, which was published for public comment over the weekend.
Amendments to the .org RA, which came to the end of its six-year term in April, are very similar to those put forward for the .info and .biz contracts last month.
But .org is a far larger and more popular TLD, putting more pressure on more registrars to sign up to the 2013 RAA, with its new Whois verification and privacy service obligations.
For registrars on the 2009 and 2001 RAAs, the clock would start ticking the day that registrars representing two thirds of all .org registrations sign the 2013 RAA.
That threshold could be met in .org if the top eight or nine registrars make the switch.
PIR would then get 60 days to tell its remaining registrars that they have 270 days to move to the new RAA. Any registrar that failed to adopt it in that time would lose its right to sell .org domain names.
As with the .info and .biz contracts, the provisions related to the 2013 RAA would only kick in if Verisign asks for the same changes for its .com and .net agreements, which may never happen.
Other changes proposed for the .org contract include:
- Cross-ownership restrictions. PIR will be able to own a registrar under the new deal, lifting the long-standing ban on gTLD registries selling domains in their own TLD.
- Price increases. PIR will be able to raise its .org registry fee by 10% per year, from its current level of $8.25.
- Code of Conduct. PIR will have to abide by the same registry Code of Conduct as new gTLD operators, which contains provisions mainly related to equal registrar access.
The propose .org contract is open for public comment until August 12.
PuntCAT has become the first gTLD registry operator to have a ban on owning an affiliated registrar lifted.
The change means the company will be able to directly market its .cat domain names to registrants via a registrar that it owns.
PuntCAT is the first to take advantage of ICANN’s liberalization of rules on registry-registrar cross ownership.
Afilias and Neustar will benefit from the same changes, but their respective .info and .biz registry agreements are currently in public comment periods and not yet signed.
Afilias and Neustar will be soon able to sell .biz and .info domains direct, and may have to shut down registrars that refuse to sign up to the new 2013 Registrar Accreditation Agreement.
Those are two of the biggest changes proposed to the companies’ ICANN contracts, drafts of which were published this morning six months after their last registry agreements expired.
The new .biz and .info deals would allow both companies to vertically integrate — that is, own a controlling position in a registrar that sells domains in their respective gTLDs.
This would remove unwanted friction from their sales and marketing efforts, but would mean both registries would start competing with their own registrar channel in the retail market.
That’s currently not allowed in almost all gTLD contracts, but is expected to become commonplace in the era of new gTLDs, which have no such ownership restrictions.
These new vertical integration clauses were not unexpected; it’s been envisaged for a couple of years that the restrictions would be dropped in legacy gTLDs.
What is surprising are newly proposed clauses that would oblige Neustar and Afilias to terminate accredited registrars’ access to their TLDs if they don’t sign up to the 2013 RAA.
Under the process set out in the contracts, when registrars representing 67% of the domains in each given TLD have signed up to the 2013 RAA, all the other registrars would have between 270 and 330 days to also sign up to it or lose their ability to access the .biz/.info registries.
That would mean no selling new names and no accepting inbound transfers — a growth death sentence in the affected TLDs.
In the case of .info, in which Go Daddy has a 45% market share, it would only take the top four registrars to sign up to the 2013 RAA before the clock started ticking for the others.
However, this 67% rule would only kick in for Afilias and Neustar if Public Interest Registry and Verisign also voluntarily agree to the same rules for their .org, .com and .net gTLDs.
It’s a pretty aggressive move by ICANN to push the 2013 RAA onto registrars via its contracts with registries, but not the first.
In the separately proposed base New gTLD Registry Agreement, expected to be finalized in the next few weeks, registrars can only sell new gTLD domains if they’re on the 2013 RAA.
Other changes to the .biz and .info contracts include giving the registries the ability to block certain domains from registration to deal with security threats. Registries have been doing this since Conficker, but now they’ll be explicitly allowed to under their contracts.
They’ll also now be subject to the same emergency back-end transition provisions as new gTLDs, in the event of a catastrophic failure.
Both companies will also get to keep their ability to raise registry fees by 10% a year.
Presumably, given that the US Department of Commerce is not party to the .biz and .info deals, neither registry will get the same nasty surprise that Verisign got last year when Commerce froze its prices.
The previous contracts actually expired last December but were extended for six months due to ICANN’s focus on new gTLDs and the fact that it wanted to bring both agreements closer to the new gTLD contract.
PuntCAT, the .cat registry, has become the first gTLD operator to apply to ICANN for the right to dump the registrar ownership ban in its contract.
If the request is approved by ICANN, the company will be able to own an ICANN-accredited registrar and start selling .cat domain names more or less directly to registrants.
The company has proposed several amendments to its existing contract that would allow it to become an “affiliate” of — ie own — a registrar with respect to its own gTLD.
ICANN believes the request, which is open for public comment until February 13, will not create any competition problems.
ICANN approved the rules for enabling cross-ownership in October, after competition concerns from the European Commission and US Department of Commerce appeared to disappear.
The .cat request was handled via the Process for Handling Requests for Removal of Cross-Ownership Restrictions on Operators of Existing gTLDs, which absolutely nobody is calling PFHRFROCOROOOEG.
Under the rules, the alternative to amending an existing contract is adopting the standard new gTLDs registry agreement wholesale, but I’m not expecting any incumbent registries to do that.
PuntCAT is pretty much unique among “sponsored” gTLD operators in that it’s experienced steady growth, not subject to the same degree of speculation-related spikes as others, since launching in 2006.
It currently has roughly 60,000 domains under management, growing at about 10,000 names a year. Three Spanish registrars hold over half of the market between them, led by Nominalia.
But the gTLD faces an uncertain future.
The Catalonia region of Spain, which .cat represents, is set for an independence referendum in 2014. If it were to split off into a new country, it would get its own potentially competing ccTLD.
Sales could benefit from the imminent delegation of .dog, which three companies have applied for as a gTLD, but PuntCAT’s rules state that all .cat sites must have Catalan-language content.