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Rules for registry-registrar mergers proposed

ICANN has revealed how it intends to enable incumbent domain name registries to also become registrars, ending a decade of cross-ownership restrictions.

The industry shake-up could allow companies such as VeriSign, Neustar and Afilias to become accredited registrars in their own top-level domains later this year.

Hypothetically, before long you could be able to go directly to VeriSign for your .com domains, to Afilias and Public Interest Registry for .info and .org, or to Neustar for .biz.

The changes could potentially also kick off a wave of consolidation in the industry, with registry operators buying previously independent registrars.

ICANN’s proposed process is straightforward, requiring just a few amendments to the registries’ existing contracts, but it could also call for governmental competition reviews.

Registries will have to agree to abide by a Code of Conduct substantially the same as the one binding on wannabe registries applying later this year under the new gTLD program.

The Code is designed to stop registries giving their affiliated registrars unfair advantages, such as lower prices or preferential access to data, over other ICANN-accredited registrars.

Registries would also have the option to adopt the registry contract from the new gTLD Applicant Guidebook wholesale, although I expect in practice this is unlikely to happen.

ICANN would be able to refer vertical integration requests to national competition authorities if it determined that cross-ownership could cause “significant competition issues”.

VeriSign would be the most likely to be hit by such a review, but it’s also the only registry that does not appear to have been particularly hamstrung over the years by the forced separation rules.

The proposed process for registries to request the contract changes has been posted to the ICANN web site and is now open for public comment.

Neustar wants to be a registrar ASAP

Kevin Murphy, March 10, 2011, Domain Registries

Neustar, registry manager for the .biz and .us top-level domains, has put the wheels in motion to acquire an ICANN registrar accreditation as soon as possible.

It’s the first major gTLD operator to formally request permission to “vertically integrate” since ICANN announced last November that it was prepared to lift the ownership caps that have previously kept registries and registrars quite strictly separated.

Neustar’s .biz contract currently forbids it from owning more than 15% of an ICANN registrar.

In a letter to ICANN sent this afternoon, Neustar vice president of law and policy Jeff Neuman said the company wants this provision deleted:

We are asking for this language now to allow Neustar to compete fairly for new gTLDs on the same terms and conditions as registrars entering the new gTLD registry market.

It is critical to resolve this issue immediately to ensure that Neustar is able to compete on a level playing field with the new entrants into the marketplace and to promote the efficiencies and innovation for consumers as advocated by the ICANN Board.

ICANN shocked the industry last year when its board of directors decided to allow registries and registrars to own each other.

The decision meant that niche community and brand TLDs will be able to sell direct to registrants, without having to secure the support of reluctant big-name registrars.

It also meant that existing gTLD operators will be able to own registrars for the first time.

As a caveat, designed to protect consumers from gaming registries, ICANN proposed a Code of Conduct designed to limit the cross-pollination of data that could be abused.

Similarly, the Code calls for registries to treat all approved registrars equally, regardless of ownership stakes, to avoid competition concerns.

Neuman wrote that Neustar is prepared to have language along the lines of the current draft Code of Conduct, but “no more restrictive”, incorporated into the .biz registry contract.

Other incumbent gTLD registry operators, notably VeriSign and Afilias, are bound by similar contractual restrictions and will presumably also pursue their options along the same lines in future.