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Here’s why registrars are boycotting .sexy

Kevin Murphy, February 25, 2014, 16:53:54 (UTC), Domain Registries

Will .sexy and .tattoo trip on the starting blocks today due to registrars’ fears about competition and Whois privacy?
Uniregistry went into general availability at 1600 UTC today with the two new gTLDs — its first to market — but it did so without the support of some of the biggest registrars.
Go Daddy — alone responsible for almost half of all new domain registrations — Network Solutions, and 1&1 are among those that are refusing to carry the new TLDs.
The reason, according to multiple sources, is that Uniregistry’s Registry-Registrar Agreement contains two major provisions that would dilute registrars’ “ownership” of their customer base.
First, Uniregistry wants to know the real identities of all of the registrants in its TLDs, even those who register names using Whois privacy services.
That’s not completely unprecedented; ICM Registry asks the same of .xxx registrars in order to authenticate registrants’ identities.
Second, Uniregistry wants to be able to email or otherwise contact those registrants to tell them about registry services it plans to launch in future. The Uniregistry RRA says:

Uniregistry may from time to time contact the Registered Name Holder directly with information about the Registered Name and related or future registry services.

We gather that registrars are worried that Uniregistry — which will shortly launch its own in-house registrar under ICANN’s new liberal rules on vertical integration — may try to poach their customers.
The difference between ICM and Uniregistry is that ICM does not own its own registrar.
The Uniregistry RRA seems to take account of this worry, however, saying:

Except for circumstances related to a termination under Section 6.7 below, Uniregistry shall never use Personal Data of a Registered Name Holder, acquired under this Agreement, (a) to contact the Registered Name Holder with a communication intended or designed to induce the Registered Name Holder to change Registrars or (b) for the purpose of offering or selling non-registry services to the Registered Name Holder.

Some registrars evidently do not trust this promise, or are concerned that Uniregistry may figure out a way around it, and have voted with their storefronts by refusing to carry these first two gTLDs.
Ownership of the customer relationship is a pretty big deal for registrars, especially when domain names are often a low-margin entry product used to up-sell more lucrative services.
What if a future Uniregistry “registry service” competes with something these registrars already offer? You can see why they’re worried.
A lot of registrars have asserted that with the new influx of TLDs, registrars have more negotiating power over registries than they ever did in a world of 18 gTLDs.
Uniregistry CEO Frank Schilling is basically testing out this proposition on his own multi-million-dollar investment.
But will the absence of these registrars — Go Daddy in particular — hurt the launch numbers for .sexy and .tattoo?
I think there could be some impact, but it might be tempered by the fact that a large number of early registrations are likely to come from domainers, and domainers know that Go Daddy is not the only place to buy domains.
Schilling tweeted at about 1605 UTC today that .sexy was over 1,800 registrations.
Longer term, who knows? This is uncharted territory. Right now Uniregistry seems to be banking on the 40-odd registrars — some of them quite large — that have signed up, along with its own marketing efforts, to make up any shortfall an absence of Go Daddy may cause.
Tomorrow, I’d be surprised if NameCheap, which is the distant number two registrar in new gTLDs right now (judging by name server counts) is not the leader in .sexy and .tattoo names.

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Comments (8)

  1. Hi Kevin,
    Your characterization of ICANN’s rules on vertical integration rules being “liberal” is surprising. The original separation was to combat monopolistic use of market power on the part of the .com registry (then Network Solutions, now VeriSign). It was loosened because ICANN is not an anti-trust regulator, and because the market power of concern was effectively dealt with by the introduction of the registrar channel.
    In most industries, there are no rules on competition except as defined by national or multinational competition authorities. ICANN has promulgated vague language about the roles of registries and registrars and how they are supposed to interact, and it’s being interpreted differently by different parties. What we are seeing now is different companies interpreting the rules differently, and not surprisingly the differing interpretations always seem to favor the interpreter.
    Elsewhere, ICANN has requirements that registries verify Whois information. How are they supposed to do that without contacting the customer? As a registry, if you are marketing to a particular channel, how are you supposed to understand your market if you can’t communicate with them? Are you then required to hope and pray that the registrars will do a decent job with your TLD? These kinds of questions (and the Very Bad Answers to them) led both Minds + Machines, and (I assume) Uniregistry to build their own registrars. Not to unfairly compete with registrars, but to assure distribution.
    The current rules don’t work in the real world. The problem with ICANN’s rules is not that they are too liberal or too conservative, it’s that they’re too vague, and competitors are using them against each other.

    • Kevin Murphy says:

      It’s liberal compared to what it used to be.
      “Liberalized” might have been a better choice of word.

    • gpm group says:

      …These kinds of questions (and the Very Bad Answers to them) led both Minds + Machines, and (I assume) [others] to build their own registrars
      A tad disengenuous don’t you think?
      Vertical separation generally affords consumers far greater protections and it was industry players (as is usual) i.e. [would be] registries players who lobbied to change the most succesful system in the history of mankind to siloed positions.

  2. Acro says:

    If ICANN is being vague now, can’t imagine what it’d be like if it skirted away from its US-based command and onto a “globalized” territory. It’d become the Tower of Babel.

  3. Adolfo Grego says:

    This “boycott” might actually have to do more with a Privacy issue.
    My understanding is that Registrars never ask Registrants for their authorization to receive information on behalf of the Registry, and therefore, the Registry cannot just send emails to the Registrants unless they are authorized by the Registrant.
    A tick-box during checkout asking for that authorization from the Registrant could do the trick, but other questions arise, of course…
    If I buy a .sexy domain name… am I forced to receive information from the Registry?
    Will I be able to “unsubscribe” from this mailing list?
    If so… is that a breach to the RRA?
    just asking…

  4. Quentin says:

    Is the lack of an ability to make your data private compliant with the UK Data Protection Act?

    • Kevin Murphy says:

      Whois privacy services are still allowed.
      Uniregistry is also based in the Cayman Islands, so I wonder if UK law would apply to it.

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