Smaller registrars say .uk release is biased towards the Big Boys

A group of small .uk registrars have complained to Nominet that the imminent release of three million second-level .uk domain names is biased towards their deep-pocketed rivals.
So far, 33 registrars have signed a petition, penned by Netistrar’s Andrew Bennett, against Nominet’s rules.
On July 1, the registry plans to start releasing .uk 2LDs that are currently reserved under its five-year-long grandfathering program.
These are domains that match existing third-level domains in .co.uk, .org.uk, etc.
The 3LD registrants have until 0500 UTC on June 25 to claim their 2LD matches. A week later, Nominet will start releasing them in alphabetical batches of 600,000 per day, over five days, to the available pool.
It’s going to be a little like “the drop” in gTLDs such as .com, with registrars all vying to pick up the most-valuable names as soon as they are released.
In the gTLD space, each registrar is given an equal number of connections, which is why drop-catch specialists such as SnapNames own hundreds of registrar accreditations.
Nominet’s doing it a little different, instead throttling connections based on how much credit registrars have with the registry, which the petitioners believe rigs the system towards the registrars with the most money.
According to the Nominet, registrars with £450 of credit get six connections per minute, rising to nine per minute for those with £4,500, 60 per minute for £45,000 and, at the top end, 150 per minute for registrars with £90,000 stashed in the Bank of Nominet.
Larger registrars with multiple Nominet accreditations, known as “tags” in the .uk space, will be able to stack their connections for an even greater chance at grabbing the best names.
Registrars such as GoDaddy are already taking pre-orders and will auction off the domains they catch to the highest bidder, if there are multiple pre-orders for the same names, so there’s potentially a fair bit of money to be made.
The small registrars say these credit-based rules are “disproportionately unfair” to their business models.
They point out that it doesn’t make much sense to rate-limit connections based on their proven ability to pay, given that there’s no link between how many they plan to register in the crucial first minute after the drop and how many they intend to register overall.
Nominet says on its web site that the tiers as described are provisional and will be firmed up the week of June 24.
The petitioners are also bothered that Nominet has not made any EPP code available to help the smaller guys, which have fewer engineering resources, to adjust to this temporary, time-sensitive registration system, and that the release plan was not communicated well to registrars.
They further claim that Nominet has not conducted enough outreach to .uk registrants to let them know their grandfathered rights will soon expire.
Many well-known brands have yet to claim their trademark.uk names, they claim.
Nominet has previously told DI that it planned to advertise the end of grandfathering in the press and on radio in the run-up to the release.

Second-level .au domains ARE coming soon

Australian ccTLD manager auDA has given itself approval to start selling .au domains at the second level for the first time.
auDA said today that it plans to lift its third-level-only rule in the fourth quarter this year.
The date of October 1 has been penciled in, but auDA said it will release more details as the time approaches.
There will be a grandfathering policy in place for existing registrants of 3LDs under the likes of .com.au and .org.au, but its deadlines are much tighter than the policies in, for example, .uk.
Under the published rules (pdf), registrants who owned 3LDs in .au before a cut-off date will get first dibs on the matching 2LD.
That priority period will end April 1, 2020.
After that, registrants who bought their .au names between the cut-off date and now will get also get priority, until August 1, 2020.
The cut-off date has yet to be determined by the auDA board of directors.
After the priority period is over, all unclaimed domains will be available to register by anyone.
You’re basically looking at six to 10 months of grandfathering rights, compared to the five years Nominet offered in when it made direct 2LD registration possible in .uk.
The 2LD policy has been four years in the making, and has courted controversy along the way.
Domain investors in particular have complained, worried that 2LDs will cause confusion and dilute the value of their 3LD investments.

Got a spare three grand? For a limited period, you can buy a .th domain name

The Thailand ccTLD registry’s unusual, and unusually expensive, approach to selling second-level domains has seen .th open up for another limited-period application window.
Until June 30, anyone can pay THNIC Foundation a THB 10,000 ($313) fee to “apply for” a 2LD.
Each application will be manually reviewed, and successful registrants will be notified July 8.
But be warned: the fee for the first year and subsequent annual renewals is an eye-watering THB 100,000 ($3,130).
Trademark owners and owners of matching .co.th domains will get priority in the event of clashes with regular would-be registrants.
THNIC has been using this strange approach to second-level domain allocation — which looks more like a series of sunrise periods that never culminate in general availability — in sporadic, brief rounds for the last five years.
Most ccTLD registries with a legacy three-level structure — such as .uk, .jp and .nz — have opted to instead make 2LDs available in much the same way as 3LDs.

auDA rejects domaining ban but approves second-level domains

Australian ccTLD registry auDA has rejected a proposal that would have essentially banned domainers from the .au space.
In response to recommendations of its Policy Review Panel, auDA management said that the PRP “has not provided any evidentiary material” that so-called “warehousing” is harmful.
It further concluded that the policies proposed for monitoring and rooting out suspected domainers would disproportionately increase compliance costs for both registrants and auDA itself.
In management’s response (pdf) to the PRP, auDA wrote that the ban would make investors second-class citizens when compared to powerful trademark owners:

The warehousing prohibition appears to disproportionately target domain investors as the licence portfolios or holdings of trademark and brand owners will be excluded under the PRP proposal. This proposal elevates the rights of trademark and other intellectual property owners over other licence holders in the .au domain, which may give rise to issues of market power and anti-competitive practices. Management believes that further information is required to assess whether the net benefit to the community of prohibiting warehousing in respect of a class of registrants outweighs the competition issues. For these reasons Management believes that there should be no change to the existing policy position.

It added:

Management does not support the PRP recommendation for a resale and warehousing prohibition for the reasons set out earlier. The proposed test for determining whether a registrant has contravened the resale and warehousing prohibition will increase compliance costs for registrants and administration, monitoring and enforcement costs for auDA. These costs may be disproportionate to the risk or severity of the harm to the community from warehousing and the cost of a licence in the .au domain.

Not only did it decide not to crack down on domainers, but auDA also plans to make their lives a little easier by updating current eligibility policy to explicitly state that parking, or “monetization”, is permitted.

To ensure there is no ambiguity or reliance on interpreting ‘content’, auDA management has recommended an additional allocation criteria can be applied to com.au and net.au which would include that a domain name could be used for the purpose of pay-per-click or affiliate web advertising/ lead generation, or electronic information services including email, file transfer protocol, cloud storage or managing Internet of Things (IoT) devices.

It’s a comprehensive win for domainers, such as those represented by the Internet Commerce Association, which had been outraged by the PRP’s findings.
It’s less good news when it comes to the perhaps more controversial plans to allow direct, second-level registrations under .au.
auDA has decided to go ahead with these longstanding plans, which domainers worry will promote confusion and dilute the value of their third-level .com.au portfolios.
The new draft plans (pdf) for the launch of 2LDs would see existing 3LD registrants given “priority status” to register the exact-match 2LD.
There would be a six-month application window for registrants to lodge their claims, beginning October 1 this year.
If the .com.au version and .org.au version, for example, were owned by different parties, the registrant with the earliest registration date would have priority.
After the application window closed, any unclaimed domains would be made available on a first-come, first-served basis.
These rules, and all the results of auDA’s response to the PRP, are open for public comment until May 10.

Most .uk registrants not interested in .uk

The majority of people eligible to register .uk domains at the second level have not yet chosen to do so, according to local registry Nominet.
Numbers the company released this week show that only two million 2LD .uk names have been registered since they first became available five years ago.
That’s despite the fact that the owners of over 10 million domains registered at the third level, such as under .co.uk or .org.uk, had exclusive rights to those names.
Today, the owners of 3.2 million .uk 3LDs have yet to exercise their grandfathered rights, Nominet said.
Those rights expire 0500 UTC June 25 this year.
Nominet plans to ramp up its outreach to affected registrants with radio, print and online ads in May, the company has previously told DI.
If you’re wondering why two million plus 3.2 million does not add up to 10 million, that’s because over the last five years about half of original 10 million domains with grandfathering rights have dropped.
Many will have been re-registered (which does not transfer the rights) or have been replaced with different fresh registrations, which is why Nominet’s total 3LDs under management has only declined from 10.4 million to 9.7 million since 2014.

At eleventh hour, most .uk registrants still don’t own their .uk names

Less than a quarter of all third-level .uk registrants have taken up the opportunity to buy their matching second-level domain, just a few months before the deadline.
According to February stats from registry Nominet, 9.76 million domains were registered under the likes of .co.uk and .org.uk, but only 2.27 million domains were registered directly under .uk, which works out at about 23%.
Nominet’s controversial Direct.uk policy was introduced in June 2014, with a grandfathering clause that gave all third-level registrants five years to grab their matching .uk domain before it returns to the pool of available names.
So if you own example.co.uk, you have until June 25 this year, 110 days from now, to exercise your exclusive rights to example.uk.
Registrants of .co.uk domains have priority over registrants of matching .org.uk and .me.uk domains. Nominet’s Whois tool can be used to figure out who has first dibs on any given string.
At least two brand protection registrars warned their clients this week that they will be at risk of cybersquatting if they don’t pick up their direct matches in time. But there’s potential for confusion here, after the deadline, whether or not you own a trademark.
I expect we could see a spike in complaints under Nominet’s Dispute Resolution Service (the .uk equivalent of UDRP) in the back half of the year.
Nominet told DI in a statement today:

The take up right now is roughly in line with what we envisaged. We knew from the outset that some of the original 10 million with rights would not renew their domain, some would decide they did not want the equivalent .UK and some would leave it to the last minute to decide or take action. The feedback from both registrants and registrars, and the registration data, bears this out.

The statement added that the registry has started “ramping up” its outreach, and that in May it will launch “an advertising and awareness campaign” that will include newspapers, radio and trade publications.

auDA may sue to delay boardroom bloodbath

auDA is thinking about taking its membership to court in order to delay a vote on the jobs of four of its directors.
The Australian ccTLD registry has also delayed further consideration of its policy to introduce direct, second-level registrations in .au until late 2019.
Both announcements came in the wake of a government review of the organization, which found it “no longer fit-for-purpose”.
auDA last week asked its members to agree to a postponement of the special general meeting, called for by a petition of more than 5% of its members, at which there would be votes on whether to fire the CEO, its chair, and two independent directors.
Under the law, auDA has to hold the SGM by June 7 at the latest, according to a letter (pdf) sent to members on Friday.
But auDA wants to delay the meeting until mid-September, at the earliest, to coincide with its regular Annual General Meeting.
If its members do not consent to the delay — it gave them a deadline of 4pm local time today, meaning responses would have to be drafted over the weekend — auDA said it “intends to apply for a court order… extending the time for calling the requested SGM”.
The delay is needed, auDA said, in order to give the organization the breathing space to start to implement the reforms called for by the government review.
The government wants the makeup of the auDA board substantially overhauled within a year to better reflect the stakeholder community and to ensure directors have the necessary skills and experience.
In response, auDA has told the government (pdf) that it agrees with the need for reform, but that it will not be able to hit its deadlines unlesss the SGM is delayed.
It also said calling the SGM on time would cost it somewhere in the region of AUD 70,000, based on the cost of a similar meeting last year.
auDA announced separately last week that it is delaying any more discussion on second-level registrations — something the reform campaigners largely are opposed to — “until the second half of 2019 at the earliest”.
Josh Rowe, coordinator of the Grumpier.com.au petitioners, said in his response that he found the request for the SGM delay “extremely disappointing”, adding:

auDA is at an important juncture following the Australian Government’s review. However, it is critical that people with the right skills and experience lead auDA through its reform.
Members have lost confidence in the auDA CEO, and the three auDA independent directors. They do not have the right skills and experience to lead auDA through its reform.

He noted that members do not have the resources to fight auDA in court.

Grumpier Aussies call for more blood on the auDA boardroom floor

A group of pissed-off members of the Australian domain name industry are calling for the heads of auDA’s CEO, its new chair, and two other members of its board.
A triumvirate of long-time participants in the auDA community say they have secured enough signatures on a petition to force the organization to call the meeting under Aussie law.
They want a vote of no confidence in the CEO, Cameron Boardman, and the firing of all three “independent” directors: Chris Leptos (also chair), Sandra Hook and Suzanne Ewart.
Their list of beefs is long, but high on it is auDA’s plan to open up .au to direct, second-level registrations for the first time, enabling folk to register example.au instead of example.com.au.
If this all sounds worryingly familiar, it’s because it’s the second year in a row members have called a special meeting in order to oust its top brass.
A campaign orchestrated at Grumpy.com.au last year resulted in chair Stuart Benjamin quitting ahead of a member vote to fire him.
This year’s campaign is being coordinated, with a nod and a wink but none of Grumpy’s original leaders, at Grumpier.com.au.
Entrepreneur Josh Rowe appears to have held the pen on the petition, backed up by former head of auDA public affairs Paul Szyndler and businessman Jim Stewart.
As well as the direct registration issue, which the three men think is merely a cash-grab with no benefits for registrants, the petitioners have some harsh things to say about auDA’s governance and transparency.
The organization has promised to be more open in the wake of last year’s carnage, but Grumpier thinks “things have only got worse”.
The petition also alludes to rumors of “whispering campaigns” against former staff and “possible financial irregularities”.
Rowe recently complained on his blog about a freedom of information request related to his own conduct, filed by the same person pursing form auDA CEO (and current ICANN vice chair) Chris Disspain with FOIA requests.
They also unhappy that auDA is switching .au’s registry service provider from Neustar to Afilias, gaining a rumored 60% discount of which only 10% will be passed on to registrars.
It’s all getting rather nasty, and I’ve not even mentioned some of the rumors of shenanigans that I seem to find in my inbox on an almost daily basis.
To force a special member meeting under Australian law, Grumpier says it had to secure signatures of 5% of the members, which it says it has done.
That’s not much of a threshold, given that auDA only has about 320 members at the moment.
Assuming auDA agrees that it has to hold a meeting, it has a couple of months to do so.

Now South Africa looks to second-level domain sales

South Africa looks to be the next country to start letting people register domains directly at the second level of its ccTLD.
Local registry authority ZADNA this week opened a policy consultation on allowing registrants access to direct, second-level .za names.
Currently, if you want a .za you have to register at the third level under the likes of .co.za or .net.za.
But ZADNA says second-level names will help it continue to compete in a market now populated by hundreds of new gTLDs.
The company said it has been “inundated” by calls for such a move.
The policy shift would see South Africa follow the the path beaten in recent years by UK, New Zealand, Kenya and (probably) Australia, which have all changed policy to allow second-level names.
But these things are never without controversy.
Domain investors are typically resistant to such moves, fearing dilution and the possible devaluing of their portfolios.
There are often also intellectual property concerns, and concerns about priority “grandfathering” rights when matching .co.za and .org.za names, for example, have different owners.
ZADNA is floating the possibility of auctions to resolve these kinds of conflicts.
The proposal (pdf) is open for comment until April 16.

auDA probably won’t pass on full Afilias savings to registrants

Switching .au’s back-end to Afilias will cut auDA’s per-domain costs by more than half, but registrants are not likely to benefit from the full impact of the savings.
auDA’s Bruce Tonkin, who led the committee that selected Afilias to replace incumbent Neustar, told DI this week that the organization is likely to take a bigger cut of .au registration fees in future, in order to invest in marketing.
That would include marketing the ability of Aussies to register .au domains at the second level for the first time — a controversial, yet-to-roll-out proposal.
Tonkin confirmed that the back-end fee auDA will be paying Afilias is less than half of what it is currently paying Neustar — the unconfirmed rumor is that it’s 40% of the current rate — but said that Afilias was not the cheapest of the nine bidders.
While .au names are sold for a minimum of two years, the current wholesale price charged to registrars works out to AUD 8.75 ($6.85) per year, of which Neustar gets AUD 6.33; auDA receives the other AUD 2.42.
A back-end fee of roughly $5 (US) per domain per year is well above market rates, so it’s pretty clear why auDA chose to open the contract to competition.
Tonkin explained the process by which Afilias was selected:

We first considered scoring without price, and Afilias received the highest score for non-financial criteria.
We then considered pricing information to form an assessment of value for money. The average pricing across the 9 [Request For Tender] responses was less than half of the present registry back-end fee ($6.33). Afilias was close to the average pricing, and while it was not the cheapest price — it was considered best value for money when taking into account the highest score in non-financial criteria.

I asked Afilias for comment on rumors that its price was 60% down on the current rate and received this statement:

Afilias believes auDA chose us based on the best overall value for the Australian internet community. The evaluation heavily weighted expertise, quality and breadth of service over price. While we don’t know what others bid, Afilias works to be competitive in today’s market. Attempts to price significantly higher than market without a value proposition are unrealistic and could even be considered price gouging.

It’s not known what price Neustar bid for the continuation of the contract, but I expect it will have also offered a deep discount to its current rate.
By switching, auDA is basically going to be saving itself over AUD 3 per domain per year, which works out to a total of AUD 9 million ($7 million) per year at least.
But the organization has yet to decide how much of that money, if any, to pass on to its registrars and ultimately registrants.
The auDA board of directors will meet in March to discuss this, Tonkin (who is in charge of the registry transition project but not on the board) said.
“We don’t want to set expectations that the wholesale price is going to change massively,” he said.
“I don’t expect it’s going to be any higher than the current wholesale price,” he said.
But he said he expects auDA to increase its slice of the pie in order to raise more money for marketing. The organization does “basically no marketing” now, he said.
“There’s certainly strong interest in doing more to market and grow the namespace,” he said. “One option is that more money is put into marketing the namespace and growing awareness of .au… That AUD 2.42, I expect that to change.”
This would include marketing direct second-level registrations, an incoming change to how .au names are sold that has domain investors worried about confusion and market dilution.
Outrage over the 2LD proposal — it appears to be a done deal, even if the details and timeline have yet to be finalized — has started attracting the attention of business media in Australia recently.
But auDA’s own research shows that opposition is not that substantial outside of these “special interests”.
A survey last year showed that 40% of .com.au registrants “support” or “strongly support” the direct registration proposal, with 18% “opposed” or “strongly opposed” Another 42% were completely unaware of the changes.
Support among .org.au registrants was lower, and it was higher among .net.au registrants.
But 36% of “special interests” — which appears to mean people who discovered the survey due to their close involvement in the domain industry — were opposed to the plan.
There’s no current timeline for the introduction of direct registrations, but the back-end handover from Neustar to Afilias is set to happen July 1 this year.
Neustar acquired AusRegistry, which has been running .au since 2002, for $87 million a couple of years ago.