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.

Australia likely to BAN domaining

Domain investors will soon be no longer welcome in Australia’s .au, if proposed policy changes are approved.
Registrants who own more than 100 names and cannot prove they’re not a domainer will have their names deleted, under the recommendations of an Policy Review Panel appointed by Aussie ccTLD registry auDA this week.
The practice of vacuuming up domains for resale has long been against auDA policy, but the rules have been perceived as weak, easily worked around, and have been rarely enforced.
The current policy states: “A registrant may not register a domain name for the sole purpose of resale or transfer to another entity.”
But domainers have successfully argued that by parking their speculative domains, resale is no longer the “sole” purpose of the registration.
That loophole would be closed under the PRP’s recommendations. If approved by auDA, the rule would be changed to:

A registrant is prohibited from registering any open 2LD domain name for the primary purpose of (a) resale, (b) transfer to another entity, or (c) warehousing.

The PRP noted that it had received input “that registering domain names for resale increases the cost of doing business, increases the scarcity of names, and that registering domain names for the purpose of resale adds no real value to the internet name space.”
Registrants with 100-strong portfolios of “acronyms, dictionary words, or common phrases” would be singled out for review, as would registrants who are seen to engage in the resale of their domains.
Registrants who have “solicited the sale of the domain name or offered the domain name for sale to another for valuable consideration in excess of documented out-of-pocket costs” or who have sold more than six domains in six months, would also be presumed domainers.
Being found to be “warehousing”, domainers would no longer be eligible to their names.
They’d need to show “clear and convincing evidence” that the domain in question was not registered for resale in order to keep their names.
It’s a fairly comprehensive ban on domaining, in other words.
While there may well be workarounds — such as owning matching trademarks or selling shell companies rather than merely the domains — I can’t think of any that would wouldn’t be overly burdensome or costly in the vast majority of cases.
The PRP has also recommended the introduction of opening up .au to direct, second-level registrations, much like the UK, New Zealand and others have over the last several years.
Domainers also hate this, as it could dilute the value of their investments.
The PRP’s final report is now open for public comment until April 12.
After receiving these comments, auDA expects its board to provide a response April 15, which itself will be open for public comment until May 10.