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ICANN's Brave New World of Tiered Pricing for Top Level Domain Names

  • To: ga@xxxxxxxxxxxxxx
  • Subject: ICANN's Brave New World of Tiered Pricing for Top Level Domain Names
  • From: George Kirikos <gkirikos@xxxxxxxxx>
  • Date: Wed, 23 Aug 2006 21:39:17 -0700 (PDT)

Imagine, you've built a great website, and are on top of the world due
to all the incoming visitors and sales revenues. Your competitors envy
you, as do your neighbours. Your online brand has become very valuable,
and when people think of widgets, the first website that comes to mind
is your site. Life is good.

You open the mail, though, and see a renewal notice for your domain
name that is $75,000/yr, instead of the $10/yr that you were used to.
You call up your registrar, thinking "this must be a typo". But,
instead, you are told, "due to the success and high value you are
receiving from your domain, the renewal fee really is $75,000/yr."

Sounds impossible and outlandish? Not so, if proposed new top-level
domain contracts are approved by ICANN.


With parallels to the network neutrality debate, ICANN is set to
approve new registry agreements for .biz, .info and .org that do not
forbid differential/tiered pricing on a domain-by-domain basis. The
public comment period ends on Monday.

When ICANN's Board approved a highly controversial new .com agreement
with VeriSign earlier in 2006


(which thankfully the Department of Commerce has yet to approve) as
settlement for the SiteFinder lawsuit, other registries wanted to get
the same spoils that VeriSign received, including presumptive renewal


and the ability to raise domain prices. VeriSign's price increases for
.com would be capped at 7% per year, though. These new proposed
contracts leapfrog VeriSign, and shockingly propose to remove all
pricing caps entirely. The only protection existing domain registrants
would have is the 6-month notice period, and the ability to renew their
domains at the old price for up to 10 years from the present. 

A loophole in the contract, which ICANN has confirmed exists would go
even further and create an ominous scenario, though. It would not
forbid registries from charging different renewal or registration
prices on a tiered/differential domain-by-domain basis. This would be
comparable to the .TV registry


pricing model. Thus, for example, the renewal fee for Sex.biz  could be
raised to $100,000/yr, for movies.info $25,000/yr, for Google.org $1
million/yr, and so on -- whatever would maximize the profits of

Registries have seen what DSL and cable companies are trying to do, to
break network neutrality


and charge discriminatory prices to maximize their profits at the
expense of website operators (for example, charge higher rates to
Google or Yahoo or Microsoft, for access to their subscriber base,
knowing that Google, Yahoo and Microsoft are very profitable).
Registries are very shrewd, and these new contracts would not forbid
them from discriminatory pricing to emulate what ISPs would like to do.

If these flawed contracts are approved for .biz, .info, and .org, it
would not be a huge leap to think that VeriSign might take advantage of
the precedent, and attempt to achieve the same pricing power for .com
and .net through future contractual negotiations with an ICANN that has
routinely failed to protect domain registrants' interests. 

Network Solutions CEO Champ Mitchell said that the .com deal "shocks
the conscience."


These new contracts are infinitely worse, and create dangerous new
precedents. Read over the contracts and public comments yourself, and
then tell ICANN whether these new changes are acceptable to you. The
deadline for comments is Monday.


George Kirikos

P.S. If anyone would like a copy of a nicely formatted version of the
above, with proper HTML formatting of all links, for inclusion on your
blog, etc., please email me.

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