Important: Tiered Pricing Battle Again At ICANN

[shenron]

I'd also love to know what is to be considered premium and not premium.

 

[David G]

I'd also love to know what is to be considered premium and not premium.

Probably based on a combination of traffic and subjectivity.

Based on the last Icann battle I understand there are ways the registry can monitor the actual traffic.

 

[Gerry]

Thanks for moving the thread. Hopefully as more folks become aware of the implications of these new gTLD discussions on their existing .com/net/org/biz/info gTLD domains, they'll make their voice heard, and not allow the registry operators to whittle away the rights of registrants. ICANN staff are obviously not looking out for our interests.

George, Perhaps putting time and effort into an open letter that each member could copy and submit would be a start.

Plus, being in the exclusive section? Seems like this would involve everyone and be of concern to all.

Obviously, this is a pure blatant money grab to begin with. ICANN is so ineffective. The new gTLD program is going to be one huge mess.

 

[GeorgeK]

ICANN is not a "membership based" organization. Thus, there's no easy way to remove the board, especially for domain registrants who don't even have standing. Most are appointed through the Nominating Committee, which operates in secret --- basically insiders appointing other insiders.

http://nomcom.icann.org/

I'm not seeing many new comments being posted on the ICANN comment forum. If you have sent in a comment, be sure to watch for a followup email from ICANN that contains a link that you must click for verification, otherwise your comment won't make it into the comments archive (i.e. it would be junked as spam).

George, Perhaps putting time and effort into an open letter that each member could copy and submit would be a start.

That's called "astroturfing" and isn't a good idea --- better to have individual comments from each person.

http://blog.lextext.com/blog/_archives/2008/2/4/3505675.html
http://en.wikipedia.org/wiki/Astroturfing

Lots of uninformed and identical comments were mass-emailed last time by folks unfamiliar with the issues, and that didn't help the cause much.

Plus, being in the exclusive section? Seems like this would involve everyone and be of concern to all.

It was moved, so now everyone can see it. The original post I made in "News" got tripped up by moderation, so I duplicated it in Exclusive (which has now been moved back to News).

Obviously, this is a pure blatant money grab to begin with. ICANN is so ineffective. The new gTLD program is going to be one huge mess.

Indeed, and the money that is being grabbed is coming from the pockets of registrants, i.e. ALL OF US!

You'll note most registrars have said nothing about all this -- many are lining up to become registry operators too, to join in the cash grab.

 

[Warren2]

In a worst case scenario, what sort of time frame is there before this could be implemented?

Maybe it would be an idea to immediately renew all the .com domains one plans to keep for a 10 year period? Surely they then couldn't come back and charge more during that 10 year period at least?

 

[David G]

In a worst case scenario, what sort of time frame is there before this could be implemented?

Maybe it would be an idea to immediately renew all the .com domains one plans to keep for a 10 year period? Surely they then couldn't come back and charge more during that 10 year period at least?

Not a good option for some because needs lots of capital to do that with larger portfolios and for smaller portfolios of resellers they would in effect lose the reg money with a sale.

 

[Warren2]

and for smaller portfolios of resellers they would in effect lose the reg money with a sale.

Why would they loose the reg money?

The reg money would just be factored into the new market sale price...and a longer reg period would ALWAYS be a benefit if you are selling, and for some domains a huge benefit.

Imagine that you own casinos.com as a reseller and you can offer the new buyer a 10 year pre-paid registration period for $8/year instead of the new "premium domain registration fee" of $100k per year. How do you think this would affect your sale price of Casinos.com?

 

[GeorgeK]

Suppose this went through and VeriSign later engaged in .tv-style pricing for .com domains. Everyone would be aware that domain costs would skyrocket in 10 years (i.e. assuming you renewed to the max before the price increases).

That means in year 1, no rational person would pay more than 10 years income for your website/domain.

In year 2, no rational person would pay more than 9 years income for your website/domain.

In year 3, no rational person would pay more than 8 years income for your website/domain.

and so on. Basically, your business would be dead. Tiered pricing would be like the Mafia deciding they want to "partner up" with you, and they get to decide how much you pay them each year. Would anyone want to buy your business?

Think about Russia, and how the authorities expropriated companies from their rightful owners, and gave them to their friends. Would you want to invest in Russia in that climate?

Without certainty as to the renewal price in the future, the entire landscape for domain registrants would be put at risk. Allowing VeriSign and other gTLD operators to cherry-pick the most favourable terms to themselves from new gTLD contracts puts us all at risk. When there are 500+ registry operators, each of them putting in requests to modify their contracts on a regular basis, as they do now:

http://www.icann.org/en/registries/rsep/

this would create a lot more risk, unless procedures are put in place to stop it.

 

[David G]

Why would they loose the reg money?

The reg money would just be factored into the new market sale price...and a longer reg period would ALWAYS be a benefit if you are selling, and for some domains a huge benefit.

Imagine that you own casinos.com as a reseller and you can offer the new buyer a 10 year pre-paid registration period for $8/year instead of the new "premium domain registration fee" of $100k per year. How do you think this would affect your sale price of Casinos.com?

Because I do not believe the buyer or seller normally factor in the renewal date as far as the pricing goes.

 

[Theo]

Because I do not believe the buyer or seller normally factor in the renewal date as far as the pricing goes.

In the open tier plan, they'd have to.

 

[GeorgeK]

Imagine that you own casinos.com as a reseller and you can offer the new buyer a 10 year pre-paid registration period for $8/year instead of the new "premium domain registration fee" of $100k per year.

It would also mean that you couldn't transfer the domain name to a new registrar, as then you'd be immediately hit with the huge increase in fees.

 

[Theo]

What is the cumulative IQ of the ICANN committee members?

 

[GeorgeK]

Because I do not believe the buyer or seller normally factor in the renewal date as far as the pricing goes.

They would have to. If your company locked in oil at $10/barrel for 10 years via the futures markets, and then saw oil hit $140/barrel (or $60 today), would you be building your financial models for the future (i.e. beyond the period you hedged for) on $10 oil, or much higher oil prices in the actual marketplace of today?

 

[Warren2]

Tiered pricing would be like the Mafia deciding they want to "partner up" with you, and they get to decide how much you pay them each year. Would anyone want to buy your business?

I am not in any way suggesting that the proposal or current wording is a good thing, there is no question that this would be a terrible development!

However, if you own 10 keyword domains each worth $100k it would be a pretty cheap insurance to pay the 10 year renewal fee of $800 to make sure that your domains at least have some value to yourself or an end user for the coming decade. Of course you are right, with this type of pricing the domains may be worthless after 10 years, but at least it offers you some protection in the meantime... You could at least have some hope that in the coming 10 years ICANN will come to realise that this pricing structure could destroy thousands or hundreds of thousands of online businesses and change the rules, (and from what little I understand about ICANN operations they may need those 10 years! :?.

Does anyone have an answer to my question though?

In a worst case scenario, how long would it take before this disastrous pricing strategy is implemented?

 

[GeorgeK]

In a worst case scenario, what sort of time frame is there before this could be implemented?

Once the first new gTLD signs a contract that has no price controls, which could be as early as next year. Existing registrars would then ask for a contract revision, which ICANN would be in no position to deny.

Note how this is exactly the same battle as before. Let's rewind to 2006:

http://www.icann.org/en/announcements/announcement-2-28jul06.htm

Lifting of Price Controls on Registry Services. Following extensive consideration and discussion, each of the proposed new .BIZ, .INFO and .ORG registry agreements provide for the lifting of price controls formerly imposed on the pricing of registry services.

If you were shocked and disgusted 2 years ago, all the same arguments apply today. I don't think ICANN ever answered who those "extensive discussions" took place with --- certainly not with any domain registrants, or anyone who can read a contract and understand its implications!

 

[Theo]

I am curious about the method that would be used to price domain renewal fees. E.g. other than the obvious keywords, how would the registry price a domain like "superfollicle" or "tubawuba"?

 

[stewie]

good information

thx

 

[GeorgeK]

I am curious about the method that would be used to price domain renewal fees. E.g. other than the obvious keywords, how would the registry price a domain like "superfollicle" or "tubawuba"?

As a baseline, you need to put yourself in VeriSign's shoes. Effectively, they would own the name, just like a BuyDomains owns their portfolio, or Vertical Axis would own their portfolio. What would they charge you to rent a name from them?

And if they were smart (and there's no reason to assume they are dumb), they would partner with Yahoo and Google, and pull out your historical domain name parking stats (and pay Yahoo/Google a license fee for the data). They would know exactly how much your parked names make, or how much they earn from AdSense, etc. They could probably partner with credit bureaus, payment processors, Visa, Mastercard, Amex, D&B, PayPal, etc. to find out how much your company makes in its ecommerce.

Be lucky I don't work for VeriSign. :lol: I already know some stuff they've not thought of (which I'll keep to myself).

 

[Theo]

Assuming these names make no money, or make little money, how would they determine the base fee? I am not familiar with the methods or pricing used in the .tv TLD.

ICANN is doing two opposing things: on one hand it purports to be expanding the namespace on the Internet, having introduced IDN domains (at the root servers as well) and on the other hand its practice of potential open pricing would destroy businesses around the world that cannot afford anything resembling such a pricing model.

I wonder how much they'd charge me for ICANNT.com

 

[GeorgeK]

Assuming these names make no money, or make little money, how would they determine the base fee? I am not familiar with the methods or pricing used in the .tv TLD.

Combination of art and science. Take a look at whether the domain is registered in other ccTLDs. Take a look at historical prices, etc. BuyDomains has a boatload of $2,488 domains that they bought for $6.

Think outside the box. Suppose I want to own Acro.net. I call up VeriSign, and tell them I'll pay $300/yr to get it. They then jack up the price on you. If you don't want to renew it, they've got a buyer in hand for it. Can you afford to outbid every other person on earth for the domains you already own? And even if you could, would you want to pay that for the privilege of renewal?