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26 Aug 2006
Whatever you think the answer is (typically about ten bucks), the answer is likely to change radically for the worse, based on new contracts that ICANN is planning to approve. On July 28th ICANN posted proposed new contracts for .ORG, .BIZ, and .INFO, for a public comment period that ends four days from now, on the 28th. There's a lot not to like about these proposed contracts, but I will concentrate here on two related particularly troublesome areas, pricing and data mining.
The current contracts all set a fixed price per domain per years for each TLD. In .ORG it's $6, .BIZ it's $5.30, and .INFO it's $5.75. The proposed contracts keep the same prices, but let the registries change the prices unilaterally with six months' notice to the registrars (not the registrants.)
George Kirikos has published a note outlining some of his concerns, along with an astonishingly naive response from Vint Cerf to them. His main concerns are about differentiated pricing like .TV has tried to do, without notable success. If they crank up the prices on available domains, that seems kind of sleazy but easy enough to work around. The problem is renewals; there's nothing to prevent the registries from charging any price they want for a domain that is well known. If they decided that the renewal price for icann.org is now $100,000, what is ICANN going to do?
Since the agreements say that the registries have to give six months notice to the registrars, Vint Cerf said in a message to Kirikos, that in case of a price increase, registrants will just renew for ten years, and lock in the price, which either will solve the problem or deter registries from raising prices. This is unrealistically naive for several reasons. The one that Kirikos pointed out is that ten years may seem like a long time on the Internet, but it's not a long time in real life. The most well known info domain, mta.info, belongs to the New York Metropolitan Transportation Authority which has been around since 1965 and whose predecessors go back to 1906. I suppose that in ten years they could go look for a different domain with a less abusive registry, but it's hard to defend a pricing policy that makes legitimate companies switch names every decade to avoid being shaken down. It also means that registrants who now register a domain for a year or two and then let it expire if the plans didn't work out would defensively register for ten years, just in case. This is basically protection money for the registry, and will have the perverse effect of creating large numbers of abandoned domains not in use by the registrants and not available to anyone else. (No doubt the registrars will "solve" this problem by parking click farms on them.)
A more serious problem is that although the registries have to notify the registrars of a price change, there's no rule that requires the registrar to pass the news along to the ultimate victims. If the registrar were to set its price to, say, the registry price plus 40%, what incentive do they have to tell a customer to renew now for $9 rather than next year for $500? Anyone who says "oh, they would never do that" must not have dealt with many registrars. It is telling that the proposed agreements, which include a long list of required provisions in all registry-registrar contracts, could easily say that registrars must pass along word of a price change, but they don't.
Danny Younger pointed out in a phone call that the proposed contracts also specifically permit registries to sell DNS traffic information about non-existent domains, thereby making it much easier to identify and squat on all of the most commonly mistyped domain names. As I've said elsewhere, I think it would be much more productive to persuade Google and Overture to stop paying for clicks on pages without useful content since typosquats are far from the only place this noxious practice occurs, but there are probably other abuses of combined DNS data mining and differential pricing that we haven't figured out yet.
So I have a few suggestions to avoid the damage that differential pricing would cause.
The simplest, fairest, and most obvious solution is to avoid it. All of the registries are doing well enough at the current fixed price to want to renew, so there is no reason to change from a fixed price. An obvious price to level the playing field is $4, what the current agreement for .net sets. Registries are largely automated, computers keep getting cheaper, and even the huge artificial load caused by domain tasting and sniping (trying to grab expired domains the millisecond after they're released) doesn't seem to have affected their profit margins enough to be worth doing anything.
If we can't agree to be that sensible, the next least bad option would be something like .com, all the prices are the same even though the overall price goes up at a limited rate.
If ICANN is determined to permit differential pricing, the worst abuses affect registrants (such as me) who registered domains in good faith assuming that the price we paid was pretty much the price we would continue to pay. This suggests that once a domain is registered, the price for that domain is fixed for all renewals and transfers until and unless the registrant decides to abandon it.
From a simple viewpoint of consumer protection, it is at least as important to notify registrants of price increases. If the increase is small, say, up to 25% over what it was the last time the registrant registered or renewed the domain, e-mail would be OK. If the price increase is substantial, it really needs to be something more substantial, like a paper letter. If registries think that would be too expensive, they could save themselves a lot of money and hassle by not raising the price.
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