Verisign Registry Angling For Price Increase
Date: Tuesday October 16 2001, @05:27PM
Topic: Verisign/NSI

ross writes "Briefly? Verisign Registry is attempting to leverage their failure to provide adequate registry services under their contract to ICANN into a price increase for dotCOM names. The whole story? Read on..."

On July 16, 2001 ICANN issued an advisory [1] indicating that Verisign Global Registry Services (VGRS) would be imposing limits on the registry resources made available to registrars to add, delete and modify domain registrations. The justification given for these limitations was that some registrars were, as they attempted to register newly deleted domain names, utilizing excessive registry resources - to the detriment of other registrars.

According to the advisory, registrars would now be limited to 250 simultaneous connections. At that time, this seemed to be a more than generous allotment as most high-volume registrars would only need tens, not hundreds of simultaneous connections, except when they encountered rare "extreme-peak" demand conditions. Both ICANN and VGRS urged affected stakeholders to enter into a dialogue with an eye towards identifying the root problem causing these speculative land-rushes and ideally, identify a solution (or solutions) that would create an even and sustainable playing field for everyone at the table. As a result of this solicitation, dozens of suggestions were put forth [2, 3, 4, 5...]. Some of these ideas were very simple and outlined how the registry could streamline their existing processes and therefore increase their top-end capacity. Others proposals outlined new re-registration mechanics that would completely change the way deleted names were picked up by new registrants. And a few, drilled down to the root of the problem and advocated sanctions against registrars that were, in effect, abusing the registry and therefore in breach of their contract.

Through this round of commentary, VGRS implemented a semi-interim solution [6] that required registrars to pursue the registration of new domain names through one system and re-registration of deleted names through another. This new structure (still in place today) is governed by a few ill-defined rules that outline registrar conduct in the new environment. Clarification concerning these rules has been requested a number of times, but VGRS has not seen fit to describe them further in any meaningful way. This has left "non-abusive' registrars without a clear understanding of what constitutes abuse, what doesn't and what they should do if they fall afoul of the vague rules. This has also left the "abusive" registrars to continue to exploit the system.

To VGRS' credit, they explicitly stated that this was an "interim" solution and wanted to continue the discussion with the registrars and ICANN to implement a scalable, long-term solution. At VGRS' invitation, a meeting of interested parties was convened in Uruguay to discuss a reasonable outcome. An interesting thing happened at this meeting. Chuck Gomes, a long-time VGRS staffer, indicated that while they were very interested in hearing what everyone had to say, "they had to be conscious of the cost involved with implementing whatever solution we decided to adopt."

An interesting turn-of-the-word - "...be conscious of the cost involved with implementing whatever...we decided to adopt." The careful listener/reader will have already picked out the implications of this statement. The easiest way for VGRS to grow their business is to increase their revenue. The easiest way for them to do this, as a monopoly, is to increase their price. The easiest way for them to do this is to pull the trigger on the "policy = price increase" clause [7] in their registry contract with ICANN. If ICANN says jump as a result of a policy decision, VGRS can quite rightly say "for how much?".

The group quickly caught on to this tactic and made it very clear to VGRS that we were only there to provide consultation to the registry. Adoption and selection of the solution was up to VGRS and VGRS alone. The informal gathering in Montevideo produced the seeds of three serious proposals;

  • the MelbourneIT/Tucows Landrush Allocation proposal [8]
  • the AfterNIC Auction proposal [9]
  • the SnapNames Parallel Registry proposal [10]
The MIT/Tucows joint proposal advocated the adoption of an indiscriminate landrush queue that would allocate the next deleted name on the randomized list to the next eligible registrant on a randomized list. In effect, deletions would be re-allocated in much the same manner as the dotINFO landrush queue's. In it's simplest form, the AfterNIC proposal would see the desirable deletions auctioned off to the highest bidder. Lastly, the SnapNames Parallel Registry proposal would see the name going to the very first person that had asked to register that name that particular year through a mechanism they call "SnapBacks".

This last proposal was particularly troubling to most people at the table. For instance, the only way to re-register a domain name would be if you purchased a SnapBack at a preset price through the Parallel Registry. For most people, the extra $49 (or whatever the actual price ends up to be) isn't the problem. The problem lies with the fact that the existing domain registrant does not get a chance at a cut of the option value inherent in his domain as a result of this new service. But. the Registry gets a cut, so do SnapNames and so do the Registrars.

Additionally, because deleted names can only be re-registered as the result of owning the SnapBack privilege, registrars that cater to the secondary market speculators that like to snap-up freshly deleted names would effectively be put out of this lucrative business. Whether or not one appreciates the secondary market is another question. Regardless, the SnapNames proposal effectively limits the capability of a registrar to choose certain aspects of the business model they wish to employ. Again, the end-customer suffers from the registrars decreased capacity to innovate new services and products. No innovation, no competition.

Perhaps most aggravating, this last proposal does very little to address the very problems that created this issue in the first place. While it does gloss over the core issues and dodge the real challenges by re-organizing the secondary market, it ignores the basic problems that got it to the table in the first place.

Sadly, in complete defiance of all recommendations made by the affected stakeholders, VGRS has endorsed [11] this last proposal with the following language;

"I would be willing to recommend that VGRS consider implementing the [...] Parallel Registry [...] as a new optional service to all registrars with a separate pricing structure."

The fourth and last proposal on this subject was issued earlier this month [12] as a response to the astounding analysis made by VGRS;

  1. Eliminate the "batch pool" methodology and infrastructure currently in place as an "interim" measure.
  2. Reinstate the previous "first-come, first-served" re-registration processes.
  3. Require that all registrars immediately cease "batch-delete" processes.
  4. Require that all registrars adhere to the 45-day post-expiry registered name deletion requirements of the Verisign Registrar/Registry agreements.
  5. Police denial of service and other abusive practices by registrars as required by the Verisign/ICANN registry services agreement.
In its commentary, this new proposal specifically states that "[VGRS] enjoys substantial revenues from the operation of the services contemplated by the VGRS/ICANN Registry Services Agreement. In return for these revenues, Registrars are entitled to demand the services they pay for." In other words, if they can't fix their problems at the current price, perhaps it is time for a rebid of this contract that has so obviously become a burden to VGRS.

Further background information can be found at http://www.opensrs.org/ross/rc-deletes/

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Re: Verisign Registry Angling For Price Increase
by kodo (binaryloop@nospam.yahoo.com) on Tuesday October 16 2001, @06:58PM (#2972)
User #21 Info | http://www.paradigm.nu/icann
Why does this not surprise me?

Resigning a contract with them was a HUGE mistake for ICANN! Just about everyone on the Net totally opposed the new VeriSign / ICANN contract.

Why do you think nobody wanted to do business with these guys?

Although I got to say that support changing the re-registration process. This joke of NSI holding onto expired domains has got to stop!

The minute that VeriSign bought GreatDomains someone should have hauled their butts into court!

"Money is the most egalitarian force in society. It confers power on whoever holds it."
-- Roger Starr
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Re: Verisign Registry Angling For Price Increase
by Ron_Bennett on Tuesday October 16 2001, @11:30PM (#2977)
User #3011 Info | http://www.wyomissing.com/bennett/
Lesson to be learned here:

Renew any critical domains for the MAX term of 10 years at today's low prices. This a policy I generally follow for critical domains that I maintain.

.COM prices will someday be much more than they are now, assuming .COM remains dominant...I project a price range of around $50 to $100 per year for .COM domains within the the next 5 years. And upwards of $250 per year by 2010.

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Re: Verisign Registry Angling For Price Increase
by JohnR (yes@fakemail.com) on Wednesday October 17 2001, @07:42AM (#2986)
User #2937 Info
Afiasco for the U.S. Government.

I am afraid that the government officials
have some stakes with the domain industry so
they just open one eye and close another.

I have no say about the conduct of
verisign and even ICANN. Greed is the human
nature of some people at least.

But I supposed the government should do something
for the citizens no that they take some much
taxes?

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Re: Verisign Registry Angling For Price Increase
by fnord (groy2kNO@SPAMyahoo.com) on Friday October 19 2001, @10:33AM (#3024)
User #2810 Info
According to the URLY Indicator, a weekly email sent out by Afternic.com, a domain name auction site, they have launched a testbed to auction off expiring names. The first, and so far apparently only, registrar to take part is Register.com, not surprising as Register.com owns Afternic.

Newbies may not be aware that prior to that ownership, Afternic got into a lawsuit with ICANN over its wish to partner with a registrar. That was settled out of court with some wonky agreement that the auction and registrar would have to distance themselves through some intermittent gateway page (which didn't seem to survive the Register.com takeover, there is a direct Register.com link off the Afternic homepage). BTW the ICANN position (it it was such, it seems to have been Louis Touton acting on its own, it certainly wasn't policy) that registrars and aftermarket be kept separate is one of the few ICANN positions I agreed with at the time (though there should be a policy, not a position). Seens to me Register.com is now making it even more necessary for a policy for expiring names. Neither site's front page has mention of this 'testbed' at the time of writing. -g

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  • This article comes from ICANNWatch
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