[GTLD-WG] [CPWG] Reflections on registry agreement renewals

John McCormac jmcc at hosterstats.com
Wed May 8 11:55:40 UTC 2019

On 04/05/2019 13:50, John Laprise wrote:
> The recent discussion on this topic has made me reflect on the topic 
> more broadly and I'd like to share something provocative I've been 
> pondering.

Did you do any research on this topic before pondering?

> At the broadest level, domain reselling and all speculation surrounding 
> domain names should be outlawed outright. ICANN doesn't as a rule tell 
> end users how to (not) use their domains. However there is an argument 
> to be made that speculative behaviour hurts all non-speculative users by 
> increasing pricing.
As others on the list have pointed out, it is a difficult task to 
determine which is a speculative registration and which is not. Even for 
those who understand the problems of measuring usage in TLDs, beyond a 
"for sale" sign on the domain name's website or a domain name parked on 
an auction site, it is difficult to establish if a registration is 

If someone registers a domain name for a future project, is that 
speculative? Or does "speculative" simply mean that someone registered 
the domain name first?

Even putting a "for sale" sign on a domain name in the launch phase of a 
TLD is often counter-productive because the market has not stabilised 
and prices are unstable. The "for sale" sign may no longer be reliable 
as some registrars may have a "for sale" sign on expired/non-renewed 
domain names.

In the March 2019 new gTLD usage survey, 3.175% of new gTLD domain names 
were classified as being for sale or rent. The April 2019 survey had it 
at 3.128%. The May 2019 survey is currently being processed. There is an 
opportunity to see the Junk Dump in action with the upcoming .APP first 
renewal. In terms of recent launches, it is quite an unusual gTLD. As a 
percentage, the "for sale" segment of a TLD is much smaller than the 
percentage of domain names on PPC parking or holding pages. Even that 
whole argument about "Parking" is a problem when it comes to 
understanding how domain names are used but that's another discussion.

The recent new gTLD round has shown that speculation is essential for a 
new TLD. It increases market awareness. It gets people developing 
websites. It pushes the TLD towards a wider audience. Without it, a 
newly launched TLD flatlines as demand collapses within weeks after 
General Availability. The Land Rush period for most new TLDs was 
typically six months. After that, the daily new registrations figures 
settle into to a more stable pattern.

Without that Land Rush in a new TLD, marketing the TLD becomes much more 
difficult for the registry and for the registrars. Some of the worst 
examples in the new gTLDs were where the registry reserved thousands of 
domain names as "premium" domain names. At its most extreme, it killed 
demand in some new gTLDs. New registrations fell to hundreds, or lower, 
per month.

The problem with claiming that speculative behaviour hurts 
non-speculative users is that it is not supported by reality. It is a 
classic dotBombism that's right up there with the "all the good domain 
names are taken" fallacy. And it is generally made in the absence of any 
knowledge of how and why people register domain names.

There is a significant overlap between the legacy gTLDs in that the same 
term will be registered across the main legacy gTLDs. It represents 
approximately 50K of .COM registrations though it varies. Many of these 
registrations are brand protection registrations and there is a much 
smaller generic keyword type registration. It is these generic keyword 
domain names that form the basis for most domain name speculation. There 
are other multiple keyword domain names that may be speculative 
registations. However, the bulk of registrations in mature TLDs are from 
small businesses and individuals.

As a group, speculative registrations in a new TLD do not renew well. On 
the first renewal, most of them are dropped. This forms part of the Junk 
Dump seen at the first renewal of a new TLD. Basically they are domain 
names that were registered in the hope of being sold on and for whatever 
reason, they did not sell. A few of them will be reregistered but most 
will not. A first year TLD is very different to that of the TLD in 
subsequent years. One of the proposed metrics for the Domain Name 
Marketplace Indicators is a Churn and Burn metric that measures the 
total number of domain names that were ever registered in a gTLD against 
the current zonefile.

Too much speculation in a TLD will kill it. The bungled .EU ccTLD launch 
is the classic example. The European Commission and its advisors just 
didn't have a clue about the domain name business and came up with a 
bunch of easily gamed "regulations" for the TLD. Basically, .EU ccTLD 
was plundered by non-EU actors using front companies and fake addresses 
and it effectively killed the ccTLD as a primary use TLD. It still 
hasn't recovered. The .EU ccTLD is not a core TLD in the Irish and UK 
markets. It is below 5% of the country level markets in most EU 
countries and it is definitely not a dotCOM killer. Some of the new gTLD 
registries actually had more of a clue than the EU and took very 
effective measures to limit the damage caused by speculation. The 
.BERLIN gTLD is the best example of this. It shut down a discount offer 
when it was being abused.

No speculation in a retail TLD will kill it just as effectively. 
Speculation is proof that someone thinks that a TLD has a future. These 
people are putting their money on the line. To those who don't 
understand the domain name business, speculation may appear bad. To 
those who actually work in the domain name business, it is necessary.

These speculators actually register domain names in TLDs. These 
speculators also become unpaid salespeople for a TLD. They promote it 
and get it noticed. That's important for the survival of a TLD.

The real danger for most TLDs is from arguments that are not based on 
any facts or data.

John McCormac  *  e-mail: jmcc at hosterstats.com
MC2            *  web: http://www.hosterstats.com/
22 Viewmount   *  Domain Registrations Statistics
Waterford      *  And Historical DNS Database.
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