[CPWG] The crux of the COM issue

[John McCormac]

On 05/01/2020 21:42, Evan Leibovitch wrote:
> On Sun, 5 Jan 2020 at 15:59, John McCormac <jmcc at hosterstats.com 
> <mailto:jmcc at hosterstats.com>> wrote:
> 
>     On 05/01/2020 17:09, Jonathan Zuck wrote:
>      > My point, to be clear, is that these price hikes really only
>     affect the
>      > investor community and will, as Evan has suggested, help clear some
>      > clutter out of the secondary market.
> 
> 
>     You and Evan are wrong. These price hikes affect all registrants of
>     and some of them have built their presence on a TLD and cannot
>     afford to rebrand.
> 
> 
> As someone who owns a bunch of domains and has acquired many, many more 
> on behalf of clients, friends and good causes, I see first-hand what's 
> going on with these registrants and I have worked with them myself.

The .ORG was a special gTLD. It always had an element of speculation but 
the problem is that there is an expectation that just because someone 
has an idea for a domain name that they should be entitled to that 
domain name even if someone else has registered it first.

> Evidence? Your stats are great but assertions such as "confidence" are 
> not quite so easy to quantify.I would counter-assert that it's lack of 

The Uniregistry price increases. When Unireg increased the price of 
their domain names, it upset registrants and managed to get all its 
gTLDs kicked off Godaddy. The early adopters got screwed because 
Uniregistry badly handled the increases.

Most of the historical registrations in .BIZ are brand protection 
registrations but these are declining as the retail price on .BIZ is 
increasing and the gTLD has become less important as a main TLD.

> transparency, and the inability to have enough future data upon which to 
> plan, that causes the jitters. Domains that are expensive and thus have 
> few registrants may be the most "reliable" and stable on the web from an 
> end-user's PoV (registries' financial circumstances notwithstanding). 
> Most legacy TLDs have track records that indicate incremental increases 
> which registrants can live with. The lack of transparency, and the 
> unawareness of what Ethos plans to do with .org, IMO contributes more to 
> instability and lack of confidence than anything else. A pledge not to 
> exceed 10% per year does not alleviate that.

The .ORG has the characteristics of a ccTLD in that it has a core of 
registrants that identify with the gTLD as being *their* TLD. That's a 
very unusual thing for a TLD outside some of the geoTLDs. The bad 
publicity from the sale has antagonised some of these registrants and 
unless Ethos handles it carefully, it will damage the gTLD. Hiring 
ex-ICANN people was not a good move in terms of optics.

> So it's not their primary domain, meaning that the holders of these 
> defensive domains are likely not NPOs.

They are defensive registrations but some of the larger businesses might 
eventually use the domain name for some do-good purpose.
>     Discounting is a far greater threat to the stability of a TLD than
>     any secondary market. In reality, unfettered discounting destroys
>     the credibility of a TLD.
> 
> 
> Agreed. And they do so far more than incremental price increases that 
> hurt portfolio owners more than those who use their domains to provide 
> services.

Those portfolio owners can always sell. The people using the domain 
names are in a golden handcuffs situation which the registry can 
exploit. That didn't happen, to a great extent, with PIR. The other 
thing that may hit confidence is the TLD is a kind of snap-back of 
expired domain names for resale by the registry and tiered pricing.

> 
>     The .ORG is one of the most stable of the legacy gTLDs.
> 
> 
> Do you have 100% confidence that the switch to Ethos will maintain that 
> stability? Those opposing the sale are making your point that PIR under 
> ISOC was a great steward of .ORG, the cause of such stability, and there 
> were better ways turn it into stable income. while maintaining that 
> status quo.

I am not sure. The optics on the deal are terrible and the connection 
between former ICANN people and Ethos make it worse. Ethos has a lot of 
hard work to do to regain the trust of the true believers in .ORG. If it 
loses them, it loses the gTLD and becomes completely dependent on the 
existing registrants. Most of them will renew but the danger is that in 
the long term, .ORG becomes another .MOBI.

>     The strange idea that the secondary market is some big, bad ogre
>     devouring all the domain names in a TLD is wrong. The reality is
>     quite different.
> 
> 
> As someone who has worked for decades with entrepreneurs and nonprofits 
> who struggle to find suitable domain names that aren't taken up by 
> squatters, I will challenge that assertion of reality.

The secondary market in most TLDs is far smaller than people expect. The 
problem with coming up with a good domain name is that people tend to 
think in purely generic terms when purely generic terms are long gone in 
TLDs that have been around for over thirty years.

> Not so much in .ORG, but in .COM the availability of original-release 
> domains is pretty sparse unless you create your own coined word or 
> resort to dashes in the name.
> But I'm struggling to find the point of this debate. The subject line 
> says it's about .COM. If you want to argue against sudden and 
> non-incremental price increases and other destabilizing forces in .ORG, 
> I'm all with you. I detest domainers but agree that their impact on .ORG 
> is far less than .COM. So what are we arguing about?

The .COM is actually in a more fragile position than .ORG. It may not 
look like it but .ORG still has a unique function in that it is the 
NGO/do-gooder gTLD. What's happening at a global level is that there has 
been a shift towards ccTLDs happening for the last fifteen years and the 
registrations in .COM in these countries have been declining. The .COM 
is lucky to be the de facto ccTLD of the USA and it accounts for the 
bulk of the registrations. Where the ccTLD is the dominant TLD in a 
country level market, the more redirects from .COM will go to the ccTLD 
website than the other way. The registrant's brand has become largely 
integrated with the ccTLD and the bulk of the registrations in .COM are 
historical. The volume of new registrations is mainly ccTLD. A price 
increase in .COM will accelerate that because the .COM, a global TLD, 
may not be necessary for local business. What actually happens with 
ccTLDs is that the number of unique registrations that only exist in the 
ccTLD and not in any gTLD increases.

Verisign has been using discounting promotions over the years to drive 
registration volumes but some of these promotions, particularly with 
Chinese registrars, have very low renewal rates. Because of the huge 
volume of historical registrations and renewals, these non-renewals 
disappear in the ebb and flow of registrations.

The market, other than the stable US and EU markets, for new .COM 
registrations is highly dependent on markets where the local ccTLD is 
not as strong. The big problem with that is that ICANN's registrar model 
is too expensive for hosters in these countries to make the jump to 
becoming fully accredited ICANN registrars. Some countries such as 
Brazil with 4 million ccTLD registrations have no ICANN accredited 
registrars. Many countries in Africa have no ICANN registrars.

Regards...jmcc
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