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ICANN Board to Vote on Domain Tasting Measure

Kieren McCarthy

The ICANN Board will vote today on a new registry service put forward by PIR for .org which is its attempt to solve the domain tasting issue.

It takes the form of an amendment [pdf] to the .org contract and enables PIR to charge five cents per domain "when the number of such deleted registrations is in excess of 90 per cent of the total number of initial registrations".

I've done a long-ish story about it for The Register.

There's several issues as I see it:

* Will this work? Is 90 percent right? Is five cents right?
* Did ICANN give this agreement enough attention?
* Should the domainers have been involved in these conversations?

I asked ICANN some straight questions about the transparency issue here and got some straight answers.

But I suspect that since it has been so quiet that most people haven't seen this coming. Although I do remember discussing it with David Maher in Marrakech and he was already decided on the best way forward back then.

What ever happened to Paul Stahura's Class I/Class II domain idea? Did anyone discuss that properly?

Anyway, the ICANN Board is likely to approve this change, and then there's nothing to stop other registries asking for the same change if it can be shown to work.

By Kieren McCarthy, Executive Director at IFFOR; CEO at .Nxt
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Re: ICANN Board to Vote on Domain Tasting Measure John Berryhill  –  Oct 19, 2006 1:29 PM PDT

there’s nothing to stop other registries asking for the same change if it can be shown to work.

...except their own self-interest.

First things first.  PIR is not really a registry in the same sense that Verisign is.  Afilias runs the .org registry under contract to PIR.  PIR does not own the iron on which .org runs.  In the accounting between PIR and Afilias, domain tasting has an economic impact which is not a factor in other TLDs which are actually run by the entity responsible for the TLD.

Verisign, and only Verisgn, knows the extent to which domain tasting constitutes a proportion of the net growth over time of the .com zone.  As is continuously thrown around with no basis in the discussions about domain tasting - only Verisign knows their cost/benefit, and only Verisign can speak authoritatively to that question.  Verisign has expressly declined to discuss that question.

It is a certainty that some sort of fee will have an impact on the numbers of domains which are traffic tested.  Obviously, if the "keep ratio" of domain tasters falls below a threshold - again, known only to Verisign - then a fee would be a mechanism for shutting off the testing.  But you have to understand that Verisign likely knows with high accuracy what that "keep ratio" is.  If, for example, the names kept by domain testers constitute 75% of new registrations per month, then imagine how stockholders are going to react to finding out that, in one month, Verisign were to lose 75% of its growth?

One minor issue, that is overlooked with the 90% rule, as opposed to direct quantitative rule, is that it skews in favor of larger registrars being able to continue domain tasting at a higher rate than smaller registrars.  In other words, if I am a registrar, then I can continue to domain taste in .org for free up to 10% of the rate at which I attract retail customers to .org.  So, Registrar A, which sells 50,000 .org domain names a month can domain taste 5,000 .org domains for free.  Registrar B, which sells 10,000 .org domains per month, can only taste 1,000 .org domains for free.

Re: ICANN Board to Vote on Domain Tasting Measure Alan Shea  –  Oct 19, 2006 7:12 PM PDT

I wholeheartedly agree with the need to be cautious in making changes at this level, but I frankly fail to understand why there shouldn't be some cost for every domain registered, regardless of its final disposition.

No registrar I have ever visited offered a refund if you ordered the wrong domain — in fact, most of them state up front that domain name orders are final. So if the registrars don't offer consumers the option, why should they get off 100% free? It seems like a 5-cent charge for every registration would be reasonable. If the registrar did somehow make a mistake on some of them they would more than make it up from the normal stream. And that would bring the tasteless "domain-tasting" scheme to a halt, freeing up countless domain names for the consumers. I have seen examples where a domain is "tasted" for five days, then immediately "tasted" by another entity, and so forth — all of them shells for the first. Consquently a legitimate consumer is denied the domain name of their choice for weeks.

I say we nickel and dime the shills.

Re: ICANN Board to Vote on Domain Tasting Measure John Berryhill  –  Oct 20, 2006 9:19 AM PDT

No registrar I have ever visited offered a refund if you ordered the wrong domain

Then perhaps you should visit more registrars…

http://manage.gi.net/kb/servlet/KBServlet/faq459.html
If you already have a Domain Name Registered, you can delete it from your Control Panel within 4 days of Registration. This 4 day period in case of domain names is referred as the Money Back Period.

Re: ICANN Board to Vote on Domain Tasting Measure Thomas Barrett  –  Oct 20, 2006 7:38 PM PDT

EnCirca willingly cancels any registration within the 5-day add-grace period, for any reason.

We also use the 5-day grace period for another reason:  stolen credit cards.  These are orders where a valid credit card is submitted with the correct billing address and telephone number.  But the order was not placed by the card holder.  These are not detected at the time of the order but are often caught within a few days of the order.

Tom Barrett
EnCirca, Inc

Re: ICANN Board to Vote on Domain Tasting Measure Suresh Ramasubramanian  –  Oct 21, 2006 7:07 PM PDT

It is numbers you must limit then, I guess?  And/or preventing the automated creation and surrender of thousands of domains at a time?  Assuming you want to keep tasters / kiters / whatever off your registrar that is.

Re: ICANN Board to Vote on Domain Tasting Measure John Berryhill  –  Oct 22, 2006 5:47 PM PDT

I frankly fail to understand why there shouldn’t be some cost for every domain registered, regardless of its final disposition.

I walked into an auto dealership the other day because I saw a car that I liked.  I asked the salesman how much it would cost for me to have that car, and he said it would cost me $30,000.

While we were talking, I saw another guy walk up to another salesman.  After a brief conversation, the salesman handed him a set of keys, and away the customer drove in the car I was looking at.

I was shocked, shocked I tell you, to find out that this car dealership was in the business of letting people take "free test drives" in the cars on that lot.  What it boils down to is that they've got dozens of people walking in every day, and they let these people drive these cars for free for a couple of hours.  They even keep cars around for that very purpose.

Now, do you know who PAYS for those excess "test drive" cars, and the gas an maintenance on them?  The people like me who BUY the cars.  I asked the manager about why they are letting people drive those new cars around for free, and he tried to tell me something about how, on balance, the free test drives help them sell more cars, so in effect the higher sales volume lets them offer me reasonable prices, because I was only interested in buying one car while these "car tasters" end up collectively buying hundreds of cars per year.

Well, I'm having none of that.  I urge you to join me in not buying cars from people who encourage this "car tasting" scam.

Re: ICANN Board to Vote on Domain Tasting Measure The Famous Brett Watson  –  Oct 22, 2006 8:23 PM PDT

John, I consider your "car dealership" analogy so deeply flawed that it actually generates confusion. Let me explain why, off the top of my head.

A car dealership owns its cars up until the time it sells them: nobody is in any position to tell them what to do with their cars. The same is not true of domains, which are ostensibly a public resource managed on our behalf by ICANN. Your analogy is thus flawed because it refers to the wrong kind of property and ownership models.

Similarly, cars transfer in their ownership when sold. Domains are, alas, only available under lease — not because of any inherent property of domain names, but simply because that's the way it's always been done, and nobody has seriously challenged that tradition. Your analogy should thus refer to a car rental company rather than a car dealership.

Again, test driving does not appreciably increase the cost of cars in general, or appreciably decrease the value of a car so used. People would feel differently about test driving if the test drive lasted for five days and hundreds of miles — indeed, they might start "test driving" instead of renting. Your analogy hides massive differences in costs and prices.

Looking at the same issue from another perspective, there's a world of difference between someone who uses a car for one test drive and someone who owns a car. Where domain names are concerned, all domain name users are granted is "temporary use" of the domain. A "taster" gets the domain free for approximately five days; a normal registrant gets it for about 73 times that length (given a one year registration). Your analogy compares qualitatively different states to those which are merely quantitatively different by a measurable factor.

A car dealership will take serious interest in a person's identity, so that they do not simply steal the car. This is because cars are expensive items, and non-trivial to recover should someone decide not to bring it back. Domains are nothing like this, of course. Your analogy ignores the important differences between tangible and intangible items.

Purchasing a car is a major commitment, and you'd be crazy to buy a car that you'd never tried. Domain names are nothing like this: they represent a small commitment, and a name is just a name — there's no functional difference between one name and another. Given a choice of two cars, there are significant barriers to purchasing both, whereas leasing more than one domain name is relatively trivial. Your analogy ignores significant practical differences between the way in which the items are used — the reason why "test drives" exist at all.

All analogies are limited in their application, but they should act as a limited aid to understanding. The only thing I understand from your analogy, John, is that you are so completely and utterly sold on the idea of free domain tasting that you aren't even aware whether your analogy has any intrinsic merit.

Re: ICANN Board to Vote on Domain Tasting Measure John Berryhill  –  Oct 23, 2006 7:50 AM PDT

All analogies are limited in their application, but they should act as a limited aid to understanding. The only thing I understand from your analogy, John, is that you are so completely and utterly sold on the idea of free domain tasting that you aren't even aware whether your analogy has any intrinsic merit.

Actually Brett, I wouldn't care one iota if domain tasting were banned immediately.  I have zero interest in the practice whatsoever, and would be interested to know where I've ever suggested it was a good idea - except in the context of net revenue to the registry.  The only people I know who had been doing it in the past have told me that it's not worth the returns. 

I do have an interest in realism in the discussion of the topic.

Yes, there are a zillion ways that a domain name is not like a car.  The point of the analogy was not in the area of ownership, it was about "free samples generally, to address the notion that all registries are necessarily opposed to the idea on the ground that someone is getting a free lunch.  I was following up on the comment expressing wonder at why a registrar wouldn't charge, and would allow the practice to continue - and Kieren's implicit suggestion that registries would NOT want it to continue.  Not all registries are similarly positioned relative to the subject.  This is what Verisign had to say on the subject:

--------
>>MARCUS FAURE: I am Marcus Faure and I am with core council of registrars and I have a question for Pat or Sarah maybe. Would you say that the extended revenue you receive through domain monetization pages or you don't receive the revenue from the pages but from the registrations of course, would you say that those cover the cost you have because you have an extended load on the registry? So it is a business for you or is it a loss?

>>JOTHAN FRAKES: That's a good question.

>>PAT KANE: Every registration that we do receive is a $6 per term, is what we receive. And based upon the increased activity that we continue to see both in registration and in resolution, we do have to invest in the infrastructure to handle the upgrades in CPUs. We are talking about a system that was not designed to do 1.7 million registrations in a specific day.
So there is increase in the SRS and investment that has to take place. Is it a loss or is it a gain is your specific question, and I think the analysis has to be done in terms of if you would take a look at developing a registration system to handle just that volume, and that analysis has not been done.
So I can't answer your specific question.

>>MARCUS FAURE: I expected that a little bit. Are you planning to do that analysis and are you willing to present the result of that?

>>JOTHAN FRAKES: I was able to get some information, and I'll be talking about — I'll share that as I introduce the add-grace, which are some numbers that indicate just overall like rates of these different practices, which one might be able to work out the numbers in their own head. Is that fair?

>>MARCUS FAURE: Maybe if Pat can answer the question, if you are going to do the analysis or not.

>> Pat Kane: I will make that analysis probably not publicly available.
---------------

Brett, you're a smart guy - and famous too.  Do you believe that Verisign doesn't know whether or not it is making money on balance?  When cornered, Verisign's representative said that if they DID know, they wouldn't tell.

Verisign's position is brilliant.  Pay no attention to the man behind the curtain, there are evil domain tasters making, gasp, money somewhere.

They could shut it off in a heartbeat if they wanted to.  They are pointedly not lining up behind PIR to charge a nickel.  They will do so when it reaches a point of diminishing returns.

We may yet find that PIR's nickel may still be worthwhile for creative folks.  In that case, the move here is not so much to "ban" the practice as to increase the return to the registry from it.

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