Protect .ORG .INFO, and .BIZ from price hikes
Get involved before it’s too late
Until July 2019, .ORG, .INFO, and .BIZ had a price cap as part of their Registry Agreements. When ICANN renewed these back in July 2019, the historic price caps on the wholesale prices of the domains were removed from the agreement. This means that in the future, the operators of .ORG, .INFO, and .BIZ can raise prices whenever they want (and for as much as they want).
The big issue
Registry operators of the oldest TLDs (like .ORG, .INFO, and .BIZ) have been able to profit from their ‘first-mover’ advantage for a long time — the fact everyone knows about .ORG, .INFO, and .BIZ means they have a perceived value over-and-above other newer TLDs. They have brand awareness, and customer loyalty.
What can I do?
Share your thoughts and comments with us! You can also add your voice to existing movements, or submit your own legal arguments in the form of an Amicus Curiae brief. If you buy or trade in these TLDs, you could find your costs going up unchecked now the price caps have been removed, so have your say!
Share your thoughts
Namecheap took the first steps for an IRP with ICANN in November 2019 by submitting a Cooperative Engagement Process (CEP) request. If Namecheap and ICANN cannot resolve the issues identified in the CEP, Namecheap intends to file an IRP to protect the historic price caps in pre-2012 TLDs (including .ORG, .INFO, and .BIZ). Interested parties may file their own amicus brief in support of Namecheap’s IRP (once this is pending).
The decision on whether to consider an Amicus Curiae brief will lie within the discretion of the IRP panel.
Timeline of events
Price cap introduced
Price caps were introduced for .COM, .NET and .ORG in 1999. The original purpose of introducing these price caps was to avoid abuse of dominance. At the time, Network Solutions, Inc. (NSI) was the exclusive registry of legacy (the Original) TLDs that operated upon a first-come, first-served basis.
For this exclusivity position, there was a growing dissatisfaction about the absence of competition in the Domain Name System and the dominance of NSI. Price caps were considered necessary to protect Internet users, and stakeholders, against capture by a dominant company working in its own interest.
Additional information about the historic price caps and operators of the TLDs is available at Ownership and Pricing.
In June 2019, ICANN renewed the Registry Agreement with Public Interest Registry (PIR) for the .ORG generic top-level domain. Additionally, ICANN also renewed the Registry Agreement with Afilias Limited (Afilias) for the .INFO generic top-level domain and the Registry Agreement with Registry Services, LLC (RS), for the .BIZ generic top-level domain.
All these renewals eliminated “the historic price cap” on the wholesale price for domain name registrations of .ORG, .INFO and .BIZ.
In July 2019, Namecheap filed a reconsideration request (Request 19-2) challenging these renewals with the eliminated price caps.
The ICANN Board has denied Namecheap’s reconsideration request and, to date, it refused to reconsider its elimination of the price caps.
On 13 November 2019, the Internet Society and PIR announced that PIR is to be sold to the investment firm Ethos Capital. The purchase price is over $1 billion, and could have significant repercussions regarding the operation of .ORG — including pressures to reduce expenses and increase prices.
In the reconsideration request process, Namecheap pointed to this transaction as well as to its extraordinary timing: The transaction soon followed the decision to allow the renewal without the price cap.
On 18 November 2019, Namecheap submitted a Cooperative Engagement Process (CEP) request with ICANN. If Namecheap and ICANN cannot resolve the issues identified during the CEP, Namecheap intends to file an IRP to protect the historic price caps in pre-2012 TLDs (including .ORG, .INFO, and .BIZ). To assist in fighting to retain historic price caps, Namecheap has retained the services of the law firm Petillion. The firm has an established history of success in ICANN matters.
On 3 January 2020, ICANN announced that it, and VeriSign, Inc. (Verisign) — the operator of the .COM and .NET TLDs — had negotiated an amendment to the .COM registry agreement.
The amendment provides (in part) that Verisign can begin raising wholesale prices by 7% annually (prices have been frozen since 2012), as well as pay ICANN at least $4 million additionally per year for 5 years.
On 8 January 2020, Namecheap filed a reconsideration request (Request 20-1) with ICANN regarding the elimination of the historic price caps and the lack of disclosure and transparency regarding the purchase of PIR by Ethos Capital of an integral Internet asset.
Concurrent with this request, Namecheap filed an extensive disclosure request for documents and information relating to the elimination of the historic price caps for .ORG, .INFO, and .BIZ.
Namecheap will continue with the CEP process with ICANN, and if needed, file an IRP. Furthermore, Namecheap will continue to work to ensure that prices in .COM are not allowed to raise at an unreasonable rate.
On 8 February 2020, ICANN responded to Namecheap’s disclosure request. The response was mostly links to materials on ICANN’s website that Namecheap was already publicly known. ICANN did not respond directly to Namecheap’s specific requests regarding removal of historic price caps for the .ORG, .INFO, and .BIZ TLDs. This information is essential to understanding how ICANN arrived at its decision, and will be subject to further requests from Namecheap.
On 10 February 2020, Namecheap published the blog post ICANN Allows .COM Price Increases, Gets More Money to raise awareness about the proposed .COM wholesale price increases. It explains changes to the .COM contract that have the potential to significantly alter the domain name industry, and recommends that all Internet users tell ICANN their concerns through a public comment before the 14 February 2020 deadline.
On 14 February 2020, Namecheap submitted a comment to ICANN raising serious concerns about the changes to the .COM contract. The concerns include (1) .COM prices could rise by 70% over ten years, (2) the size of Verisign necessitates additional scrutiny, (3) Verisign will be able to operate a domain registrar that can abuse its market dominance, (4) the changes are made without a market analysis (such as ones ICANN has done before), and (5) Verisign’s payment of $4 million to ICANN annually for 5 years raise questions. Namecheap also contributed to the comment submitted by the Registrar Stakeholder Group.
On 25 February 2020, Namecheap filed an Independent Review Process proceeding against ICANN. The filing included a Request for Interim Measures of Protection, due to the impending deadline for ICANN’s review of the change of control of .ORG. There will be hearing on the urgent request on 14 March 2020.
On 3 March 2020, Ethos Capital and PIR requested community feedback regarding their proposal to modify the .org agreement with ICANN, including (a) cap price increases at 10% per year, (b) create a stewardship council, and (c) fund community initiatives. There are several concerns with the proposal, for example the price caps can far exceed inflation and the historic increases for .org (and uncertainty regarding price increases will remain), and the stewardship council will be determined by PIR/Ethos Capital (and will not have any authority over pricing). Ethos Capital and PIR promised to report on the feedback, but did not commit to make any changes in response to this feedback. To share your thoughts, please visit their Public Engagement page.
On 11 March 2020, ICANN filed its Opposition to Namecheap’s Request for Interim Measures of Protection. Following the hearing on 14 March 2020, the Emergency Panelist’s Decision was issued on 20 March 2020. Although the Emergency Panelist denied Namecheap’s request for interim relief, the Panelist did find that Namecheap raised serious questions in the IRP, specifically:
… (1) any obligation by ICANN to engage in policymaking with respect to the removal of price controls on registry services for legacy gTLDs including .ORG; (2) ICANN’s decision-making process in renewing the .ORG Registry Agreement without the historic price controls; and, (3) any obligation by ICANN to engage in policymaking with respect to direct or indirect operation of the .ORG registry by entities other than non-profit entities.
The main IRP will now continue. There will be three arbitrators, with Namecheap and ICANN selecting one each, and those two will then select a third. Namecheap and ICANN have until 29 April 2020 to select their respective arbitrators.
What should the ICANN Board do?
Registry operators of these historic TLDs have been able to profit from their first-mover advantage for a long time, resulting in high brand awareness, customer loyalty and consistent consumer behaviour.
They possess a degree of market power that would enable them, without price caps, to charge unreasonably high registration and/or renewal fees. Removing price caps would be detrimental to the interest of Internet users.
Despite the fact that since 2012, the available TLDs have expanded with over a thousand new gTLDs, the operators of the historic TLDs have no more, or fewer, restrictions than when they delegated in ICANN’s early interest days. This clearly gives them a major advantage.
Why it’s important to keep the caps in place?
This matter, like many others, requires a substantive review and a truly personal analysis by the ICANN Board.
The ICANN Board can only do so in an open and transparent fashion. It must use expert advice (based upon facts and evidence rather than outdated opinions) to make well-informed decisions, and it must ensure that the Internet community, and those entities most affected, can assist in the policy development process. Such policy development process and careful analysis should have preceded any decision that implies a radical shift from the policies and/or conditions under which a TLD is (re)assigned or (re)delegated.
The ICANN Board should stop hiding behind meaningless processing arguments. Too many times in the past has the Board tried to get rid of the problem by arguing that it can delegate decisions to third parties or ICANN Staff. ICANN cannot argue that the Board can delegate the renewal and price cap removal discussions (and decisions) and simultaneously maintain that the Board must not substantively review the third parties’ or the Staff’s position or actions.
This should not work in this instance. The Board is the ultimate responsible body in the ICANN organization and should undertake a truly conscious analysis, and check the renewals and price caps issues in view of ICANN core values. The Board has a duty to ensure that ICANN Staff (and third parties it uses to make decisions for them) comply with the Articles of Incorporation and Bylaws of ICANN. A failure of the Board to ensure such compliance is a failure of the Board itself.
Approval from the ICANN Board
The ICANN Board approved the caps. This is an excerpt from their report:
“The Board could have directed the CEO and Staff not to renew under these terms had it thought that warranted. It decided not to do so.
The Board were well aware of the public comments, had been briefed on them by the CEO and Staff, and had been provided with the Staff Report summarizing them; they chose to let Staff go ahead and renew on the terms agreed to with the Registry Operators, and the renewal Registry Agreements were duly and timely executed. Nothing about this seems to me, based on my investigation and understanding of the relevant rules, laws and Bylaws, to be any kind of violation or dereliction of CEO and Staff’s normal executive obligations and duties, or of the Mission, Core Values, or Commitments of ICANN.” (1)
(1) ICANN, Substantive Evaluation by the ICANN Ombudsman of Request for Reconsideration 19-2, 7 September 2019, https://www.icann.ORG/en/system/files/files/reconsideration-19-2-namecheap-evaluation-icann-ombudsman-request-07sep19-en.pdf.
In denying Namecheap’s reconsideration request, the ICANN Board also considered that ICANN’s execution of the renewed Registry Agreements did not contradict ICANN’s Bylaws, policies, or procedures, and that ICANN Staff did not fail to consider material information in executing these agreements. In other words, the ICANN Board reapproved Staff’s decision when denying Namecheap’s reconsideration request.