By Nick Patience
Even though none of the five companies chosen to be one of the five test-bed domain name registrars has actually got its system up and running yet, their competitors are concerned about what the effect of being excluded from the test phase will have on their business.
The test is scheduled to run from April 26 through June 24, after which the opportunity the register names in .com, .net and .org will be opened up to all companies accredited by the Internet Corporation for Assigned Names and Numbers (ICANN). It has already accredited 29 companies, in addition to the five it chose for the test period. One that has not been accredited yet is Network Solutions Inc (NSI), the keeper of the registry as well as hitherto the only registrar for domain names in .com, .net and .org, under its agreement with the Department of Commerce (DoC).
Some of the five test-bed registrars are expected to be up and running some time next week, while others, like America Online Inc are apparently a few weeks off being ready. They will pay NSI $18 per name for two years registration, as NSI controls the registry. It negotiated that price with the DoC, rather than ICANN, which currently has no powers to set pricing.
While the five companies may face problems from potential bugs in the system and the bad PR that some sort of failure will inevitably bring, those on the outside that have also been accredited are also worried about their future. If the system works reasonably well, the first five will get a head start on their competitors. Meanwhile, those companies that are excluded will still have to register through NSI at the full price of $70 per name for two years and make whatever they can on top of that. Although AT&T Corp, RCN Corp and Verio Inc are among the forthcoming registrars, some of these companies are very small and a bad two-month period could put some of their futures in jeopardy.
The company that appears to have spotted this problem first is NameSecure.com, which applied to be a test-bed registrar, but had to make to do with accreditation for the post-test phase. Jeff Field, the company’s founder and president says that ICANN has told him that it is the responsibility of the DoC, not ICANN to set pricing and its job is to foster competition. ICANN confirmed its position to us. Field argues that competition cannot happen if companies are not able to compete because they are at a pricing disadvantage set by the DoC. Field has pointed this out to the DoC and it is said to be looking into the situation. Nobody at the DoC was available for comment.
Chris Bura, the chief executive of Alldomains.com, another of the accredited companies outside the test-bed, says there is the option of registering their names through the test-bed registrars, but there is no incentive for them to provide such a service and obviously no reason why they should offer their would-be competitors a price lower than NSI offers. Field says the DoC has also suggested this as a possibility, but says his systems interface with NSI and to try and switch that to one of the test-bed registrars would not be viable in the 60-day test period. The alternative is just passing on the registrant for Register.com or one of the others to process, but Field says it competes head-to-head with Register.com and has no intention of helping it and the other companies by funneling its customers through them.
A potentially more serious problem has arisen for NameSecure.com in that some of its contracts with partners gives those partners the right to break the contract should NameSecure.com become non- competitive in the market for whatever reason. Field reckons the test-bed phase should be merely a technical exercise, not one where the pricing model has changed. He suggests that everybody should have to register names at the current $70 tag and then set a date at which point everybody can compete at a lower registry price. But the test-bed registrars argue they are taking the risk of using the new systems and therefore should be able to make some money out of it.
Larry Erlich, a partner at Domainregistry.com, which has also received accreditation for the full competition phase says the price should be tagged at $18 for companies during and after the test-bed phase. He argues that the risks from potential bad publicity from system crashes and the like is outweighed by the level of exposure the five anointed registrars, as he calls them, will receive. There’s no such thing as bad publicity, he says. He doesn’t believe the industry would swallow a flat $70 fee, as it does not signal much of a move towards competition and away from NSI’s monopoly. Erlich does not see the situation changing during the test period.
Bura is worried that the test phase may drag on longer than the 60 days and if it does the public will probably become aware that there are alternatives to NSI, depending on the success of the test-bed company’s marketing efforts, which are non-existent right now.
