27 days... Model C... an auction model

[Siusaidh]

Yes, that's one of my concerns too. I raised it on Page 1 of this thread. I'll repost a part, so it's alongside yours, Edwin, because I do see this danger:

I have written to Nick Wenban-Smith this week on the subject of large registrars - but haven't heard back yet. What I want to clarify is, if Nominet decide to run auctions at around 90 days (after a 'pending delete' period)... can we be sure that large registrars with their own platforms won't auction the names first in order to cream off the profits before Nominet's charities get them?

I could imagine emails routinely sent to registrants with wording something like: 'We are sorry you have decided not to renew your domain name and have chosen to let it expire. If we do not hear from you, we serve notice that consequent to your decision we shall be auctioning your domain name to let someone else have it. Please reply within 7 days if you do not want us to do this, as if you do not, we shall take that as confirmation that you have indeed chosen to let it expire.'

And frankly, as that would be (to use Nominet's justification for non-action over the mass-registration) "a matter between the registrars and their clients", would Nominet intervene to stop that happening?

I am considerably concerned, based on previous behaviour, that large registrars may see the new model and decide to monetize all expiring domains for themselves, thereby preventing the money ever getting anywhere near a charity.

 

[Lovekraft]

I do sympathise with your position here Susanna, your opinion might not be the most popular here but I can see you are sincere in the reasons you wanted to go this direction. I don't hold any grudges on you personally even if my messages might seem anti whatever it is you are proposing!

Quite a few people on here are literally having to come to terms with the likelihood that their income is about to vanish wether that's a full time or part time income it affects many small organisations. It comes at no comfort when that income is going to be swallowed up by the very organisation we pay our membership fees to every year or outsourced to one large entity.

However... I can't deny the whole game has become a mess so I'm not naive enough to have not seen this coming.

 

[Murray]

How about operating them, not for charity, but to reduce domain registration fees?

That would be handy for someone with an obese portfolio

Wouldn't be much benefit to anyone else

 

[Edwin]

The way the .com registrars seem to do it is they just go ahead and auction the names anyway, and cancel the auction if they get renewed. It's "easier" for them because there's a brief PENDING DELETE period in the .com drop cycle - before the domains drop, but during which time they can't be renewed any more.

So they run the auction from say 30 days before the drop date up to and including the start of the PENDING DELETE period.

If the name gets renewed, the auction just "vanishes" i.e. it's as if it never took place.
If the name makes it as far as the PENDING DELETE period, they know it's guaranteed to drop, so the auction can proceed to its second, final stage. There are various slightly different models, but they usually allow bidding to continue during PENDING DELETE though there might be a buy-in requirement i.e. you have to pay a fee to join the auction during that late stage. If you were alread bidding prior to that, usually you can keep participating. They've all cooked up so many different versions it's hard to keep track, and quite honestly I haven't bothered for years, but that's the basic shape of how it works.

 

[Siusaidh]

In the eventuality of an auction model being adopted (which I am not advocating in preference to other outcomes) I think Nominet should make clear in Registrar rules that the auctioning of domains by Registrars after renewal date should not be permitted.

At the point of expiry (renewal date) all registrars become stewards and guardians of the UK's domains, until or unless the named registrant chooses to renew them prior to the proposed pending delete. Those expired domains DO NOT BELONG TO THE REGISTRARS - they are just stewards of the UK's names. The registrant retains a right of registration which means they individually have a right to sell until the proposed 'pending delete' but the Registrar should not have that right. UK domains belong to the UK, and the right of a Registrar to operate should be conditional on them NOT trying to sell off UK domain names that belong during that period to neither registrar nor registrant.

By 'belong', I recognise that there is never 'ownership' of the domain as such - but a domain can be registered for use. If it's not registered, a registrar should not be allowed to sell it.

Otherwise, were this system running now, you could envisage a situation where Fasthosts and Ionos mass-register 100,000s of names that no-one asked them to register - in the names of people who are 'ghost registrants' who have not consented to Nominet's terms and conditions - and then proceed to sell them as if they could do what they like with the UK namespace.

The UK namespace is not the private fiefdom of big tech companies - or certainly should not be - and if Nominet proposed to implement an auction system later this year, the Registry-Registrar rules should be re-drafted to make sure no scenario occurs where the 'auctioning' and profit can ever transfer to registrars, some of whom already hold too much sway and influence. Nominet needs to keep these large companies scrupulously at arm's length.

I wrote to Nick Wenban-Smith about this on Thursday, and I am interested to hear what he has to say on this subject.

 

[Siusaidh]

That's a good point. In that sense, sending any windfall profits to charities at least distances Nominet from any excess profit in the sale.

That said, the Registry is the designated agent of domain registrations. In my view, the domains are still fundamentally UK property not Nominet property (I'd have to check the legals on that). However, the principle of them 'selling' registrations has been established for years. Whether that sale is £3-90 or £390 in an auction, it is still a transaction between the Registry and the willing Registrant and (usually) their Registrar go-between.

What's far less acceptable is for Registrars to co-opt domains for themselves as if they can requisition any expired domains on their tags for sale. That should be ruled out from the start, if the auction model was adopted, or indeed if any model is adopted.

 

[Siusaidh]

These are all good questions!

I'm assuming, as they say the auction provides a token to be passed to a designated/chosen registrar, that the winner of the auction would simply add on whatever the registrar's normal registration fee was. So I doubt if many would choose to reg direct with Nominet, or even if it would be allowed.

With regard to your point about abandoning the charitable Trust, I'm with you on that one. I speak independently and say unpopular things - here and to Nominet - if it's what I believe. So I'm going to sound like a corporate shill for a moment, but I actually think some of the recent charitable initiatives for the Samaritans and the Scouts and some others have been genuinely worth affirming. Where I agree with you, is that I personally think that things could be done better if they were done through a charitable trust, like they used to be. Obviously, not being totally thick, there is the 'nagging doubt' concern that at present Nominet spends £x a year on public benefit. When Nominet proposes that auction revenue will go to charity, is that additional to the present spend on public benefit, or does the auction revenue cover that expenditure so some or all of the present charity spend can be funnelled into general Nominet funds instead? It's a pretty obvious question and anyone with any sense is bound to wonder about that.

Your last point - surely Nominet *always* takes claim of the expired domain to profit from its resale? In this case, it seems to be saying it won't profit any more than at present, because the money will go to charities >>> but then I return to the issue in my second paragraph.

 

[Ben Thomas]

I won’t lie, this all sucks. None of us have actually asked for this bar a minority.

 

[mcrick]

(b) I'd also observe that if Nominet says these auctions are going to be used for charity, then if they are putting the auction platform out to tender, the bids for operating the auctions should be restricted to non-profits or charities with clear purposes and high reputation.

What should not happen is that, say, GoDaddy undertakes to run these auctions.

What would seem sensible is someone who has a good reputation at running auctions doing it. I see no reason to exclude expressions of interest from any qualified party and if that party were offering the best service, why they shouldn't win the tender. Users of auctions will want the best service, be that from a non-domain name industry provider (as was the case in the 2010 L/LL.co.uk auctions) or an industry provider. Every user of the auction platform is receiving a service; it's not simply money going to some third party entity in return for nil value returned.

I have written to Nick Wenban-Smith this week on the subject of large registrars - but haven't heard back yet. What I want to clarify is, if Nominet decide to run auctions at around 90 days (after a 'pending delete' period)... can we be sure that large registrars with their own platforms won't auction the names first in order to cream off the profits before Nominet's charities get them?

The RRA isn't changing in this respect. What you are suggest is only currently permitted in very specific circumstances as detailed in the RRA at E.3.6. Those unfamiliar with the RRA (everyone who's a registrar will of course be familiar with it) may might want to familiarise themselves with it.

And frankly, as that would be (to use Nominet's justification for non-action over the mass-registration) "a matter between the registrars and their clients", would Nominet intervene to stop that happening?

No because this activity is specifically worded for in the RRA in detail. Your other (non) issue relates to B.1.8.

I am considerably concerned, based on previous behaviour, that large registrars may see the new model and decide to monetize all expiring domains for themselves, thereby preventing the money ever getting anywhere near a charity.

See above and the RRA for what they've been permitted and non permitted to do since 2014, I think.

Do you think if Nominet began running the auctions themselves, it would only be a matter of time before they receive complaints about the way they run the auctions, and then rather than dealing with those complaints, they'll likely sell the rights to providing the auctions to one of the big registrars?

The preference is for third parties experienced at such things to do them where ever possible.

Why? For me, that seems the most obvious attraction of an auction platform for a certain segment of their customer base. The credibility of having them run the auction would be huge.

It's been discussed in the past. You might be surprised who's pro it. Perhaps it'll get discussed again.

Does the same principle apply to expired domains, they don't belong to the registry to further profit from either?

They belong to the registry (operated by Nominet) when they're no longer within contract. Domain names aren't property so this whole "belongs' is ambiguous. I know we all often use these sort of terms but really its a rights issue and rights can lapse.

I think members would have more faith/trust in such an idea had Nominet not walked away from its own charitable foundation.

Doing so probably saved about £1m p/a in operating costs. Nominet now does public benefit work more directly and gets some recognition for doing so (which is good news for the Nominet brand, despite anyone perhaps cynically suggesting its only recognition for the Board) without needing all the intermediary faff which previously existed.

 

[davedevelopment]

I'm all for the auction system proposed, except for the parts that benefit the nominet circle jerk.

 

[xdnet]

The way the .com registrars seem to do it is they just go ahead and auction the names anyway, and cancel the auction if they get renewed. It's "easier" for them because there's a brief PENDING DELETE period in the .com drop cycle - before the domains drop, but during which time they can't be renewed any more.

So they run the auction from say 30 days before the drop date up to and including the start of the PENDING DELETE period.

As I understand it, this is technically a falsehood on the registrars part as usually these domains don't actually drop (based on create dates).

The registrar technically has 45 days to renew normally, they set a grace period of 14-30 days usually and after that they charge the registrant the redemption fee - even if they didn't actually process a delete request putting the domain into "REDEMPTION" at the registry.

They can then do a similar with auctions, as you said making them available to auction after their "grace" period but still able to nullify the auction if the registrant restores their domain within grace + 30 day redemption.

I have experience with certain registrars where contractually the registrant loses rights at (say) day 45, and you then have to fight them to cancel their auction and get the domain back, usually with a heftier fee than normal. Even though it's still within the registry specified redemption period.

 

[Siusaidh]

... edited out - I thought you were talking about UK domains

 

[Murray]

I'm all for the auction system proposed, except for the parts that benefit the nominet circle jerk.

Can I ask why?

Excited for Nominets balance sheet to look slightly better

 

[KarlM]

I really do not like the auction model, at least with some sort of dropcatching method, it is more open to everyone, lets be honest a auction model will just result in a monopoly with the deep pocket investors moping up.

 

[webber]

I think the auction model has the potential to positively impact the wider uk domain market because:
• it should be more transparent (Nominet have confirmed that even a sealed auction will have the bids public afterwards);
• it would be a one stop shop for acquiring expired domain names; no more signing up to various dropcatching platforms, placing pre-bids here, first come first server there, dropcatch slots elsewhere – it's a right mess if all you want is to buy a domain name;
• it could implement more advanced features like watchlists, alerts, auto bidding, but for that it would probably have to be developed in house;
• it would distribute a significant proportion of the money in the secondary market to good charitable causes;

I do have some concerns:
• where the money goes to and how will it be ringfenced; Nominet have given reassurances that this is not driven by profit, but without a truly transparent structure this is just hot air – this needs a separate charity entity.
• the £10 or £5 non-refundable joining fee for each auction is outrageous in my opinion; I want to be able to take part in auctions easily, if it reaches a level outside of my budget then I should be able to step back without any financial penalty; think of the September drop and how much that would cost to simply take part;
• the system can still be abused; accounts need to have some basic verification – instead of £10 non-refundable fee, make it a £100 hold on your credit card for each auction you take part so as to verify identity and act as a penalty if you're the winner and don't complete the payment;
• the token implementation is not in line with current "push" method of transferring uk domains; you should push the domain to your registrar from the auction website;

 

[super-whois]

it should be more transparent (Nominet have confirmed that even a sealed auction will have the bids public afterwards);

This argument contradicts competition law, and there is no evidence Nominet will be more transparent than what the market would offer on its own accord. If you would like transparency, then either provide that platform, or support one that does.

it would be a one stop shop for acquiring expired domain names; no more signing up to various dropcatching platforms, placing pre-bids here, first come first server there, dropcatch slots elsewhere – it's a right mess if all you want is to buy a domain name;

That would be a monopoly, which would contravene competition law.

it could implement more advanced features like watchlists, alerts, auto bidding, but for that it would probably have to be developed in house;

The free market already provide this, thanks to the likes of @lazarus and flip.uk.

it would distribute a significant proportion of the money in the secondary market to good charitable causes;

There is no proof that Nominet would do this. We do have a prominent member in our community that does this out of his own good will, and I'm sure there are others we don't know about. Nominet will just give more bonuses to its executive...

 

[Murray]

it would distribute a significant proportion of the money in the secondary market to good charitable causes

I'd rather people have the opportunity to make a success of themselves than rely on charity

Dropcatching provided that, anyone could have got into it and I was anyone in 2012

I didn't start with any money or knowledge and its worked out great for me

It would have been nice to leave a great entrepreneurial avenue open

 

[webber]

I don't claim to have definitive answers or to be some sort of expert.
This is just my opinion as a self managed registrar, a domain investor of sorts, and user of hosted catching service.

This argument contradicts competition law, and there is no evidence Nominet will be more transparent than what the market would offer on its own accord. If you would like transparency, then either provide that platform, or support one that does.

In what way does it contradicts competition law?

That would be a monopoly, which would contravene competition law.

Nominet is a monopoliy. If it was replaced as a registry by a fully transparent charity organisation then I would be very happy.

The free market already provide this, thanks to the likes of @lazarus and flip.uk.

Indeed, some do it very well like @dropped.uk. Some of these features would probably need to be incorporated in an auction platform

There is no proof that Nominet would do this. We do have a prominent member in our community that does this out of his own good will, and I'm sure there are others we don't know about. Nominet will just give more bonuses to its executive...

Hence the need to be more transparent and have revenue ringfenced.

It would have been nice to leave a great entrepreneurial avenue open

And I agree with that, but current system has been proven to only benefit a select few. We're now asked what alternative system to replace it and out of the proposed solutions the auction seems to make most sense to me.

 

[Ben Thomas]

This is all going to backfire on them. Without the domain industry, dropcatchers, backorders, etc. a LOT of registrations won’t take place. And people who would have previously thrown a bid or two in an auction on DomainLore or Flip or UKBO will now not bother. Industry needs competition to grow. Nominet taking them lions share and squashing their dropcatching industry will reduce the buzz about .uk names even further.

And as someone mentioned earlier, how convenient just in time for Septembers drops.

I personally think Nominet can take a hike, off a cliff preferably. They’re stepping on toes they shouldn’t be. This is a non-profit organisation. What business do they have auctioning names they don’t own?

 

[mcrick]

I'd rather people have the opportunity to make a success of themselves than rely on charity

Dropcatching provided that, anyone could have got into it and I was anyone in 2012

I didn't start with any money or knowledge and its worked out great for me

It would have been nice to leave a great entrepreneurial avenue open

What would you have likely done if you hadn't gone into drop catching? Did it ever come to mind that it might not continue as it had been doing and you should think about planning for that day?