Price rise decision this week

[Whois-Search]

There is a Nominet board meeting this week and on the agenda is a possible price rise:

.UK Price Review – At the July meeting the Board had an initial discussion regarding wholesale .UK pricing. Views and feedback were sought from Board members, particularly the elected NEDs. The item will be taken to the September 2019 Board meeting when a decision will be made. The plan is to announce the results of the price review exercise in late September.

See: https://media.nominet.uk/wp-content/uploads/2019/08/Board-matters-May-and-July-2019.pdf

According to an ex director (Volker) on the Nominet forum the price review will be based on registry costs and that .uk is currently ‘moderately priced’:

https://forum.nominet.uk/forum/memb.../12104-well-and-truly-taxed?p=12742#post12742

So if you have a large portfolio and will be impacted by a price rise on both .co.uk and .uk at the same time (£4+ per name) next year.

I encourage you to write to our elected NEDs this weekend before the board meeting this week: https://www.nominet.uk/board/

David - david.thornton[at]nominet.uk
Kelly - kelly.salter[at]nominet.uk
Anne - anne.taylor[at]nominet.uk
James - james.bladel[at]nominet.uk

 

[Siusaidh]

I haven't read the 2019 report, but if Nominet's assets in March 2018 were £74million with an overall income for the preceding period (after all running deductions) of £21million, I am wondering whether the present registration fees really need altering (and on what grounds). Do the combined assets and continuing income offer Nominet all the flexibility they need to carry out their functions? Is it necessary to add a surcharge to the registration fees, when the assets and income seem healthy? And would that be to the benefit of registrants and internet users for whom the registry fundamentally exists?

I'm not trying to be hyper critical. I am just trying to understand the rationale for any proposed increases in registrations because, on the face of it, it seems quite strange. Presumably Nominet does not exist simply with the purpose of accumulating more money. Its aim should surely be to keep the DNS secure and operating well. I don't doubt that cyber security raises growing challenges, but I might expect the Board to make clear precisely what expenditure is projected, to those ends. The UK's DNS is in their hands, but I'm sure they would concede that ordinary internet users and registrants should not be used unnecessarily as 'cash cows', but only charged to the extent that is necessary to keep the DNS secure and operational.

The 2020 initiative seems to talk in terms of growth, which is understandable if a company is primarily functioning to increase its own wealth more and more. However, if the raison d'etre of Niminet is the safe and efficient running of the UK's DNS, then I'd argue that growth itself is not necessarily a primary or even inevitable function or goal. After all, growth and expansion bring their own risks, and a counter-argument could possibly be made to KISS, and focus on the original remit and functions for which Nominet was initially set up. Does our country's DNS need to be grown along the lines of a multi-national corporation, spreading wider and wider into cyber security and other markets? Is the UK DNS best-served by it focussing in a fairly focussed way on... operating the DNS?

With regard to domain name prices, which Nominet claims are "moderate", well yes, they are, if compared to .com or .org but 'moderate' is a good goal, and not a justification to increase charges unless absolutely necessary. Here in UK, we should be proud if our domain prices are kept very modest indeed: because that increases rather than reduces accessibility.

I'm just thinking these thoughts aloud, trying to understand what is going on, that might entitle an organisation to raise the cost of strings of digits (aka domains) to further increase assets and income. I guess I'm trying to understand "Who, and what, is Nominet for?"

 

[Siusaidh]

Ah, looking at the 2019 report, assets have grown from £74 million to £82 million, though with overall income (admittedly for a 12-month period as opposed to the preceding 18-month period) down from £21 million to £8 million. Reasons for that?

Overall though, assets have still increased, and income is still substantially in the black even after all deductions, so I'm still curious to understand the rationale for any registration increases?

There may be justifiable rationale. Or it may be just trying to increase profits. I'd just like clarification of what projected expenditure would possibly see the Board - with its healthy assets and income - opting to charge customers more...

To fuel expansion into new markets? If so, what for? Just asking.

 

[Whois-Search]

It is hard to know what the current aim of the current executive is.....The new CEO was obviously employed to change the company but I’m not sure what he’s turning it in to yet?

The only interview I’ve seen on his current strategy is here:

https://www.computerweekly.com/news/252465094/Innovation-drives-Nominet-to-cyber-security

Note that article talks about a three-pronged approach to innovation:

1. Optimising innovation (using what they already have to power other things). It mentions providing back-end registry systems and then says “To capitalise on this opportunity, he said Nominet invested heavily in technology and developed its own DNS deep packet threat intelligence software, known as Nominet’s NTX Platform, which has been deployed by governments and large enterprises in Europe, the US and the Middle East”. That is what you see on www.nominetcyber.com and all the recent staff hires on the careers page.

2. The second element is “around communication about Nominet’s “Project 2020” which is a 1,000-day plan to meet business growth targets with 100-day sprints in which every employee is tasked with focusing on achieving three objectives to engage them in the journey to innovation”. If you go to Nominet there is a big countdown to 2020 in reception on the wall.

3. The third element, said Haworth, is around accountability. “In addition to aligning compensation systems and business focus behind the drive to innovation, we’ve had to make sure that we have a ‘one Nominet story’ so that culturally we are all behind the same goal.” I read that one as bonus schemes and toeing the party line.

So...

In my own view Nominet seems to have gone in to self-preservation mode and the board thinks it needs to innovate (spend money) to continue in business?

Yet at the same time .uk is funding all of this ‘innovation’ and the new products NTX are not making any money? You won’t find a breakdown of how much the new business units are actually costing / making in the annual report?

Therefore is it a case of they just need even more money to ‘innovate’ as they are making a loss so far ? Or has the cost of registry IT systems really gone up since the last price rise ?

As for its public benefit commitments...

If the .uk registry was being run in the national interest then it would be put out to tender and someone like Afilias or Centralnic could do it much cheaper. Let’s not forget Nominet is a private company and owned by its members.

You will also note the donations to charity are far less now at £1.7 million:

https://media.nominet.uk/wp-content...minet-Public-Benefit-Social-Impact-Report.pdf

So where are the missing millions in donations?

 

[RobM]

Maybe we could get a breakdown of the board members/owners of any companies receiving nominet funding. Maybe 'charity' does begin at home.

 

[poetry]

This was their attitude in 2009 AGM wrt to performance related pay and charity donations then, I’m not sure anything has changed. It’s pretty damning particularly as they’d continued
To take bonuses even after stock market losses.start 2:55

 

[WalkinDude]

Watched about a third of that. Feels like you could cut the air. Need a break before seeing the rest.

 

[willbon]

Surely having just nearly doubled the .uk namespace... a price DROP should be the way forward?

 

[Whois-Search]

Surely having just nearly doubled the .uk namespace... a price DROP should be the way forward?

The last price rise was on 1st March 2016

https://www.nominet.uk/change-to-wholesale-pricing-for-uk-domains/

Back then the registry stood at:

March 2016 - third level - 10,162,803
March 2016 - second level - 548,300
Total 10,711,103
https://www.nominet.uk/news/reports-statistics/uk-register-statistics-2016/

Today the registry is at:
August 2019 - third level - 9,628,357
August 2019 - second level - 3,687,040
Total 13,315,397

https://www.nominet.com/news/reports-statistics/uk-register-statistics-2019/

So since the last price rise it’s only increased by 2,604,294 names

Which is most likely the same number given away free during the .uk promotions !

 

[TRUK]

It is hard to know what the current aim of the current executive is.....The new CEO was obviously employed to change the company but I’m not sure what he’s turning it in to yet?

He behaves like he's a CEO of a private cyber security firm. He cares less for domains or domain prices. That is why when you open the homepage of Nominet you see "domain solutions", " cyber security" and "tech for good" motto. Only "domain solutions" brings money to the mill. The other 2 are money wasters in my opinion. Cyber security and tech for good can be done with private companies not with a profit for purpose company.

He probably thinks to increase per domain price and wants to cross subsidy (waste) extra money for especially for cyber security stuff.

 

[Whois-Search]

These are the expenditure figures since the last price rise:

Operating charges
2019: £35.3m, 82.8% of revenue
2018-2017: £40.1m, 71.1% of revenue
2016: £22.1m, 73.5% of revenue
2015: £21.3m, 73.9% of revenue

Operating profit
2019: £7.3m, 17.2% of revenue
2018-2017: £16.3m, 28.9% of revenue
2016: £8.7m, 29% of revenue
2015: £7.6m, 26% of revenue

Staff costs (have increased)
2019: £18.3m
2018-2017: £20.5m
2016: £12.0m
2015: £11.0m

Staff numbers (have increased)
2019: 202
2018: 166
2016: 152
2015: 155

Investments (have increased)
2019: £99.0m
2018-2017: £95.8m
2016: £64.8m
2015: £45.9m

Public Benefit (has decreased)
2019: £1.9m
2018: £0.6m
2017: £5.4m
2015: £4.0m

 

[RobM]

Maybe they need to stop sending money to other companies and ventures and concentrate on their one actual job. So they get to raise prices because they are frittering away profits?

 

[lazarus]

The employee wage average has gone down from 123k in 2018 to only 90k in 2019
How will they cope the poor little darlings...



On a serious note: It's a disgusting outrage that just 3% get 50% of the total wage expenditure.

 

[martin-s]

The wage average in 2019 is 90k. poor little darlings...

Don't worry, they don't share it anything like evenly.

 

[TRUK]

By the way there is something wrong with those "investment" numbers. They could not be annual investment allocations but the total investment cost. Since operating charges are around 35 million pounds 99 million pounds could not be saved for investment. Anyway, if our hope comes to the Dave Thornton, just bury me alive underground!

 

[RobM]

Well we're jumping the gun anyway. They haven't raised prices yet and I'm sure whatever they decide will be in the best interests of the registrants. I'm also certain that our ever active NED (whoever that is at the moment) will come in and make sure we all understand what a wonderful thing it will be for us - I hope this happens during the 30 days a year they have to work though.

 

[Admin]

Based on the evidence of numbers, the wholesale price should be reduced. Anything else is corrupt pocket lining and not aligned with a not for profit organisation. The fact is they will do exactly what they want for their personal financial gain, regardless of what any NED says. It's futile.

 

[poetry]

Plate sin with gold,
And the strong lance of justice hurtless breaks.
Arm it in rags, a pigmy’s straw does pierce it.
Lear

 

[Siusaidh]

(Nominet): The plan is to announce the results of the price review exercise in late September

So that's by this Monday?

 

[anthony]

This is the problem with a monopoly, one company calls the shots. In any other established industry, prices often go down with competition.