[registrars] .net Renewal Fees (fwd)

[Mark Jeftovic <markjr@xxxxxxxxxxx>]

Moving right along to the next can of worms. Denic sent this into
our support queue this morning. I imagine you all received one too.

The concern seems to be around how multi-year registrations under
.net will survive (or not survive) the transition to a new registry
operator for .net tld.

The two options described below: a) verisign keeps the money or
b) verisign returns the money to registrars seems to imply that
a serious fracas may ensue over these multiyear terms.

IF: Verisign returns the unused fees to registrars then I guess its
up to us to then remit those fees to the new registry operator to keep
the multi-year terms intact (are the costs to the new operator going to
be in line with present costs?)

or IF:

A) Verisign keeps the money
B) The new operator is NOT Verisign
C) The new operator decides not to "eat" the multi-year registrations

then

D) The registrants will get screwed

and

E) The registrars will be left holding the bag.


Am I understanding this correctly? Is this a serious possibility?

-mark

-- 
Mark Jeftovic <markjr@xxxxxxxxxxx>
Co-founder, easyDNS Technologies Inc.
ph. +1-(416)-535-8672 ext 225
fx. +1-(416)-535-0237

---------- Forwarded message ----------
Date: Fri, 21 Jan 2005 13:00:43 -0500 (EST)
From: easyDNS Support <support@xxxxxxxxxxx>
To: markjr@xxxxxxxxxxx
Subject: .net Renewal Fees (fwd)



Forwarded message follows......
-------------------------------

Dear Registrar

As one of the domain registry operators vying to take over the administration of .net, we wanted to inform you of an important issue regarding .net registration/renewal fees that is currently not resolved - one that should be of great interest to you as a .net registrar.

In ICANN's Request for Proposal (RFP) to all competing .net registries, a statement was added at the last moment regarding the transfer of registration fees (or lack thereof) from VeriSign to the successor registry operator. On Page 12 of the RFP, under 'Section 4: Revenue and Pricing Model', it is stated:

"All applicants should note that registration fees paid to VeriSign prior to the actual transfer of operational responsibility will not be transferred to a subsequent registry operator."

In the event VeriSign is not selected on March 31 as the .net registry moving forward, this statement leaves important questions unanswered and is concerning - for registries and registrars alike. At face value, it could imply either a) VeriSign will be allowed to retain monies from registrars for services not being provided (after June 30), or b) VeriSign will be asked to return monies to registrars for services that were to be performed after June 30 - as ICANN has made clear those monies will not be transferred to the successor registry. We've submitted a letter to ICANN in December asking for clarification of this statement (please see letter posted on ICANN website dated December 16, 2004 - http://www.icann.org/correspondence/), but as of January 20, we have not yet received a response.

We recognize that .net renewal fees are often paid in multi-year increments, in some cases up to ten years at a time. As you can imagine, at more than five million registered domains, these multi-year renewal fees paid in advance to VeriSign add up quickly to a significant amount of money. Certainly, it was your understanding at the time these payments were made that they would go towards the improvement of the .net infrastructure and for the delivery of related domain registration services.

It is our sincere hope that this is indeed the case, but until clarification is made by ICANN, we believe it is in your best interest to NOT pay any additional .net renewal fees to VeriSign, for services beyond June 30, 2005, until a decision has been reached by ICANN on March 31, 2005, at which time it is expected to name the new .net registry operator.

As part of our proposal, which was officially submitted to ICANN on January 18th, we submitted a business case that focuses on technically and financially stable operations of .net.

To offer the highest level of technical stability and security, DENIC will provide a state of the art technical architecture with very high levels of redundancy. Generously-apportioned server hardware will enable DENIC to deliver outstanding response times as well as robust performance under peak conditions. To provide these services, DENIC has planned massive investments in infrastructure for 2005.

To guarantee the highest level of financial stability and security, DENIC has based its business model for .net on sound and fair financial planning. Thus, DENIC is minimizing any risk for the operation of .net. Although DENIC's business focuses on a 100% secure provision of .net regarding any technical and financial risks, we intend to reduce the prices of .net domain registrations initially by 10 percent. Over time, as more and more renewals come in and our revenue for services provided increases, we will make further reductions in price. A realistic price for 2009 therefore would be approximately $ 3.60.

Our not-for-profit business model will allow for such price reductions, regardless of how the above matter is resolved by ICANN. However, should ICANN reverse its decision and mandate VeriSign to transfer fees for services beyond June 30, 2005 to the successor registry, or if ICANN asks VeriSign to return the unearned monies to .net registrars who in turn would then pay fees to the successor registry, then we would be able to make further price reductions - and to do so sooner rather than later.

Because fair and equal treatment of all registrars is a key point for DENIC, we will not offer any promotional rates for the registration of new .net domains. We believe by offering reduced prices for new registrations, thereby asking existing .net registrants to cross-subsidize new customers, is not fair and equitable to all customers. DENIC proved with its .de operations that a business case based on long-term considerations enables the registry to provide better, more innovative services at much lower prices than operations only based on short-term considerations.

We felt it was important to bring this issue to your attention. If your .net registrations are up for renewal in the next few months, or if you have any questions about fees you've already paid to VeriSign for services after June 30, we'd suggest you write to ICANN and ask for immediate clarification. We, too, will continue to seek clarification, and will inform you as soon as we hear anything.


Best regards,

Sabine Dolderer
CEO, DENIC eG