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discuss Bitcoin XYZ auction proof nGTLDs can raise renewals to any price they choose?

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J.R.

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Twitter from DNW sparked conversation around Bitcoin.xyz auction close at $42,501:
Reference: https://domainnamewire.com/2022/07/02/bitcoin-xyz-auction-ends-at-42501/#comments

My comment on DomainNameWire.com 2 July 2022.

Had an exchange on Twitter with XYZ, Namecheap about this Bitcoin(.)xyz premium pricing scheme. Based on this discussion, I’m convinced XYZ can raise renewal rate to whatever price they choose.

Not saying it’ll happen, but until someone shows EXACTLY where in ICAAN policy it prohibits XYZ from raising renewals to whatever it likes; I think they can.

Theoretical scenario: Year 2024.

Bitcoin bottoms out at $5K in 2023, another ‘greater fool’ mania sweeps crypto markets in Q2 2024 as Bitcoin reaches $100K .

Business leaders at XYZ, see an opportunity to make more money on XYZ premiums. They say, we can flex this registry super power, maybe GD will buy us out too? Plus, Many crypto startups would love to have Bitcoin XYZ in 2024.

XYZ notifies Bitcoin XYZ registrant renewal price will increase to $10K (2024) then $25K (2025).

Where in ICANN policy does it say XYZ and other nGTLDs can’t do this? Why isn’t the $3250 current renewal price arbitrary?

Legacy TLDs have a FIXED renewal rate which is to the advantage of domainers and consistency. Could you imagine if legacy gtld registry was given this arbitrary pricing power! They could claw-back thousands of premium dot-Com domains by raising renewals to $thousands.

Why not institute a $100K premium on Sex*com? Voice*com? Casino*com?

How many 5K+ portfolio holders could stay solvent in such an environment?

Sure, I’m being theoretical, but I couldn’t help but consider the above scenario. Hopefully I am wrong about this arbitrary pricing power of nGTLDs.

Two days later, XYZ hasn't disputed my claims. Call me alarmist, but I have to imagine legacy tlds have interested parties ready to fight for this same ability to create arbitrary and variable renewal prices on (.com, .net, org, etc.).

These establishment forces work for their shareholders, not domainers.
 
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alcy

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meanwhile super average 1word xyz sell for 5 and 6fig regularly.. go figure
 
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Is the premium renewal price set by NameCheap or .xyz registry?
 
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J.R.

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Is the premium renewal price set by NameCheap or .xyz registry?
According to NameCheap, XYZ sets the price.
Confirmed via ICANN agreement as well.
 
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alcy

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According to NameCheap, XYZ sets the price.
Confirmed via ICANN agreement as well.

yea that's what they all say..and then they are free to. add little bonus for themselves... this is why prem prices vary between registrars..
 
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I am not aware of anything in the agreement with ICANN that limits new gTLD from raising the prices, even on existing registrations. The only thing they are required to do is disclose it to the registrar I believe, who is then supposed to notify the customer.

When Uniregistry raised their prices dramatically for many extensions, they initially were also going to apply these prices to existing registrations before they later backed down on that.

https://domainnamewire.com/2017/04/03/uniregistry-backtracks-price-hike-existing-registrations/

New top level domain name registry Uniregistry is backtracking on its plans to significantly increase prices on existing registrations this September.

Last month, the company announced price increases of up to 30x current prices. This caused quite an uproar and put Uniregistry founder Frank Schilling on the defensive. GoDaddy stopped enabling registrations and transfers-in of Uniregistry names as a result.


The company will still increase pricing in September, but now the company says it will grandfather existing registrations in nine of its domain names that are having the biggest price hikes: .audio, .blackfriday, .diet, .flowers, .guitars, .hiphop, property, .hosting and .jeugos.


This is a major reason I don't really mess with new extensions - the confusion and uncertainty of different registration prices, renewal prices, premium tiers, etc.

Brad
 
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J.R.

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I am not aware of anything in the agreement with ICANN that limits new gTLD from raising the prices, even on existing registrations. The only thing they are required to do is disclose it to the registrar I believe, who is then supposed to notify the customer.

When Uniregistry raised their prices dramatically for many extensions, they initially were also going to apply these prices to existing registrations before they later backed down on that.

https://domainnamewire.com/2017/04/03/uniregistry-backtracks-price-hike-existing-registrations/

New top level domain name registry Uniregistry is backtracking on its plans to significantly increase prices on existing registrations this September.

Last month, the company announced price increases of up to 30x current prices. This caused quite an uproar and put Uniregistry founder Frank Schilling on the defensive. GoDaddy stopped enabling registrations and transfers-in of Uniregistry names as a result.


The company will still increase pricing in September, but now the company says it will grandfather existing registrations in nine of its domain names that are having the biggest price hikes: .audio, .blackfriday, .diet, .flowers, .guitars, .hiphop, property, .hosting and .jeugos.


This is a major reason I don't really mess with new extensions - the confusion and uncertainty of different registration prices, renewal prices, premium tiers, etc.

Brad

Glad you shared this example of Uniregistry because it reveals another unspoken reason GoDaddy.com would look to purchase registries in the nGTLD space - the ability to exercise the super power of variable renewal rates on 'premium domains' in the near future.

Bitcoin XYZ sale is a perfect example of registries being more comfortable flexing this variable renewal rate power. The arbitrary $3245 renewal is unreal, especially when bitcoin last closed at $19,752.

I could see some enterprising insider at XYZ or similar nGTLD registry lobbying to increase renewal to $10K, if say Bitcoin was $100K? it is the imperative of business to seek highest returns they can get and UNFIXED renewal rates allow for such experimentation.

What can registrant do, since renewal rate is set at the registry level; they either pay new renewal rate or lose the asset. Registry isn't worried because they a robust market on their 'premium allocations' hence the confidence in premium pricing in the 1st place.

I don't trust ICANN, registries or registrars on this FIXED v. VARIABLE, they will not look out for the best interest of domain registrants.
 
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Glad you shared this example of Uniregistry because it reveals another unspoken reason GoDaddy.com would look to purchase registries in the nGTLD space - the ability to exercise the super power of variable renewal rates on 'premium domains' in the near future.

Bitcoin XYZ sale is a perfect example of registries being more comfortable flexing this variable renewal rate power. The arbitrary $3245 renewal is unreal, especially when bitcoin last closed at $19,752.

I could see some enterprising insider at XYZ or similar nGTLD registry lobbying to increase renewal to $10K, if say Bitcoin was $100K? it is the imperative of business to seek highest returns they can get and UNFIXED renewal rates allow for such experimentation.

What can registrant do, since renewal rate is set at the registry level; they either pay new renewal rate or lose the asset. Registry isn't worried because they a robust market on their 'premium allocations' hence the confidence in premium pricing in the 1st place.

I don't trust ICANN, registries or registrars on this FIXED v. VARIABLE, they will not look out for the best interest of domain registrants.

One legal defense would be to have a court determine it to be a "unconscionable contract", which essentially deems a contract to be too one sided to be valid, but that might be tough to achieve.

https://www.law.cornell.edu/wex/unconscionability

A defense against the enforcement of a contract or portion of a contract. If a contract is unfair or oppressive to one party in a way that suggests abuses during its formation, a court may find it unconscionable and refuse to enforce it. A contract is most likely to be found unconscionable if both unfair bargaining and unfair substantive terms are shown. An absence of meaningful choice by the disadvantaged party is often used to prove unfair bargaining.

One thing is clear though - in new gTLD consumers have far less rights and protections than with legacy extensions.

Verisign does not own the .COM or .NET extension, they are simply allowed to operate it under contract. The new registries have far more freedoms to do as they please. Domains owners are at their whims.

Brad
 
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ryan29

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This topic interests me every time it comes up and I would love to know the answer. The best I've been able to find in terms of rules for renewal pricing is in section 2.1 of the baseline registry agreement.

In addition, Registry Operator must have uniform pricing for renewals of domain name registrations (“Renewal Pricing”). For the purposes of determining Renewal Pricing, the price for each domain registration renewal must be identical to the price of all other domain name registration renewals in place at the time of such renewal, and such price must take into account universal application of any refunds, rebates, discounts, product tying or other programs in place at the time of renewal. The foregoing requirements of this Section 2.10(c) shall not apply for (i) purposes of determining Renewal Pricing if the registrar has provided Registry Operator with documentation that demonstrates that the applicable registrant expressly agreed in its registration agreement with registrar to higher Renewal Pricing at the time of the initial registration of the domain name following clear and conspicuous disclosure of such Renewal Pricing to such registrant, and (ii) discounted Renewal Pricing pursuant to a Qualified Marketing Program (as defined below). The parties acknowledge that the purpose of this Section 2.10(c) is to prohibit abusive and/or discriminatory Renewal Pricing practices imposed by Registry Operator without the written consent of the applicable registrant at the time of the initial registration of the domain and this Section 2.10(c) will be interpreted broadly to prohibit such practices.

I'm not a lawyer, but the thing that bothers me about the above is that all of the one-off, arbitrary, premium prices don't have a "uniform" price to compare to. Obviously the registries are going to want to raise all prices at some point and I've never seen anything that explicitly defines what's allowed. If the non-premium variant of an ngTLD goes from $20 to $22, is that a uniform $2 increase or a uniform 10% increase?

The foregoing requirements of this Section 2.10(c) shall not apply for (i) purposes of determining Renewal Pricing if the registrar has provided Registry Operator with documentation that demonstrates that the applicable registrant expressly agreed in its registration agreement...

Doesn't that mean renewal terms should be explicitly spelled out in the registration agreement? I've never registered a premium domain (and I'm never going to), so I've never seen if there's a custom agreement. Does anyone have one? If the registrant agreement doesn't explicitly spell out the renewal terms, could section 2.1 be used to argue the renewal price should be uniform and match all other non-premium domains on the same ngTLD?

I can't imagine a one-off agreement for every premium registration, so, if I had to make a guess, I'd guess the registrant agreement for a premium domain is going to be open ended in favor of the registrar/registry. The best case I can imagine for the registrant is something that tethers the renewal price to the initial registration price, but, since the registration and renewal costs vary between registrars, I don't see how that would work. Do you get a new registrant agreement when you transfer a domain to a new registrar?

I've been logging the status of a specific keyword domain across about 400 TLDs for 2.5 years and that includes the premium status. In that time I've seen 8 TLDs reclassify domains for the keyword as premium. In every case the domain changed to available before the reclassification. IE: None were reclassified while registered.

My goal was to track reclassifications, but I also have (registrar) prices for all the premium domains. Of those 70, about 30 are unavailable, so I assume they're registered. A very simple diff between the first and the last log that I have doesn't show much in terms of price changes. I can see some very small price decreases and no significant increases. I assume the price decreases are the registrar, not the registry.

Every time I see this topic on any forum I ask if anyone has ever had a domain reclassified from non-premium to premium while it's registered or if anyone has ever had a domain's renewal price increased in an abusive manner. I know that registries have drastically increased prices on all registrants at the same time. I'm only interested in someone being singled out.

Given ICANN's commitment to eliminating price caps, I'm skeptical of the truth in the claim that "Section 2.10(c) will be interpreted broadly to prohibit" abusive practices.

As a registrant, I dislike the lack of consistency and stability I get. The registry pricing games are a huge negative for me and I assume it's the same for almost anyone that wants to register a domain. I think domains would be a better product with better growth potential if ICANN and the registries focused on creating better guarantees for registrants.
 
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J.R.

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Given ICANN's commitment to eliminating price caps, I'm skeptical of the truth in the claim that "Section 2.10(c) will be interpreted broadly to prohibit" abusive practices.

As a registrant, I dislike the lack of consistency and stability I get. The registry pricing games are a huge negative for me and I assume it's the same for almost anyone that wants to register a domain. I think domains would be a better product with better growth potential if ICANN and the registries focused on creating better guarantees for registrants.

My interpretation of 2.1 is as long as ICANN and the registrar receives a timely notification, nGTLD registry can increase price to whatever they choose. Bitcoin XYZ renewal rate is arbitrary, and could have easily been $5K or $10K. To be fair, buyers of these nGTLDs know what they are getting themselves into, because renewal rate is known upfront. If you can afford to pay $50K for a domain name with upfront $3K renewal, you can afford $5K to have a good lawyer look over registry to registrant contract and break down the potential for $10K renewal.

Mark my words, there will be a day when the temptation to raise renewal rates on an asset like Bitcoin XYZ will happen, and many will play dumb. From a purely business perspective, why wouldn't XYZ raise renewal rate to $10K if Bitcoin was $100K?

ICANN allows this arbitrariness in nGTLD pricing for a reason.
 
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J.R.

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One legal defense would be to have a court determine it to be a "unconscionable contract", which essentially deems a contract to be too one sided to be valid, but that might be tough to achieve.

https://www.law.cornell.edu/wex/unconscionability

I'm going to look more into the case law on unconscionable contract and how it might apply to domain registrant contracts with the registry. It raises some serious questions, and we already know Courts are inconsistent on defining registrants property rights in domain registrations. Some Courts says they are leases only others say they are personal property. A Supreme Court ruling on domain as property or lease is long overdue and I was hoping SCOTUS would take the France.com case, but they dismissed it.

Is it unconscionable to asks for a $10K renewal on a premium domain based on market conditions? Isn't this a subjective valuation either way?

More importantly, this is why renewal rates should be FIXED.
 
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ryan29

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I could see some enterprising insider at XYZ or similar nGTLD registry lobbying to increase renewal to $10K, if say Bitcoin was $100K? it is the imperative of business to seek highest returns they can get and UNFIXED renewal rates allow for such experimentation.
Has there ever been a case where a premium domain was singled out for a price hike while it was registered? In this case, the domain expired, dropped, and was re-priced, right?

To play the devil's advocate...

If you view the upfront domain cost from the perspective of a registrant, no one will care much about registries repricing dropped domains. I'm not a domainer, so I have no hope of catching a decent dropped domain. For me, a high value, expired domain is going to be caught by a domainer or repriced by the registry. In both cases I'm going to pay far above face value. Why would I care if the extra value goes to a domainer vs a registry?

Since this topic is mainly about premium renewal fees, I'll say that I think it's a bad scenario for the average registrant. Low renewal costs improve the upfront value of domains and it allows small business to buy good domains. Once the upfront cost is covered, the domain is an asset that can be held onto long term because the annual cost is negligible.

As soon as premium renewal fees come into play, a lot of the low end market gets locked out because it becomes difficult for a small business to justify the renewal cost of a domain. They're better off with a lower quality domain and a little extra money for advertising IMO.

I'm sure premium renewal pricing is awesome if you're rich since the pool of high quality domains to register is much larger, but it sucks if you're a normal person trying to build a brand.

I also think the registries are missing out on industry growth as a result of their pricing games. I think fair value pricing on domains would grow the industry enough to offset the "losses" from eliminating all of the price discrimination.
 
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ryan29

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More importantly, this is why renewal rates should be FIXED.
And, if it's not already a thing, they should forbid re-leasing or whatever you want to call a situation where someone buys a domain and leases it out forever instead of selling the registration to someone. That scenario is even worse than the registries charging premium renewal fees because the lease agreement won't be subjected to any rules.

If ICANN changes the rules to give registrants better guarantees, I'm sure the registries can use a handful of "unaffiliated" shell companies to buy their own domains so they can lease them out with the same kind of premium renewal setup as they have now.

The relationship should be registry > registrar > registrant and never registry > registrar > registrant > lease holder. Is there anything that currently forbids that?
 
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