[At-Large] DomainIncite : Is this why WhatsApp hates some TLDs but not others?

[Antony Van Couvering]

> Domain Tasting stopped domain names that would have naturally gone through the deletion process becoming available for reregistration. That created an artificial demand for new gTLDs and drove a lot of the enthusiasm for the new gTLD round of 2012.

John, 

While I agree with the rest of your excellent post, the idea that domain tasting was in any way responsible for the demand for new gTLDs is speculative at best and doesn’t at all accord with my own (extremely close) experience of the introduction of new gTLDs. 

If you are saying that consumers were frustrated with the (lack of) choice in the .com space, and that (therefore?) consumers were pushing for new gTLDs, I couldn’t agree less. Consumers at the time had no idea about new gTLDs; my bet, and those of other business people at the time, was that upon the introduction of new gTLDs, consumers would wake up to the idea of choice once it was presented to them. Consumers didn’t have much idea of choice outside of local ccTLDs before the new gTLDs were introduced, and so they couldn’t have driven demand for new gTLDs.

Quite the contrary — we bet on consumers being interested in new gTLDs *despite* there being no direct evidence that they were. I often used the quote from Henry Ford — “If I asked my customers what they wanted, they’d all say they wanted a faster horse” — as an illustration of how we approached this possible new market. 

Domain tasting could not have created an artificial (or any) demand for new gTLDs, because no-one outside of ICANN even knew about new gTLDs prior to their introduction.  The long fight to get them introduced was ignored by the press, including the tech press, and if you recall correctly, ICANN ran exactly one advertisement to promote them.  As I said at the time: “One World, One Internet, One Ad.” 

Of those that did know about new gTLDs, many, including ALAC, worked to quash them.  The only ones promoting them were the new registries, and we were having to spend all of our time and money trying to win over the supposed champions of choice and competition. 

So no, there was no consumer demand for new gTLDs prior to their introduction, whether artificial or otherwise, and certainly none created by domain tasting. 

Maybe you have evidence that shows I’m wrong; I’d love to see it. 

Antony





> On Sep 17, 2023, at 11:34 AM, John McCormac via At-Large <at-large at atlarge-lists.icann.org> wrote:
> 
> On 17/09/2023 01:37, Barry Shein via At-Large wrote:
>> ICANN is if nothing else a network of contracts with various provisions.
>> The general term of art used within the ICANN context for registries,
>> registrars etc is the "contracted parties".
>> ICANN has acted previously to curtail the mass use of throw-away
>> domains by putting restrictions on refunds.
> 
> This was Domain Tasting in the 2000s where the five day Add Grace Period was exploited. The AGP was intended to allow registrars to deleted domain names without cost where bad payment details had been used or the domain name had been registered in error. Domain names were registered for less than the five day period, tested with PPC advertising and held if they made advertising revenue. Those that did not generate money from clicks were dropped. The process went on for a number of years and over 1,000,000,000 .COM domain names were registered and deleted.
> 
> Domain Tasting is quite different to the Bulk Registrations issue (2014 to present) in that Domain Tasting was driven by a small number of registrars. Bulk registrations are driven by a combination of registries, registrars and end-users.
> 
> ICANN eventually got around to dealing with the Domain Tasting problem when it had become so bad that more domain names were being registered and deleted each month than were active in the gTLD zones.
> 
> The problem was discussed and discussed in ICANN groups. There was even a report drafted. It was Google's decision not to monetise these AGP domain names and legal action by Dell against some of the registrars involved in Domain Tasting who were targeting trademarks and other Intellectual Property that changed things. ICANN brought in the "restocking fee" and the combination effectively destroyed large-scale registration patterns by 2009. ICANN hasn't done anything, as far as I know, about Bulk Registrations because it may be business issue for the registries rather than a regulatory issue.
> 
>> So for example they believe they can put requirements on identity of
>> the purchaser. Imperfectly implemented but no one questions ICANN's
>> ability to contractually require the registrar to attempt to gather
>> accurate information at registration.
>> And the notion of disallowing the use of their product (domains) for
>> likely illegal or fraudulent purposes is hardly unique to ICANN.
> 
> Domain Tasting stopped domain names that would have naturally gone through the deletion process becoming available for reregistration. That created an artificial demand for new gTLDs and drove a lot of the enthusiasm for the new gTLD round of 2012.
> 
> ICANN's introduction of the "restocking fee" had the unintended effect of channging the demand for new gTLDs. People could reregister deleting domain names (those that weren't shifted to sales and auction sites by the registrars) and outside the US, a lot of new registration activity shifted to the ccTLDs. ICANN expected tens of millions of new gTLD registrations for the first year of their operation. It didn't happen.
> 
> What did happen was Bulk Registrations as a mainstream business model when registries saw demand for their new gTLDs was not commercially viable for their continued existence as a registry.
> 
> Bulk Registrations are the heavily discounted registrations that flooded some of the new gTLDs. ICANN got its fee and some of the registries using bulk registrations to inflate their zones appeared, for a while, to be successful. Rather than the smooth growth curve of a healthy gTLD, the growth curve for gTLDs using heavy discounting as a business model took on a kind of sawtooth shape with the spikes of large numbers of discounted registrations being followed by a trough of deletions just over a year later.
> 
> These registrations were used for advertising, affiliated landing pages, phishing and search engine manipulation (backlinks from fake websites using scraped content etc). The economic model meant that it was cheaper to register a new domain name than pay the full renewal fee. The non-renewal rate for some of these gTLDs was over 95%. One of the largest of these new gTLDs peaked at over 2 million registrations and within five years, approximately 2,000 of those domain names were still in the zone. The rest were deleted.
> 
> The .INFO had used a similar approach to inflate its zone but that was a long time before the new gTLDs and it was different and there was no "restocking fee" back then.) When it comes to adding conditions to the registry and registrar contracts, the line between DNS Abuse (phishing, spam and malware) and Content Abuse (intellectual property and trademark infringement etc) is blurred.
> 
>> Anyhow the point is that registrars can be contractually bound to not
>> engage in behaviors known to be of advantage to micreants.
> 
> Would some of these new gTLDs be commercially viable if such a policy was part of the contract? No. Heavy discounting is a business model that has kept some of these registries in business. While 95% of some gTLD registrations may not renew on their first renewal, a small percentage will renew at full fee. If a registry continues this process, it builds up a core of domain names that will continue to renew at full fee.
> 
> There was a study by SIDN Labs (2017) that indicated that a lot of the bad activity in the legacy gTLDs had switched to these heavily discounted new gTLDs because the heavy discounting model had changed the economics of DNS Abuse.
> 
> ICANN's big problem is that it is a reactive, rather than pro-active, organisation. Worse still, it often relies on studies that do not accurately represent the market or its dynamics.
> 
> The domain name market is a continually changing one. The delivery date for some of these studies is often a year or so after the RFP. By then, the market has changed because the circumstances that applied to registrations made a year ago may have changed and this can affect renewals. To put this into some perspective, the first renewal rate for .COM hovers between 50% and 54%. That means that up to half of the new .COM registrations in 2022 will not renew. Some gTLDs are better and some are much worse.
> 
> Changing registry or registrar contracts involves a lot of discussion and takes years. The problem for ICANN, and the registries, with the link between heavily discounted registrations and DNS Abuse is that ICANN setting a minimum price for a registration or restricting the abilities of registries and registrars to engage in discounting would create a lot of legal problems for ICANN's almost hands-off approach with the operation of registries and gTLDs. ICANN is damned if it does and damned if it doesn't.
> 
> Regards...jmcc
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