Re: [ga] Afternic Auctioning register.com expireds

[Derek Conant <dconant@dnsga.org>]

Is there any information that shows Register.com using Afternic to
auction expired domain names within the 40 day hold or grace period
VeriSign allots Registrars and Registrants before a domain name is to be
released by the sponsoring Registrar?  

Is there any information that shows Register.com not allowing its
customers a 40 day grace period upon the domain name registration
expiration date (thus preventing Registrants from recouping their
expired domain names)?  Or, does Register.com use Afternic to auction
domain names immediately upon the domain name registration expiration
date?  

In these cases, within the 40 day hold or grace period VeriSign allots
Registrars and Registrants before a domain name is to be released by the
sponsoring Registrar, there would be no out of pocket expenses incurred
by Register.com using Afternic to auction domain names. 

However, these matters appear to be Registry (VeriSign) contractual
enforcement issues.  Not ICANN contractual issues,....yet.

Derek Conant
DNSGA President and Chairman  
  

Andy Gardner wrote:
> 
> At 10:33 AM -0400 19/10/01, L Gallegos wrote:
> >Of course it's a violation.  Does tha make any difference?  ICANN
> >has not enforced any contractual obligations yet, so why would
> >you think they would do so now?  Since the only enforcement
> >would have to come from ICANN based on its own contracts with
> >the registries, it's rather moot, unless ICANN can be forced to
> >enforce its own contracts.  DoC could probably do that, but it won't.
> 
> I was under the (possibly mistaken) impression, that ICANN's mandate was to
> introduce competition at the registrar level, to ensure customers are
> supplied domain names at appropriate fee levels.
> 
> This move by register.com is anti-competitive (other registrars cannot
> supply names previously supplied by register.com), and certainly jacks up
> the price of a domain name for registrants, with no one benefiting except
> for RCOM stockholders.
> 
> I guess after paying such a ridiculous price for Afternic in the first
> place ($10 million in cash and 4,378,289 RCOM shares), it's only right that
> they should use it to circumvent the system in order to prop up their stock
> price.
> 
> >From August 13, 2001 REGISTER COM INC (RCOM) Quarterly Report (SEC form 10-Q):
> 
> "Our number of paid domain name registrations, including renewals and
> transfers, has decreased sequentially each quarter since the first quarter
> of 2000. We believe that the high growth rate experienced in the domain
> name registration market in late 1999 and 2000 is not an indication of
> anticipated future growth rates."
> 
> "We also believe that a large number of the names registered in 1999 and
> 2000 were registered by domain name speculators who register names with the
> intention of reselling them rather than putting them to use. As a result,
> we expect that a significant percentage of the currently existing domain
> name registrations will not be renewed and will be allowed to lapse. Over
> time, as the percentage of names held by speculators decreases, we expect
> to see an increase in renewal rates across the industry. Taking into
> account all of these market dynamics, we anticipate that revenues from
> domain name registrations will continue to be the largest component of our
> revenues and will increase over time. "
> 
> Must be some tricky logic involved in coming up with the "will increase
> over time" bit tacked onto the end of that statement, especially when they
> also say...
> 
> "This decrease was primarily the result of the decrease in paid new domain
> name registrations since March 31, 2000 as compared to the increase in paid
> new domain name registrations for the periods prior to March 31, 2000, as
> well as the decrease in the average registration term since January 2000."
> 
> Of course, if you're planning to hold expired domain names hostage...
> 
> It appears (to my non-accountant brain) that register.com only managed to
> declare a profit due to "deferred revenue" from it's initial 2 year domain
> registrations - which it admits were mostly by speculators and have all but
> dried-up.
> 
> Also:"Cost of Domain Name Registrations. Cost of domain name registrations
> increased 55% from $5.3 million for the three months ended June 30, 2000 to
> $8.2 million for the three months ended June 30, 2001. The dollar amounts
> of registry fees paid were lower in the current period. This decrease was
> offset by the recognition of a significantly greater amount of prepaid
> registry fees during the three months ended June 30, 2001 as compared to
> the amounts recognized for the three months ended June 30, 2000"
> 
> What register.com fails to tell its stockholders here is that these
> "prepaid registry fees" that it shelled out to verisign.com are for domain
> names that the registrant no longer wants. Register.com has paid for all
> these names in the hope that it will recover the funds by auctioning the
> names off via afternic.com
> 
> It astounds me that in they admit that the speculation market has dried up,
> but seem to be under the misapprehension that although these speculators
> are no longer willing to pay register.com $35 to renew these names, they're
> going to flock to afternic.com to buy them up at inflated auction prices -
> $35 minimum bid - see http://members.afternic.com/reservations for the
> current list of names they will allow you to "reserve" (thus forbidding
> other registrars the chance to sell the name). Such doozies as
> "ebadcreditloans.net", "clicks-and-mortar.net" and "click2etalk.com" can be
> yours!
> 
> RCOM's quartely report is chock full of bad news: "We anticipate that our
> renewal rates will be affected by the high number of speculative
> registrations which occurred during the initial growth stage of the domain
> name registration industry in 1999 and 2000. In addition, during the third
> and fourth quarters of 2000 we offered one-year registrations at no charge
> or at significant discounts to our standard registration fees. Given their
> nature, we anticipate low renewal rates for these registrations. If we are
> unable to increase our number of new registrations, the combination of our
> customers deciding not to renew their registrations through us and the
> increase we have experienced in the transfers of registrations to other
> registrars will have the cumulative effect of decreasing the number of
> domain names under our management. This could cause our revenues from
> domain name registrations to decrease and would materially adversely affect
> our business, financial condition and results of operations."
> 
> My guess is that RCOM is going to have a very sick balance sheet very
> shortly, once they've run out of "deferred revenue". If I had RCOM stock
> (and hadn't sold it already) I know what I'd be doing with it RIGHT NOW.
> 
> On the GA side of things, if the GA wants to get involved in complaining
> about their anti-competitive practices, is there any conflict-of-interest
> that needs to be declared here?
> 
> --
> Andrew P. Gardner
> barcelona.com stolen, stmoritz.com stays. What's uniform about the UDRP?
> We could ask ICANN to send WIPO a clue, but do they have any to spare?
> Get active: http://www.tldlobby.com
> --
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