Further Proposal for Second Level UK Domains

Direct.uk – The New Premium UK Domain Name

Nominet have announced a further consultation regarding the introduction of new UK domains at the second level, i.e. domain.uk rather than domain.co.uk. This latest offering is almost unrecognisable from the first, which even Nominet admitted was fundamentally flawed. Core controversial issues remain though, in what has so far been a rather secretive and closed consultation.

Whereas previously the second level .uk domains were stated as being primarily for business, now they are being touted as open to everyone, which in turn makes it very hard to provide feedback on, as its purpose is now unclear. Currently approximately 90% of domains registered ending in .uk are commercial, i.e. .co.uk, so it seems odd that Nominet should muddy the waters in this way.

The original justification for introducing second level domains was primarily for increased security and availability. This too has changed and now the premise is primarily based on the forthcoming introduction of new Top Level Domains (TLD’s), which Nominet fear will pose a threat to the numbers of UK domains registered in the future.

These new TLD’s will start to arrive next year and will add huge levels of choice to the available domains for people to register. For example, instead of .com or .co.uk you will have the opportunity to register .london, or .shop and hundreds of others. Whether it makes good business sense to register addresses with currently obscure suffixes is questionable, and the true impact that these new domains will have is not clear at all. We’ve already seen the likes of .eu, .biz, .co and others, none of which have made any significant impression so far and don’t look like doing so; after all, they’re simply not needed.

Nominet seem to be fearful of their future and now seek to follow the trend for shorter web addresses. These second level domains are being seen as the new premium UK domain to own, which means that the future of .co.uk looks very uncertain.

Registration Process & Verification

The proposal includes provision for registrant verification, electronically checking registrant data against third party databases. The WHOIS[1] record for each domain will now also show the status of the registrant as being validated, or not. Non UK registrants will be required to have a UK address for service, in addition to their resident address, giving them a legal UK presence. Whether this will actually help with enforcing the law is questionable. Verification is to be carried out annually on all registrants, as well as whenever a domain is renewed or ownership is transferred. Whether all of these costs are included within the registration price of second level domains is not clear.

Registrant verification will eventually be made available across all third level domains too (.co.uk, .org.uk etc.), optionally to begin with and at additional cost. However, if a registrant is already verified at the second level then they will automatically be verified for all their third level registrations too. Accuracy of the publically available WHOIS data held on each registrant is an important part of this process and is part of Nominet’s plan.

Release Mechanism: All Domains are Equal!

The new release mechanism proposed for the second level domains has now recognised the high relevance of rights for existing registrants of UK domains. It provides a first right of refusal feature, giving them a six month option to secure their matching address at the second level. However, rights are being assigned equally to all existing registrants; .co.uk registrants are not being given any preference over .org.uk, .me.uk, .plc.uk, .ltd.uk and (more recently) .net.uk. Wherever there are multiple registrants for any single address then the one with the earliest continuous[2] registration date will be given first refusal. Competing parties will be able to register an interest and will be awarded the rights automatically if the earliest registrant allows the option to expire. Domains not taken up after this time will go on public release on a yet to be determined date.

The release mechanism is the most contentious element of this proposal in that it fails to recognise that this is a further sale of .uk commercial rights, as commercial activity will be permitted. This means that current .co.uk owners, who believed they held the commercial rights, will now face the possibility of holding only secondary rights, and may have to be a spectator as a competitor secures the same address as theirs, but in the new premium .uk commercial form. Many current registrants of .org.uk and .me.uk domains won’t be able to believe their luck, and would never have imagined that they would end up with the primary commercial rights to their address; that isn’t what they were buying.

It’s very clear within Nominet’s terms and conditions that .org.uk and .me.uk domains are not intended for commercial use, but many have ignored this, including Nominet, who turn a blind eye and are happy to receive the registration fees. Now, significant numbers of these registrants are set to overturn applications from existing .co.uk owners. Nominet have estimated that over 500,000 domains exist which have registrations in more than one suffix. That means potentially up to 250,000 registrants that won’t get a chance to register the .uk version of their address. By definition, these duplicate registrations will tend to be for the more valuable domains and therefore Nominet can expect significant levels of conflict to arise from this element of the proposal.

Pricing: Increased Cost of Ownership

Pricing was contentious in the initial proposal and poorly thought through. Wholesale fees are now being estimated at £4.50 – £5.50 per year, depending upon how many years you register for. By the time these prices are retail you can expect to pay £6.50 – £20.00 per year, depending upon your registrar. These costs will of course come on top of your current UK domains, as all existing domains ending in .uk will remain in place. For many, this new domain will need to be registered simply as a defensive move, and maybe also the “hyphenated-version.uk” too, whether .uk becomes popular or not. Many businesses now hold small portfolios, in which case the additional cost becomes significant.

We don’t accept the argument that supports increased availability through this proposal. Assuming Nominet promotes any new launch then the expectation is for a high take-up of the new domains. On this basis the .uk registry will become an effective mirror copy of the existing .co.uk registry, with similar availability of unregistered domains.

Security: Further Costs to Come?

Security, through the use of new features such as DNSSEC, malware monitoring and the use of a trust mark, was strongly opposed in the first consultation, primarily because the features were made compulsory with cost implications, and have been removed from this proposal. Instead there is a stated intention from Nominet that security will be enhanced across the whole .uk name space on an on-going basis, but details of the new products they are intending to introduce and the pricing for them remain unknown. It seems that the cost to own any .uk domain may be set to increase further still.

Other Factors

A migration from .co.uk to .uk has always seemed to be an obvious path for this proposal for a number of reasons, including minimal conflict and reducing the cost burden. In their first proposal Nominet dismissed the idea based upon the cost to implement and also that they did not want to impose additional costs on existing registrants. For changes that will be as impacting as this one then the cost to implement should not be a restricting factor if it can be shown there is a strong case to proceed. Nominet already operate with a large cash surplus, which is set to become much larger if this proposal goes ahead. Imposing costs on existing registrants they will have effectively been done anyway, by introducing an enhanced domain that any sensible business knows it will need to own.

The other big unknown and potentially very disruptive factor is running two commercial domain spaces in competition with each other. There is an obvious concern about confusion for users having to distinguish between two such similar addresses. There is also potential for commercial conflict when two parties argue rights over use of the new domains. With over 10 million domain names registered in the UK, it is one of the largest country level domain registries in the world; mistakes made here will be very disruptive to normal service and irreversible.

Nominet have placed a lot of focus on the importance of integrity within the UK domain system and the need for best practice. We would suggest that Nominet need to follow this through in-house too and consider restricting and controlling the registration and use of .org.uk and .me.uk domains. These need to be registered and used by legitimate parties only, as is currently the practice with .ltd.uk and .plc.uk. This proposal, as it stands, will handsomely reward some registrants who have been previously abusive.

It’s questionable whether there will be a need for third level domains in future, if the initial reason for differentiating is removed by Nominet’s “open to anyone” policy for second level domains. Whilst it’s right that legitimate not-for-profit bodies should get access to these second level domains too, many existing .org.uk and .me.uk registrants are actually commercial enterprises and use their domains accordingly.

Nominet and Issues of Trust

The Nominet board have come under increased pressure and criticism since the initial launch of the direct.uk proposal in October 2012. Some members are unhappy at how Nominet have conducted this consultation so far and there is a perception that their behaviour is increasingly defensive and secretive. There are a growing number of members who have major trust issues with the current Nominet board, headed up by their CEO Lesley Cowley. Whilst the board seem to have recognised the problem, they’ve not seen fit to address it by changing their behaviour.

The issue of trust has been rearing its head for some time, as there have been a number of contentious issues in recent years. Now, with such an impacting and controversial proposal on the table, it seems that Nominet are on a collision course, not only with its own members, but with numerous businesses too.

The membership of Nominet are also stakeholders who, with the board, collectively provide a self-regulatory body. Voting rights however are not one per member, so large registrars, of which there are a few, have the ability, via the block voting system, to have a much greater say in things. In turn these members are also some of Nominet’s largest customers, a number of which also have representation on the board.

It does feel as if the monopolistic position that Nominet hold over UK domains is allowing them to create their own marketplace, in the absence of any significant support, market research, business case or proper scrutiny.

We await the outcome of this proposal with great interest, but are concerned that Nominet are determined on a course of action, funded by UK business, that offers little more than cosmetic benefit, unknown risks, significant conflict and at great financial benefit to themselves.

The Consultation

The consultation for direct.uk has now closed. We expect to hear the outcome at some point during November. We submitted our own consultation response.

For more background information on the original consultation see our previous article Direct.uk – Taking the co out of co uk.

Notes:

[1]. The Nominet WHOIS is a publically available database of all .uk domain registrations providing registrant ownership and contact details, as well as relevant dates for the domain, including the registration date.

[2]. Continuous Registration Date. The registration date starts when a domain is registered. Therefore, if a domain is allowed to expire by one owner to be later registered by another then the date is reset. Whereas, if you acquire the domain from a current owner the registration date is not reset, it is continuous.