Site owners have long enjoyed a stable marketplace for domain names, with predictable price increases and the assurance that domain sellers were not allowed to gouge them.
That stability comes from the Internet Corporation for Assigned Names and Numbers or ICANN. It’s a powerful organization responsible for imposing price limits that keep domain costs in check. The group is considering a policy shift that could cause the price of certain domains to go through the roof.
ICANN has proposed the elimination of all price controls on .org, .biz, and .info domains.
This article will briefly explain how domain prices are determined and elaborate on ICANN’s role. It will also discuss the impact that ICANN’s new proposal could have and tell you what you can do (before April 29th) to stop it.
How are Domain Prices Set?
Multiple factors influence domain pricing.
When you buy a domain name, the seller, usually a web hosting company, is known as the registrar. The registrar gets your domain name from another company, the domain name registry.
Of those two links in the supply chain, it’s the registrar who has more incentive to keep prices reasonable.
They’ll typically charge a small amount more than they paid the registry for your domain name. That’s done to help offset operating costs. Market competition motivates registrars to keep prices low because that helps attract and retain more customers.
Registries, however, being one step removed from the domain’s final purchaser, have less incentive to moderate the cost of domains.
They also have what some might consider a monopoly on domains. For each of the popular domain extensions, like .com, .net, and .org, there can be only one registry.
Anytime a small group of sellers has that much control over a commodity, a watchdog must be put in place, and in this case, that watchdog is ICANN.
Historically, ICANN has helped keep domain costs in check by limiting how much registries are allowed to charge registrars for domain names.
Registries have to enter into a contract with ICANN before they can do business. That’s how ICANN has been exercising control over domain prices—the organization adds provisions in contracts that place limits on what registries can charge.
ICANN—The Domain Cost Watchdog?
If you’re a not sure what ICANN is, you’re not alone. Many site owners never have any reason to be aware that the organization even exists. Nevertheless, it’s an extremely influential group.
ICANN is a nonprofit organization that’s responsible for the maintenance of namespaces and numerical spaces of the Internet. The organization exists to help preserve the operational stability of the Internet on a global scale.
It’s a good thing they’re watching over domain prices for us, right?
With ICANN’s recent proposal to eliminate all price limits on .org, .biz, and .info domain names, they may have dropped the ball.
If the proposed changes are made, it will not be good for site owners who need to renew their domain names, or for business owners who want to register new domains.
It’s also a terribly bad precedent to set.
If ICANN decides to let the .org registry set its own prices, how long will it be before they lift pricing restriction on .com domains, or simply allow all domain pricing to be controlled by free market influences?
Brace for Higher .Org Prices
If ICANN follows through on their plan to lift price limits on .org domains, think of all the long-standing governmental, educational, and non-profit groups whose web sites will suddenly cost much more to operate.
The impact will be large for .biz and .info domain owners too, but .org is the most established of the three extensions.
The group that controls the .org domain name is called Public Interest Registry (PIR). Right now, ICANN’s contract with PIR allows them to increase the price of .org domains by 10 percent each year.
The new proposed contract with PIR would allow the registry to set any prices it wants. Instead of increasing rates by 10 percent each year, PIR could decide to increase your rates by 90 or 100 percent annually.
If you’re the owner of a .org domain, from your perspective, it will likely go down like this: you’ll open the annual email from your hosting company reminding you that it’s time to renew your domain contract, then you’ll notice the massive jump in the fee.
The same thing would have happened to your registrar.
PIR’s price increases will be imposed on your registrar, who will, in turn, be forced to pass at least some of the charges on to you.
If all that happens, you may consider switching domain names. That’s not easy. A business or blog with a large following will lose some people during the change, so many organizations will simply opt for paying the higher domain fees.
A Questionable Reason for Lifting Price Limits
ICANN’s rationale for eliminating price controls on .org, .biz, and .info domain names is questionable, at best. They say that an older, well-established top-level domain (TLD) should be priced the same as a new TLD.
To understand how they might have arrived at that misguided idea, you have to go back a few years in the Internet’s history.
ICANN began taking applications for “new“ TLDs in 2012. Many companies took the opportunity to create alternatives to the .com extension, and domains like .money and .xyz came into being.
ICANN decided back then that contracts for these new domains should not impose any price controls. The group is now saying that the contracts to run established TLDs (like .org) should also have no price controls.
That’s where ICANN is missing a significant point.
The owners of new top-level domains are entrepreneurs who have risked their own capital to introduce new domains, whereas the groups that run fully established domains like .com, .org, and .biz were practically appointed, chosen to oversee the selling of domains that are an integral part of the web itself.
From a business perspective, new TLD registries and established TLD registries are pretty different, but ICANN wants to treat them the same.
It’s Not Too Late to Stop This
We’re not here to criticize ICANN. The nonprofit organization has a policy of global inclusiveness and prioritizes fairness when wielding its control over the Internet.
They’re openly asking the Internet community for input about the proposed removal of price caps.
You should let ICANN know that you think price limits on established TLDs should remain in place, and you only have until April 29, 2019 to tell them.
There’s a separate comment form for each of the three domains:
If your main concern is about the future pricing of .org domains in particular, there’s a simpler form you can use. An advocacy group supporting domain name owners called the Internet Commerce Association has posted a form where you can submit your comments about the .org proposal, which will be passed on to ICANN.
If you’re against the proposed elimination of price limits on .org, .biz, and .info domain names, let your voice be heard before it’s too late!