Domain name prices rising despite move to competition

By RICHARD WOOD

A leading seller of website domain names says prices are rising despite the impending introduction of a more competitive industry structure.

It pays to shop around among sellers of domain names because charges range from $44 to $268 and value for money varies.

Freeparking managing director Richard Shearer told the Herald that under the new domain name registry system, due to come into effect next month, domain names should reduce in cost.

But instead, some firms were already increasing prices.

He blamed profiteering and a recent increase in charges by the monopoly supplier Domainz, which sells to the sellers.

"It's hard to see how domain name prices will fall if the wholesale prices are going to increase," he said.

On December 7, sellers gain direct electronic access into the domain name "register" run by The New Zealand Domain Name Registry, a firm launched on October 14. It is owned by InternetNZ, the Internet Society of New Zealand (www.isocnz.org.nz), which also owns Domainz.

Domainz at present also sells domain names direct but will, from December 7, be just another "registrar" in the new arrangement.

Shearer said that in October and this month, Domainz increased the wholesale price to ".nz" domain name providers from $20 to $24 a year.

InternetNZ domain name commissioner Debbie Monahan said Domainz had three categories of charging and one group was not paying what Domainz now had to pay to the registry.

"All it did to that group was bring them into line."

But Shearer said all the high-volume sellers were in that group.

Monahan said the level playing field being created would provide for competition and some firms may even offer free domain names as part of wider services.

But Domainz itself is sending a mixed message. It is increasing its registration prices for end users from $50 to $62 on February 1, although it is cutting a $30 fee for new Domainz account holders.

On the plus side for the major sellers, the annual levy that they will be charged to be involved falls from $5000 to a new flat rate for all firms of $2000 each.

The new structure will be hard on people who miss payments. Domain names are likely to be cancelled by sellers within five days of the due date.

Ironically, the new industry structure is designed to protect domain-name holders. Before, domain names were automatically renewed rather than cancelled.

Shearer said the effect of the new policy was to encourage sellers to cancel overdue domain names or risk being charged money they may not be able to recover.

"Previously it's been less rigid. If you didn't renew your domain on time you might have a month to pay that fee before Domainz would actually cancel the name. All registrars are going to have to be very hard on cancelling domain names that are not renewed by a due date."

Monahan said that was a business decision for the sellers, who would have to weigh up the importance of retaining the customer's web name.

Cancelled names can be made available to other buyers after 90 days.

Monahan said that if sellers stuck to the default, one-month billing cycle then they would incur only the monthly $2 per domain.

There had to be rules, and the new ones were well accepted by sellers.