Domain names competition opens with a twist

By RICHARD WOOD

The registration of internet domain names has opened up to competition, with a twist.

The previous monopoly supplier, Domainz, will operate as a special "stabilising registrar", to help the changeover rather than compete on price.

On Saturday domain name sellers Webaddress, Iserve and Iconz connected to a new shared registry system, and the Herald understands at least 20 others will join over the next three months.

The Internet Society of New Zealand (InternetNZ), which owns Domainz, would like some but not all Domainz customers to shift to these other incoming registrars.

Society secretary David Farrar said in March that a letter would go out to any Domainz customers who had remained by default with Domainz, asking them which of the registrars they wanted to be with.

InternetNZ intends to sell Domainz to avoid a conflict of interest, as it owns the firm that runs the registry system as well. Its stabilising registrar agreement with Domainz ends in September next year.

In October and November Domainz increased its wholesale price for domain names to A-level providers from $22.50 a year to $27, and this will go up to $39.38 in February. This attracted some criticism.

Domainz chief executive Derek Locke said that although 15 of its resellers were receiving a price rise, for more than 100 the wholesale price remained the same.

Farrar said the price decision was made at an internet society meeting in June in order to provide a larger financial buffer as market changes were implemented.

Domainz has yet to decide whether it has a future in wholesaling domain names, but Locke said it would not compete in the wholesale market at the level of $30 that early competitors are entering at, and he did not expect those prices to last.

Farrar said the costs of implementing the new system had been lower than expected and it was likely that the wholesale price would drop in future.

Despite suggestions of rising prices the onset of wholesale competition in the domain name market has had an immediate effect.

Iserve has dropped its retail price from $45 to $38 a year with no name holder or setup fees and has wholesale for high-volume buyers down to $29.50 a domain with a $282 a customer annual fee.

Newcomer Webaddress has a bulk-buyer focus, selling domain name registrations for $32.63 a year with a minimum $62.50 monthly bill.

Iconz is reviewing its pricing, which is at present $44, to register a name with a $50 set-up fee in some situations and a $10 charge per three domain names.

Christchurch seller RegisterDirect will join the registry this week. Spokesman Michael Schupback said it would review its prices but for now keep them at $49.50 retail for domain registration and a $33.75 name-holder setup fee.

He expects prices to drop on basic registrations and that money to be made up on additional services.

Last month Richard Shearer, of domain name seller Freeparking, questioned whether prices would drop, considering that the wholesale price for the larger sellers had risen from $22.50 to $27 a year. Freeparking's retail price is $44.95, and it has an affiliate program that pays users $5 per NZ domain.

Shearer expects FreeParking to have joined the registry before February.

Telecom-owned ISP Xtra has not committed to becoming a registrar. Spokesman Chris Thompson said he expected some turbulence and the market would take a while to settle down.

He said Xtra did not want to be the "domain name speculative area" of the market and its customers demanded that Xtra take a conservative approach around supplying domain name services.

A total first-year cost of domain name setup and ownership through Xtra at present costs $267.75.

WebAddress

iSERVE

Iconz

Register Direct

Free Parking