EURid To Stifle .eu Speculation

In a move that seems contrary to the whole registrar/reseller model on which the internet runs, the bozos in Brussels (The European Commission) have decided that only registrars who have forked up the 10,000 Euros up front payment will be allowed to sell .eu domains. But this is an advance payment for the registration of 1000 domains rather than a fee to become a registrar. Michele Neylon blogged about it but the .eu gTLD does not seem to have registered with most hosters in Ireland.

The following clarification, quoted below, appeared on the EURid website:

“Reselling” of .eu domain name services
22 Jul 2005

Important notice concerning the “reselling” of .eu domain name services

A consultation with the European Commission services has led towards a clear position concerning the offering of so called “reseller” services for .eu domain names.

Regulation 874/2004 of the European Commission laying down the public policy rules concerning the .eu Top Level Domain states clearly that only registrars accredited by the Registry (EURid) shall be permitted to offer registration services for .eu domain names (see article 4 of the regulation). This means that the offering of services as a “reseller” (as a kind of subcontractor of an accredited registrar or as an intermediary without having concluded an agreement with the Registry in order to become an accredited registrar) is completely excluded.

EURid advises to check at all times if your service provider appears in the list of accredited registrars. Only companies and undertakings which appear in that list have the authorisation to offer .eu domain name services. ”

Since the .eu gTLD has not launched yet, it is only possible to speculate on what effect that this will have on the new gTLD. Selling 1000 .eu domains in the first few months of launch is possible. But it is only possible for the top hosting companies in Ireland. The ISPs may have to sit this one out as they seem to just keep losing clients to the second generation hosters. The big question is whether people will adopt the .eu gTLD. It has a lot of competition.

As a speculative market, the .com gTLD took off a few years ago when it was effectively deregulated. Prior to that, Network Solutions had been the registry and sole registrar for .com gTLD, .net gTLD and .org gTLD. The price of a domain went from free (the good old days) to to $100, $110, and to $70. When other registars were permitted to sell .com/net/org, the prices dropped dramatically. The effect of that price drop coupled with the whole dot.bomb bubble drove the speculation in domain names. Eager speculators saw good domains changing hands for millions or at least thousands. And unlike the dot.bomb bubble, domain name speculation is still rife in .com gTLD.

The .info and .biz gTLDs are still small. Many of the registrations in .info are freebies - domains given to holders of the equivalent .com domains by registrars eager to promote the gTLD. The core count of .info domains could be around the 1.5 million mark rather than the 3.6 million or so .info domains registered. The .biz gTLD has around 1.2 million domains. The .com gTLD on the other hand has around 39.8 domains registered. While .eu may have a large market, it is this existing market that it has to overcome.

So what drives the growth in the .com market? The big registrars have millions of domains registered but it is the resellers with their own branding that account for many of these domains - exactly the kind of registrar/reseller model that the bozos in Brussels want to ignore. But .eu will be an unregulated gTLD and it will be open to just the same kind of cybersquatting and speculation that inflates other gTLDs. But in a few years time will .eu be a competitor to .com or will it be a case of dot who?

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Written by John McCormac on July 30th, 2005 with comments disabled.
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