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November 26, 2007
Nominet rules foster domain ticket-touts
According to Nominet, the registry for .uk domain names, one in 14 lapsed domain names is registered within 10 seconds of becoming available to a new registrant.
The data, contained in a Nominet report on the domain name system, serves as a warning to firms that fail to keep their contact details up to date, or fail to monitor messages sent to the registered email address, or fail to scribble renewable reminders on their kitchen calendar. You can renew up to six months before the expiry date.
The ten-second figure is significant, because it highlights that a lot of re-registration activity is automated, with software hooked up to Nominet’s Domain Availability Checker (DAC) tool. Available only to registrars affiliated with Nominet, DAC is kept busy: “The DAC averages 25 million queries per day [and] the top 20% of DAC users account for over 80% of DAC activity,” Nominet reports. This is a lot, given that there are only six million .uk registered domains.
Part of the reason for this volume of requests is, no doubt, that Nominet is a little loose with the cancellation processes. For reasons that may be obvious, I was recently interested in snapping up the golem.co.uk domain, which was not renewed by its prior owner and was suspended early in September this year
You can’t reserve a domain in this limbo situation - Nominet operates a first come, first served system. But you can work out what day the domain will be made available.
The cancellation process works like this:
- On the domain’s expiry date, if the domain has not already been renewed, Nominet sends an email reminder to the registrant advising them to renew via their normal registrar.
- Seven days later, if the domain has still not been renewed, an invoice is sent to the registrant by post and email.
- After 30 days from the date of the invoice, in the absence of payment, Nominet suspends the domain name, removing records from its DNS servers but not from its Whois database.
- In the absence of a renewal, Nominet cancels the domain name 60 days later.
In other words, the domain becomes available for new registrants 97 days after the expiry date.
The cancellation process is automated, and I had assumed that this meant the golem.co.uk domain would become available to buy just after midnight on 6 November [Update: I've since learned that the expiry occurs at a random time on the appropriate day]. Maybe my maths was poor, because it actually became available on 8 November, and not at midnight but at some point between 8am and 9.30am - I’m not sure exactly. When I checked at 8am it was still suspended, but by 9.30 it had a new owner.
It was snapped up while I was on my way to work by a registrant called TagNames, through a registrar called TagNames. My assumption is that TagNames has a DAC account, although it is not actually listed as a Nominet member. Currently no nameservers are listed for the golem.co.uk domain, suggesting that its current owner is not urgently about to do anything at all with it. I assume TagNames is actually a domain speculator.
This sort of renewal speculation is potentially a very lucrative business, and the profit is being actively pursued. Nominet’s report reveals that “around 50 registrants hold more than 3,000 domain names”. Maintaining 3,000 .uk domains requires an annual outlay of about £9,000 in Nominet fees alone.
One snapper-up of expired domains is Denys Ostashko, who is personally registered with Nominet as a registrar. Among others he now owns the lem.co.uk domain, which used to belong to a forgetful firm called LEM. Ostashko expects a “five figure sum” before he’d consider selling this three-letter domain. I doubt he’ll get a buyer at that level, but at an asking profit margin of a million percent he clearly doesn’t need to sell many to make the effort worthwhile.
While Ostashko and TagNames are doing nothing that is against the rules, I wonder why Nominet leaves space for what are effectively the equivalent of ticket touts.
Why doesn’t Nominet operate a sealed-bid system for auctioning off suspended domains? It would certainly be fairer than today’s automated first-past-the-post system, it would discourage speculation - and would make more money for Nominet to boot.
Update: I've come back to this topic in a follow-up post.
Hot off the press.. brought here to comment =)
Don't you think this attitude is slightly biased? I appreciate desire to own generic 3 letter acronym, which also happens to be a (rare?) name, however this domain is in single quantity but wanted by many. It is only market which dictates it's value.
4(by the way)-5 figures is a real price tag and I'm sorry if you can't afford it. The domain is an investment and is not necessary for re-sale. In a year or ten, I might find it fits well for another project and it will be there ready to be built.
Parallel with ticket touts is flawed, you should have drawn a proper parallel with land buyers. Or even buy-to-let landlords.
Cheers.
Posted by :Denys | November 26, 2007 3:10 PM
Interesting comments... however, as most of the owners of previously registered domain names within the UK 1) Do not exsist from 12 years ago 2) Have no interest in your opinion on 1 single 3L UK... why act so huffy? IF you had actually researched your comments BEFORE posting, you would also see that, of the 6 million UK names, only a very small number are actually worth any real value to previous or new owners alike! The object of registering a domain name is nothing like that of a ticket tout. Serious "Domainers" (by the way not only is it a reference to Domain Buyers, it is a REAL JOB!) work very hard, just as a any other person, in any other industry... if you want to make an offer for LEM.co.uk just email us and we will put a brokered offer in for you... be quick though as LEM.com will not moan about paying a few pounds out for something they want... unlike you, thank you for allowing us to comment on your "story" if you require a REAL press release, from a REAL person... you only have to ask and we would be able to provide it, have a nice day :-)
Posted by :mxm | November 26, 2007 3:25 PM
Your article looks like sour grapes at not securing two domain names you would have liked for yourself, manifesting itself in an article describing those who beat you to them as Touts. It is not nearly as balanced as you might think. The cancellation process is a red herring to your gripe, as clearly by the end of this stage, sufficiently ample opportunity has been afforded to the current registrant by Nominet to retain the name.
To the informed reader, it looks like because you didn't get the names you wanted, on your terms, you've published a crusading article aimed at spoiling it for those who secure names with the legitimate use of Nominet's DAC.
LEM, you should have focussed your grievance much more on Nominet than you did, and i only hope that in the future when something really critical of Nominet surfaces, you afford as much effort to that as you have on this!
Posted by :Tony | November 26, 2007 4:46 PM
I'd just like to say that the article was not prompted by sour grapes. As I said, the people who own the names I would like to own did not bend the rules, and are entitled to ask what they like for the names they hold. I happen to think that Nominet's policy is not the best policy it could operate. The comparison with touts is perhaps unfair, as touts generally operate outside the rules set by the venue, but the gist of what's being done by some domainers is, I feel, similar nonetheless.
Posted by :Lem | November 26, 2007 6:34 PM
If you're going to start from Nominet's report as the basis of your post, then don't be too selective!
Nominet recognizes the secondary market as being a business in its own right later in the report (no nonsense about "touting" to be found in their official document).
Their report also clearly explains the real-life current value of transactions in the aftermarket, so your incredulity at the pricing of a 3-letter generic rings somewhat hollow. Here's their section on resale from later in the SAME report, to illustrate what I mean (the words below are entirely theirs, not mine):-
"Resale
A good domain name has become an intrinsic part of any brand, and the value of a domain name registration therefore varies according to its association with a brand or product. As the .uk domain name space becomes more crowded, new companies, products or marketing campaigns requiring a relevant domain name will often find their first choice name is already registered. There are a number of companies whose sole business is the buying, selling and storage of domain names. People who buy domain names for the purpose of re-sale at a higher price at an opportune point in time are known as domainers or domain warehousers and may own several thousand domains across a variety of TLDs. There is an active market in the buying and selling of domain name registrations, with peak values reaching in excess of £1m, and regular sales in excess of £100k. Domain name registrations are sold via direct contact or at auctions, both online and ofline."
Posted by :Edwin | November 26, 2007 11:50 PM
What were you going to do with golem.co.uk Lem? Were you going to make a site with content about Lord of the Rings, or sell it on for a profit?
I agree it's not an ideal situation, I suppose the logic of having a first come first served system in theory means anyone can regiter it, not just whichever big company has the most money (as would happen with an auction system).
In practice whoever gets there first then puts it up for sale (if profit is thier motive) and the person with the most money wins. Doing it this way means nominet is doing it fairly from their point of view and are not profiting from old domains
Posted by :MrTshirts | June 19, 2008 1:56 PM