2007 NPP Meeting - 14 August 2007
Sixth Meeting
14 August 2007, 2.00-5.00pm
Maddocks Lawyers, Sydney
Present: Bruce Arnold, Philip Argy, Darrell Burkey, Grace Chu Te, Brett Fenton, Peter Firminger, David Goldstein, Kim Heitman, Kathryn Kerr (proxy for Graham Ingram), Amin Kroll, Jo Lim, Jeff Marr, Andrew McCullough, Jamie Murphy, Bennett Oprysa, George Pongas, Holly Raiche, Dean Shannon (observer) Tony Steven, Bruce Tonkin, Derek Whitehead
Teleconference: Simon Delzoppo, Sally Foreman, Paul Szyndler
Apologies: Alex Woerndle
Actions:
• DW and JL to draft secondary market proposal.
• DW and JL to draft Panel’s second consultation report.
Discussion:
1. Discussion of domain monetisation policy
DS gave a short presentation about domain monetisation based on his seven years experience in the .com market. His former company holds 550,000 .com domain names, and sells on average 5 domain names per day for an average price of USD800 per domain name. DS advised that, at the moment, the com.au market is worth 40% less than the .com market.
BT explained that domainers obtain profitable domain names through two ways: by registering expired domain names that already have associated traffic, or by registering topical domain names about a current event or celebrity.
JL advised that there are some gaps in the current policy relating to the protection of brand names where they are included in compound domain names (eg. domain names like telstraphones.com.au or safewaysupermarket.com.au would not be covered under the current policy).
There was general discussion about the impact of domain monetisation. The Panel noted that:
• auDA’s conservative estimate is that approximately 5% of com.au domain names have been registered for the purpose of domain monetisation
• there has not been a noticeable increase or spike in registrations since the domain monetisation policy was introduced in July 2006
• around 30-50% of complaints to auDA are about domain monetisation
There was also some discussion about what domain monetisation means in practice; it is often difficult to define a “monetised website”, based on the design of the site and the ratio of ads to other content.
Two propositions were put forward, which attracted some minority support, but were rejected by the majority of Panel members on a formal vote:
• that the domain monetisation policy be abolished, ie. it would no longer be permissable to use the close and substantial connection rule to register domain names for the purpose of monetisation
• that domain monetisation be separated out from the close and substantial connection rule, and that domainers be required to self-select the “domain monetisation” category at the time of registration.
The Panel agreed to recommend that the current domain monetisation policy be strengthened to provide additional protection to brand names.
2. Discussion of secondary market
JM and DS tabled an informal survey of 84 small business owners in the Gold Coast region showing that 95% did not have a problem with selling .au domain names.
The Panel considered the two options outlined in the discussion paper (attached). A straw poll of Panel members indicated clear consensus for relaxing the current policy to permit a wider range of circumstances in which transfers could take place, however there was no consensus for an open secondary market in domain names.
There are two opposing principles held by Panel members:
1. Domain names are a public resource, and .au policy should not regard domain name licences as a tradeable commodity.
2. An open market is the norm, and domain name licences should be as tradeable as any other form of licence.
Some Panel members expressed concerns that a secondary market would artificially inflate demand by making people think they need to buy more domain names, or that there is a lot of money to be made in selling them. It was thought that small business in particular would be priced out of the market.
Other Panel members argued that a secondary market would give small business more choice and open up new online business opportunities. It was also pointed out that restricting transfers to a private transaction would not necessarily make domain names more affordable.
There was general agreement that cybersquatting, domain speculation and warehousing would need to be addressed within an open market scenario.
BT proposed a model to facilitate implementation of a secondary market in a way that addresses concerns about equity and access, domain speculation and warehousing, and other potential negative effects. He suggested the following:
• an initial centralised market, with all sales listed on a public website
• domain names cannot be transferred in the first 6 months of registration
• cap on the number of domain names that a registrant can transfer per annum
• domain names must be listed for 30 days before sale to allow time for any objections from trademark holders
• the registrant must advertise a fixed upfront price
• a transfer fee is payable to auDA, to cover the cost of monitoring the market
• sale price must be published on the site and notified to auDA
• a built-in 6 month review mechanism.
The Panel will continue discussion of this proposal on the mail list.
3. Next steps
The Panel is due to release a second consultation report containing its draft recommendations to the auDA board.
The aim is to finalise the report on the mail list and release it by the end of August, for public consultation during September.
Next meeting:
Tuesday 11 September, 2-5pm in Melbourne – to be confirmed, depending on the outcome of Panel discussions on the mail list.
Last Updated: 06/09/2007 15:57
