One of the most read articles in Domainer history was “Follow The Money”. Believe it or not, this was written almost 4 years ago to the day! This was an article about who would be the financial winners out of the introduction of direct registration e.g. yourname.au.

Little did any of us know back then that things could get even worse.

We now have a situation where not only is there going to be additional revenue generated by an extra extension, there are going to be a swag of ongoing fees generated ad infinitum. People, small and big business paying a fee year after year if they have a com.au domain name that is conflicted. i.e. if someone else has the same domain name, but in a different extension like net.au, org.au, asn.au, gov.au, id.au etc.

Fair Implementation

Direct registration is coming whether some of us like it or not. But if you go back to the original 2015 Names Panel and the subsequent Board decision, it was always subject to the development of an acceptable and fair implementation policy. In my opinion, this charging of an ongoing “opportunity fee” to multiple holders (by auDA) is unconscionable.

Who Are The Winners?

  • auDA (regulator)
  • Afilias (registry operator)
  • Registrars
  • Registrars who are drop catchers
  • Resellers
  • Some registrants

Conclusion

I’ve written before that I understand (and can accept) that direct registration is being introduced to support the .au eco system. But it has to be done fairly without any hint of avarice or greed.

Most importantly though, those 90% of registrants that wouldn’t even have a clue what is happening need to be told and educated. This is auDA’s fiduciary duty.

Ned O’Meara – 12th September 2019

5 thoughts on “Following The Money

  • Scott.L
    September 12, 2019 at 10:02 am
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    What are the real reasons for this fee? Is it to cover admin costs or something else?
    I see some people think this fee is for leverage (applying an element of financial pressure) but the fee is cunning enough to be small enough for many people to pay it. It goes under the radar. (What’s ten bucks) Now consider the actual process, multiple parties are locked into a multi-conflict process, and this is when the real expensive element comes into play, one registrant is required to negotiate and possibly pay out multiple parties for ONE DOMAIN. Who is going to do that? Therefore, these conflicted domains are locked down and the application fee is raked in by auDA year after year until the gleam and gloss of this opportunity is gone along with the motivation to keep paying the application fee. auDA is profiteering from a conflicted namespace which they have deliberately created, and how ironic, auDA will not provide these parties any remediation between them except to say, go find a lawyer. (But it’s only $10 bucks)

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  • Avatar
    September 12, 2019 at 10:46 am
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    AudaClassAction.com

    auDA have ignored the warnings and No the Directors insurance will not cover them personally on this one as it appears their Insurance company will not have been properly informed of all risks and facts… just like everyone else hasn’t been either!

    FYI auDA Policy Review Panel said No Conflict Process fees would occur! It was knocked on the head in the public meetings when questioned.

    auDA ( and the PRP?) may have deliberately misled the public and stakeholders during the false Consultation process.

    Is this why auDA and their PRP wanted to shred all evidence of their meetings?
    https://www.itwire.com/strategy/83762-auda-panel-moves-to-delete-record-of-past-meetings.html
    PRP Wants to Destroy recordings and evidence https://www.dntrade.com.au/threads/prp-wants-to-destroy-recordings.12060/
    https://www.dntrade.com.au/threads/auda-prp-meeting-audio-and-presentation-request-on-auda-website-for-public.11765/

    auDA and their Policy Review Panel had been referred specifically to this and advised in writing the evidence may be required in the future:

    http://classic.austlii.edu.au/au/legis/vic/consol_act/ca195882/s254.html

    CRIMES ACT 1958 – SECT 254
    Destruction of evidence

    (1) A person who—

    (a) knows that a document or other thing of any kind is, or is reasonably likely to be, required in evidence in a legal proceeding; and

    (b) either—

    (i) destroys or conceals it or renders it illegible, undecipherable or incapable of identification; or

    (ii) expressly, tacitly or impliedly authorises or permits another person to destroy or conceal it or render it illegible, undecipherable or incapable of identification and that other person does so; and

    (c) acts as described in paragraph (b) with the intention of preventing it from being used in evidence in a legal proceeding—

    is guilty of an indictable offence and liable to level 6 imprisonment (5 years maximum) or a level 6 fine or both.

    Notes

    Note 1 to s. 254(1) substituted by No. 69/2009 s. 40.

    1 Document is defined in the Evidence Act 2008 .

    2 The maximum fine that may be imposed on a body corporate found guilty of an offence against this section is 3000 penalty units: see Sentencing Act 1991 s. 113D.

    (2) This section applies with respect to a legal proceeding, whether the proceeding is one that is in progress or is to be, or may be, commenced in the future.

    New s. 255 inserted by No. 6/2006 s. 3.

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  • Avatar
    September 12, 2019 at 11:13 am
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    Spot-on, Ned and Scott.

    The never ending “opportunity fee” is ridiculous. And so is the weaving, ducking and diving and constantly changing “cut-off date”.

    The “opportunity fee” and the “cut-off date” need to be abolished.

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    • Scott.L
      September 12, 2019 at 11:42 am
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      Yeah, auDA took advantage of the attitude, “if I can’t have it then neither can anyone else” as long as I pay that annual fee, because it’s cheaper to veto my competitors with a $10 annual fee than to pay them out. Therefore, why should I fork out wads of cash to my competitor just to buy a domain name in a hodgepodge space that is untested to provide any real value.

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  • Avatar
    September 13, 2019 at 9:42 pm
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    The following text* draws substantially on my “Confidential” Submission to auDA of 13 May 2019. I see some of this text as being relevant to the “Following The Money” article and “Comments” thereon at . I’m overseas in a significantly different time zone.

    Ian Johnston
    ______

    * This Submission responds to a public invitation to comment on the following documents:
    1. 2017 Policy Review Panel Final Report and Recommendations: auDA Management Response (1)
    2. auDA: Management review of PRP panel recommendations and refinement of existing rules, April 2019 (Board Presentation) (2)
    3. Proposed .au Domain Administration Rules: Licensing (3)
    4. Proposed .au Domain Administration Rules: .au Namespace Implementation Rules. (4)

    Specific Comments

    I have a fundamental concern that the published documents (1, 2, 3 & 4 above) do not give sufficient weight to “principles of competition”, a core function under auDA’s Terms of Endorsement and the underlying economic foundations and principles of competition law as embedded in the Competition and Consumer Act and administered by the ACCC.

    I note key points in each of the following published documents and provide comments thereon:

    1. 2017 Policy Review Panel Final Report and Recommendations: auDA Management Response (9)

    This document notes auDA’s Terms of Endorsement (ToE) (10) and includes these core functions:
    – Promote fair trading and consumer protection (ToE); and
    – Establish appropriate dispute resolution mechanisms (ToE).

    It includes six references to “competition” (at pages 3, 6, 9, 12), mainly related to auDA’s core function to “Promote principles of competition, fair trading and consumer protection”.

    The reference at p.12 relating to Recommendation 22 – That Direct Registration be implemented as soon as practical in accordance with the implementation policy set out in Annexure E to this (PPR) paper – states:
    “Competition in the .au domain namespaces is enshrined in the principles of no hierarchy of rights, no proprietary interest in a domain name and. … . The first come, first served principle means that the first person who makes a valid application for a licence using that domain name will be able to register that domain name. 
auDA acknowledges there is a persuasive argument for protection of incumbent interests to protect consumers but notes that the consumer risks are no different to those encountered already in the 2LD namespaces.”

    Comments

    To assert that: “Competition in the .au domain namespaces is enshrined in the principle … of first come, first served.” demonstrates a lack of understanding of important economic concepts that underpin “principles of competition”.

    If anything, first come, first served (FCFS) is time based competition and does not guarantee “fair trading and consumer protection”. For example, in cases:
    – when multiple Registrars and others use high speed systems to capture potentially valuable domain names in “fractions of a second”, e.g. as happened in 2002 when residual generic domain name rights were subsequently auctioned; and
    – when multiple persons with the same Registrar have an interest in acquiring a licence to the same domain name in the new .au namespace.

    3. Proposed .au Domain Administration Rules: Licensing (3)
    4. Proposed .au Domain Administration Rules: .au Namespace Implementation Rules (4)

    Comments

    • In my view, both of these Proposed Rules do not give sufficient weight to the “principles of competition … ” a core function under auDA’s Terms of Endorsement. 
 In fact there is no reference to “competition” in the Implementation Rules:
    • The Proposed .au Domain Administration Rules: Licensing sets out the Objects (p.2) of these Rules. The objects are to ensure that a licensing system is established which, amongst other things:
    – Promotes consumer protection, fair trading and competition; and
    – Preserves the fundamental principles of no proprietary rights in a domain name, first come, first served, and no hierarchy of rights.
    • Proposed .au Domain Administration Rules: .au Namespace Implementation Rules sets out Objects of these Rules:
    – There is no reference to “competition” in these Proposed Implementation Rules.
    – These Proposed Implementation Rules includes Objects that state that these Rules are to: (1) establish a transparent and equitable process for priority registration of licences in the .au namespace; … (3) implement an efficient and effective dispute process for the registration of licences in the .au namespace.

    Recommendation

    I recommend that the Proposed Implementation Rules be revised to include:
    • a reference to “competition” in the Objects of these Rules; and
    • a mechanism to ensure that where multiple persons with an eligible licence, if no agreement is reached within a specified time, then an orderly, open and competitive auction would be conducted as the basis for allocation of the rights to the licence in the .au namespace.

    Reasons in support of this Recommendation

    The use of an orderly, open and competitive auction:
    • is consistent with competition policies of successive Australian Governments as embedded in competition law, sale of leases (airports) and sale by auction of licences to use radio frequency spectrum, smart phone numbers and other electronic addresses;
    • is consistent with auDA’s core function to “Promote principles of competition” and “Establish appropriate dispute resolution mechanisms”;
    • is an appropriate way to address problematic issues identified above;
    • is entirely consistent with the Principles set out above; and
    • would meet the core function of auDA to “Establish appropriate dispute resolution mechanisms”
    • is consistent with auDA’s longstanding precedents, policies and practices of auctioning and/or facilitating the auctioning of (the rights to) potentially large numbers of valuable domain name licences in primary and secondary domain name licence markets since 2001;
    • is a quick, fair and efficient way of determining allocation of potentially valuable and/or large numbers of domain names licences, notably generic domain name licences;
    • will ensure that an ‘eligible’ person who values a domain name the most will be allocated the name in the new .au namespace;
    • would avoid potentially costly and complex negotiations between multiple persons with an eligible licence, involving lawyers and other dispute resolution service providers, with no certainty of a successful outcome; moneys may be better spent in bidding at an auction;
    • would avoid criticism of auDA that its Rules, in effect, caused prohibition of registration and use of domain names in the .au namespace which are potentially valuable and/or large numbers of domain names licences; these domain names are likely to be generic domain names in .com.au, the rights to which were won at auDA auctions won by auction in the early 2000s and the .net.au domain names with the same suffix acquired on a FCFS basis;
    • would enable auDA to capture the proceeds from auctions and distribute them to other registrants – predominantly micro and small businesses;
    • would avoid auDA having to develop and administer a potentially complex system involving “annual application renewal fees” (1.9.10, page 11);
    • would prevent any person or persons with an eligible licence from exercising the power of veto and, in effect, prohibit the use of a domain name in the new .au namespace;
    • would ensure the issue of a domain name licence by auDA in the .au namespace that would be in the long term interests of consumers and end-users, rather than administering another system of, in effect. “prohibited” domain names; anti-competitive in nature; and
    • would avoid the risk of aggrieved persons with an eligible licence from seeking ACCC intervention under the Competition and Consumer Act 2010, noting that the Proposed Licensing Rules states: “Nothing in these auDA Rules is intended to exclude the operation of the Competition and Consumer Act 2010 (Cth)”.

    Footnotes:
    (1) https://www.auda.org.au/assets/Uploads/auDA-Management-Report-PRP-Recommendations-Final.pdf
    (2) https://www.auda.org.au/assets/Uploads/auDA-Management-Report-PRP-Recommendations-Presentataion-15Apr2019.pdf
    (3) https://www.auda.org.au/assets/Uploads/auDA-Licencing-Rules-consultation-final.pdf
    (4) https://www.auda.org.au/assets/Uploads/auDA-namespace-implementation-rules-15-April-2020.pdf
    (5) …
    (9) https://www.auda.org.au/assets/Uploads/auDA-Management-Report-PRP-Recommendations-Final.pdf
    (10) Terms of Endorsement https://www.communications.gov.au/documents/review-au-domain-administration-terms-endorsement
    &
    Minister for Communications and the Arts’ Letter of 16 Apr 2018 to auDA Chairman forwarding Terms of Endorsement https://www.communications.gov.au/sites/g/files/net301/f/minister-to-auda-chair.pdf

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