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I want to register a domain for a new top domain. The sunshine period has just expired so I expected domains to be available freely.

However, I was surprised to find that there's now an 8 day "auction", where prices for "pre-registration" drops every day, until domains are freely available on day 8. The first day, the price (for pre-registration of the domain I want on a certain registrar) is about $12 000. The second day the price drops to $4 000, and so on until day 8 with a price of a mere $25.

Is this auction-style process how domains for new TLDs normally are offered, or is it a scam? Do these pre-registration prices vary significantly between different vendors? And who takes the money in the end, ICANN?

  • Gtld are a royal scam, since the spirit of the web has been "free and open". I don't buy a gtld unless it's under $100. – 51336 Sep 15 '18 at 17:53
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The new GTLDs (Generic Top Level Domains) are privately owned. The companies have generally paid a pretty hefty price for the rights to be the registry.

The evaluation fee from prospective applicants is $185,000. According to the gTLD Applicant Guidebook, a $5,000 deposit is required "at the time the user requests an application slot within the Top-Level Domain Application System, and a payment of the remaining $180,000 submitted with the full application.*"

They then have the right to sell the gTLD for any price they like. There have been some problems with the system ranging from significant price increases to lack of general awareness.

Is the auction selling model a scam? Depends on how you look at it.

  • Not to mention the infrastructure requirements which can make any TLD sky rocket into the millions. Cheers!! – closetnoc May 1 '18 at 15:30
  • Thanks. gTLD = Generic Top-Level Domain, TAS = Top-Level Domain Application System – Gruber May 1 '18 at 18:03
  • $185,000 is a very small part of all they have to pay, there are many other fees. – Patrick Mevzek May 3 '18 at 0:55
  • @PatrickMevzek yeah, I just wanted to give the idea that it is not an inexpensive undertaking. – Steve May 3 '18 at 1:26
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I think you are speaking about .APP (operated by Google) that just opened on May 1st with a reverse auction model, starting the first day with a $10,000 price tag (registry price, you need to add the normal creation price which depends if the domain is premium or not) and going down each day until May 8th where it will open to everyone at the same price (except premiums that will always be priced differently).

For .APP, you will be able to find all of its registrars here: https://www.registry.google/about/register.html and hence comparing their price. You have also a specific badge for those participating in the EAP (Early Access Period). Some registrars clearly show the repartition between their added price and the registry price, and sometimes how the registry price is composed of a base price, sometimes a premium price for some domains, and then the "EAP" special price on top of it, as needed.

If you were speaking about another TLD you should have said so, but anyway the rest of my reply below applies as well in other cases.

Like @Steve said, various organizations participated in the ICANN new gTLD openings a few years back. Most of them are now started or dead, only a few remains (or are in heavy disputes like .WEB right now).

$185,000 was indeed the application fee to be able to candidate for a TLD. This is far from all fees to be paid, both during the assesments and later during the life of the TLD, both as fixed amounts or as amounts tied to the volume. Since it is not the topic of this question, suffice it to say that this is a business counting in millions of dollars. But, specifically for .APP, Google had to shell out more than 25 millions of USD to win the right to operate it: http://domainincite.com/18066-google-buys-app-for-over-25-million ; and in that specific case the results of this auction won by Google did go directly to ICANN, in a specific fund, for some use yet to be determined (they have in excess of USD 230 millions sitting like that, see https://newgtlds.icann.org/en/applicants/auctions/proceeds).

So, obviously, except brands, a TLD would need at some point to earn enough money to justify its existence, otherwise it may just be closed, and this already happened (see for example lately: http://domainincite.com/22902-i-just-bought-a-new-gtld-registrys-domain-for-10).

It can do almost what it wants, as long as

  • it respects its local laws, of course
  • it stays within its contract with ICANN

The contract with ICANN basically mandates first a sunrise period where trademark owners, through a complicated mechanism (a third party managed by IBM, to which both registries and registrars must be accredited and hence pay some other fees), can justify their priority on some names.

You can find here: https://newgtlds.icann.org/en/program-status/sunrise-claims-periods the data about the relevant phases per TLD (this information is public and mandatory to be given by registries prior to their launch), or specifically for .APP at https://newgtlds.icann.org/en/program-status/sunrise-claims-periods/app

After that the registry can decide to go live, or start with specific phases and rules such as:

  • giving some domains to some parties that are good ambassadors of the TLD
  • changing its prices, in a reverse auction, like the case we are discussing.

What is the rationale of this last point? Past cases have shown that when new opportunities arise in domain names some parties do register a lot of domain and then sometimes quite fast try to resell them, for an higher price. So to deter this, or at least to moderate this activity, the prices are higher in the beginning in the hope of attracting only "legit" registrants that will really use and develop the name they buy.

You can argue about this all you want, it is a business position by a registry and there is nothing against it you can do. You can disagree about the rationale or the consequences but if you do not want to participate in these phases, you just need to wait for general availability. Even then some domains remain premium (from a list of reserved names by the registry) and will be billed a different price.

To go back to your questions:

  1. what you see is a process that happened in previous TLDs too; it is not necessarily a mandatory route, but it is not unusual either. Prepare yourself for the next ones being the same, like .DEV from Google also. So it is not a "scam" at least on the registry level. What other players can try to sell you is another issue, especially this is not a pre-registration, see the point just below.
  2. very important as this seems to be widespread: this EAP case is NOT pre-registration, it is a pure and simple registration, but with specific prices; domains are created live and can resolve immediately, if configured. See http://domainincite.com/22951-googles-app-gtld-beats-porn-to-biggest-sunrise-yet and Google own curated list at https://get.app/ for some examples; of course some registrars can offer you pre-registration services to queue your name and try to create it just after EAP ends: as with all pre-registrations system likes that, it does come with some drawbacks, the first one being that you have absolutely no guarantee of getting the domain you want (and also some registrars may make you pay even for failed attempts)
  3. who takes the money in the end? Not specially ICANN, while it gets its cut. The registry decides its pricing strategy so the money goes to it, and registrars along the route take their share as you need to use one to register the domain. Then registries and registrars have fees to pay to ICANN, but this has nothing specially related to the EAP case. IF you are interested by this have a look at:

    1. the ICANN-registry agreement at https://newgtlds.icann.org/sites/default/files/agreements/agreement-approved-31jul17-en.html (article 6)
    2. the ICANN-registrar agreement at https://www.icann.org/resources/pages/approved-with-specs-2013-09-17-en#raa (section 3.9)
  • Thanks, a very thorough answer. Yes, it's the new .app TLD I'm interested in. – Gruber May 3 '18 at 9:06
  • @Gruber That was expected ;-) If interested see my updates with link to get.app, details about pre-registration vs EAP, and details about the $25 million price paid by Google in an auction for this TLD and who got this money and what for. – Patrick Mevzek May 3 '18 at 17:02

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