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Fair Market Value

Fair Market Value

August 25, 2006
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XBIZ News reported today that “ICANN Changes Fee Structure for .Biz, .Org, .Info” – a story that was accompanied by speculation that fee structures could also be changing for other TLDs such as .com.

For those that missed this breaking news story, the upshot is that “differential/tiered pricing on a domain-by-domain basis” would now be allowed.

What does that mean? It means that “the registries could charge $100,000 per year for Sex.biz, $25,000 per year for Movies.org, etc” rather than charging a fixed amount per domain name, regardless of its true, fair market value, as is the case today.

Some see this as a way to purge adult properties from inappropriate TLDs, a move which isn’t a bad idea, since in the case of dot-org; the TLD was intended to serve non-profit organizations, not house “gaping-vagina-videos.org.” This isn’t an issue of “censorship” but of appropriate use of web designations – a key step in ensuring that adult material is targeted to consenting adults only, in part by pricing adult (or other objectionable) domains out of the market.

Others see it in purely economic terms. For example, under the current system, registrars are required to charge the same fee whether the domain is ‘sex.com’ or ‘dafdsajgp.com’ – two names with vastly different values. While registrants are free to resell names at often insanely marked-up prices, the registrars are stuck with charging the base fee, perhaps unfairly so.

While some domain holders will certainly face problems over this, as it appears there is little recourse once your registration fee is due other than to pay up or lose the name, it has to be said that this is capitalism the way it’s supposed to work, “fair” or not. Sure, I’d like to see provisions that would protect existing domain holders, but this defeats the idea since just about every decent name is already taken.

Regardless of the outcome of the current changes or of any future measures along these lines, webmasters need to watch this story and make contingency plans in the case that their $8 domain name suddenly costs them $80,000 when it’s time to renew…


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