Nominet stands to gain millions from .uk domains, but do businesses really need them?

I reported at the end of last year on Nominet's controversial proposals for .uk domains, which were viewed with scepticism by many businesses. 

Nominet recently came back after a consultation process with modified proposals, but the big question still remains: are they actually necessary? 

The problem is that this move potentialy devalues .co.uk domains, and will therefore force businesses to cough up for the .uk equivalent.  

And who benefits? Nominet, to the tune of £25m+...

The new proposals

Key controversies from the original proposals included the difficulty of existing .co.uk owners in acquiring the .uk versions of their domains, and the fact that part of the justification for the new extensions was security. 

The obvious response is: why not extend security to all UK domains? This is itself is no justification for .uk. Indeed, Nominet's answers to these questions were unconvincing, with the explanation that adding security measures to .co.uk would cost businesses more money.

The revised proposal includes: 

• Enhanced checks on registration data, and a UK 'address for service' requirement, to enhance consumer trust.
• A right of first refusal for existing .uk registrants.
• A competitive price point of around £5.50.
• A commitment to offer services to improve security across the whole .uk namespace.

One good thing is the right of first refusal to existing registrants of domain names, though this is common sense and fairness. Frankly, it was bizarre that this wasn't thought of in the first proposal. 

Issues not addressed by Nominet

There are a few here, one big one being the need for .uk in the first place.

Introducing the new extension virtually forces brands to buy the new domains, as they wouldn't want to risk confusion for searchers, as well as the potential for existing domain extensions to be devalued. 

So, this essentially doubles the renewal fees for the 3m+ businesses with .co.uk domains, not to mention the costs of changing stationery, marketing materials, customer 'education' and so on. All for no obvious benefit for business.

Also, despite much-trumpeted new security features, the confusion between .uk and .co.uk could well mean a greater likelihood of phishing attacks working. 

In a post from Edwin Hayward, he outlines other problems with .uk. These are just a sample:

• The current system is effective and well understood.
• There are no technical reasons to change the current structure.
• Using .UK and .CO.UK alongside each other for businesses creates confusion.
• Technical setup costs for running two domains and redirecting emails and traffic.
• Loss of confidence in .co.uk as .uk takes off.

The benefits for Nominet

The benefits of the new domain extension are unclear at best for businesses, but the extra renewal fees will certainly benefit Nominet. 

Depending on the uptake, and based on a £5 per year renewal fee, Nominet stands to make more than £25m, and perhaps £40m+ from .uk. 

I said in my last post that this amounts to a tax on the UK's online businesses, and the new proposals haven't changed my mind on this. While some issues have been addressed, the fundamental question of why this is necessary remains. 

Here's Nominet's explanation: 

We believe that a new secure product will create a new, trusted online home for British businesses. We hope it will help the internet economy by combating cybercrime and creating a namespace which consumers trust.

Since our inception in 1996, we have been asked numerous times about whether registrations at the second level would be possible. Our market research shows businesses demand for effective and convenient tools that would ensure the integrity of their online presence and deliver higher customer confidence.   

So we have security issues which could be addressed without the new domains, and their own market research which can't always be trusted, especially when the organisation carrying out the research has a vested interest. (Lets face it, if you want a certain answer, you can ask the question in a certain way). 

Edwin Hayward: 

The winners from this are Nominet, registrars, and trademark holders, while the losers are existing .co.uk registrants, UK businesses, the credibility of .co.uk namespace, and trust in .co.uk. 

In fact, a similar proposal was put forward in 2005 (quietly to the Policy Advisory Board, not to the public) and was voted down 11-0. This PAB board was abolished in 2010, and now Nominet 'oversight' is from Nominet Members, who are mainly registrars.  

If there are genuine reasons for the new .uk domains, Nominet should state them clearly and, if there is a demand from businesses, let's see the stats. 

The consultation continues...

This is not finally decided yet. The consultation process will continue until 23 September 2013. 

You can add your views on this using this online form (spot the link to the form if you can). It's hardly an example of web form best practice, but it's important to make your views known if you have concerns.