Open War for the РФ Domain. FAS was really FAST!

The National Cyrillic Domain has managed to become a real scandal generator as early as at the stage of Sunrise Registration. It started from registration of a pair of dozens of .РФ domains by a quickwitted CETIS company, which has allotted "секс.рф" for "ladies’ handbags" under absolutely lawful grounds. The tabloid story has proceeded with the registration of fictitious companies and mass media. The examples were not difficult to appear. However, the РФ TLD sponsor- Coordination Center for TLD RU (CC) has kept laudable optimism for the whole period by claiming that scandals only stir up interest to the new project.

All these disturbances turned out to be only a modest prelude to the major action — public registration of Cyrillic domains, launched on November 11. РФ TLD has shown an impressive breakthrough, and a week later the number of registrations exceeded their limit of 500 ths. On the other hand, the degree of scandalous stories around РФ TLD has gone over a boiling point, when lawsuits, Antimonopoly Service, and even deletion of already registered domain names started to be mentioned in terms of public registration.

On November 19, the Federal Antimonopoly Service (FAS RF) took a decision on initiation of proceedings concerning several registrars — RU-CENTER, ElvisTelecom, Demos, Relcom, Delovaya Set and Domenus. The grounds therefore were 14 applications from various citizens, who have detected unfair competition in the registrars’ activities. Among the most persistent complainants was, in particular, Alexander Kogan, a deputy of the State Duma, who was inspired for application to FAS by Mikhail Dvorkovich, brother of the RF President’s Assistant.

This circumstance has forced a lot of people to rub their hands with waning bloodiness in expectation of vindicatory punishment. Whether the excited users will make a rod for themselves in their joy or not is highly questionable. It would be not bad to gain insight into occurring situation before shouting halloo.

It is needed to search the roots of arisen complicated situation in the threemonthold decision. On September 2, the Council of the Coordination Center has unexpectedly rejected the idea of "premium registrations", which served for protection of the Cyrillic domain against black marketeers. As early as in March of the current year, concern of Andrey Kolesnikov was unlimited: "Most probably, the following model will be developed: registrars will sell domain names at the price of about one million rubles during the first week, and then the price will weekly scale down".

In September, the Coordination Center has changed its mind to hold centralized biddings with price scaledown, having referred to the skyrocketing price, concern of FAS and other reasons. In any case, it was absolutely purposely decided to pass a significant stage, which appears in the global practice of top level domains launch. It was temporarily forgotten in the Coordination Center about protection against notorious cybersquatters. It is worth noticing that the Council of the Coordination Center has considered a suggestion of Alexey Lesnikov, Director General of RU-CENTER: "For the purpose of preventing bulk buy-up of the most interesting domains, I suggest prolongation of the stage of premium registration and fixing the price per domain amounting to 5,000 rubles, not less than for one year." (It is referred to the price of the Coordination Center for registrars). However, the Council of the Coordination Center has not accepted this offer either. The Council has confirmed a simpler pattern of .РФ domains public registration, even at the time experts have made a disappointing conclusion: it will not be possible to avoid "gold rush" in Cyrillic TLD at the beginning of public registration, as the only effective method of cybersquatting counterstrategy are pricing mechanisms.

In this case, it is worth mentioning, how Landrushperiods have passed for the last twothree years by launching public registration in other new extensions. Thus, 5,500 premium domains being keywords, have been auctioned (on the marketplace of the accredited SEDO registrar) in MOBI TLD after the period of Sunrise Registration. Registration in TEL TLD was also launched in 3 stages: Sunrise Period (sunrise registration), Landrush Period (premium registration) and General Availability (public registration). RU-CENTER has collected preorders for .TEL domains registration in coordination with the domain registrant (Telnic) in Russia prior to commencement of public registration, and then, in case of receipt of two or more preorder requests, held private auctions between the applicants. Under a similar pattern (Sunrise — Landrush — Public Registration), registration of second level domains in CO TLD (countrycode top level domain of Colombia) started this autumn, by the way, the accredited registrars have also collected preorder requests with subsequent holding of auctions (in particular, on the NAMEJET platform). Auctions to ownership rights of premium domains have also been carried out (and are still in place now) by opening of the countrycode ME TLD (Montenegro) at the auctions of different registrars. The list of such examples is far from limited.

It is appropriate to recollect the fact that various options of "public start" have also been discussed with reference to the РФ TLD, but the choice has been made in favor of a "first come — first served" model — the very same option, which has been successfully providing competitive advantages for black marketeers in the RU TLD for a long time. At this very moment, the Coordination Center has run into obliviousness once again.

Preorder requests, which the registrars have started to collect as early as in September could save the status of the end user. Thus, under absolutely logical grounds, each of them behaved according to the interests of its clients. Some of them have created preferences to the most aware and prepared clients, accepting strictly per one request for a domain name. If you happened to be half an hour late, the preorder request for your domain has already been placed by a black marketer, and you may queue up and pray for adequacy of a reseller after November 11.

RU-CENTER, being a registrar with a large number of the above mentioned end clients has decided to behave by other means. It is unfair to deprive a client of even theoretical possibility to register a domain name, therefore, the domain registrant — two or more applicants are claiming to be, is defined at the private auction. The same idea is prompted by the global practice, which the Coordination Center has deliberately rejected.

"Equal" conditions for registrars became one more unobvious bonus for black marketeers, each of which has received a limit for processing of 4,800 requests for registration of .РФ domains per hour. As a result, minor players did not imagine whereto they could use the allocated quotas as early as in some hours after registration. The market leaders racked their brains, how they could satisfy speculative demand on the part of the clients. Resolution on partnership was lying on the surface — some have quotas, others have a client base — therefore, the registration market was cooperated in spite of irrational restrictions.

Availability of standard partner agreements (other registrars have similar agreements) with Relcom, Demos, ElvisTelecom, and Domenus has allowed RU-CENTER satisfying the majority of more than 100 ths. preliminary requests for .РФ domains placed by its clients. It allowed the company proving its leadership in the Cyrillic domain, having been supported by about 50% of all .РФ domain names. It goes without saying that such situation did not suit the nearest competitor, who has taken into its head to "shut the stable door after the horse has bolted".

Extremely perspicacious journalists and bloggers have suddenly found out thousands of domains "captured" by RU-CENTER "for its auctions". It is too bad that hardly anybody from those of user protection expressed a desire to examine the situation substantially.

The fact is that the Coordination Center has set a moratorium for changing the registrant in the РФ TLD in the thick of "selective" struggle with cybersquatting as well as forbade registration for nonresidents. RU-CENTER has forcedly registered more than 55 ths. of .РФ domain names for itself, having rendered an "ownership" service to its clients. User of such service may completely dispose of the domain (as well as use for addressing for its site), and will become its registrant in a year as soon as the moratorium for registrant change for residents is no longer in force. "Ownership" certainly represents a compromise, however it is quite acceptable for the majority of users (not to confuse with black marketeers!).

Only 25 ths. of registrations have appeared to be at the private auctions from more than 200 ths. Most efficient bidding is being held in terms of 10 ths. of domains, for which some preorder requests have been placed. RU-CENTER has registered a modest quantity of Cyrillic domains for its own projects- about 170, which is much less than in case of some counterparts.

Thus, complainants simply lacked a basic knowledge by carrying out an analysis of registration statistics. This lack has not prevented them from applying with complaints to the antimonopoly service. The loaded word "FAS" took up even those who understood nothing in the matter of the conflict and started persistently repeating. Andrey Kolesnikov, Director of the Coordination Center, waited a pause to estimate, whose side won. Soon after getting information on initiation of proceedings against 6 registrars, the "cautious" regulator has assailed with destructive criticism. To be brief, its essence narrowed down to typically Russian rhetoric: "who has dared, hold off, everybody will be dismissed".

"We are always working for protection of interests of the end user. And nowadays, our major concern is avoiding conscientious clients who have already paid their money for chosen domains being suffered in the arisen situation", Andrey Kolesnikov reassured the journalists at the press conference in "RIAnews".

Meanwhile, curious particularities of complaints applied to FAS have started to emerge. In particular, according to some massmedia, Phillip Gross, the owner of a large quantity of domains and, according to some information, even a cofounder of Reg.Ru became one of the major searchers of justice.

However, gossips about socalled possible allocation and even deletion of a large quantity of .РФ domains from the registry, if the competition of registrars is suddenly recognized as unfair, became the most unpleasant and uncontrolled consequence.

Mr. Kolesnikov has probably also regretted about his own bravery. In the interview to "Interfax", he already expressed his concern regarding possible changes, which will exactly break the image of Cyrillic top level domain to smash. As it happens, "it is very complicated technically" to sell the Cyrillic domain again. Apparently, the collapse of a great undertaking, the importance of which was repeatedly underlined by the RF President, seems nothing for the Coordination Center in comparison with the possibility for demonstrating ambitions of severe and cautious market regulator.

Nevertheless, on November 19, RU-CENTER received a formal notification from the Coordination Center on the necessity of public waiver of auctions practice. Under the threat of accreditation forfeiture, the largest registrar was offered to give the domains to the applicant under "first come — first served" pattern. As it happens, even the circumstance that the procedure of accreditation forfeiture fails to exist does not bring the Coordination Center to stop. Andrey Kolesnikov is ready to accept it within the shortened terms.

The extraordinary meeting of the Council of the Coordination Center was held on November 23. Key issues included legitimacy of the Coordination centre’s claims with respect to the largest registrar of domains as well as formation of a working group for studying activities of all market participants during the period of РФ launch.

Moral is needed? The Runet observed the extremely inconsistent behavior of the РФ domain registrant, which is now imbued with concern about the user, and then appears in one team with black marketeers "by chance". Concurrently, there occurs a violent competitive struggle between registrars, mainly, post factum, when some players are trying to reconsider the results of public registration by means of FAS and other quite significant organizations. All this campaign is occurring under the pretence of struggle for the end user, whom the role of protesting crowd is prepared.

One may only hope that the registrant of "the first Cyrillic", which has declared on successes of the РФ domain to the entire world and has already accounted for the government commission, will have enough prudence not to bite the hand that feeds him.

Fedor Smirnov, analyst Info.nic.ru