RealTime IT News

Domain Price War Begins

A domain registrar in Germany has quietly kicked off some long-awaited competition in domain name pricing.

CSL GmbH of Duesseldorf is offering two-year registrations in the top-level domains .com, .net, and .org, for 40.9 Euros, or about US$43.50.

That's nearly 40 percent off the industry-standard fee of $70 established by Network Solutions, Inc. -- a price that has held up despite the entry of new registrars in recent months.

CSL President Siegfried Langenbach Thursday said the firm has only taken about 100 registrations since it launched the service 10 days ago. Langenbach attributes the tepid response to a combination of poor marketing by CSL and to disbelief by Internet users. But Langenbach predicts that once word gets out, other registrars will be forced to follow.

"Most people don't believe it because of the big difference in price, so they continue to register for $70. But as soon as they realize that's not the price they have to pay, others will lower their prices."

CSL handles domain registrations at a site called joker.com, an address which Langenbach admits may have contributed to confusion or hesitance by registrants. But in fact, CSL is a member of the Internet Council of Registrars, or CORE, which was one of the first five registrars accredited by the Internet Corp. for Assigned Names and Numbers last April to compete with Network Solutions in registering top-level domains.

Bill Whyman, a principal analyst with the Legg-Mason Precursor Group, said while the process of privatizing Internet domain registration has proceeded more slowly than some observers would like, the move by CSL will ratchet up competition.

"This is exactly what government regulators wanted and the incumbent companies have been afraid of. Domains are a scale, commodity-driven business, and at some point somebody is going to break ranks and cut pricing to gain share. If CORE is going for a pure price play, then some portion of the market is going to be price-sensitive and put pressure on everyone else."

Should domain pricing fall across the board, it may take some heat off of ICANN, which in recent weeks has been the subject of sharp criticism from some members of Congress. ICANN chairperson Esther Dyson Thursday said the latest pricing developments show that the non-profit Internet governance board is accomplishing its objectives.

"There are more issues here than just pricing, but it shows that what we're trying to do is having the positive effect that we indicated," Dyson said.

A price war in domain registration could hurt Network Solutions' core business, according to Whyman. But he says NSI has been anticipating such a development and positioning itself accordingly, through initiatives such as its DotCom Directory. "It just pushes them to build out valued-added services that can insulate them from price-based competition," he said.

Network Solutions representatives were not immediately available for comment. At present, NSI charges $119 dollars for a two-year registration with name service. CSL's fee with name service rises to 65.46 Euros or about US$69 Register.com, also one of the first five ICANN-accredited registrars, similarly charges US$70 for combined registration and name service.