Web domain registration cost soars as UK internet registry hikes prices by 50%

Move by not-for-profit company Nominet prompts revolt among dozens of individuals and companies from its membership

Jonathan Owen
Thursday 26 November 2015 20:12
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There are 10.5m domains ending in ‘.uk’
There are 10.5m domains ending in ‘.uk’

Britons wanting to register web addresses face a price hike as a result of a controversial decision by the UK’s internet registry to charge 50 per cent more than it does at present. The move by Nominet, the not-for-profit company which controls and manages British internet addresses, has prompted a revolt among its own members. Dozens of individuals and companies from its membership have signed a petition demanding the company hold an extraordinary general meeting in a bid to force it to back down over the price increase.

The protest has been prompted by an announcement by Russell Haworth, the company’s chief executive, that the wholesale price to register a web domain will go up to £3.75 a year from next March in the first rise in 16 years. The new flat rate will replace current yearly prices - £2.50 for addresses registered for more than two years, and £3.50 for one year’s registration. In a statement on Wednesday, Mr Haworth said: “Costs have risen considerably since we last changed the price, and we need to compete in a promotion-driven industry.” Pricing will now be reviewed annually, as part of the company’s commercial strategy, according to the statement.

Nominet

  • Nominet was established in 1996 by Dr Willie Black, a computer expert who was part of a group of academics that had previously looked after British web domains.
  • The not-for-profit company, which has its headquarters in Oxford, has more than 150 staff and is responsible for the registration of .uk web addresses.
  • It has more than 2,700 members including businesses which sell or own internet domains. And the company has given £39m to its charitable arm within the past decade.
  • Nominet made £2.4 million in profit in the year to September 2014, paying more than £8m in staff salaries, according to its latest accounts.
  • It is run by a ten strong board chaired by Baroness Rennie Fritchie DBE, which includes chief executive Russell Haworth, and Andrew Pinder CBE, a former director of IT at the Inland Revenue.
  • Ed Vaizey, culture and digital economy minister, describes Nominet as a “not-for-profit company with a public purpose objective.”

The new cost will apply to all web addresses ending in .uk and, with around 10.5m such domains, Nominet is set to make millions from the move. The decision means the average two year .uk registration will increase from £6 to £9, according to a website (www.egm.uk) set up by those opposed to the increase. “Prices could increase again next year and year on year? Despite the ‘not-for-profit’ making a huge profit for years now,” it states. “Nominet Members outraged by such a large one off increase have founded this site to petition Nominet to stop the price increase on 1st March 2016 before it is passed on to registrants,” adds the statement.

One of those members supporting the campaign, Edward Dore, director of Freethought Internet, said: “Nominet are supposed to be a not-for-profit, membership owned, public purpose organisation...they claim that the reason for the price increases is that their costs have risen considerably, yet they donated £3m to the Nominet trust in their 2013-2014 financial year and have reserves of more than £34m. I cannot see how they can possibly justify a price increase of any kind, let alone 50 per cent!”

In a statement, a spokesperson for Nominet said: “We think most people will understand the need to review prices after 16 years. We are confident that £3.75 a year is a reasonable wholesale price to set for a world class domain. The majority of registrants have one domain and even if the rise of 25p or £1.25 is passed on, it’s less than the price of buying a snack or a cup of coffee.” They added: “A small number of people who hold large numbers of domains for sale to the secondary market will be most impacted by this.”

Dr Damian Tambini, research Director, media and communications department at the London School of Economics, commented: “Nominet does have a strong position in the market and they are in charge of distributing domain names, which are an essential facility in the internet economy. It is inevitable that people – particularly those responsible for maintaining multiple domains – will ask questions about a price hike on this scale, and in particular ask whether there should be more competition in the market for domain names.”

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