Domain name dispute blows wide open

The country's largest domain name specialist claims the policies of the national Internet registry, Domainz, have driven it out of the business of being a billing agent for the registry. But Domainz CEO Patrick O'Brien is rejecting 2Day Internet's contention that it 'could not continue to trade with Domainz under its new policy without placing ourselves at considerable risk financially and legally.'

The country's largest domain name specialist claims the policies of the national Internet registry, Domainz, have driven it out of the business of being a billing agent for the registry.

On Wednesday, 2Day Internet emailed all its customers to offer further explanation for its announcement on January 10 that it would be unbundling the Domainz registration fees from its annual domain name service fee of $99 + GST.

In the letter, managing director Peter Mott said 2Day "could not continue to trade with Domainz under its new policy without placing 2Day at considerable risk financially and legally."

Domainz CEO Patrick O'Brien has responded angrily to the letter, claiming it was "not a very smart letter - and it contains factual errors. Peter is also breaking confidence on a number of matters."

Mott was recently elected as a member of the board of the Internet Society of New Zealand (ISOCNZ), which owns Domainz.

The dispute began in November, when Domainz changed its pricing structure, scrapping the $16 "billing fee" applied to every invoice. O'Brien says the billing fee was a "blunt instrument", but agrees that providers such as 2Day, which were billed for all their names on a single invoice, were entitled to treat the fee as their volume discount.

Mott says that with 2Day billing for between 200 and 300 new registrations and renewals a month, the fee amounted to a 20% to 24% discount. When it was scrapped, it was replaced by what Domainz called a "volume discount for prompt payment".

O'Brien says discounts were negotiated individually with a number of billing agents but says the exact level of discount is confidential. Mott says it was 15%. The discount, however, was only available for prompt payment - that is on the 20th of the month following Domainz invoices, which are issued at the end of each month.

The dispute quickly came to a head in December. Mott's letter said 2Day paid for 176 of 178 renewals due, having been unable to contact the holders of two domains. O'Brien describes the statement as "incorrect - quite a substantial sum of money was outstanding."

Asked for more details by @IDG, Mott says all but 13 of the names had been paid for by December 20, and all but two by December 31. Nonetheless, 2Day was denied its volume discount of $2093 by Domainz. Days later, 2Day told its customers they would now have to be billed direct by Domainz.

O'Brien agrees he told Mott the only way 2Day could keep its discount was to either pay for the outstanding names itself or cancel all names on the day they fell due.

O'Brien concedes that Domainz itself does not cancel names on the day their fees fall due, but says Mott is merely "using us to push his prices up … He's offered to drip-feed the money - but that's not the contractual relationship. The terms have always said that bills have to be paid on the 20th of the month. Peter's now trying to pay at the end of the month."

O'Brien also dismisses Mott's qualms about cancelling domain names without further notice, maintaining that as an agent for nameholders he has "power of attorney" to cancel names at any time.

Mott says his company has always paid its bills and would be happy to run an account in credit with Domainz, as it does with some other country registries. He agrees that it would be easier for him to collect fees on time if Domainz' terms were more flexible.

"We're a very flexible organisation and we don't do things in a brutal manner," says O'Brien.

"Bollocks," says Mott.

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