Nominet’s recent proposals for a .uk extension for domain names have not been met with universal approval. 

There is much concern that the new domains will end up costing online businesses a lot of money with no obvious benefits to compensate. 

In an email Q&A, I put some of these concerns to Nominet’s Director of Marketing and Communications Phil Kingsland…

Why do we need .uk domains?

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.   

Is there any demand from online businesses and web users for the new domains? Have you attempted to gauge demand? 

In recent research we found that more than 60% of businesses surveyed liked the idea of a new product offering extra features such as identity verification and 79% of those surveyed who intended to buy a domain name liked the idea of a new secure product.  

Our own research indicates that consumers and other stakeholders are seeking higher levels of confidence in knowing whom they are trading with online.

The research found that 79% of British consumers prefer to use a .uk domain when buying online, whilst 74% said the same when simply searching for information.

67% also said they would expect a .uk site to conform to UK law regarding security and data protection. We believe that providing an optional product – that validates registrants have a service address in the UK – meets this demand.

Won’t the new domain extension devalue .co.uk? 

We envisaged direct.uk as a complement to the existing .uk portfolio which offers something unique to those in the business community who want it.

So it was designed to represent a different proposition for potential registrants. We believe .co.uk could continue to run in parallel as a trusted, vibrant online space for registrants who don’t require – and don’t want to pay for –  the additional features.  

However, we want to hear the views of the existing .co.uk community about this approach. 

Can you explain the decision making process?

The consultation closes on 7 January 2013. Our board will then consider the feedback from all stakeholders and make a decision on if and how to progress with the proposal.

How will it ‘’support the economic growth of the UK internet’?

The creation of a more secure domain space will increase consumer trust in transacting in that space, supporting and further encouraging the growth of the UK digital economy. 

You have mentioned the extra security measures, citing a figure of £27bn. How much of an impact on this £27bn will your security measures have? Why not simply add this protection to .uk domains?

We recognise that the measures we are proposing will not eradicate cyber crime and neither is there a silver bullet that would do so. However, as a responsible domain name registry with public purpose at our heart, we have a responsibility to consider how we can play our part in helping to address this issue.

In consultation feedback so far, some have wondered why we have not opted simply to include these across the existing .uk namespace.

Our reason for not proposing this is that there would be an impact on the cost of .co.uk domains if we included this as mandatory.

We would buy-in the additional security features, and the more stringent verification process also has a cost. .co.uk is already very successful and we felt that not all of the existing registrants would want or be happy to pay extra for the features we are proposing to include in the new product. 

For example, if you were an individual running a blog, you may not want to pay more, whereas an online business could consider it an attractive package worth paying extra for. We felt it would be unfair to retrospectively impose the costs and conditions of a new suite of features and requirements on co.uk or any of our other TLDs.

However, it is possible that we could offer these services for existing registrants (e.g. .co.uk users) in the future in some way, and are interested to hear views on this.

There seems to be some confusion over the process for acquiring the new .uk domains. If a business has worked hard and invested time and money to build up their business on .co.uk, should they not have first choice on the new domains? If not, why not? 

We are looking closely at this issue, which has been raised by many of the respondents to the consultation. It is worth clarifying our thinking on this to date.

We have viewed this as an addition to the .uk namespace, rather than a transition, so this led us away from automatically ‘grandfathering’ every existing domain.

Secondly, the process is not straightforward.  It would not be practical to offer every existing .uk registrant the direct.uk equivalent, as 470k domains in the .uk registry are not unique e.g.  shop.co.uk and shop.org.uk are already registered to two different registrants.

We have made provision for existing .uk registrants who wish to opt for the equivalent at the second level. Domain names registered at the third level would constitute an unregistered right provided evidence of use could be shown prior to the qualifying date. 

Thirdly, we know that we need to respect trademark holders, and for practical reasons we judged it to be more appropriate to involve them at the start of the process, avoiding competing claims and potential conflicts that would otherwise come later in the process.

Trademark holders will not automatically be granted a .uk domain – we intend to set criteria for them (as we did with the short domains release), including having to be an EU or UK trademark, with evidence of bona fide use – verified by external agents -  prior to 1 July 2012 (to help prevent trademark squatting).

Getting an appropriate release and rights management policy for any addition to the .uk namespace is vital, and we have specifically asked stakeholders for their views on this (section K of the consultation). 

Since Nominet is a non-profit body, should it not consider the risks of loading the UK’s digital economy (one of the few bright spots during the recession) with extra, unwanted costs?

The consultation will seek to assess views of, and potential impact on, business and this will have a bearing on any decision.

Our hope is that the costs to an individual business will not be excessive and the potential benefits in terms of a secure domain space with increased consumer trust will far outweigh them.

I.e. if trust in transacting in the .uk domain space is higher, then people will transact more and ultimately help grow the UK digital economy further.

Why will the new .uk domains cost more than .co.uk?

Exact pricing is yet to be determined though we have indicated that the cost will be sub £20 per year wholesale to registrars. Registrars are free to set their own price in the market.  

The pricing reflects the additional costs of providing the additional security features and the validation and verification processes – all of which are bought-in costs – as well as the ongoing maintenance of the domain service. 

There are plenty of people who are suspicious of the fact that some of Nominet’s decision-making committee on this issue have a vested interest in these proposals. How do you respond to this? Is it right that domain registration services should have a part in this decision? 

Where a director has a direct or indirect interest in a matter for decision by the board then they must disclose this and, depending on the circumstances, may be obliged to abstain from any relevant discussions or decision.

All board members receive training on their company law responsibilities, with particular emphasis on conflicts of interest. The directors must act in the way they consider in good faith is most likely to promote the success of the company, in keeping with Nominet’s public purpose mandate.   

The Board will want to consider feedback from a wide variety of stakeholders before making any decision on this.

We are currently in a consultation period on this proposal. What would make Nominet decide not to go ahead with the new domain extensions?

This is a consultation. The service outlined in the proposal is not a fait accompli.

We have a consultative approach to policy-making for .uk  and want to hear the views of all. This consultation will help us determine if we go ahead with this, and if we do, how we could shape our plans to take stakeholder views into account.

We are committed to ensuring that any changes to the namespace would have a net positive impact on UK businesses and consumers and this will determine whether and how we move forward on this proposal.  Your views are welcome.

We have a range of events and opportunities to get involved, and we would encourage all interested parties to do so. In addition to the online feedback form, stakeholders are also welcome to provide their views on the phone or by email.