Big. ICANN To End Registry-Registrar Separation — This is

Will we someday see VeriDaddy?

The ICANN board of directors has passed a resolution that will relax restrictions on registries owning domain name registrars and vice-versa.

While specific to fresh top level domain names, don’t be surprised to see this extended to existing top level domain names over time.

This was a contentious issue that was negotiated at length between all parties interested in fresh top level domain names. A working group went through 3,000 emails and long discussions but came up with no consensus, so ICANN decided to step in and make the call.

Both Go Daddy and Afilias had been opposed to broad cross ownership. Afilias was pushing for cross ownership but with some limitations, since a number of registrars own equity in Afilias. Top Level Domain Holdings and Mind + Machines also hoped to see restrictions maintained. [Update: Apparently M+M was opposed to cross-ownership restrictions. Still, TLDH’s updates typically stated “TLDH will benefit from this continuing separation between registrars and registries”]

The biggest losers in this fresh model are registries. Registrars by now “own” the clients while registries will find it more difficult to enter the registrar market from scratch. (Of course they could acquire their way in.)

An example I like to give is this: picture a rule restricting grocery stores from selling store brand goods while manufacturers are prohibited from owning grocery stores. These rules are changed, allowing grocery stores to sell their own store brands and allowing food manufacturers to open their own grocery stores. Who wins at first? The grocery stores, which can quickly get store brand product onto shelves and sell them to existing clients. The manufacturers would have to build stores and a client base from scratch.

Don’t be surprised if governmental anti-trust groups review any major deals between registries and registrars.