Reclassification

TLDR

• ICANN allows reclassification.
• Reclassification does not eliminate identical renewal pricing protections, aka uniform pricing.
• Reclassification creates a new category of domains.
• Reclassification is a discriminatory practice.
• Reclassification undermines section 2.10c of the base registry agreement.
  • Registrants cannot easily verify uniform pricing obligations are being met.
  • Registrars may lack the information required to defend registrants against pricing violations.
  • After transfer, a new registrant will not be able to prove a domain’s original fee class.
• Registrants need proof of a domain’s original fee class.
• Reclassification has a significant, negative impact on registrants, with little benefit to registries.
• ICANN has the authority to forbid reclassification.

Overview

Reclassification is a scenario where a domain is moved from one pricing tier to another. This has long been considered a violation of the base registry agreement. However, ICANN allows it.

The scenario described below specifically refers to a scenario where a domain is moved from the standard fee class into a premium fee class.

ICANN

ICANN policy and agreements do not prohibit registries from changing a standard domain classification to a non-standard classification, even when a domain is under a period of continuous registration.

After further dispute the domain still had a standard classification:

Price Protections

As explained in price protections, ICANN does not consider itself to be a price regulator. Regardless, section 2.10c of the base registry agreement grants registrants some limited price protections in the form of identical renewal pricing. The only exception is if registrants agree to waive those protections following clear and conspicuous disclosure. Agreeing to waive those protections must be done at the time of the initial registration, so unless a registrant has done that, which is effectively impossible for a domain in the standard fee class, those protections cannot be removed from a domain that was in the standard fee class at the time of initial registration.

A New Category

Reclassification of domains creates a new category of domains that new registrants and aftermarket participants need to understand. Prior to ICANN’s endorsement of reclassification, domains could fall into one of two simple to understand categories:

1. Domains with a standard fee class and uniform, aka standard, pricing.
2. Domains with a non-standard fee class and no price protections.

With reclassification, there is now a new category:

3. Domains with a non-standard fee class and uniform, aka standard, pricing.

As of 2024, the industry is not equipped to deal with this new category of domain. Registrants do not realize it is a risk they need to be aware of, and registrars cannot be assumed to have the information required to ensure registries meet their uniform pricing obligations for these domains.

Discriminatory Practice

Reclassification is a discriminatory practice that identifies and targets high-value domains that were registered with a standard fee class. The act of reclassifying domains makes it more difficult for registrants to verify registries are meeting their pricing obligations, and it benefits the registries if registrants are unwilling or unable to demonstrate their domains are entitled to identical renewal pricing protections.

Undermining Section 2.10c

Reclassification undermines the identical renewal pricing protections that registrants expect to receive from section 2.10c. This is done by shifting the responsibility of verifying and enforcing pricing obligations onto unsuspecting registrants. In some cases, like transferring a domain to a new registrant without proof of the original fee class, identical renewal pricing protections are nullified.

Insurmountable Verification

The identical renewal pricing protections given to domains do not guarantee registrants are charged identical retail prices. Rather, the registries’ obligation is to charge identical renewal pricing, which is the wholesale renewal price charged to registrars. This is not information that registrants can access without interacting with registrar support, and, even if registrar support is willing to help, they may lack the technical systems, tools, and training required to supply registrants with accurate, relevant information. Additionally, registrars may be bound by private agreements that forbid them from disclosing wholesale pricing.

Combined, these challenges make it nearly impossible for registrants to obtain the pricing information required to verify the registries’ are meeting their uniform wholesale pricing obligations for domains that were in the standard fee class at the time of initial registration.

Registrar Limitations

The EPP responses provided by the pricing extension described in RFC 8748 (archived) only provide registrars with the current fee class of a domain, not the original fee class that a domain had at the time of initial registration. The original fee class is what is important to determine if a domain is entitled to identical renewal pricing protections and, without having that information provided via EPP, it cannot be assumed registrars will have enough information to ensure registries are meeting their pricing obligations for a domain.

Unprovable Protections

Transferring a reclassified domain to a new registrar or registrant can make it impossible to prove the original fee class of the domain.

If a registrar is not the original registrar for a domain, they will not have a record of the domain’s original fee class. The original registrar has no obligation to provide that information to the registrant or another registrar. Similarly, registries have no contractual obligation to provide a domain’s original fee class and, even if they did, it is not reasonable to expect registrants and registrars to trust registries as the sole source of truth for that information.

The ability to prove a domain’s original fee class will be lost when a domain is transferred to a new registrant. Registrars, rightfully so, will flat-out refuse to give information about a registrant’s account to anyone but the account owner. A subsequent registrant asking for historical information from another, previous, registrant’s account will not be given any information. Registrars cannot give out that information due to privacy obligations.

Get Proof

Unless the industry adds new technical measures to ensure reclassified domains continue to benefit from the identical renewal pricing protections they are entitled to, it is extremely important for registrants to obtain proof of the original fee class for any domains registered in gTLDs that are not .com or .net.

Do not trust the registries to provide the information you need to verify they are fulfilling their obligations, or, even worse, prove they are failing to fulfill those obligations.

Lopsided Impact

Reclassification has a significant, negative impact for registrants and, in turn, registrars that need to support registrants with reclassified domains. However, there is very little positive impact, if any, for the registries. The registries must continue to meet their pricing obligations and tracking the original fee class for reclassified domains adds unnecessary technical complexity and risk.

Assuming the registries intend to continue meeting their pricing obligations for reclassified domains, what do they gain from reclassification?

ICANN’s Power

The registries are abusing their ability to set classifications and using that ability to discriminate against registrants with high value domains. By reclassifying standard domains, registries are eliminating technical information that is essential for registrants to prove any violations of identical renewal pricing obligations. Preserving the standard classification is vital to the ongoing enforcement of section 2.10c.

ICANN has the ability to forbid the practice. This power is provided to them by the base registry agreement (emphasis added, truncated):

This grants ICANN the ability to prohibit abusive and/or discriminatory renewal pricing practices and the requirement to interpret the section broadly gives ICANN the latitude required to forbid the practice of reclassifying standard domains. The agreement does not require anything beyond ICANN considering the practice to be abusive or discriminatory. Since abusive and/or discriminatory are not defined in the agreement, ICANN must interpret those terms in a way that serves the public interest.