Domain Monetisation Policy explained

(Warning: This blog is quite long and contains a lot of policy detail. It’s been written for people who have a particular interest in auDA’s current policy on domain monetisation. If that is not you, then you probably don’t want to read it.)

In simple terms, domain monetisation is the practice of registering domain names to make money from them. There are lots of different ways of doing this, but the one that most internet users would be familiar with is when a domain name resolves to a webpage with click-through advertising links – something like www.computers.com.au.

The registrant of the domain name earns revenue each time a user clicks on one of the advertising links. Hence, they are using the domain name to earn money from it, or in other words they are “monetising” the domain name. Someone who is in the business of monetising domain names is commonly known as a “domainer”.

auDA has had a Domain Monetisation Policy since 2006, when the practice first started to emerge in the com.au domain space (it had already been going on in .com for some years). The policy was revised and reissued in 2008, and is currently under review by the 2010 Names Policy Panel.

I am not writing this blog to talk about the Panel’s draft recommendations on domain monetisation, which are contained in the Panel’s second consultation report – see http://www.auda.org.au/2010npp/2010npp-index/. I encourage people to read the report for themselves and submit their comments to the Panel.

My reason for writing this blog is in response to queries that auDA receives about the current Domain Monetisation Policy – why it exists, and what it means.

To understand the Domain Monetisation Policy, it is important to understand one of the key policy principles that underpins the .au domain. The .au domain is not, and never has been, a free-for-all “open slather” space like .com. It has always been the case that the registrant of a .au domain name must demonstrate their eligibility or entitlement to the domain name.

In the old (pre-2002) days, the only way you could demonstrate eligibility was if the domain name matched, or was derived from, your company or business name. When auDA took over administration of the .au domain, the eligibility rules were significantly relaxed to allow people to register domain names under the “close and substantial connection rule”.

This rule says that your domain name does not have to match or be derived from your company or business name, as long as there is some kind of genuine connection between the domain name and your business. There are several different categories of “close and substantial connection”, including a product that you sell or manufacture, or a service that you provide. For example, a florist business would be allowed to register “flowers.com.au”, “roses.com.au”, “carnations.com.au”, “flowerarranging.com.au”, “bouquets.com.au” and so on, because the all the domain names refer to products and services of the registrant’s business.

Following this logic through, the kinds of domain names that a domainer would be allowed to register under the close and substantial connection rule would be anything that referred to domain names and monetisation (eg. “domains.com.au”, “monetisation.com.au”, “domainrevenue.com.au”, “domainadvertising.com.au” and so on).

But the whole point of domain monetisation is to register domain names that you can make money from, and this is most likely to be generic domain names, or domain names that refer to popular brands, celebrities, events etc. The problem is that there is no apparent “close and substantial connection” between a domainer and the domain names they want to register, because the domainer does not provide any products or services that refer to the domain names. For example, a domainer does not sell flowers, therefore under a strict interpretation of the close and substantial connection rule, they would not be eligible to register “flowers.com.au”.

Back in 2006, auDA released an Issues Paper (see http://www.auda.org.au/reviews/monetisation-2006/) which explained this problem and proposed two possible policy approaches:

1.    That domain monetisation SHOULD NOT be allowed under the close and substantial connection rule. This would mean that registering domain names for the primary purpose of domain monetisation would not be permitted under any circumstances, and any such domain names would be deleted for breach of policy.

2.    That domain monetisation SHOULD be allowed under the close and substantial connection rule. This would mean that registering domain names for the primary purpose of domain monetisation would be permitted.

(I must admit, it’s been a while since I re-read the Issues Paper, and I think it still stands up as a pretty good summary of the issues around domain monetisation and .au policy.)

Public consultation on the Issues Paper elicited passionate views in support of both options, leaving auDA to steer a middle path between the two. The result was the Domain Monetisation Policy, which allows people to register domain names for monetisation purposes under the close and substantial connection rule, provided they comply with certain conditions of use.

Let me just repeat that, because it’s really the key to the whole thing. The Domain Monetisation Policy allows people to register domain names for monetisation purposes under the close and substantial connection rule. If the policy did not exist, then domainers would not be able to register any domain names at all, because they would not meet the close and substantial connection rule.

So, the policy says that domain monetisation is acceptable under the close and substantial connection rule, but only if the registrant complies with two conditions of use.

The first condition is often referred to as the “content rule”. This says that the content on a monetised website must be related specifically and predominantly to the domain name. For example, if you have registered flowers.com.au to monetise it, then the advertising links on the website must be mostly related to flowers. The purpose of the content rule is to establish a connection between the registrant and the domain name that otherwise does not exist. In other words, it’s ok that the registrant of flowers.com.au does not actually sell flowers, because they are providing content about flowers on their website.

If auDA determines that the content rule has been breached, then the registrant is given seven days to change the content and make the website compliant. Sometimes a registrant needs to make several changes in order to comply, and we will always allow them reasonable time and opportunity to do what they need to do.

Sometimes a registrant will tell us that they have no control over the content of the website because they have signed up to a service like Google Adsense which automatically generates the content. We do not accept this as an excuse for non-compliance, because the registrant can always remove the domain name from the automatic service and upload different content to the website.

Sometimes a registrant has not yet resolved the domain name to a website. In our view, if the domain name has been registered for monetisation purposes, then it stands to reason that the registrant actually has to be monetising it in order to comply with the policy. Again, we will allow the registrant reasonable time and opportunity to ensure that the domain name resolves to a website with appropriate content.

Ultimately, if the registrant does not comply with the content rule then the domain name will be deleted, but that happens very rarely and usually only when the registrant has made a business decision that the domain name is not valuable enough for them to go to the effort of complying with the policy.

The second condition of use is that the domain name must not be, or incorporate, an entity, personal or brand name in existence at the time the domain name is registered. The reason for this condition is to address concerns that domain monetisation may be used as a cover for cybersquatting. We tend to see this happen with names that become famous overnight (eg. reality TV celebrities, people who feature in the news).

If auDA determines that a registrant has breached this condition, then the domain name will be deleted. We will always consider any information or argument that the registrant wants to provide in defence of their registration. For example, sometimes the domain name in question might also be a generic word or have an alternative meaning. If the registrant can show us that they did not register the domain name to trade off the reputation of the entity or brand name, but were using it for its generic or alternative meaning, then we will allow them to keep the domain name.

It’s also important to note that the entity, personal or brand name must have been in existence at the time the domain name was registered. The policy does not allow people to engage in “reverse domain name hijacking”, which is where a complainant tries to assert ownership over a domain name that pre-existed their company name or trade mark.

I hope that I’ve managed to cast some light on the origins and meaning of the Domain Monetisation Policy. The key point to remember is that the policy allows people to register domain names for monetisation purposes, provided they comply with the two conditions of use.

The final thing I’d like to say is that, contrary to popular belief, auDA does not have a vendetta against domainers and domain monetisation. Our role is simply to enforce the Domain Monetisation Policy. We strive to do this as fairly and consistently as we can, bearing in mind that some elements of the policy are inherently subjective.

We give all registrants a reasonable opportunity to respond to a complaint, be it during the investigation period before we make our determination, and/or during the 14 day pending delete period after the domain name has been deleted (policy-deleted domain names can be reinstated right up until they are due to drop).

In addition, we advise all registrants of their right to a review – firstly an internal review by auDA senior management, and then access to an independent review by the Registrant Review Panel (see http://www.auda.org.au/policies/auda-2011-01/).

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