Netregistry pulls out of China business

SYDNEY, Australia — One of Australia’s most prominent domain name registrars has joined the world’s largest, GoDaddy.com, in ceasing to offer .cn services because of new regulatory obligations imposed by Chinese authorities.

Netregistry Pty Ltd. chief executive officer, Larry Bloch, said the new requirements made offering the Chinese domain name extension service “untenable”.

Previously, those looking to register a .cn domain name extension only had to provide a name, address and email, similar to .com services.

However, in December last year China’s domain-name authority, CNNIC, tightened the rules, requiring applicants to provide a business seal, a copy of the company business license and a copy of the registrant’s identification.

The CNNIC website says it did this to “enhance the authenticity, accuracy, and integrality [sic] of the domain name registration information”.

But the new regulations have irked many registrars and comes at a time when China is embroiled in a very public spat with Google over the company’s decision to exit the booming market over censorship concerns.

“Domain names are a commodity product and there is not a huge amount of margin in them,” Bloch said. “Ultimately, our .cn service was really targeted at companies in Australia that wanted to have a presence in China or certainly within that domain. Most of our customers that wished to register .cn names through us fall foul or don’t satisfy the new eligibility criteria so it became untenable for us to offer that service.”

Last week at a U.S. Congressional-Executive Commission on China hearing, GoDaddy revealed that as it had been asked by Chinese authorities to provide personal details of customers that had purchased a .cn domain name in the past, it would cease offering the service.
However, like GoDaddy, Bloch maintains the .cn business is a negligible part of revenues and withdrawing will have minimal impact on Netregistry’s financial performance.

In contrast, fellow Australian domain name registrar, Melbourne IT has decided to continue offering the .cn domain name service.

Melbourne IT’s chief strategy officer, Bruce Tonkin said there were many countries where strict verification process are in place and the Chinese moves won’t deter the company.

“The registrars in Australia, by and large to varying degrees, generally have to verify an Australian company number or business number. So there is a degree of verification of the registrar for .com.au,” Tonkin said. “That has kept out a lot of the international registrars because it’s not their service model. There are not that many Australian registrars that offer the .cn domain but those that do are generally at a higher level service model. So Melbourne IT takes the approach that we offer both — yes, we offer .com and you can log into our website and get a name instantly. But we also offer many of the other countries around the world that have restricted rules where there is usually a requirement to interact with the customer to get copies of incorporation, etc.”

Over the past few years a lot of countries have moved to a .com easy registration model and generated significant revenue as a result. But Tonkin says the amount of fraud or malicious conduct has also increased and this is possibly one reason the Chinese authorities have tightened the reins.

“China is now requiring you to verify the identity of the registrant in one form or another and it effectively means they become accountable for whatever they do with that domain name,” he said. “Russia has just done the same. They were one of the domain spaces that had a growth both in volume of new names and also in volumes of malicious conduct. They have just introduced requirements to do checks as well.”

(From Computerworld Australia)