What Are You Agreeing To When You Register That Domain Name?

Re: ICANN 2013 RAA: Domain Name Registrant Provisions

So what are you agreeing to when you register that domain name?

Better read both the terms of your Registrar's Registration Agreement and the terms of that Registrar's Agreement with ICANN (RAA), the current version of which is the 2013 RAA:

ICANN: Current Agreement - 2013 Registrar Accreditation Agreement
(For Registrar Accreditation Agreements entered into after 28 June 2013)
2013 RAA PDFs: English | Español | العربية | Français | 日本語 | 한국어 | Português | русский | 中文
Redline of 2013 RAA against 2009 RAA [PDF, 425 KB]
2013 RAA Frequently Asked Questions

2009 Registrar Accreditation Agreement
(For Registrar Accreditation Agreements entered into between 21 May 2009 and 28 June 2013)

ICANN 2013 Registrar Accreditation Agreement (2013 RAA) (excerpts follow, emphasis added):

3.7.7 Registrar shall require all Registered Name Holders to enter into an electronic or paper registration agreement with Registrar including at least the provisions set forth in Subsections 3.7.7.1 through 3.7.7.12, and which agreement shall otherwise set forth the terms and conditions applicable to the registration of a domain name sponsored by Registrar. The Registered Name Holder with whom Registrar enters into a registration agreement must be a person or legal entity other than the Registrar, provided that Registrar may be the Registered Name Holder for domains registered for the purpose of conducting its Registrar Services, in which case the Registrar shall submit to the provisions set forth in Subsections 3.7.7.1 through 3.7.7.12 and shall be responsible to ICANN for compliance with all obligations of the Registered Name Holder as set forth in this Agreement and Specifications and Policies. Registrar shall use commercially reasonable efforts to enforce compliance with the provisions of the registration agreement between Registrar and any Registered Name Holder that relate to implementing the requirements of Subsections 3.7.7.1 through 3.7.7.12 or any Consensus Policy.

3.7.7.1 The Registered Name Holder shall provide to Registrar accurate and reliable contact details and correct and update them within seven (7) days of any change during the term of the Registered Name registration, including: the full name, postal address, e-mail address, voice telephone number, and fax number if available of the Registered Name Holder; name of authorized person for contact purposes in the case of an Registered Name Holder that is an organization, association, or corporation; and the data elements listed in Subsections 3.3.1.2, 3.3.1.7 and 3.3.1.8.

3.7.7.2 A Registered Name Holder's willful provision of inaccurate or unreliable information, its willful failure to update information provided to Registrar within seven (7) days of any change, or its failure to respond for over fifteen (15) days to inquiries by Registrar concerning the accuracy of contact details associated with the Registered Name Holder's registration shall constitute a material breach of the Registered Name Holder-registrar contract and be a basis for suspension and/or cancellation of the Registered Name registration.

3.7.7.3 Any Registered Name Holder that intends to license use of a domain name to a third party is nonetheless the Registered Name Holder of record and is responsible for providing its own full contact information and for providing and updating accurate technical and administrative contact information adequate to facilitate timely resolution of any problems that arise in connection with the Registered Name. A Registered Name Holder licensing use of a Registered Name according to this provision shall accept liability for harm caused by wrongful use of the Registered Name, unless it discloses the current contact information provided by the licensee and the identity of the licensee within seven (7) days to a party providing the Registered Name Holder reasonable evidence of actionable harm.

3.7.7.4 Registrar shall provide notice to each new or renewed Registered Name Holder stating:
3.7.7.4.1 The purposes for which any Personal Data collected from the applicant are intended;
3.7.7.4.2 The intended recipients or categories of recipients of the data (including the Registry Operator and others who will receive the data from Registry Operator);
3.7.7.4.3 Which data are obligatory and which data, if any, are voluntary; and
3.7.7.4.4 How the Registered Name Holder or data subject can access and, if necessary, rectify the data held about them.

3.7.7.5 The Registered Name Holder shall consent to the data processing referred to in Subsection 3.7.7.4.
3.7.7.6 The Registered Name Holder shall represent that notice has been provided equivalent to that described in Subsection 3.7.7.4 to any third-party individuals whose Personal Data are supplied to Registrar by the Registered Name Holder, and that the Registered Name Holder has obtained consent equivalent to that referred to in Subsection 3.7.7.5 of any such third-party individuals.
3.7.7.7 Registrar shall agree that it will not process the Personal Data collected from the Registered Name Holder in a way incompatible with the purposes and other limitations about which it has provided notice to the Registered Name Holder in accordance with Subsection 3.7.7.4 above.
3.7.7.8 Registrar shall agree that it will take reasonable precautions to protect Personal Data from loss, misuse, unauthorized access or disclosure, alteration, or destruction.
3.7.7.9 The Registered Name Holder shall represent that, to the best of the Registered Name Holder's knowledge and belief, neither the registration of the Registered Name nor the manner in which it is directly or indirectly used infringes the legal rights of any third party.
3.7.7.10 For the adjudication of disputes concerning or arising from use of the Registered Name, the Registered Name Holder shall submit, without prejudice to other potentially applicable jurisdictions, to the jurisdiction of the courts (1) of the Registered Name Holder's domicile and (2) where Registrar is located.
3.7.7.11 The Registered Name Holder shall agree that its registration of the Registered Name shall be subject to suspension, cancellation, or transfer pursuant to any Specification or Policy, or pursuant to any registrar or registry procedure not inconsistent with any Specification or Policy, (1) to correct mistakes by Registrar or the Registry Operator in registering the name or (2) for the resolution of disputes concerning the Registered Name.
3.7.7.12 The Registered Name Holder shall indemnify and hold harmless the Registry Operator and its directors, officers, employees, and agents from and against any and all claims, damages, liabilities, costs, and expenses (including reasonable legal fees and expenses) arising out of or related to the Registered Name Holder's domain name registration.

3.7.8 Registrar shall comply with the obligations specified in the Whois Accuracy Program Specification. In addition, notwithstanding anything in the Whois Accuracy Program Specification to the contrary, Registrar shall abide by any Consensus Policy requiring reasonable and commercially practicable (a) verification, at the time of registration, of contact information associated with a Registered Name sponsored by Registrar or (b) periodic re-verification of such information. Registrar shall, upon notification by any person of an inaccuracy in the contact information associated with a Registered Name sponsored by Registrar, take reasonable steps to investigate that claimed inaccuracy. In the event Registrar learns of inaccurate contact information associated with a Registered Name it sponsors, it shall take reasonable steps to correct that inaccuracy.
3.7.9 Registrar shall abide by any Consensus Policy prohibiting or restricting warehousing of or speculation in domain names by registrars.
3.7.10 Registrar shall publish on its website(s) and/or provide a link to the Registrants' Benefits and Responsibilities Specification attached hereto and shall not take any action inconsistent with the corresponding provisions of this Agreement or applicable law.
3.7.11 Registrar shall make available a description of the customer service handling processes available to Registered Name Holders regarding Registrar Services, including a description of the processes for submitting complaints and resolving disputes regarding the Registrar Services.
3.7.12 Nothing in this Agreement prescribes or limits the amount Registrar may charge Registered Name Holders for registration of Registered Names. 


Caveat Emptor!

See also: 

• DomainMondo.com: Registrant Resources
• ICANN: Domain Name Registrants' Rights and Responsibilities
• ICANN: Information for Registrars and Domain Name Registrants

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Verisign: 299 million Domain Names Registered Globally as of Q3 2015

 Above Chart: at the end of the third quarter of 2015, new gTLD (ngTLD) registrations totaled approximately 7.6 million, which represents only 2.5 percent of total domain name registrations of 299 million. The top 10 ngTLDs represented 44.8 percent of all ngTLD domain name registrations. Source: Domain Name Industry Brief, infra

Approximately 3.1 million domain names were added to the Internet in the third quarter of 2015, bringing the total number of registered domain names to approximately 299 million worldwide across all top-level domains (TLDs) as of Sept. 30, 2015, according to the latest Domain Name Industry Brief by Domain Name Registry (.COM, .NET) operator Verisign (domain name: verisign.com) (NASDAQ:VRSN).

Verisign ($VRSN) reports the increase of approximately 3.1 million domain names globally equates to a growth rate of 1.1 percent over the second quarter of 2015. Worldwide registrations have grown by 14.8 million, or 5.2 percent, year over year. As of Sept. 30, 2015, the domain name base of .COM equaled 120.1 million names, while .NET equaled 15.1 million names. In the third quarter, Verisign processed 9.2 million new domain name registrations for .com and .net, as compared to 8.7 million domain names for the same period in 2014. See the Domain Name Industry Brief.(pdf) to learn more about the trends and techniques in the domain name industry, such as the following:

Most Common Parts of Speech Combinations - Percent of Occurrences:

NOUN-NOUN-NOUN- 42

ADJ-NOUN-NOUN- 10

NOUN-ADJ-NOUN- 5

NOUN-VERB-NOUN- 3

VERB-NOUN-NOUN- 3

NOUN-NOUN-ADJ- 3

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Neustar $NSR Will Lose $500 Million Annual Revenue, 80% Downside?

See also newer posts  on Domain Mondo: Caveat Emptor: Neustar MarketShare Acquisition, 2016 $NSR Guidance (10 Dec 2015); Investors Flee Neustar $NSR, Stock Down 19% in Five Trading Days (12 Nov 2015) and Nov 9, 2015: Neustar $NSR Shares Tanked Friday After Marketshare Announcement

(Editor's Note: This post's original title was: "LIVE Webcasts: Neustar, Web.com, Q3 2015, $NSR 80% Downside Risk?")

"Loss of the NPAC contracts on or after September 30, 2016 will have a material impact on our future operating results when compared to our current financial profile. We expect to lose approximately $500 million of annual revenue and this loss will adversely impact our income from operations and operating margin. Additionally, this loss may have a disproportionate material negative impact on our operating margin because of the largely fixed and shared cost structure that is designed to support all of our services. We are unable to quantify the impact on our income from operations and operating margin at this time because the end date of the NPAC contract is uncertain and due to our largely fixed and shared cost structure. Our disclosure will expand as we evaluate the cost structure that will be in place to support our ongoing business, as we approach September 30, 2016 or as we learn more about the timing of the NPAC contract termination." p. 27 Neustar 10-Q (emphasis added), filed with the SEC October 29, 2015

"Since our previous article detailing how NeuStar (NYSE:NSR) is unlikely to survive without its NPAC contract, management has strengthened the bear case once again by making a rather costly acquisition and increasing leverage significantly, while canceling its share repurchase scheme ... What slightly befuddles us is that management would take on so much leverage at a time when the survival of the company hangs in the balance. Clearly, the company is extremely cash strapped as they were forced to cancel their $150M share repurchase program after only spending ~$102M (or two thirds of the allocated amount). Recall that management announced this share repurchase programme on the same day that they confirmed the loss of the NPAC contract. (The termination of the share repurchase was only announced through a passing remark in the conference call. There was no press release)."--John Zhang, Seeking Alpha, Nov. 9, 2015 

3rd UPDATE 30 Oct 2015: Seeking Alpha has now picked up on the Neustar disclosure (see 2nd Update below): NeuStar: The Loss Of The NAPM Contract Sees New Disclosure - NeuStar, Inc. (NYSE:NSR) | Seeking Alpha. In addition the transcript from yesterday's call has been released by Seeking Alpha--excerpts--emphasis and links added:

"... with Bombora, we're the clear global leader in launching and operating TLDs. To-date, we have launched 122 new TLDs or Top Level Domains, including notable names like .nyc, .science, and .club. We have several hundred more to launch including over 150 brand TLDs, which present great opportunities for us to cross-sell other services ...

"... First question is on the recent filings or documents that we saw filed on the SEC at your website. The SEC is currently asking for more segments' margin disclosure. What is your plan to address this, because the documents that were filed so far really don't indicate what you're planning to take?

Paul S. Lalljie - Chief Financial Officer & Senior Vice President:
"... as you can see from the outline and in all of our public filings, we generally capture information at the consolidated level. As we get closer to an end date for the impact, we will revisit our disclosures. Unfortunately that date is not very specific at this point in time, and as you can see in our 10-Q page 27 of 151, we have disclosures about expecting to lose the $500 million of revenue, but we – it is uncertain at this point in time what the impact will be, although we believe the impact on operating margin will be disproportionate, meaning it's not a dollar-for-dollar impact...

Will V. Power - Robert W. Baird & Co., Inc. (Broker):
"... on the Bombora deal I think you said $2.8 million of revenue contribution. Did you all give the EBITDA contribution? I know it would be small, but be curious to know what that might have been. If you're able to disclose that?

Paul S. Lalljie - Chief Financial Officer & Senior Vice President:
"I don't think we gave the EBITDA contribution, but I think in our explanation of expenses, we did include $2.7 million of acquisition-related operating expense and that should be primarily Bombora."


Based on the above, it is clear that the expected (approximately) $500 million loss disclosed in the 10-Q (see above and below), will have a "disproportionate impact on operating margin"--meaning impact on EBITDA and profits. On the Bombora deal, it appears to be a low-margin business at present: $2.8M revenue less $2.7 (approx) expenses= $100,000 EBITDA contribution for the quarter--Caveat Emptor!

2nd UPDATE 29 Oct 2015: Neustar admits "annual revenue will decrease by approximately $500 million" upon termination of NPAC contracts. and "total revenue and profitability may be materially adversely affected" (see 10-Q excerpt below). Note that 2014 total annual revenue was only $964 million, of which John Zhang (see further below) has stated "NPAC contract accounts for over 100% of Neustar's EBITDA" (Earnings Before Interest, Taxes, Depreciation, Amortization):

Item 1A. Risk Factors (p.33-34, Form 10-Q) (emphasis added)
"In addition to the other information set forth in this Quarterly Report, you should carefully consider the risks discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended December 31, 2014, filed with the SEC on February 13, 2015. The risks discussed in this Quarterly Report and in our Annual Report on Form 10-K could materially affect our business, financial condition and future results. The risks set forth below and described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results.

"When our seven contracts with North American Portability Management LLC are terminated, the timing of which is uncertain, our revenue and profitability may be materially adversely affected.

"We cannot be certain whether our contracts to provide local number portability services will be extended beyond September 30, 2016.  Once the contracts terminate, our annual revenue will decrease by approximately $500 million.  As a result of the uncertain contract end date and due to our cost structure, which is organized by function, the impact of the termination of the contracts on our income from operations is not currently quantifiable.  At the time of termination, our revenue and profitability will be dependent upon the success of our remaining business.  If we are not able to replace this lost revenue and adjust our operating plans to support our remaining business, our total revenue and profitability may be materially adversely affected."

UPDATE: Neustar misses on revenue: NeuStar (NYSE:NSR): Q3 EPS of $1.29 beats by $0.17.
Revenue of $261.7M (+7.3% Y/Y) misses by $0.31M. Press Release. Neustar stock closed today DOWN 3.93% at $26.89 (price decrease $1.10 ).
Web.com (NASDAQ:WWWW): Q3 EPS of $0.62 beats by $0.02; Revenue $140.4M (-2.4% Y/Y) beats by $0.85M. Earnings Release.

Domain Name Registry operator Neustar (NYSE: NSR) and Domain Name Registrar Web.com Group, Inc. (NASDAQ: WWWW - Web.com, NetworkSolutions.com, Register.com) both report Q3 2015 earnings after the market close today and each will have live webcasts at 5 pm ET. Here are the links to Web.com's earnings and live webcast [Web.com Group (WWWW) David L. Brown on Q3 2015 Results - Earnings Call Transcript | Seeking Alpha] BUT the more interesting story is Neustar:

Neustar 5-year stock chart as of Oct 28, 2015 (source: google.com)

Neustar, Inc., (NYSE: NSR) will report Q3 2015 results on Thursday, October 29, 2015, after the close of regular trading. The third quarter earnings release will be followed by a teleconference and webcast beginning at 5:00 p.m. ET. For the live or archived webcast via the Internet, go to the Investor Relations section of the Neustar website: http://www.neustar.biz/about-us/investor-relations (source: NSR press release).

To participate in the teleconference: 800-765-0709 (international callers: 913-312-0860) and enter PIN 447718 (a few minutes prior to the call in order to register). A replay of the call will be available through 11:59 p.m. (Eastern Time) on Thursday, November 5, 2015 by dialing 877-870-5176 (international callers should dial 858-384-5517) and entering PIN 447718.

Principal domain name: neustar.biz
Stock exchange and Symbol: NYSE: NSR

About Neustar, Inc.(source: Neustar): Neustar, Inc., is the first real-time provider of cloud-based information services, enabling marketing and IT security professionals to promote and protect their businesses. With a commitment to privacy and neutrality, Neustar operates complex data registries and uses its expertise to deliver actionable, data-driven insights that help clients make high-value business decisions in real time, one customer interaction at a time.

Neustar is also a domain name registry operator for top-level domains (TLDs) such as .biz, .us (ccTLD for the U.S.), .co (ccTLD for Colombia), and other TLDs, (.nyc, .travel) as well as providing services for other TLD registry operators.

Neustar insiders have been selling their shares in Neustar, generally a bearish sign. In a recent Seeking Alpha article: Neustar: 80%+ Downside Within 13 Months (Oct 14, 2015), John Zhang, a self-described contrarian value investor, concludes (emphasis added):

• There is a highly probable 80%+ downside within the next 13 months, with a chance the NSR may face default in the next 3 years due to continued deterioration in the non-NPAC business combined with the large liabilities on the balance sheet;
• The NPAC contract (FCC's Numbering Portability Administration Contract) accounts for over 100% of Neustar's EBITDA;.
• "Neustar risks breaching debt covenants in 2016 and 2017, and is unlikely to be able to refinance $300M in Senior Notes maturing in 2018;"

But what about Neustar's well-known acquisitions in the domain name industry, including .CO
and ARI Registry Services? Zhang specifically mentions .CO:

"... in March 2014, Neustar acquired .CO Internet S.A.S., the exclusive operator of .CO domain names. However, management disclosed in the next few quarters that [acquisition] contributed to incremental expenses and lower-than-expected revenues ... non-NPAC growth is slowing and margins are deteriorating. Furthermore, Neustar had to take on incremental amounts of debt to fund these purchases, leading to high leverage over the past few years." (emphasis added)

See also on Domain Mondo:

• Neustar Buys Bombora and ARI Registry Services for US$87 Million: 31 July 2015
• Domain Name Registry Operator Neustar After Losing FCC Vote 30 March 2015

Tweets about $NSR

Caveat Emptor!

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