On May 12, the press center of the Russian Ministry of Communications and Mass Media held a roundtable on the condition of and development prospects for the market of the national domains .RU and .РФ, as well as tasks the registration system is facing. The event was organized by the Coordination Center for TLD .RU/.РФ together with the Ministry of Communications and Mass Media.
The roundtable was attended by representatives of the Coordination Center, the Communications Ministry and other founders of the Coordination Center, the Technical Center of Internet, MSK-IX, GroupIB, leaders of Russia’s largest registrars and domain investors and journalists.
Participants discussed the increased cost of .RU and .РФ domain names for accredited registrars, as well as the possible influence of this increase on the domain market. The main cause of the price increase is the need to bring additional investment to the development of the domain space infrastructure of the Russian segment of the internet.
“The cost of .RU domains has been stable for the past 10 years, while the inflation rate has been over 120%. Operational costs to maintain safe, stable and reliable operations of the internet infrastructure require additional budgeting. Also, the Coordination Center development plan involves several priority projects, one of which is to create a backup register to improve the reliability of the addressing system. The Coordination Center is also working on import substitution of software used by the register, as well as on a marketing communications program aimed at promoting the .RU and .РФ domains,” said Coordination Center Director Andrei Vorobyev.
Deputy Director of the Coordination Center Irina Danelia spoke about a survey of price demand elasticity, which the center had conducted before proposing to increase the price for domain names in .RU and .РФ. Domain name registrars, from large to small ones, as well as domain investors and customers (both individuals and legal entities) took part in the survey, which showed that a cost increase to 100–120 rubles would not affect the Russian domain market and is unlikely to cause a drop in the number of domain names in the national domains.
However, some registrars and domain investors disagree. They believe that the market might shrink by 15–20%, and that this increase would lead to significant changes in the business model registrars and resellers employ. Some registrars think that the objective – to increase Coordination Center revenue – will not be achieved.
This point of view is contradicted by the global experience. In 2015–2016 domain name prices were increased in some large European national domains, and this did not lead to a market drop. In the Swedish .SE domain the price increase even improved the situation: more registered domain names were renewed.
“European registries consider domain names part of their ‘national value’ and believe that the price should correspond with this idea. This provides for stable domain and registry operation and improves security of the domain,” Danelia emphasized.
General Director of the Technical Center of Internet Alexei Platonov also said that the domain cost represents not only its value, but is also a question of security. “A cheap price, to some extent, is a signal for cyber criminals that it is possible to create illegal resources and post illegal content in this domain. Therefore, it is necessary to constantly contribute to both the development of the domain zone infrastructure and to its security. Almost all large registries support projects aimed at the development of the internet, and I believe that the Coordination Center should do so as well,” Platonov said.
MSK-IX General Director Yelena Voronina spoke about projects that MSK-IX is implementing to develop the system of domain name registration and the development of the DNS network. She emphasized the importance of work on a backup domain name register; ICANN demands that such registers are created for new top-level domains and it would be logical if all other registries had this as well. Voronina also spoke about a project to place DNS hubs in local areas where there is selective localization of Russian-language content, above all, in the countries of the Eurasian Economic Union.
Sergei Grebennikov, director of the Regional Public Center of Internet Technology (ROCIT), presented the results of the monitoring of domain names for end users, which ROCIT has conducted since 2015. The monitoring clearly shows that over these years, many registrars have raised prices for users, while the Coordination Center’s selling cost remained the same. “ROCIT does not see a problem for end users in increasing Coordination Center prices to 120 rubles. As for registrars and resellers, we are sure that they will be able to offer new services that will bring them additional revenue,” Grebennikov said.
