Nominet faces rebellion over rule changes

Extraordinary general meeting next month

Nominet, the company in charge of the .uk registry, is facing a grassroots rebellion over proposed changes to company rules that will see it enter a more commercial phase.

Last week, Nominet announced an extraordinary general meeting on March 16, where members would be invited to vote in favour of changes to its Articles of Association.

Those changes will see the board expanded to nine members and given far greater power. The aim, company chairman Bob Gilbert stated in a letter, is to make the company more flexible and capable of dealing with rapid changes in the internet market.

That aim has been warmly greeted by most Nominet members, however a review of the exact changes has caused widespread concern that the not-for-profit company has gone too far and will end up competing with its own members.

Most vocal in opposition has been Hazel Pegg, member of Nominet's Public Advisory Board (PAB), who has set up her own website - NotNominet.org.uk - in order to outline the actual changes and the reason for her opposition.

"This is a deliberate move by the board to move influence away from the membership," Pegg told us. "And to some extent I agree with that, we do need to remove some of the restrictions. But this is a step too far - it is opening up all sorts of doors. I don't like it at all."

Over half of the eight elected PAB members are also known to be against the changes. Many of the remainder privately possess reservations about some of the changes.

The opposition is worrying Gilbert and Nominet chief executive Lesley Cowley, who need 90 percent of votes cast at the March meeting for the changes to go ahead.

Nominet has an unusual history - it was set up to act as a benign not-for-profit company that would be as a quasi-governmental body and serve only its members. The idea was that administration of the .uk registry would be kept safe from commercial pressures and so act in the best faith for the community as a whole.

As a result, the company's rules were designed to make members, made up of companies that sell .uk domains, the most powerful force. No changes in price, membership, or business could be made without 90 percent of members behind them.

However, the enormous changes in the internet - the most significant being the rapid rise of search engines - plus the huge expansion in Nominet members has meant the original rules are making it extremely difficult for Nominet to function. A simple price rise can take anything up to six months for the company to approve.

A review of the company's governance structure was set in motion by Nominet founder Willie Black, but this was scrapped when he resigned in September 2004 and the new chairman embarked on a new process following his appointment in May 2005.

Bob Gilbert is an experienced businessman and lawyer and was brought in with a clear remit to use Nominet's good name and experience to expand commercially into other parts of the internet market.

The concern is that Gilbert does not understand Nominet's unique history and that the changes suggested will end up turning the organisation against its own members. Included in the changes is room to charge members differently, to pay dividends, and to pay bonuses to board members.

While the company says its intention is to remain not-for-profit, the main fear is that the changes are no more than the first in a two-step process to Nominet becoming an entirely commercial enterprise, with one eye on going public.

Nominet's claims that it needs to make the changes in order to bid for contracts outside the .uk domain registry are also in question, as the company needs only to create subsidiary companies for particular contracts - something it already did in 2001 when it created three Nominet companies in order to bid for the .eu, .org and Enum registries. ®

Related links

Nominet EGM information
NotNominet.org.uk