UK registry operator Nominet is planning to increase the cost of .uk domains by 50 per cent starting 1 March 2016, raising questions over its historic nonprofit status.
The surprise announcement will see the wholesale price for all web addresses ending in "UK" increase to £3.75 from £2.50 per year, and are needed to deal with costs that "have risen considerably since we last changed the price," according to CEO Russell Haworth.
In addition, the company has proposed a number of changes to its terms and conditions that would give Nominet's management the ability to make further price increases without having to go through a public consultation and without having to justify any increase in terms of cost-recovery.
In other words, the historically non-profit member organization that was set up to act as a steward of the UK's internet namespace is positioning itself to become a for-profit that is free to raise funds for greater expansion by charging UK citizens more for their domain names.
Unsurprisingly, many of Nominet's members – most of whom are small companies that sell domains to end customers – are unhappy with the proposed changes and have already set up an online petition to oppose them at egm.uk.
A number have already pointedly highlighted the fact that much of the cost increase has come in the form of salaries paid to Nominet's staff and directors, and that the organization costs significantly more to run than equivalent registries.
Healer: pay thyself
In 2002, the average staff member was paid £28,542 and that has increased every year by an average of 7.3 per cent to an average wage of £60,276 in 2014. By contrast, inflation has averaged just 2.5 per cent per year over the same time period.
The increase in director remuneration has been more dramatic, more than quadrupling since 2002. The highest-paid director in 2002 received £125,000 and now receives £308,000. Overall director pay has increased by 14.5 per cent each year and in the past two years by 24 and 23 per cent respectively.
Despite the increased costs, the organization still makes a significant profit – something that led it to set up a separate trust in 2008 for good causes. Since then, it has given the trust £35 million: an average of £5 million a year.
Members are asking why a price increase makes sense when despite inflation-busting salary increases, the organization still makes millions of pounds in profit.
There is little that Nominet members are able to do to prevent the price rise however. Despite the fact that Nominet is putting the issue out to "public consultation," changes to its bylaws that the organization controversially pushed through several years ago mean that the rise no longer requires a 75 per cent membership vote to pass.
Just the latest
The price rise and proposed changes to terms and conditions are just the latest in a long series of unpopular changes that have: repeatedly put the nonprofit's membership at loggerheads with the organization; caused the resignation of multiple directors, staff, and a chairman; and led to repeated calls for the resignation of the former CEO.
Back in 2006, an effort by then-chair Bob Gilbert to make changes to the organization's structure led to a humiliating defeat at an extraordinary general meeting of the company for Gilbert and CEO Lesley Cowley – something that developed into a bitter relationship between staff and members.
Members subsequently supported candidates for the Board that vowed to keep Nominet's expansionist plans in check. They were subsequently elected despite an active and aggressive campaign against them by Nominet's staff: a process that repeated itself twice more at subsequent elections.
Those directors resigned after one of them was sued by the organization, and the other quit in protest. Both called for the resignations of Gilbert and Cowley.
Gilbert did eventually resign in 2010 – the day after he finally got structural changes to the organization passed – but Cowley stayed on until 2014.
Nominet's legal director Emily Taylor and its CTO Jay Daley also quit following clashes with Cowley. Daley went on to become the chief executive of New Zealand's .nz registry. Taylor won an employment tribunal that shone a light on the highly dysfunctional organization.
In 2013, Cowley was forced to sack her newly appointed chief commercial officer Jill Finney, who was said to be at the centre of an alleged coverup of the deaths of babies in the NHS. (Finney denied ordering officials to delete a damning health service report.)
Can't hear you
Cowley and new chairwoman Rennie Fritchie managed to evade questions over how much they knew about Finney's alleged role in the scandal, but only by ignoring their members. At one annual general meeting, both Fritchie and Cowley repeatedly shut the meeting down rather than respond to hecklers' questions.
Nominet also launched – and then dropped – a libel case against a member who used the testimony from the earlier employment tribunal to produce online videos commenting on statements made by Cowley.
And finally, Nominet's staff pushed through a decision to create second-level .uk domain names, going through a highly contentious year-long consultation that at one point saw them throw critics out of a meeting where the plans were being discussed.
Cowley finally quit in 2014 soon after the new .uk proposals were approved.
Many members had hoped that with the announcement of a new CEO in October 2014, the organization would finally settle down after eight years of in-fighting.
However, the new head, Russell Haworth, risked agitating the situation just a few months later when he announced yet another review of the organization's membership structure – something that members have come to associate with a gradual reduction in their powers to hold the organization accountable.
And Nominet was typically tight-lipped when the entire Nominet Trust team resigned en masse. Chief executive Annika Small, chairman Lord Knight of Weymouth, five of its six trustees, and most of its senior staff all left at the same time without giving clear reasons why. Nominet's response was to insert its outgoing Board members into the roles.
Haworth has repeatedly promised to take into account Nominet's history since he took over, but his focus has also been squarely on expanding the company's commercial footprint.
With the proposed changes, that commercialization of the organization will be largely complete. The average citizen with a .uk domain name is unlikely to notice however: the end result will be just a few extra pounds when they renew their web address. ®