Why Domains Are 'Rented' and Renewed

Steven Forrest asks a "dumb question" that's not dumb at all:

Why are domain names rented instead of sold? Why can't a brand-name company own its domain name rather than just rent it year to year? ... why is there an artificial limit on the number of years - 10 - that a domain name user can register a domain name for? Why not 15 years? Or 50? Or 100?

Actually, you can register a domain for 100 years, but the larger question about the need for annual renewals is a fair one, and Forrest isn't alone in questioning current practice. "The idea that domain names must be rented is nothing more than an arbitrary and capricious business rule imposed by ICANN," says the CaveBear Blog.

I'm sure many domain owners would agree, and prefer not to renew every year. It'd sure make my life easier. But name owners aren't the only constituents in the domain system. The reason for the current system can probably be summarized in a single word: registrars. Someone has to manage domain registrations, and it's a large and complex enough job that registrars need an economic incentive to invest the resources and staff to do it right. Annual renewals provide the hope of recurring revenue to sustain the registrars' business. It also keeps the cost of entry low enough ($5 to $35 for the first year) that anyone who wants a domain can likely afford one. That's certainly not true of the $999 fee to lock down a name for 100 years at Network Solutions, if not the $69.50 for 10 years at Go Daddy.

  Posted by RichM May 25, 2005 | Permalink | Newsletter

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Why Domains Are 'Rented' and Renewed - May 25, 2005





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