Allegravita published a paper that looks to be a bit troubling for registries looking to do business in China moving forward. The Chinese government is looking to regulate the Chinese domain industry while The MIIT will not interfere with existing domain registrations for unapproved registries; however, new registrations will not be permitted to be sold by Chinese registrars to Chinese registrants.
New gtlds look like they are going to have to jump through a bunch of hoops to make sure they are compliant and can be offered in China.
From the paper:
Chinaʼs domain name industry has been largely unregulated for more than a decade, and the government recognizes the need to reign in control as Internet security has become a top priority for the new administration.
Chinaʼs new regulations concerning domain name registries and registrars are now close to completion. Following several years of ambiguity and rumor, new information emerged in Chinaʼs state-run media on May 12, 2015 which casts light on the eventual requirements. The Ministry of Industry and Information Technology (MIIT) is now actively applying the regulatory code to Chinaʼs registrars.
Domestic Chinese registrars are facing new scrutiny right now, and the examination and a re-approvals process will continue over the next five to six months.
Foreign registries which have not applied for Chinese market approval are advised to do so in the near term, as unapproved Top-Level Domains are likely to be taken off the market from July this year.
According to the paper .com and .net are not on the authorized list:
Many TLDs in common use in China, such as Verisignʼs .com and .net, are not in the latest list of authorized TLDs. This demonstrates that MIIT is playing catch-up with regulating the domain name market in China, which has vastly expanded due to ICANNʼs New gTLD program and the hundreds of new TLDs launching on the internet.
Aimed largely at domestic registrars, but also addressing domestic and foreign registries and the TLDs under their control, the new regulations include an examination and approval process to ensure proper observance of the government’s domain name sector requirements.
In effect as of April 2015, the process will be completed in four phases over the next five to six months: (1) “comprehensive screening and checking” which is currently underway within the registrar channel, (2) “on-site inspection,” (3) “reorganization processing,” and finally (4) “conclusive upgrading.”
Registries and registrars are required to have a “physical presence” in China FOOTNOTE 2 to achieve full compliance.
There are only 14 approved TLDs according to the paper.
Read the full report here
This is not good .I can see that China will be trying to exert full control and in end may end up with an intranet and barring .com’s from access to China.
rip in peaches numeric investors
I find it hard to believe .com would not be on the list re Alibaba Bidu JD.com etc etc etc
Hi John, thanks for your comment. Greetings from Beijing. I’m one of the report’s authors, and you raise a helpful point. Fortunately for registrants (as pur report points out) China’s gov has committed to not deregistering or interfereing with existing domains, regardless of TLD. However all new registrations must be from the current list of approved TLDs. Currently, no Verisign TLDs are on the list (which also appears in our report).
From a meeting with China’s gov yesterday, I was able to confirm that renewals will also have to comply to the list and all other regulations, including real name verification.
My team is very close to this matter (we have been in China 13 years now, and we support around 10 TLDs in the market. Feel free to get in touch for more info.
Best, Simon Cousins, Allegravita
Simon you are saying when JD.com comes for renewal the Chinese registrant will have to let it expire or sell to someone ?
Hi Shane. Good question. Under the current regulations (in force for 10 years) JD.com’s Chinese mainland registrant did not require real name verification by China’s Public Security Bureau, because only .cn and the IDN equivalent needed RNV. Under the new regulations, ALL domains from ALL TLDs require RNV (and only approved TLDs can get RNV. So, when JD.com comes up for renewal a citizen of the People’s Republic of China will need to RNV the domain, so long as Verisign has achieved full approval for .COM (which is not currently the case).
There are other requirements for registry and Chinese registrar, but this is the main one for the registrant.
Is that clear? Let me know if not (or if you need more info).
Best from Beijing!
Simon Cousins, Allegravita
So every .com will drop if Verisign does not get approved ?
No, they will most likely be placed into the care of an overseas subsidiary as a first preference and if such is not an option, at that point sold off.
Sounds like i need to place some backorders today…
There will be no problem as long as one observes Roman law in Rome.
Scary! Dose this means the end of .com investing in china?
Gotta think Verisign will make sure they are approved.
Shame, most industry observers would share your sentiment. It is hard to imagine a situation in which .com and .net aren’t approved. But as we outline in our paper (downlad link above) the requirements are quite complicated, and a special type of company vehicle must be incorporated, and in China this process takes many months (our team has incorporated hundreds of foreign clients in our 14 years in China). Some TLDs (immodestly, all that we have supported in China!) are already deep into this complicated process, and will almost certainly be uninterrupted in China.
Any more Q’s?
Simon Cousins, Allegravita
Hello Simon good to see you, will all these .coms drop ? What about Chinese registrants who use non Chinese registrars ? Does this only affect Chinese registrant at Chinese registrar ?
Should Chinese registrants reg all their .coms out 10 years right now ?
You still working with TLD Registry ?
How about changing the registrant to someone located outside China. Major Chinese brands such as Alibaba all have related companies outside China so they can easily achieve that. Now, does it mean Alibaba will be blocked in China?
Hi Raymond, you have a few good questions.
>>will all these .coms drop?
That’s best answered by the experts — the domainers (especially those with China expertise). The most likely action that will happen — IF .com is not approved, and that is hard to imagine — that websites hosted inside China’s mainland by Chinese mainland registrants will have to be taken offline or moved offshore, because they will not be able to get an ICP license. Remember that bandwidth between China and the outside world is very, very, very, very slow, so it would make browsing those sites untenable for Chinese mainland users.
>> What about Chinese registrants who use non Chinese registrars ?
The only way for a Chinese mainland registrant to get an ICP license (which allows him to host a site inside China’s mainland) is to register the domain using real name verification etc via an approved registrar. Currently, there is an interim list of 93 Chinese registrars (although note that there are literally hundreds of thousands of resellers in China). Chinese citizens aren’t and won’t be forbidden from buying domains from foreign registrars, but those domains can’t be used to resolve to websites inside of China. That includes parked pages.
>>Does this only affect Chinese registrant at Chinese registrar ?
Yes. The new Chinese gov regulations govern Chinese companies and Chinese citizens only.
>>Should Chinese registrants reg all their .coms out 10 years right now ?
Many already do! Hit me up for the bg on this phenomenon if interested. Your question is good though — if I may rephrase it, “will .coms which currently have ICP licenses continue to have those licenses after July/September, or will they be required to reapply for ICPs?” I think the answer to that is “yes, they will need to reapply” because they don’t currently have RNV, and this is a must-have for all domains, regardless of TLD, under the new regulations.
>>You still working with TLD Registry ?
No, not since March 1. We do continue to consult for a healthy number of TLDs active in China, and my team and I are very active in the Domain Name Association, the Chinese domainer community and our consultancy is growing well. We are enormously proud of the work we did for TLD Registry. We effectively put Chinese IDNs on the map for the west. I’m a committed Chinese IDN and ASCII domain investor, and I’m very optimistic for the Chinese domain sector. Just have to know how to play that complicated market (this has been our turf for 13 yrs).
Thanks again for the questions. Simon.
@Simon
Thank you for sharing your knowledge. I’m an investor in Chinese domain market and this feedback is highly appreciated.
Regards,
EM
Hi Simon, Always a pleasure reading your input. You mentioned that “this process takes many months” for a registry’s domain extension to be approved, or maybe certified, by MIIT. As an investor in an upcoming suffix, do you know approximately how many months, or years, this process may take?
Internet by its nature is global. Can the Chinese government stops its citizens from purchasing both digital and physical goods from servers located outside China?
Yes they can unless steps are taken to thwart the government at which point you could be on sticky ground legally.
China restricts access to a substantial number of websites and online services which are hosted outside of China. So, yes, the gov can effectively restrict purchase of digital and physical goods from outside its borders. China views these restrictions as its sovereign right (as the UK does for porn, I understand). China doesn’t, however, block access to even a single foreign domain registrar and Chinese citizens have no restrictions on buying and trading domains for investment or other purposes. The new regulations seek to govern how domains are sold and managed within China.
Best, Simon, Allegravita
Does this effect the WTO negotiate trade agreements ?
I was thinking about that Jonathan, I remember when the E.U. talked about going after the U.S. for making online poker illegal.
Always thought Russia would be the first to use “sovereignty”. All those that thought they were not in at the start, this is the start. IMO the value of the premium dot COM upward curve just gathered momentum.
This is crazy BUT also a new opportunity at hand as well.
China likes to regulate almost everything. I hope this will not jeopardize internet freedom for its citizens.
@SoFreeDomains Yes, excepting when their citizens or Govt are ripping off foreign companies/persons IP rights, as China has done for decades. The trouble is the West has done nothing about that and hence China now has all our money. Don’t like nor trust China ,they are not a nice Country, they have built their Country by copying what the West has invented and then sold it back to us mugs.
Sinking Chuan!
TLD reg looks like business as usual with no transparency on the issue. With Cousins? extensions currently not listed in the government plan. Not sure how many folk invested?
Of course there could be some good investment opportunities, unless the government restricts foreign business, which would be crazy, therefore suitable.
Merch
The Chinese government registered over 20,000 domain names:
http://en.wikipedia.org/wiki/Dot_Chinese_Website
“”The Landrush event incited the Chinese government, which purchased close to 20,000 IDNs. The Chinese government also announced that the Ministry of Industry and Information Technology of the People’s Republic of China (MIIT) has made it mandatory for all Chinese government-run websites to make the change to exclusively Chinese-specific domain names. “”
Hi. Yeah, I was speculating towards the Western market, or more so outside of China. But didn’t make it clear. Cheers.
Chinese government can do whatever they want period.
This year I sold many .CN domains since I invested with this extension. I wonder why, now starting to clear up.
It’s an interesting discussion but it is very unlikely that this has any negative effect on the domain industry. On the contrary: It introduces and increased urgency to invest in domain names now as there could be difficulties in the near future.
@domain investing news
This will definitely affect the domain name sales, especially short premium names. If you have not read the blog post from Domain Holdings, it is 31.17% SOLD from China.
This must be some strategy not only to limit internet access, but mainly for the Chinese government and their “friends” to profit from Domain Names market, in the near future, through higher taxations…