EurID, the operator of the new .eu top-level domain (TLD), says registrars won't be allowed to sell .eu domains through resellers. In a statement on its web site, EurID says its agreement with the European Commission prohibits .eu sales by parties that haven't been approved by EurID. "This means that the offering of services as a 'reseller' ... is completely excluded," says the statement. While no firm date has been set, the launch of .eu domain sales is expected to begin in early 2006. Domain industry insiders say similar reseller bans are being considered for other upcoming TLDs, including the .xxx and .travel extensions.
Resellers are an important sales channel for many domain name registrars, who provide back-end management of the domains sold by partners. The reseller model is used by thousands of web hosting companies, allowing them to seamlessly sell domain names alongside their core hosting and e-mail offerings. Some registrars specialize in the reseller market, providing private-label domain management sites, which can be branded with the resellers' logo and marketing. One of the largest reseller networks is operated by eNom, which is among the registrars approved by EurID to sell .eu domains.
The role of resellers in the domain business came under scrutiny earlier this year after a domain hijacking disrupted service for thousands of customers of Panix, a New York ISP. Australian registrar Melbourne IT relied upon a reseller to confirm a transfer request for Panix.com, but the ISP was never contacted. In a recent report on domain hijacking (PDF), ICANN urged registrars to work harder to ensure that their resellers handle registrations properly and maintain accurate records. While expressing concern, ICANN doesn't appear ready to further regulate the use of resellers.
If more new TLDs follow EurID's lead, it could encourage larger resellers to become accredited as ICANN registrars, a step recently taken by hosting giants The Planet and EV1Servers. Registrar status could provide a modest edge in competitive market niches. Google, for example, is an ICANN-accredited registrar, while Yahoo and Microsoft are resellers.