One and two-character domain names become available
Legal updates: case law analysis and intelligence
On October 23 2009 DENIC, which administers the country-code top-level domain (ccTLD) '.de', amended its domain name guidelines, effectively removing many of the restrictions applicable to the registration of second-level domain names under '.de' (currently the largest ccTLD with over 13 million registrations).
The changes were brought about as a result of a 2008 decision by the Higher Regional Court of Frankfurt in favour of Volkswagen AG in which the court ordered that DENIC register 'vw.de'. The court decided that DENIC's refusal to register the domain name was against competition law due to DENIC's dominant position. DENIC had argued that one and two-character domain names could cause technical problems, but the court was unconvinced. In light of this decision, DENIC decided to allow the registration of one and two-character domain names. DENIC had previously registered a few two-character domain names in the very early days of the Internet ('ix.de', 'hq.de' and 'db.de').
The launch phase took place on a first-come, first-served basis, and was based on the following rules:
- One and two-digit domain names, as well as domain names composed exclusively of numbers, can now be registered;
- Domain names identical to combinations of letters used for German motor vehicle number plates can now be registered;
- Second-level domain names corresponding to TLDs such as '.com' or '.org' can now
- be registered;
- Domain names may consist of the numbers 0 to 9, hyphens, the letters 'A' to 'Z' of the Latin alphabet and various other characters currently used by the German alphabet;
- For technical reasons, domain names must neither begin nor end with a hyphen, and must not have hyphens as both their third and fourth characters;
- The minimum length of a domain name is one character; and
- The maximum length of a domain name is 63 characters (not counting '.de').
Taking into account that '.de' domain names top the list of the most popular ccTLDs, competition was fierce. One and two-character domain names often sell on the domain name aftermarket for significant amounts, given that there are only a finite number of them under each extension. Many other TLDs (both country specific and generic) already allow the registration of one and two-character domain names. In general, these domain names reach dizzying prices.
During the initial registration phase, DENIC restricted the number of domain names that could be registered by one registrar to four per minute - in theory to allow a spread of different registrars the chance to acquire domain names. However, it seems that around 30% of the one or two-character domain names made available were snapped up by one registrar, Tec-Media-Service. Realtime.at came a distant second with 48 domain names, and Key-Systems third with around 19 domain names.
In view of the profit ultimately at stake, it seems that some larger registrars chose to purchase the resources of several smaller registrars to increase the number of registrations that they were able to make. It is believed that certain smaller registrars were ready to provide their resources to larger registrars such as Tec-Media-Service in return for a significant fee (apparently upwards of €10,000). As a result, end customers wishing to acquire one and two-character domain names could secure a top place in an experienced registrar's queue (and thus a realistic chance of acquiring the domain name in question) only for a five to six-figure sum.
The launch was thus criticized, not only because certain large registrars were able to play the system, but also because DENIC gave only very short notice of the release.
Despite the relaxation of many restrictions relating to '.de' domain names, it is still necessary for registrants to have a local administrative contact in Germany.
David Taylor, Jane Seager and Sean Kelly, Lovells LLP, Paris
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