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The consequences of Nomer.com’s accreditation as Registrar

The .COM .NET .ORG (gTLDs – Generic Top Level Domains) obey the following structure: a single company is accredited by ICANN to administrate the main database of all domains registered of a certain extension, for example, VeriSign is responsible for the administration of the database of the following extensions: .COM and .NET. This type of company is called Registry, and it coordinates the concession and availability of a certain TLDs.

ICANN also settled that Registries of gTLDs cannot sell domain names directly to final costumers. They have to sell domain names through distributors called Registrars. Be careful to do not mistake Registry for Registrar. Registry is the company that coordinates the concession and availability of TLDs and Registrar is an organization that has been accredited by ICANN to register TLDs and sell them to final costumers. ICANN also determines the price Registrars pay for each domain registry, now settled as $6,50/year. It is Registrars' responsibility to determine the value of a domain's registry for the final customer. This structure was created to stimulate competition between the distributors and consequent improvement of the market's services and prices.

In 2005 there were about 300 companies accredited as Registrar by ICANN but none in Latin America.

When Nomer.com finished its accreditation process as a Registrar it became the first Registrar to operate locally in Latin America and that changed the scenario of the domain registration market in Brazil.

The Brazilian domain registry market consisted of small businesses, resellers from American's Registrars. Those small resellers came to be because of the need for international domains registration and typically were operations with very low investment. We call this kind of operation "Skin" because generally the operation is only a website, an interface with no technology of its own that uses the foreign Registrar's technology for its operation.

For a whole year Nomer.com was the only accredited Registrar by ICANN in Brazil, and only in 2006 Locaweb became accredited too. This accreditation stimulated a war of prices that caused the domain's value to drop from R$45,00/year to R$29,00/year for the final costumer.

After the establishment of this new level of prices, the small resellers were in a quandary; to keep competitive they had to become Registrars, which is expensive and slow, and economically viable only if the Skin has thousands of domain names.

These changes have put out of business hundreds of small resellers that used to thrive in a low competition market without local Registrars. This market sweep is considered a fine thing indeed, as now only the organizations prepared to make investments in technology and marketing are going to survive and render good services to the Brazilian market. ICANN's accreditation of a local Registrar unleashed the profissionalization of domain names registry services in Brazil.