back to article .UK overseer Nominet abandons its own charitable foundation – and why this matters

Nominet, which runs the UK's domain-name registry, has abandoned its own charitable foundation, raising questions about the organization's direction and accountability. In an email earlier this week, CEO Russell Haworth stunned members of the non-profit, public-interest outfit by announcing that he was withdrawing from the …

  1. Anonymous Coward
    Anonymous Coward

    Hold on - This reads exactly like a....

    Heist... How are they getting away with this?

    'The end result is that the finances and decision-making of what is supposed to be a member-friendly organization are largely invisible to anyone but board members and staff. The potential for self-dealing is significant. And many continue to be alarmed at inflation-busting staff salaries and bonuses, as well as director remuneration that the organization awards itself year after year.'

    'The unilateral decision to effectively kill off the organization's charitable foundation, with no consultation of members, has further raised concerns that Haworth is running what is supposed to be a steward of the UK's internet space as an investment vehicle, using the revenue from over-inflated .uk domain prices to fund a personal interest in security software.'

    1. Anonymous Coward
      Anonymous Coward

      Re: Hold on - This reads exactly like a....

      How are they getting away with this?

      Easy. Lack of accountability and lack of transparency.

      Most of us don't know how people like Haworth got appointed, don't know who is supposed to hold him in check (and how they are appointed), and there's little information for outsiders to judge how the organisation is being run. If you've got a poorly performing NHS Trust (like round my way) it is EXACTLY the same - self serving management without accountability, and a lack of proper information to hold them to account, no ready means to replace those managers. I've even been on the inside of a large listed company that went down due to directorial fraud, and that too had those same hallmarks - investors couldn't see what was actually happening, and the directors ensured that only people they assumed were crooks were allowed into their elite club - and little things, like the quorum for board meetings being two! I think those who have been following the meltdown at the EPO will be aware that is something similar, in terms of lacking transparency and accountability.

      I have observed that bullying is also pretty common in these circumstances. The outflow of people around Haworth seems deeply suspicious.

  2. Anonymous Coward
    Anonymous Coward

    Not unusual, unfortunately

    All manner of member-based organisations have done the same thing as they've grown larger - think of the AA, or the Consumers Association. It's almost as if if the professional managers they bring in as they grow get bored with the worthy-but-dull stuff the organisation was set up to do, and start using it as a vehicle to play with more exciting commercial stuff.

    1. Mage Silver badge
      Pirate

      Re: Not unusual, unfortunately

      Yes, there is ICANN.

      Enabling spam by making WhoIs public (a warrant should be needed)

      Effectively deleting paid up valid domains without telling Registrants (or allegedly Registrars/Resellers).

      Also:

      When is a Registrar just a commercial reseller of domains managed by other Registrars.

      Exactly why do ICANN exist? Should be replaced by ITU.

      Exactly why do Registrars exist? Should be done by National Comms regulator.

      Exactly why is there more than a setup charge. What is the annual fee for? (Compare Ham Radio Licences in some countries where there is only an initial charge, because it's a database and costs nearly nothing per person annually after record creation).

      ICANN and Registrars are a money making unregulated *Scam*!

      1. Yes Me Silver badge

        Re: Not unusual, unfortunately

        > Exactly why do ICANN exist? Should be replaced by ITU.

        I have to disagree there. ICANN should never have been set up under US jurisdiction, but equally the DNS should never be handed over to the ITU. Have you any idea how little the ITU understood the Internet in 1998, when this was a serious option? And have you any idea how they would mishandle the DNS today, in an organisation where totalitarian governments have the same voting rights as democracies?

        ICANN should become an NGO in a more neutral jurisdiction; Switzerland and the Netherlands are still the obvious choices, as they were in 1998.

        > Exactly why do Registrars exist? Should be done by National Comms regulator.

        If you're talking about country-code registrars, their oversight is indeed a national question, and the answer will be different in each country. But registrars for the non-country-code top level domains need to be under multi-stakeholder oversight. Unfortunately, today that means ICANN.

    2. JoJ

      Best Start-up Financial Advice -- Re: Not unusual, unfortunately

      Note to self, prompted by the otherwise unexplained and unjustified conversion of a monopoly non profit to become a investment fund: I must remember to be sure to find a charitable purpose to satisfy the Charities Commission of the clearly fair deal that's not paying any tax for my first decade or two, whilst enjoying the respect and benefits of a unsuspecting board of highly experienced trustees generously provided by the industry I intend to compete in.

      This offshore center, Great Britain, is warming up to be the friendliest place for crooks, come Brexheit.

      1. Kia Foster

        Re: Best Start-up Financial Advice -- Not unusual, unfortunately

        Or even BREXHEIST

    3. Roland6 Silver badge

      Re: Not unusual, unfortunately

      >All manner of member-based organisations have done the same thing as they've grown larger

      Not quite, remember back in 1999 Nominet UK tried to demutualise and failed...

      Normally, the Charitable Trust owns the trading company which gifts its profits to the trust.

      So what is interesting here is that instead of Nominet Trust having a controlling shareholding in the private business Nominet UK, Nominet UK has set the trust up so that legally Nominet UK is simply a member of the trust.

      My reading of this is that this step is a precursor to another attempt at demutualisation...

    4. Yes Me Silver badge
      Unhappy

      Re: Not unusual, unfortunately

      It's greed. It's Thatcherism (or Reaganism in the case of ICANN). Or if you prefer, it's Carillionism. A public good (the national namespace) handed over to private industry.

      A very black day indeed.

    5. anonymous boring coward Silver badge

      Re: Not unusual, unfortunately

      Play with?

      More like enriching themselves!

  3. Chris Hills

    What I want to know is

    What can we, the citizens, do about it?

    1. Natalie Gritpants

      Re: What I want to know is

      Don't pay for a .uk domain, there are plenty of alternatives that are in a race for the bottom and most of the planet is now used to addresses that don't end in .com or .co.uk

      1. Martin Summers Silver badge

        Re: What I want to know is

        Not paying for a .uk sounds great but if you don't get it someone else will. Plus you've got all those trademark holders who are always held to ransom when it comes to domains. Unfortunately the only people who did obviously object and could feasibly have done something resigned, leaving the current management to do exactly what they want.

      2. Will Godfrey Silver badge
        Unhappy

        Re: What I want to know is

        That's all very well, but when your .uk address has been around for nearly 20 years, you risk losing a lot of contacts by changing it. You forget to notify some, others don't get your email etc.

      3. Andy Livingstone

        Re: What I want to know is

        Too true. I moved far away from them some years ago when the signs first started to show.

    2. Adam 52 Silver badge

      Re: What I want to know is

      I would suggest to your MP, if he's Tory, that competition in the .UK domain provider market would be a good thing. If she's Labour then point out that director pay is rising, charitable donations stopped and important infrastructure like domain names should be nationalised.

    3. Stuart 22

      Re: What I want to know is

      "What can we, the citizens, do about it?"

      Dunno. And I'm a member and registrar. We are being screwed too. Having said that there is still a remnant of the old public service ethic left in the organisation doing the actual work and excluded from 'policy'. Hopefully they won't be found out before they take retirement (voluntary or otherwise).

      I have exactly the same situation in my leisure activity. CTC followed their name supporting touring cyclists with great routes, lists of good value cafes and pubs, insurance and stuff like that. Then someone comes in from outside, drops touring, stuffs up the subs to finance his activities elsewhere - even rebranding (at what cost) to Cycling UK without a by-your leave to the membership.

      We have littlr choice - needing that insurance for ourselves and our clubs. Its the modern asset striipping/exploitation ethic for personal greed.

  4. John Smith 19 Gold badge
    Unhappy

    I smell a "Carillion" in progress.

    Undercutting other bidders to guarantee the win. Check

    Using existing revenue to make up any shortfalls if the underbid too far. Check

    Aggressive acquisition strategy driven by CEO with large ego. Check.

    Senior stuff pay & benefits substantially expanded (and probably secured against future failures) Check

    Service goes TITSUP when too many contracts underbid below cost suck up the all actual revenue from their core business. TBC

    We're just missing the heavy borrowing from the banks to finance a lot of those takeovers that turn bad when the UK BoE interest rate rises for the first time in nearly a decade (who could have guessed that was going to happen?)

    1. Brewster's Angle Grinder Silver badge

      Re: I smell a "Carillion" in progress.

      Nominet can always raise UK prices to cover the losses. So it won't go TITSUP. That's the point: they have a licence to print money which they're abusing.

      Imagine if Carillion could have unilaterally raised the prices charged for PFI contracts.

  5. Anonymous Coward
    Anonymous Coward

    If they're making too much money..would it be asking too much for them to consider lowering the fees?

    1. I ain't Spartacus Gold badge
      Unhappy

      Maybe the plan is to stop making profits? Rather than make profits, give to charity, they could move to a model of make profits invest in stuff. But surely make profits pay higher bonuses would be far better?

    2. the hatter

      There was no clear reason for them to raise prices, which they did while they were already generating a sizeable excess each year, So seems unlikely.

      Sad what has become of what was once a great organisation for both members and the public.

  6. Spudley

    The launch of hundreds of new generic top-level domains – like .cooking and .horse – has not been as successful as the domain name industry expected

    Well no. Of course it hasn't. Those in the industry who expected it to work were being blinkered by greed.

    The reality is that the massive expansion of top-level domains was always a bad idea. The only reason it was done was as a cynical money grabbing ploy by the registrars. If it's back-firing on them now, then I'm not going to cry for them.

    1. I ain't Spartacus Gold badge
      Happy

      Freudian slip

      Does the article author wish to admit something? Having .cooking and .horse as the first two things that come into your head is rather suggestive. I could murder a lasagne...

      Don't put horse in the lasagne! Neigh lad! That's a waste. Roast it instead and serve with tatties and yorkshires. And a nice glass of red rum.

      1. BebopWeBop Silver badge

        Re: Freudian slip

        My partner tells me that she never feeds her horses Lasagne (disgustingly pampered brutes though they might be)

    2. Anonymous Coward
      Anonymous Coward

      The launch of hundreds of new generic top-level domains – like .cooking and .horse – has not been as successful as the domain name industry expected

      Well no. Of course it hasn't. Those in the industry who expected it to work were being blinkered by greed.

      I see what you did there. :-)

  7. This post has been deleted by its author

  8. localzuk

    Who owns .uk?

    Who actually owns .uk? Its a country ccTLD, so surely the ultimate owner would be the UK government? How would the rights to operate it change hands, should Nominet go all Dr Evil?

    1. Mage Silver badge

      Re: Who owns .uk?

      Probably ICANN, he mutters darkly. By ISO it ought to have been GBR, or GB. Like GB Pounds, GB car number plates etc. ISO Codes: "UK Reserved on request of the United Kingdom lest UK be used for any other country," Though the EU uses UK, the UK uses GB for most things (maybe they want rid of N.I.?)

      Ukraine is UA

      1. Jamie Jones Silver badge

        Re: Who owns .uk?

        I would say that "we" own .UK and the government manages it on our behalf.. Don't let the government assume personal ownership of a public resource!

        But yeah, why can't we say "bye bye nominet" and give the tender to someone else. It shouldn't be Nominets property - let them play with the domain they bought.

        Mage: I'll forever associate .gb with x.400/x500 .. arrrgh!

  9. Anonymous Coward
    Anonymous Coward

    Net neutrality? of course not

    My neighbour's pig sty smells sweeter than this.

    Next step is to abrogate its non-profit status and hand the profits to the board. Sorry, Nominet Members, you are just a bunch of charitable losers.

    After that comes corporate buy-out at massive profit gain for said board members, the toadiest of whom will be retained.

    Next comes the "we deny any attempt to destroy net neutrality" move to set up as a bandwidth regulator, destroy net neutrality and sell off the bandwidth.

    There are days when I am almost willing to vote for Jeremy Corbyn.

    1. Anonymous Coward
      Anonymous Coward

      Re: Net neutrality? of course not

      "There are days when I am almost willing to vote for Jeremy Corbyn."

      Whoever you vote for - the Government always gets in.

      1. John Crisp

        Re: Net neutrality? of course not

        Whoever you vote for - the Government Feckin Idiots always gets in.

  10. Lucien Taylor

    This is no longer a Member's problem or a governance problem.

    Nominet has shown again and again that the 'fig leaf' of the membership is pure fiction. The leadership does what it likes - doubling prices, using profits from a monopoly to invest in loser businesses without any accountability.

    Why shouldn't a private company make money and enjoy bonuses, so long as they have won the right to operate the .uk TLD following a fair and open tender by the Government? But the fact is that Nominet just appeared out of nowhere in the mid 1990s as a private company operating .uk (which had previously been run out of UCL in the public sector). How did .uk come to be transferred out of the public sector to a private company?

    The only reason it happened was because in the 1990s the government didn't realise what a valuable asset its national domain name was. It would be inconceivable in today's climate that a national TLD would be taken out of the public sector and awarded to a private company without tender, without any review of the contract, without any payment or return of profits going back into the Exchequer.

    So, I agree with some of the above commentators - it's back to MPs I'm afraid.

    1. Hazel Pegg

      Re: This is no longer a Member's problem or a governance problem.

      I said something similar back in 2006 and got a lot of flack for suggesting that it might be better all round if the govt took over the running of Nominet.

    2. John Crisp

      Re: This is no longer a Member's problem or a governance problem.

      "following a fair and open tender"

      There is no such thing. It's a unicorn.

      Value for money for the public is just marketing bullshit.

  11. Anonymous Coward
    Anonymous Coward

    I, for one, welcome our new greedy overlords

  12. teebie

    Why do you have to pay people 800 grand to decide which good causes should get 3200grand?

    1. Anonymous Coward
      Anonymous Coward

      To make sure none of the money is wasted, of course.

  13. Mr Gullible

    20% Admin and running costs??

    So a 'charitable' organisation that recieves £4M from a single source, no fundraising to do, advertising etc., and manages to spend £795,000 on ADMIN????

    One wonders if the gravy train mentality has extended into the trust itself.

    1. PeterGriffin

      Re: 20% Admin and running costs??

      Exactly my thoughts. Now the Nominet Gravy Train is being upgraded to a Corporate Jet.

      As an aside, I believe "Charitable" trusts are largely a charade. Examine what scraps of financial information you can find about any of the big charitable names and you will find an obscene amount of money is spent on salary to the executive board.

  14. Hazel Pegg

    Some of us saw this coming .....

    Back in 2006 we had enough votes from members (10% + 1) to block proposals being put to the March EGM. https://www.theregister.co.uk/2006/02/21/nominet_egm/

    In the event our votes weren't needed as a large company (or two) voted the proposals down by post prior to the meeting. But it's interesting to look back at what Nominet said then and what is happenning now. http://www.theregister.co.uk/Print/2006/02/22/nominet_response_egm/

  15. PhillW

    Why do you have to pay people 800 grand to decide which good causes should get 3200grand

    Jobs for the boys innit.

    "In November 2015, the org raised its prices by 50 per cent citing vague "additional costs.""

    "Director pay has increased a remarkable 14.5 per cent each year since 2002."

    Why would you want some mucky 'charity' getting a slice of what he assumes is, by birthright, his?

    Make me want to vote for Jeremy Corbyn......... I'd vote for Genghis Kahn if he stood on a ticket of bringing shysters like this to book!

  16. This post has been deleted by its author

  17. anonymous boring coward Silver badge

    I'm surprised it took this long!

    I expected a grab on all the valuable Internet stuff, payed for by others in money, sweat and tears. Human nature. We need to let drift any institutions that get too big and full of themselves. Just get rid of them.

    Same principle as not paying AGAIN to that puppy eyes wikipedia megalomaniac. Get rid of 'em.

    Riding on the back of others' hard work.

  18. Anonymous Coward
    Anonymous Coward

    Nominet benefits from stable annual revenue of £30m.

    That's only until bare .uk names emerge from their protected status at which point, to protect your intellectual property you are best advised to get the bare .uk equivalent of your .co.uk name so at a stroke Nominet potentially doubles its income.

    All they need to do is add a database field to each .co.uk domain name to indicate "does this registration cover both .uk and .co.uk variants?"

    In fact what benefit accrues to anyone other than Nominet for even allowing separate ownership of .uk and .co.uk - Oh yes of course, the Intellectual Property lawyers who can make a killing from the passing-off disputes.

    Nominet is a monopoly and that always leads to what most of us would consider corrupt practises.

    Maybe someone with more knowledge and time than me would like to start a petition: https://petition.parliament.uk/petitions/check

    Basically a proposal that the contract for managing the .uk registry should be put out to tender. The bait for MPs being that like the wireless spectrum bandwidth sales it could generate a few quid for government to squander. I'm sure ElReg readers would sign up.

    1. Kia Foster

      Re: Nominet benefits from stable annual revenue of £30m.

      100% agree. What we need is for all Members to group together and protect OUR interests in Nominet.

  19. Anonymous Coward
    Anonymous Coward

    I/We as members knew this would happen when "big business" started paying an interest in Nominet. They do NOT want Members having any interest or say in Nominet and will now try and get rid of them.

  20. Andrew Findlay
    Alert

    .uk is a public good

    Top-level domain names should be treated as 'public goods'. Allowing the Government to sell them off to the highest bidder will just turn them into part of the tax system: prices will go up to fund the Treasury take, and the operators will occasionally go bust because they had to over-bid to get the business - just look at the passenger rail franchises for recent examples.

    Public-Interest Company or Charity would seem to be the safest ownership structure, but even those have potential for capture by bad actors. Maybe we should go further and make this a Royal Charter Company (like the Royal Mail used to be and most pre-1970 universities still are). That would require the consent of the Privy Council to any changes in aims and objects, which should slow down the moneygrabbers quite well.

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