By Kieren McCarthy for The
Register.
This article has been reproduced with permission.
Chairman Bob Gilbert told us: "There is a lot of disinformation
being peddled that is completely erroneous." Instead, both he and
chief executive Lesley Cowley insist the changes are essential if
Nominet is to compete in the fast-moving internet market.
Last week, Nominet -
called for an extraordinary general meeting next month where it
will ask members to vote for changes to the company's basic
charter. It requires 90 per cent approval for the changes to go
through.
But soon after, several members of Nominet's Policy Advisory
Board started raising concerns over some of the changes. One, Hazel
Pegg, has even set up a website to outline her concerns in which
she urges Nominet members to vote 'no'.
Gilbert, who has spent most of the past nine months working on
the changes and who has wide-ranging experience as a company law
specialist, assured us that the changes were no more than "normal"
and that he found it frustrating that people were misreading the
changes.
The fear the changes are just the first part of a gradual move
toward far greater commercialism, and possibly a float of Nominet,
are unfounded he said. "I suppose it is because I have a track
record of taking companies public but then I have also done
a lot of non-profit work and the two are entirely separate."
Instead, he claims, he has been "infected" with Nominet's
approach and culture. It would be legally impossible for Nominet to
be floated, and besides the company is determined to remain
not-for-profit.
Cowley said the reason behind the changes is to update Nominet
and free it from past constraints that were useful back in 1996 but
now unnecessarily restrict the company.
One example is that under the existing rules, Nominet has to
poll all its members by post if it is to change prices. Others are:
that this company at the edge of internet technology is currently
restricted in its use of electronic communication; it is not
allowed to do any promotion or marketing for the .uk domain ("we'd
love to do that", Cowley said); and under its current rules, the
managing director also has to be the chairman.
With the existing articles, the board may change the voting
rules any time it pleases. And it also faces an almost impossible
task of expelling members something that came to a head when
Nominet was forced to sue one of its members for misleading
consumers while all the while the company used its membership of
Nominet as evidence of its trustworthiness.
"We've gone 10 years without an extraordinary general meeting,
and I'd be more than happy to go another 10 years without one,"
said Cowley. "But what we want is to be much more responsive and
quick to some of the changes that will happen in the industry
whether we like it or not."
Gilbert reiterates the same line: "Nominet's original
constitution has served it wonderfully well, but it's time to move
on and what we want to do is give the management the ability to run
the company the way they see fit."
So far, critics of the changes would largely agree with Gilbert
and Cowley. Members' main concerns instead surround the ability of
the board to provide "discounts" to members; to charge different
members different fees; and to provide "loyalty" payments to
members of the board.
Changes to the board structure also mean that while much-needed
skills in business and marketing will be pulled into the company,
the influence of smaller Nominet members is likely to suffer.
PAB member Pegg views the discounts as dividends by the
backdoor, and the remaining changes as a dangerous move in the
direction of commercialism where companies with more money will get
more of a say.
Several elected members of Nominet have said privately, however,
that the days of Nominet being a members-only club in the old sense
of the word are over. Nominet has a £15m turnover and runs the
fourth biggest domain registry in the world.
It is looking to use its expertise to grab new business as the
internet grows and evolves but, Cowley promises, this will not see
Nominet stealing business away from its normal members. Instead it
is aiming at the big guns of the internet industry VeriSign,
Afilias, NeuStar and so on.
The deal in Nominet's gun-sights at the moment is the contract
for ENUM in the UK. Afilias recently won Ireland's. "The UK was one
of the first places to have ENUM," says Cowley. "Now Ireland is
ahead, and Germany is miles ahead." Under Nominet's existing rules,
the company is simply prevented from bidding for anything about a
United Kingdom domain registry.
The creation in 2001 (and their subsequent dissolution in
2004/5) of three Nominet companies (Nominet.eu Ltd, Nominet.org Ltd
and Nominet.44 Ltd) were not a way of bidding for .eu, .org and
ENUM contracts, Cowley insists, but just an attempt to prevent
others from misusing the Nominet name.
Others remember the situation differently, although they still
remain unhappy about Nominet having to find ways round the
company's rules in order to bid for business that Nominet has
significant experience in.
At heart, the argument is over culture. Nominet has been
extremely successful in part because of the unwavering support
provided by members. In the past, when a million different
distractions led many internet companies to spread themselves too
thinly, Nominet thrived because of its focussed attention on the
domain name market.
But things have changed, Gilbert and Cowley say. The vast
majority of Nominet members agree but remain suspicious of what the
proposed changes will herald. Their job is to persuade all but 10
percent of the members that they know what they're doing.
"I will defend to the last breath of my body members' rights to
vote," said Gilbert. "And if they vote against these changes, fine.
But I want them to know exactly what they are voting for."
The EGM will take place at 10am on March 16, at the Kassam
football stadium in Oxford.
© The Register
2006
