Groundbreaking crash at Telnic

My bet: it'll become very, very quiet for .tel!

Hey guys just wondering if bankruptcy could occur at some point if no buyer emerges. 

If so what happens to the extension? Does ICAAN keep it afloat? And jack up the price to over $100 a year like some other extensions.

Personally I think it is a pretty long shot that some other company would want the .tel registry. But who knows.

@MikeSeaton What are automated software services? Can you give us an example?

No doubt that .tel is in a deep crisis.

Characterized by persistent lack of action to present an accepted service for .tel the initial $ 35 million investment will soon be depleted.

Three options are possible:

1. The shareholders will pump more money into Telnic. (What should their interest be to burn more money?)
   
2. The registry will be sold to another company. (Due to the slump in registrations this has just become more difficult.)
   
3. Telnic won't be able to extend the registry agreement.
   

Regarding option 3:

SPONSORED TLD REGISTRY OPERATOR AGREEMENT FOR .TEL

ARTICLE VI Termination Provisions

Section VI.3 Bankruptcy. This Agreement shall automatically terminate in the event Registry Operator shall voluntarily or involuntarily be subject to bankruptcy proceedings and such proceeding is not dismissed within sixty (60) days. For the avoidance of doubt, the termination provisions of this Section 6.3 shall not apply in the event of any reconstruction, reorganization (or similar business recombination) of Registry Operator or the activities described in Section 8.5 not arising out of insolvency.

Section VI.5 Transition of Registry Operator upon Termination of Agreement. Upon any termination of this Agreement as provided in Sections 6.1 and 6.2, the parties agree to work cooperatively to facilitate and implement the transition of the registry for the TLD in accordance with this Section 6.4. Registry Operator shall agree to provide ICANN or any successor registry operator authority that may be designated for the TLD with any data regarding operations of the registry operator for the TLD necessary to maintain operations that may be reasonably requested in addition to that data escrowed in accordance with Section 3.1(c)(i) hereof.

http://www.icann.org/en/about/agreements/registries/tel/tel-agreement-07apr06-en.htm

For this case ICANN has Registry Transition Processes.

Usually ICANN would make a call for proposals and will negotiate all terms for a new registry agreement with the potential successors.
Consequently no .tel registrant will lose his domain(s), but the price level for renewal fees of domains will be renegotiated and is completely open.

Telnic has made ​​many mistakes and wasn't willing to adapt, despite the overwhelming criticism. It's no wonder that is happening now what many have seen coming. Telnic ignored all warnings before.

@Expert Thanks for that information. 

I have long wondered whether the current registry has deliberately not done the obvious upgrades to .tel. Just taken their salaries and done very little. 

Perhaps they never expected it to succeed in the first place; just took the $35 million and bought themselves jobs for half a decade. Jobs which were only part-time in nature but with full-time salaries.

Expert wrote:Three options are possible:

1. The shareholders will pump more money into Telnic. (What should their interest be to burn more money?)
   
2. The registry will be sold to another company. (Due to the slump in registrations this has just become more difficult.)
   
3. Telnic won't be able to extend the registry agreement.
   

4.  The registry will be taken over by someboby from inside of Telnic.

But they have a track record of complete failure. How would they raise money or give confidence to ICAAN?

TelBlogger wrote:Perhaps they never expected it to succeed in the first place; just took the $35 million and bought themselves jobs for half a decade. Jobs which were only part-time in nature but with full-time salaries.

These people don't appear in the daily operation at all: http://www.teltalk.org/t1273p8-termination-of-appointment-of-telnic-director#9266
While their weekly working time appears to be zero hours, they only collect their shares.

TelBlogger wrote:But they have a track record of complete failure. How would they raise money or give confidence to ICAAN?

If you mean variant 4, then after a take over, the new owner could minimize his expenses firing off that staff of +20 people and leaving only 2-3 employees who will really work. Not a big money are needed for this.

As for ICANN I do not know. If they were silent till now, then who will forbid them to be silent further?

TelBlogger wrote:@MikeSeaton What are automated software services? Can you give us an example?

Sure - here's a couple:

- Dial/Email/Skype etc by Name (looking up the .tel DNS data to find the target address for the .tel name keyed-in).

- Remote Control of Household CCTV (.tel owner controls CCTV remotely when away from home by updating the .tel DNS data which CCTV software reads).

The more you think about it the possibilities are endless, but it needs "critical mass" of .tel domains (in the millions) to make it a large enough market to attract software service providers in the first place !

IMO, backed up by events over the last 2 years or so, Telnic will never achieve this "critical mass" that is so essential - a new dynamic pro-active operator is needed who understands the importance of creating (and keeping) a .tel "ecosystem".

Apple and Microsoft "get it" - Telnic as demonstrated by their actions unfortunately does not !

http://MikeSeaton.tel

mikeseaton wrote:The more you think about it the possibilities are endless, but it needs "critical mass" of .tel domains (in the millions) to make it a large enough market to attract software service providers in the first place !

Don't we need a new definition for "critical mass" in terms of .tel? "Critical mass" could mean the reached level of remaining domains soon when Telnic looses the interest in the continuation of the whole operation. This could be below 100,000 .tel domains. It could be a great chance for .tel if Telnic gives up .tel voluntary and clear the way for another party with serious interest in making business.

Spocky wrote:It could be a great chance for .tel if Telnic gives up .tel voluntary ...

That's nonsense!
The directors of Telnic get a fat monthly salary.
They won't give that up by choice.
Telnic will take all the money able to find to continue the registry business.

Update:

Faster than predicted: http://www.teltalk.org/t1228-tel-future

Tim Spears wrote:Faster than predicted: http://www.teltalk.org/t1228-tel-future

I really see it as a good news. The faster it will came to the bottom, the better for all of us.

Expert wrote:...

3. Telnic won't be able to extend the registry agreement.


Regarding option 3:

Usually ICANN would make a call for proposals and will negotiate all terms for a new registry agreement with the potential successors.
Consequently no .tel registrant will lose his domain(s), but the price level for renewal fees of domains will be renegotiated and is completely open.

The worst option for us. Especially bad for the holders of big TEL-portfolios. In fear of this option I reduce my TELs now.

Toptel wrote:TelChina registered approximately 90,000 .tel domains in January 2011, but most of them remained unused.
I don't know the purpose for which the domains were originally registered in the first place, but it appears to be the right thing not to renew those unused domains.

It is not acceptable that Telnic simply wipes off its best customer or partner (TelChina). In the three years when these domains have been active, Telnic could have developed something to satisfy its biggest customer.
It shows clearly that Telnic doesn't care at all. Telnic is so proud that every sense for reality is lost.

maxi wrote:

Expert wrote:Consequently no .tel registrant will lose his domain(s), but the price level for renewal fees of domains will be renegotiated and is completely open.

The worst option for us. Especially bad for the holders of big TEL-portfolios. In fear of this option I reduce my TELs now.

No, the worst option would be if Telnic extends the registry agreement with ICANN for the next period, because then nothing will happen ever!

FrankW. wrote:No, the worst option would be if Telnic extends the registry agreement with ICANN for the next period, because then nothing will happen ever!

A little bit more than 2 more years: http://www.500.name/t8-the-tel-registry-agreement-will-expire-in-2-1-2-years

...or the problem will be solved easily as soon the last customers just run away.

500 wrote:

FrankW. wrote:No, the worst option would be if Telnic extends the registry agreement with ICANN for the next period, because then nothing will happen ever!

A little bit more than 2 more years: http://www.500.name/t8-the-tel-registry-agreement-will-expire-in-2-1-2-years

IMO you won't have to wait that long at all !

There are a number of factors to consider:

1. The money is running out fast (the 2013 accounts when published in a few months time will give an idea of the date when this will actually happen).

2. Telnic have just lost around 30% of their renewal income with the recent massive IDN drops - the fast outflow of money will get even faster.

3. If properly put to ICANN (someone has to decide to do this of course), with the emphasis on the relevant points referenced in the Telnic/ICANN agreement, I believe there is likely to be a legal case for breach of contract based on the following:
- Telnic the Registry own 100% of a "de-facto" Registrar (ie. Telnames) - technically a Reseller but in practice carrying out normal Registrar functions.
- Telnic the Registry are not treating all of its Registrars equally by denying them access to the Telnames single-page template, whose creation was funded by Telnic the Registry (Telnic Ltd own the single share that exists for Telnames Ltd who receive financing from Telnic Ltd).

4. Domainers, Developers and many Users are abandoning .tel in droves - time is no longer on .tel's side as it once was.

5. Telnic's Registrars may well follow suit. What you have to appreciate is that:
- There are nearly 2000 new gTLD opportunities coming up in the next 2 or 3 years.
- It's easier to promote these than the "old story" of .tel - which anyway confuses newbies with the different offerings of Telnic and Telnames versions.
- .Tel domains are a rapidly falling marketplace with many dissatisfied customers - why would a Registrar want to align themselves with that ?
- .Tel gTLD uses up more of a Registrar's resources - with the demand for server power and people to deal with the CTH and the problems that can happen when a domain is transferred - even now your domain will stay in your CTH (at least with the major Registrars I use) when you've let it drop.

So in summary I simply don't believe Telnic will continue to limp along until the ICANN agreement expires !

http://MikeSeaton.tel

4444 wrote:...or the problem will be solved easily as soon the last customers just run away.

Unbelievable.

A 5-year head start on 1,400 new gTLDs and they have managed to screw it up royally.

"How to kill a unique tld with everything going for it."

1st Edition by Telnic, available soon in bookstores everywhere.

@Mike

Very nice analysis of the current situation.

FrankW. wrote:

Toptel wrote:TelChina registered approximately 90,000 .tel domains in January 2011, but most of them remained unused.
I don't know the purpose for which the domains were originally registered in the first place, but it appears to be the right thing not to renew those unused domains.

It is not acceptable that Telnic simply wipes off its best customer or partner (TelChina). In the three years when these domains have been active, Telnic could have developed something to satisfy its biggest customer.
It shows clearly that Telnic doesn't care at all. Telnic is so proud that every sense for reality is lost.

Was it not smart by Telnic to cash the registration fees for three years without having any effort?

ixida wrote:Was it not smart by Telnic to cash the registration fees for three years without having any effort?

I would be extremely angry in the position of TelChina (buying a product in masses without any development).