Nominet admits membership fees mistake

Nominet has told DI it made an honest mistake when it made claims about its historical membership fees, after a pressure campaign accused the .uk registry of “misleading” its members.

The company is currently holding a public consultation on sweeping revisions to its Articles of Association, but the WeightedVoting.uk campaign, led by lawyer Jim Davies, reckons that Nominet has been violating its current Articles for years.

WeightedVoting supporters believe Nominet has been unlawfully receiving millions of pounds of membership fees for the last 25 years. This week, Davies accused the company’s leadership of either being ignorant of Nominet’s own history or “deliberately misleading” members by claiming it “has always had a flat membership fee for all Members”.

Today, about 2,500 members pay a £500 joining fee and annual renewals of £100. Their voting rights are calculated based on how many domains under management they have, using a formula so complex even Nominet sometimes gets it wrong.

The system, while it caps the amount of influence any one member may have, means that the larger registrars such as GoDaddy and Tucows have more votes when it comes to things like electing directors.

Last year, Davies, with the backing of a KC and other members, claimed that this system was not envisaged under Nominet’s Articles of Association, which date back to 1996, and that collecting a flat membership fee was therefore illegal, which Nominet has denied.

WeightedVoting claims Nominet is instead supposed to have a tiered membership system where members get more votes by paying higher membership fees. An archived page from Nominet’s web site seems to support this, but Nominet chair Andy Green allegedly told members recently that this system was never actually implememnted.

“Tiered subscriptions were clearly intended by those who established Nominet and that is reflected in the Articles,” Davies wrote yesterday. “Those Articles have not been followed since 1997. Nominet is breaking the law by doing so. It also has no power to charge subscriptions at present”

Now Davies says members have found an old Usenet* post from 1996 in which a member of the fledgling registry explains how his company, pioneering dial-up ISP Demon Internet, had just paid the maximum £5,000 for 10 votes.

Presented with this new evidence, a Nominet spokesperson told DI:

Members pointed out that we made a mistake in a document supporting the consultation to update our articles of association, as we bring them in line with current practice.

We initially believed that tiered membership fees had never been implemented by Nominet. It has been our long-standing practice to charge a flat fee for all members regardless of their size. Having been made aware that some members paid more in the very early days – from incorporation in 1996 to 1997 – we are correcting the document. Our data retention policies mean that we do not have records of invoices from so long ago. This was an error, and not an attempt to mislead anybody.

We recognise our articles of association are complex and in need of updating, hence the very process to get members involved in this consultation.

Iain Mitchell KC, who wrote a legal opinion for WeightedVoting, reckons Nominet could be on the hook for £1.5 million if it is forced to refund fees, with statutes of limitations limiting liability to the last six years.

(*For the kids… Usenet is a decentralized system of text discussion groups that was popular in the 1980s and 1990s. Think Reddit, but made of glowing green text on monochrome Unix terminals like in The Matrix or something. It still exists, but the learning curve required to use it probably isn’t worth the effort.)

The post Nominet admits membership fees mistake first appeared on Domain Incite.

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