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Two companies “capture” auDA

Kevin Murphy, July 26, 2018, 18:17:34 (UTC), Domain Registries

Membership votes of the Australian ccTLD registry auDA could now essentially be captured by just two companies, potentially including new back-end provider Afilias, according to data from a disgruntled former director.

According to Josh Rowe’s analysis of auDA’s newly swollen members list, 39.2% of auDA’s members are now employees of CrazyDomains owner Dreamscape Networks, after Dreamscape signed up a whopping 527 staffers.

Assuming bloc-voting, Dreamscape would need support from only one of either Afilias (with 12.4% of members) or the registrar Arq Group (formerly Melbourne IT, with 15%) to obtain a simple majority in any member vote, judging by Rowe’s figures.

His analysis, sent out to supporters and forwarded to DI this week, was based on auDA’s official member list, which includes full contact information for each member. He had to crowdfund a couple hundred bucks to obtain the list from auDA.

Rowe told ITWire that in most cases the new members listed their employer’s address as their own.

The names-only list published on auDA’s web site currently stands at 1,345 people by my count, about a thousand more than it contained just a few days ago.

Rowe’s tally chimes roughly with my previous estimate that about 150 Afilias employees had joined auDA. Rowe makes it 166.

auDA had previously publicly thanked the three aforementioned companies, along with the registrar Ventra IP, for helping with the membership drive, which auDA says will help it diversify its membership as per the instructions of the Australian government.

The new members will not have the ability to vote in the auDA extraordinary general meeting, which is due to take place at midnight UTC tonight (1000 Friday morning in Melbourne). Their memberships should be active by the time the annual general meeting rolls around in a few months, however.

Tonight’s meeting will see the 300-odd older members vote on whether to fire auDA’s three independent directors. A fourth motion, to express no confidence in CEO Cameron Boardman, was removed from the agenda by the auDA board.

auDA was forced to called the meeting after Rowe and his allies, dismayed by what they see as policy and transparency missteps, managed to rally the support of more than the threshold 5% of the member base.

That was fewer than 20 people under the smaller membership (though Rowe’s petition obtained 22 signatures). Now it would be around 67 people.

This presumably means that Rowe’s allies — the so-called “Grumpies” — have lost their ability to shake things up in the auDA boardroom in future.

However, it presumably also means that if DreamScape, Afilias or Arq wanted to cause trouble, they could strong-arm their employees into supporting whatever flag they wanted to wave.

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Comments (2)

  1. Volker Greimann says:

    Maybe auDA needs more weighted voting with a cap, like is the case with Nominet. Also, affiliated members should not have more than one vote.

  2. Garth Miller says:

    The control and regulation of public resources and critical infrastructure by private entities is an invitation to engage in regulatory capture, a form of regulatory failure.

    The best way, and likely only way, to avoid this is to structure the commercial envonment in such a way that for- profit entities are not incentivised to engage in rent-seeking behaviour.

    Sadly, auDA has since it’s inception chosen to follow a path that creates an incentive and rewardeds capture – outsourcing the lucrative registry function and allowing surpluses to flow to private for- profit entities instead of being returned to auDA and used to full fill the objects of the auDA constitution.

    So far as I am aware, auDA is alone among OECD / similar scale ccTLD managers to outsource the registry function.

    It is interesting to note that many of those highly critical of the new administration were at the helm as the registry contract was rolled over without tender for years – at close to twice the market rate, and interestingly, recently attempted to put forward a resolution at a special meeting to block auDA bringing the registry in-house.

    While there have been many own goals scored by auDA, the abandoned attempt to bring the registry in house had considerable merrit and would have likely ended once and for all the commercial incentive to engage in regulatory capture.

    The tender process and new arrangements have resulted in a situation that while not ideal, is more closely aligned with the objects of auDA and the terms of it’s Govenment endorsent. A significantly larger portion of surpluses from operations are being retained by auDA (instead of flowing to private entities) and will be available to it to spend in ways that beneffit the community as a whole.

    It will be interesting to see if this opportunity is siezed or squandered…

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