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ICANN wins .hotels/.hoteis confusion appeal but has to pay up anyway

Kevin Murphy, March 5, 2015, Domain Policy

The proposed new gTLDs .hotels and .hoteis are too confusingly similar to coexist on the internet.

That’s the result of an Independent Review Process decision this week, which denied .hotels applicant Booking.com’s demand to have ICANN’s string confusion decision overturned.

But the IRP panel, while handing ICANN a decisive victory, characterized the string confusion and IRP processes as flawed and said ICANN should have to pay half of the panel’s $163,000 costs.

Booking.com filed the IRP a year ago, after the new gTLD program’s String Similarity Panel said in February 2013 that .hotels was too similar to rival Despegar Online’s proposed .hoteis.

.hoteis is the Portuguese translation of .hotels. Neither string was contested, so both would have been delegated to the DNS root had it not been for the confusion decision.

In my view, the String Similarity Panel’s decision was pretty sound.

With an upper-case i, .hoteIs is virtually indistinguishable from .hotels in browsers’ default sans-serif fonts, potentially increasing the ease of phishing attacks.

But Booking.com, eager to avoid a potentially costly auction, disagrees with me and, after spending a year exhausting its other avenues of appeal, filed an IRP in March 2013.

The IRP decision was handed down on Tuesday, denying Booking.com’s appeal.

The company had appealed based not on the merits of the SSP decision, but on whether the ICANN board of directors had acted outside of its bylaws in establishing an “arbitrary” and opaque SSP process.

That’s because the IRP process as established in the ICANN bylaws does not allow appellants to changed a decision on the merits. IRP panels are limited to:

comparing contested actions of the Board to the Articles of Incorporation and Bylaws, and with declaring whether the Board has acted consistently with the provisions of those Articles of Incorporation and Bylaws.

The IRP panel agreed that the SSP process could have been fairer and more transparent, by perhaps allowing applicants to submit evidence to the panel and appeal its decisions, saying:

There is no question but that that process lacks certain elements of transparency and certain practices that are widely associated with requirements of fairness.

But the IRP panel said Booking.com was unable to show that the ICANN board acted outside of its bylaws, highlighting the limits of the IRP as an appeals process:

In launching this IRP, Booking.com no doubt realized that it faced an uphill battle. The very limited nature of the IRP proceedings is such that any IRP applicant will face significant obstacles in establishing that the ICANN Board acted inconsistently with ICANN’s Articles of Incorporation or Bylaws. In fact, Booking.com acknowledges those obstacles, albeit inconsistently and at times indirectly.

Booking.com has failed to overcome the very obstacles it recognizes exist.

The IRP panel quoted members of ICANN’s New gTLD Program Committee extensively, highlighting comments which questioned the fairness of the SSP process.

In contrast to usual practice, where the losing party in an IRP bears the costs of the case, this panel said the $163,000 costs and $4,600 filing fee should be split equally between ICANN and Booking.com:

we can — and we do — acknowledge certain legitimate concerns regarding the string similarity review process raised by Booking.com, discussed above, which are evidently shared by a number of prominent and experienced ICANN NGPC members.

In view of the circumstances, each party shall bear one-half of the costs of the IRP provider

Booking.com and Despegar will now have to fight it out for their chosen strings at auction.

The full decision can be read in PDF format here. Other documents in the case can be found here.

The TL;DR version: ICANN wins because it has stacked the appeals deck in its favor and the IRP process is pretty much useless, so we’re going to make them pay up for being dicks.

The IANA transition in a nutshell

Kevin Murphy, February 27, 2015, Domain Policy

The US plan to remove itself from its unique DNS oversight role is about creating a coalition of nations to thwart attempts by Russia and other “authoritarian” countries to increase government control of the internet.

That’s according to Larry Strickling, assistant secretary at the US National Telecommunications and Information Administration, who delivered a beautifully succinct explanation to confused senators at a hearing in Washington DC this week.

Despite unnecessary diversions into issues such as net neutrality and copyright protection — which I’m sure was not at all due to senators trying to score points with their corporate paymasters — the Commerce Committee hearing was surprising well-informed and not nearly as angry as it could have been.

Senators, mostly Republicans, reiterated their concerns that for the US to give up its role in the IANA functions contract could invite a takeover of ICANN by unfriendly nations such as China and Russia, thereby harming internet freedom.

At one point, Strickling was asked by a senator: “If there’s not a problem, what are we trying to fix here?”

His answer was one the best explanations of the political back-story of the transition that I’ve heard, so I’m going to quote it in full here.

There has been a problem, sir. At the end of 2012 when the world’s governments got together in Dubai for the ITU WCIT — World Conference on International Telecommunications — you had around 80 countries who voted to say the ITU needs to be more involved in internet governance. These were largely countries in the developing world siding with the more authoritarian regimes.

Part of the impetus for this was the continued irritation that many governments have, that has been exploited by authoritarian countries, that the United States with its special role with ICANN is in a position to control the internet in these developing counties and to turn it off in these countries and to otherwise interfere with the ability of countries to manage their own affairs with respect to the internet.

After this [IANA transition] announcement was made the next two large international meetings at which governments came together you saw a major change in position among the developing countries. We didn’t see any change in position from the authoritarian countries — and you’re not, they’re not going to change their views on this. But the key to succeeding in this on the global stage is to bring the rest of the world along with us, and that’s what we saw at the NETmundial conference in Brazil last April where the only countries who spoke out against the multi-stakeholder model of internet governance were Russia and Cuba.

We then flash forward to the ITU plenipotentiary conference in Busan last November and again you had Russia with the same proposals it’s been making for 10 years: that these functions ought to be transferred to the ITU and managed by governments. And that was beaten back by a coalition of developed and developing countries. So we’ve seen immediate results, or significant results, by the basis of our having been able to take this issue off the table for these countries, to get them to look at what’s really best for them without this overhang of a US role that was unique among governments and which was a source of irritation to governments and was being exploited to our detriment by foreign governments.

The fact of the matter is that the role we play with respect of the IANA functions is a clerical role. It’s truly stewardship. As I said before, we don’t provide any oversight of the policy judgments that ICANN and the multi-stakeholder community make. We participate as a government in the Governmental Advisory Committee, and we will continue to do that in future and will be vigorous advocates for a free and open internet.

The special role we play with respect of the IANA functions is totally administrative and clerical, yet it has been exploited by other governments — authoritarian governments — to our detriment. We’ve taken that off to the table by announcing this transition and as we complete it we will continue to see the benefits of that through the continued adoption and support for this model by the developing world.

His views were echoed by ICANN CEO Fadi Chehade more than once during the hearing, talking about how the transition process is designed to bring on board the “middle countries”, rather than already-allied nations or the fringe, minority authoritarian countries.

He cited Brazil as the key example of a government once in favor of more ITU control of the internet that is now, largely due to Chehade’s outreach and its key role in the NETmundial conference, firmly in the multi-stakeholder model camp.

The entire archived hearing can be viewed here.

ICANN ditches plan to give governments more power

Kevin Murphy, February 25, 2015, Domain Policy

ICANN has quietly abandoned a plan to make it harder for its board of directors to go against the wishes of national governments.

A proposal to make a board two-thirds super-majority vote a requirement for overruling advice provided by the Governmental Advisory Committee is now “off the table”, ICANN CEO Fadi Chehade told a US Senate committee hearing today.

The threshold, which would replace the existing simple majority requirement, was proposed last August as a result of talks in a board-GAC working group.

At the time, I described the proposal as a “fait accompli” — the board had even said it would use the higher threshold in votes on GAC advice in advance of the required bylaws change.

But now it’s seemingly gone.

The news emerged during a hearing of the Senate Committee on Commerce, Science, and Transportation today in Washington DC, which was looking into the transition of US oversight of ICANN’s IANA functions to a multi-stakeholder process.

Asked by Sen. Deb Fischer whether the threshold change was consistent with ICANN’s promise to limit the power of governments in a post-US-oversight world, Chehade replied:

You are right, this would be incongruent with the stated goals [of the IANA transition]. The board has looked at that matter and has pushed it back. So it’s off the table.

That came as news to me, and to others listening to the hearing.

The original plan to change the bylaws came in a board resolution last July.

If it’s true that the board has since changed its mind, that discussion does not appear to have been documented in any of the published minutes of ICANN board meetings.

If the board has indeed changed its mind, it has done so with the near-unanimous blessing of the rest of the ICANN community (although I doubt the GAC was/will be happy).

The public comment period on the proposal attracted dozens of responses from community members, all quite vigorously opposed to the changes.

The ICANN report on the public comments was due October 2, so it’s currently well over four months late.

UPDATE 1: An ICANN spokesperson just got in touch to say that the board decided to ditch its plan in response to the negative public comments.

UPDATE 2: Another ICANN spokesperson has found a reference to the board’s U-turn in the transcript of a meeting between the ICANN board and GAC at the Los Angeles public meeting last October. A brief exchange between ICANN chair Steve Crocker and Heather Dryden, then chair of the GAC, reads:

DRYDEN: On the issue of the proposed bylaw changes to amend them to a third — two-thirds majority to reject or take a decision not consistent with the GAC’s advice, are there any updates there that the Board would like to — the Board or NGPC? I think it’s a Board matter? Yes?

CROCKER: Yes.

Well, you’ve seen the substantial reaction to the proposal.

The reaction embodies, to some extent, misunderstanding of what the purpose and the context was, but it also is very instructive to all of us that the timing of all this comes in the middle of the broader accountability question.

So it’s — I think it’s in everyone’s interest, GAC’s interest, Board’s interest, and the entire community’s interest, to put this on hold and come back and revisit this in a larger context, and that’s our plan.

So it seems that the ICANN board did tip its hand a few months ago, but not many people, myself included, noticed.

Chehade to face Congressional grilling this week

Kevin Murphy, February 23, 2015, Domain Policy

ICANN CEO Fadi Chehade is heading to Washington DC this week to defend plans to decouple the organization from formal US oversight in front of a potentially hostile committee of Congresspeople.

The Senate Committee on Commerce, Science, and Transportation will meet this Wednesday at 1000 local time to grill Chehade and others on the plan to remove the US government from the current triumvirate responsible for managing changes to the DNS root zone under the IANA arrangements.

He will be joined by Larry Strickling, who as head of the National Telecommunications and Information Administration is the US government’s point person on the transition, and Ambassador David Gross, a top DC lawyer formerly with the Department of State.

All three men are pro-transition, while the Republican-tilted committee is likely to be much more skeptical.

The blurb for the Wednesday hearing reads:

As the U.S. government considers relinquishing control over certain aspects of Internet governance to the private sector, concerns remain that the loss of U.S. involvement over the Internet Assigned Numbers Authority (IANA) could empower foreign powers — acting through intergovernmental institutions or other surrogates — to gain increased control over critical Internet functions.

Republicans and right-leaning media commentators have warned that handing over IANA oversight to a multistakeholder body risks giving too much power to governments the US doesn’t like, such as Russia and China.

Several bills introduced in the House and Senate over the last year would have given Congress much more power to delay or deny the transition.

An amendment to an appropriations bill approved in December prevents the NTIA from spending any taxpayer money on relinquishing its DNS root oversight role until after September 30 this year, the same day that the current IANA contract expires.

This effectively prevents a transition during the current IANA contract’s run. Strickling recently said that the NTIA is complying with this legislation, but noted that it does not prevent the agency participating in the development of the transition proposal.

ICANN community working groups are currently working on plans for ICANN oversight post-NTIA and for addressing ICANN accountability.

These documents are hoped to be ready to sent to the NTIA by July, so the NTIA will have enough time to consider them before September 30.

Strickling recently addressed this date in a speech at the State of the Net conference in Washington, saying:

I want to reiterate again that there is no hard and fast deadline for this transition. September 2015 has been a target date because that is when the base period of our contract with ICANN expires. But this should not be seen as a deadline. If the community needs more time, we have the ability to extend the IANA functions contract for up to four years. It is up to the community to determine a timeline that works best for stakeholders as they develop a proposal that meets NTIA’s conditions, but also works.

Opponents of the transition say that because the NTIA is prevented from terminating the IANA contract before October 1, the NTIA will have no choice but to extend it until September 30, 2017.

Given that 2016 is a presidential election year in the US, Barack Obama would be a private citizen again by the time the next opportunity to transition comes around, they say.

Which presidential hopeful — from either party — would not buckle if asked whether he supports a plan to let Iran run the internet? That’s the political logic at work here.

Chehade himself told the AFP news agency earlier this month that the transition would have to happen before the 2016 elections, to avoid political distractions.

I’m not so sure I agree with the premise that, due to the restraints imposed by the appropriation bill, the transition now has to happen under the next president’s administration.

In my layman’s reading of the current IANA contract, the NTIA is able to terminate it for the “convenience of the government” pretty much whenever it wants.

There’s also an option to extend the contract by up to six months. The NTIA exercised this option in March 2012 when it did not approve of ICANN’s first renewal proposals.

Chehade declines to backtrack on domain “hogging” comments

Kevin Murphy, February 10, 2015, Domain Policy

ICANN CEO Fadi Chehade responded yesterday to anger from domain investors over recent comments in which he talked about “hogging” domain names and implied a link to cybersquatting.

But he did not, at least as far as I understood his explanation, backtrack on his original remarks.

Chehade was cheekily asked his current thoughts on domain “hoggers” by blogger David Goldstein during a press conference at the ICANN 52 meeting in Singapore yesterday.

This is the entirety of his reply:

I think the statement I made to a different media outlet about that was conflated to signify I was including in this all those who are in the domain name business. And that’s not true. There are those that do this as a business and do it very well and actually enhance the market and there are those that do it and make the business and the market less attractive and less desirable. So I think any insinuation that that statement engulfs everyone that is in this business is not true. As you know very well I’ve a very big supporter of the industry groups and was one of the people who was frankly very happy when the Domain Name Association was created and I attended their first formation meeting. This is where we stand and we continue to feel good about how this market is evolving and how these players are making this a good market that serves the public interest.

Having listened to it a few times, I wonder whether Chehade deliberately didn’t backtrack on his original remarks, or whether he doesn’t quite understand why they caused offense in the first place.

A couple of weeks back, Chehade was talking to the Huffington Post about new gTLDs during an interview at the World Economic Forum in Davos.

The interviewer asked about “concerns about a land-grab going on” among domain speculators.

It was a bit of a silly question, if you ask me. A speculative land-grab is pretty low down the list of concerns held by critics of the new gTLD program. Regardless, Chehade replied:

The reality is, the more there are names, the less people will actually be hogging names in order to charge a lot for them. Because if somebody took your name on dot X, you can go get another name on dot Y now.

I’d personally agree with that characterization of the program. It’s meant to make finding a good name at a cheap price easier. “Hogging” was probably a poor choice of words, but Chehade was talking off the cuff so I could give him a pass.

But later in the same reply, he used the term “cybersquatting” in such a way as to make it easy to infer he was conflating domain investing with cybersquatting. That’s a loaded term that is usually reserved for trademark infringement, at least when used inside the industry.

Obviously this was guaranteed to get investors’ hackles up.

First up with the hackles was Mike Berkens, who called Chehade out on The Domains, saying he “throws large domain investors under the bus and then backs up the bus and rolls over them again”.

Berkens pointed out, quite reasonably I thought, that ICANN is funded to a great extent by domain investors. He estimates that he alone pays ICANN about $15,000 a year in the fees that are collected at the point of registration and renewal.

By some estimates, which may even be conservative, about a third of new gTLD registrations to date have been made to speculators.

Berkens made the even better point that many of the people who have pumped hundreds of millions of dollars into the new gTLD program — Uniregistry’s Frank Schilling, XYZ.com’s Daniel Negari and multiple Donuts executives, for example — made their fortunes investing in second-level domains.

He concluded:

All and all some pretty ignorant statements in our opinion made by the CEO of ICANN and an insult to those domain investors that are some of the biggest buyer’s of new gTLD’s domain names who have paid ICANN a small fortune over the years allowing them to travel the world, pay millions a year in salary and other benefits.

Phil Corwin Jeremiah Johnston of the Internet Commerce Association followed up a few days ago with an open letter to Chehade which explained the outrage in slightly more formal and lawyerly way, with all the apostrophes in the right places. He wrote:

The ICA objects to your statement as it expresses a disdainful view towards the legitimate activity of domain investing, a hostile view of domain investors who are significant ICANN stakeholders who are deeply affected by its policies, a lack of awareness of the market realities of domains as an asset class, and an unwarranted promotion of new gTLD domains over those at legacy gTLDs.

Domain investors are not “hogs” and they most certainly are not deliberate trademark infringers, or “cybersquatters”. It is not clear what you intended by your reference to “cybersquatting”, though it is concerning that you used this pejorative term just after making disparaging remarks about domain investors.

With all these criticisms in mind, let’s go back and parse what Chehade said in Singapore yesterday.

First, he said his remarks had been wrongly “conflated to signify I was including in this all those who are in the domain name business”.

I’m not sure that’s what happened. I’m pretty certain Berkens and his commenters, and then Corwin Johnston, got the hump purely because Chehade dismissed domain investing as “hogging” and then implied a link between investing and trademark infringement.

Who is Chehade talking about when he draws a distinction between those who “enhance the market” and those who “make the business and the market less attractive”?

Is the line drawn between the trademark infringers and the legitimate investors, or its it drawn somewhere else?

Why did Chehade go on to express his support for the DNA, a sell-side trade group funded largely by registries and registrars? Was he drawing the line between regular second-level domainers (hogging) and those that in many cases are essentially just top-level domainers (enhancing)?

Chehade was given the opportunity to backtrack and he didn’t take it.

I’m not a domainer, but if I were I don’t think I’d be particularly satisfied about that.