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Lawyer tries to nuke Donuts and Demand Media’s gTLD bids

Kevin Murphy, August 1, 2012, Domain Registries

A lawyer has called for new gTLD uber-applicants Demand Media and Donuts to be banned from running gTLD registries due to Demand’s history of cybersquatting.

Jeffrey Stoler of Boston law firm McCarter & English has written to ICANN’s leadership, along with the chair of the Governmental Advisory Committee, to allege that Demand Media, Donuts and their key executives:

are, by ICANN’s established eligibility guidelines, unsuited and ineligible to participate in the new gTLD program.

It goes on to state that:

ICANN can and should reject the applications from Donuts and its subsidiaries, Demand Media and its subsidiaries, and their respective affiliated companies.

The two companies have, combined, applied for 333 new gTLDs. Donuts, which was founded by former Demand executives, also plans to use Demand as its back-end registry provider.

Demand Media subsidiaries, however, have a rotten record of losing cybersquatting cases filed under the UDRP, as Stoler’s generally well-researched 24-page letter spells out in some detail.

This, Stoler argues, should cause both companies to fail ICANN’s background checks, which are specified in the Applicant Guidebook.

Companies that have “been involved in a pattern of adverse, final decisions” under the UDRP, defined as more than three losses in the last four years, are supposed to fail the background check.

Demand Media seems to fit that definition, and then some, assuming you include UDRP losses incurred by its subsidiaries.

Donuts, as a brand new company, does not have the same track record, but Stoler reckons there is “strong evidence that Donuts is merely an alter ego of, and working in concert with, Demand Media”.

The letter states:

In June 2009, when ICANN’s rules went into effect and it was widely thought that implementation of the new gTLD program was imminent, the executives of Demand Media Group realized that Demand Media’s sordid history would clearly block its ability to successfully apply for the new gTLDs.

As an initial gambit, Demand Media petitioned ICANN to revise the rules.

When ICANN rejected those revisions, the undersigned believes Demand Media decided it would be necessary to create a new entity to participate in the new gTLD program. As a result, Donuts was formed by Messrs. Stahura and Tindal.

It would make a mockery of ICANN rules, however, if Demand Media Group and its executives could absolve themselves of their record of adverse UDRP decisions merely by forming a new entity.

Donuts founders Paul Stahura and Richard Tindal were both with Demand when it lost a bunch of UDRP cases.

Stoler alleges that they left to form Donuts mainly because they didn’t think Demand would pass ICANN’s background checks.

While Donuts has made no secret of the fact that it’s behind 307 applications — and ICANN’s leadership is certainly already aware of this — each application has been filed by a different shell company.

The trail to Donuts is at least two companies deep in many cases, and it’s not entirely clear how its applications with Demand Media are structured, from a corporate point of view.

Ironically, Stoler’s letter does not disclose his affiliations — which clients he’s working for — either.

The smart money is probably on big trademark interests, but it’s not beyond the bounds of possibility, I suppose, that he could be on the payroll of rival new gTLD applicants.

I’ve reached out to Stoler, Donuts and Demand Media for comment and will provide updates later as appropriate.

Here’s the Stoler letter (pdf)

DotConnectAfrica responds to DI .africa rant

DotConnectAfrica has published a lengthy retort to DI’s recent post about the (probably) contested .africa gTLD, in which I accused DCA of being disconnected from reality.

You can read my original post here and the DCA response here.

According to DCA, DI’s post was “unprofessional, unwarranted, and sub judice to the ICANN evaluation process”, because it pointed out that Uniforum’s competing bid for .africa stands the best chance of being approved by ICANN.

Having read DCA’s response, I stand by what I wrote.

Geographic gTLDs are governed by special rules at ICANN. They need government support. Nobody disputes this.

In the case of .africa, which covers a lot of countries, support or non-objection from 60% of the relevant governments is required. I don’t think anyone is disputing this either.

Uniforum’s application has this March 2012 letter (pdf) from the African Union Commission, which provides the AUC’s explicit, unambiguous, exclusive support to Uniforum.

Uniforum also claims to have individual support from the required 60% of nations, though I have not seen documentary evidence of this.

DotConnectAfrica, on the other hand, has a August 2009 letter from AUC chair Jean Ping, which expresses support for the DCA application.

It is this 2009 letter that DCA is relying upon to pass the geographic support test in the ICANN evaluation process. In its latest blog post, DCA said, addressing DI:

If you state openly in your Blog that our 2009 endorsement that we got from the African Union Commission does not count, then you are obviously playing the same game that was started by our detractors who have been trying all along to deny and invalidate our hard-won endorsement in order to frustrate DCA’s chances of applying for DotAfrica. It is our sacred responsibility to make sure that our early-bird endorsement from the African Union Commission counts.

In response, all I can say is: “Good luck.”

The Uniforum letter of support, which is more recent by almost three years, states that it is “the only formal endorsement provided by the African Union and its member’s states with regard to dotAfrica.”

On the other hand, the DCA letter of support was “categorically” retracted by the African Union in this May 2011 communication.

The only possible interpretation of this, in my mind, is that Uniforum has African Union backing and that DCA does not.

Unless there’s some obscure nuance of African politics that I’ve failed to comprehend, I don’t think there’s a thing DCA can do to change that fact.

It sucks for DCA, but that’s the way it is.

As for DCA’s insinuations that DI’s position has somehow been bought, I’ll just say for the record that no opinion that has ever been expressed on DI has ever been paid for by a third party.

Over the last couple of years, I’ve probably turned down somewhere in the region of $20,000 from various parties who wanted me to give them favorable coverage in exchange for payment.

That’s just not how things work around here.

Verisign reveals “dark” .com domains

Verisign has started publishing the daily count of .com and .net domain names that are registered but do not work.

On a new page on its site, the company is promising to break out how many domains are registered but do not currently show up in the zone files for its two main gTLDs.

These are sometimes referred to as “dark” domains.

As of yesterday, the number of registered and active .com domains stands at 103,960,994, and there are 145,980 more (about 0.14% of the total) that are registered but do not currently have DNS.

For .net, the numbers stand at 14,750,674 and 32,440 (0.22%).

Verisign CEO Jim Bidzos told analysts last night that the data is being released to “increase transparency” into the company’s performance.

Many tools available for tracking registration numbers in TLDs are skewed slightly by the fact that they rely on publicly available zone file data, which does not count dark domains.

Registry reports containing more accurate data are released monthly by ICANN, but they’re always three months old.

ICANN to get $8 million more from new .com deal

Verisign will pay ICANN roughly $8 million more per year in fees under its new .com registry agreement, CEO Jim Bidzos told financial analysts last night.

Under the new deal, approved by ICANN last month, the company pays ICANN a $0.25 fee for every .com registration-year, renewal or transfer, instead of the lump sums it paid previously.

That’s going to work out to about $25 million in 2013, Bidzos said on Verisign’s second-quarter earnings call last night, compared to about $17 million under the old arrangement.

The new agreement continues to give the company the right to increase its price by 7% a year in most years, of course, so it’s not all bad news for Verisign investors.

The deal is currently under review by the US Department of Commerce and Bidzos said he expects it to be approved before November 30, when the current contract expires.

Afilias to extend abuse policy to .pro

Six months after acquiring RegistryPro, Afilias wants approval to extend its existing anti-abuse policy into the .pro gTLD.

The company has filed a Registry Services Evaluation Process request with ICANN for its Anti-Abuse Policy, which is apparently much the same as the one in place at .info for the last four years.

The policy would formally allow Afilias to take down .pro sites in cases of phishing, malware and other types of broadly condemned network abuse. It doesn’t appear to cover wedge issues such as cybersquatting.

Earlier this year, a DI PRO survey found that .pro was, by a large margin, the gTLD with the most instances of apparent cybersquatting among the world’s top 100 brands.

However, .pro has never been particularly known as a haven for other types of abusive practice, possibly due to the verification loops registrants need to jump through to get their domains resolving.

I understand that cleaning up and reinvigorating .pro’s image has been put firmly on the Afilias agenda in recent months. It’s a great string, and I reckon it could do well with the proper marketing.