“Ditch .com!” government to tell Indians

The Indian government is to urge citizens to register .in domain names instead of .com, according to local reports.
The Economic Times reports today that the Ministry of Economy and IT is to launch a “massive advertising campaign aimed at companies, individuals and startups” promoting .in.
Rajiv Bansal, MEIT joint secretary, is reported as saying the campaign will play up to nationalist sentiments
The government wants to grow .in from about 2.1 million domains to 3 million domains by March next year, it said.
Prices could come down to the $2 to $3 range, the paper said.
The campaign is due to start in a month or so, it was reported.

Donuts denied! .web auction to go ahead today

A California judge had denied Donuts’ eleventh-hour attempt to delay today’s .web gTLD auction.
In a ruling late yesterday, Judge Percy Anderson rejected the company’s request for an emergency temporary restraining order preventing ICANN from selling off the premium gTLD.
This means the auction is pretty much certain to go ahead starting at 1300 UTC — that’s 6am local time for ICANN — today.
Donuts had sought the TRO because it claims ICANN failed in its duty to investigate whether rival bidder Nu Dot Co is now backed by a new big-money controlling party.
Its ultimate goal appears to have been to somehow force .web to private settlement, where all the unsuccessful applicants could get a multi-million dollar pay-off.
Anderson dismissed the request for a multitude of largely technical legal reasons surrounding the timing of Donuts’ request.
He said that, had ICANN not already filed its opposition to the TRO, he would have ruled against Donuts simply for failure to formally serve ICANN in a timely fashion.
But on the merits, he ruled that there was not a strong likelihood of Donuts winning a full trial, due to the statements of two NDC executives, who swore on oath there had been no change to the company’s ownership or management.
Anderson wrote (pdf):

Based on the strength of ICANN’s evidence submitted in opposition to the Application for TRO, and the weakness of Plaintiff’s efforts to enforce vague terms contained in the ICANN bylaws and Applicant Guidebook, the Court concludes that Plaintiff has failed to establish that it is likely to succeed on the merits, raise serious issues, or show that the balance of hardships tips sharply in its favor on its breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence claims. Moreover, because the results of the auction could be unwound, Plaintiff has not met its burden to establish that it will suffer irreparable harm in the absence of the preliminary injunctive relief it seeks. The Court additionally concludes that the public interest does not favor the postponement of the auction.

He did give Donuts leave to amend its request, but given that the auction is due to start today before California office/court hours, that courtesy seems moot.
It’s likely that by the end of the day we will know how much the .web, and possibly .webs, domains fetched. We’re certainly looking at eight figures for .web, in my view.
Some have guessed prices in the ballpark of $50 million, based on the $41.5 million paid for .shop earlier this year.
It seems at least seven of the eight applicants in the auction will be bidding blind, strategically speaking.
Circumstantial evidence suggests that NDC does indeed have one or more secret sugar daddies supporting its bid, insulated from public view by NDC’s corporate structure.
The applicants for .web are NDC, Radix, Donuts, Schlund, Afilias, Google and Web.com. Vistaprint’s bid for .webs is also in the auction.
ICANN currently has over $100 million in a bank account, segregated from its operating funds, from previous last-resort auctions.

Donuts .web claims “discredited”, ICANN tells court

Donuts’ attempt to delay tomorrow’s .web gTLD auction is based on a now “discredited” reading of a single email from rival bidder Nu Dot Co, ICANN told a California court yesterday.
Supporting ICANN’s opposition to Donuts’ motion for a temporary restraining order, two top NDC executives also swore under penalty of perjury that the company is not under new ownership or management.
The filings were made in response to Donuts’ lawsuit, filed Friday, which seeks over $10 million damages and a TRO against the .web auction.
Donuts believes that NDC has been taken over by an as-yet unknown third party with a vested interest in keeping the auction proceeds out of the hands of its competitors by forcing an ICANN-run last-resort auction.
Its belief is based on a June 7 email from NDC CFO Jose Rasco that alludes to COO Nicolai Bezsonoff no longer being with the company and makes reference to unspecified “powers that be” that are now in charge of the company.
By not disclosing the alleged change of control to ICANN, NDC broke Application Guidebook rules, Donuts claims.
But according to ICANN and NDC, this is all nonsense. ICANN told the court:

three separate ICANN bodies – ICANN’s staff, ICANN’s Ombudsman, and ICANN’s Board – have already looked into the alleged change in Nu Dotco’s ownership or management. All three found no credible evidence that any such change had occurred within Nu Dotco, and therefore nothing supported a delay of the Auction. Plaintiff’s TRO application, filed nearly three months after the Auction was scheduled and just two business days before bidding is set to officially begin, relies solely on a strained, and now completely discredited, interpretation of the Nu Dotco CFO’s June 7 email. However, the evidence accompanying this opposition – sworn declarations from ICANN and Nu Dotco executives – confirms that Nu Dotco has not made any change in its ownership or management, much less a “disqualifying” change that should derail the Auction processes already under way or the official start of bidding.

Rasco and Nicolai Bezsonoff both swear in accompanying declarations that the managers and members (ie owners) of NDC have not changed since the original 2012 application.
NDC, according to its .web application, is owned by two Delaware shell companies — Domain Marketing Holdings, LLC and NUCO LP, LLC — both of which appear to have been created in order to provide a layer of separation between NDC and its actual investors.
Rasco and Bezsonoff say that these two companies remain the only owners of NDC requiring their identities to be disclosed to ICANN.
There’s no comment in either declaration about whether either of those two companies has undergone a change in control.
What we seem to have here, amusingly, is NDC using exactly the same legal tricks as Donuts to hide the ultimate beneficiaries of its gTLD applications.
Donuts, you may recall, applied for 307 new gTLDs via 307 distinct shell LLCs with randomly generated names. Not only that, but each of those LLCs is owned by one of two other shell companies — 201 belonged to Dozen Donuts LLC, 106 belonged to Covered TLD LLC.
Donuts never formally disclosed in its ICANN applications (or, to my recollection, publicly confirmed) that business partner Rightside had the right to buy any of the Covered TLD strings — including .web, it seems — a right Rightside has exercised many times since.
Rightside basically got the same layer of identity insulation that whoever’s pulling the strings at NDC is getting now.
That irony is not pointed out in ICANN’s latest court filing, which can be read here (pdf). The Rasco and Bezsonoff declarations can be read here and here.
The applicants for .web are NDC, Radix, Donuts, Schlund, Afilias, Google and Web.com. Vistaprint’s bid for .webs is also in the auction.
Unless Donuts gets its TRO, the auction will begin at 1400 UTC tomorrow and we could find out how much .web sold for later that day.

Donuts files $10 million lawsuit to stop .web auction

Donuts has sued ICANN in an attempt to block the auction of the .web gTLD this Wednesday.
The gTLD portfolio registry filed a lawsuit in California on Friday, seeking over $10 million in damages and a temporary restraining order to stop the auction going ahead.
The complaint alleges breach of contract, negligence and unfair competition and seeks a court declaration that the covenant not to sue signed by all new gTLD applicants is unenforceable.
According to Donuts, ICANN breached its duties by not fully investigating the allegation that rival .web applicant Nu Dot Co has undergone a change of control and has a new, wealthier owner.
NDC is the only applicant in the eight-strong .web/.webs contention set that refuses to resolve the contest privately.
A private auction would enrich all losing applicants to the tune of many millions of dollars.
By forcing a “last resort” ICANN auction, NDC has ensured that ICANN will be the only party to benefit from the auction proceeds.
Last-resort auction funds are placed in a separate ICANN account, currently worth over $100 million, which will be spent according to a currently undecided policy created by the ICANN community.
But Donuts’ complaint strongly implies that ICANN is forcing the auction to go ahead because it stands to benefit financially.
Donuts repeats the allegation from its recent joint Request for Reconsideration with Radix that NDC should be forced to disclose to ICANN, via a gTLD application change, the names of its alleged new directors.
It cites again a redacted email from NDC director Jose Ignacio Rasco which talks about fellow listed director Nicolai Bezsonoff no longer being involved with the application but that “several” new directors were.
It adds a quote about Rasco talking about “powers that be”, which Donuts takes to mean he is answering to someone else.
NDC is not listed in the lawsuit, which focuses on ICANN’s obligations under the new gTLD program application contract.
Donuts alleges, for example, that ICANN has a duty to fully investigate whether NDC has indeed changed directors.
ICANN’s Board Governance Committee said last week that ICANN staff had talked to and emailed Rasco about the allegations. Donuts says it should have at least talked to Bezsonoff too.
Donuts also claims that ICANN is not allowed to go ahead with a last-resort auction while there are still outstanding “accountability mechanisms” — including the RfR, which has not yet been formally closed out by the full ICANN board.
The lawsuit also reveals that Donuts simultaneously filed a complaint using ICANN’s less legally formal Independent Review Process, though documentation for that is not yet available.
ICANN’s most recent statement on .web, which just confirms that the .web auction will go ahead this coming Wednesday, was also posted on Friday. It’s not clear if that was posted before or after ICANN became aware of the lawsuit.
All new gTLD applicants had to agree not to sue ICANN when they applied, but Donuts argues that this is unfair and unenforceable.
DotConnectAfrica has had some success with this argument, though Donuts does not cite that case in its own complaint.
There’s been some speculation about the motives of Donuts and others in trying to delay the auction.
The lawsuit will not force NDC into a private auction, but it might buy Donuts and the other applicants more time to consider their strategies.
I’m getting into speculative territory here, but if NDC’s strategy is to win the .web auction as a Trojan horse for its alleged new owner, perhaps revealing the identity of that new owner would make it less likely to insist on a last-resort auction.
If NDC’s alleged new owner has a time-sensitive need for the revenue .web could bring (which could be the case if, for example, the owner was Neustar) perhaps the prospect of a long lawsuit and IRP case could make it more likely to accept a private auction.
If the alleged new owner was revealed to be Verisign — a company more likely than most to acquire .web simply in order to bury it — perhaps that revelation could spur remaining applicants into pooling their resources to defeat it.
It it was a big tech firm from outside the domain industry, perhaps that would strengthen Google’s resolve to win the auction.
That’s all just me talking off the top of my head, of course.
I have no idea whether or not NDC even has new backers, though its behavior in avoiding private auction goes against character and certainly raises eyebrows.
The Donuts complaint, filed as its subsidiary Ruby Glen LLC, can be read here (pdf).

.web auction to go ahead after ICANN denies Donuts/Radix appeal

The new gTLD .web seems set to go to auction next week after ICANN rejected an 11th-hour delay attempt by two applicants.
ICANN’s Board Governance Committee said yesterday that there is no evidence that applicant Nu Dot Co has been taken over by a deep-pocketed third party.
The BGC therefore rejected Donuts’ and Radix’s joint attempt to have the July 27 “last resort” auction delayed.
Donuts and Radix had argued in a Request for Reconsideration earlier this week that Nu Dot Co has changed its board of directors since first applying for .web, which would oblige it to change the application.
Its failure to do so meant they auction should be delayed, they said.
They based their beliefs on an email from NDC director Jose Ignacio Rasco, in which he said one originally listed director was no longer involved with the application but that “several others” were.
There’s speculation in the contention set that a legacy gTLD operator such as Verisign or Neustar might now be in control of NDC.
But the BGC said ICANN had already “diligently” investigated these claims:

in response to the Requesters’ allegations, ICANN did diligently investigate the claims regarding potential changes to Nu Dot’s leadership and/or ownership. Indeed, on several occasions, ICANN staff communicated with the primary contact for Nu Dot both through emails and a phone conversation to determine whether there had been any changes to the Nu Dot organization that would require an application change request. On each occasion, Nu Dot confirmed that no such changes had occurred, and ICANN is entitled to rely upon those representations.

ICANN staff had asked Rasco via email and then telephone whether there had been any changes to NDC’s leadership or control, and he said there had not.
He is quoted by he BGC as saying:

[n]either the ownership nor the control of Nu Dotco, LLC has changed since we filed our application. The Managers designated pursuant to the company’s LLC operating agreement (the LLC equivalent of a corporate Board) have not changed. And there have been no changes to the membership of the LLC either.

The RfR has therefore been thrown out.
Unless further legal action is taken, the auction is still scheduled for July 27. The deadline for all eight applicants (seven for .web and one for .webs) to post deposits with ICANN passed on Wednesday.
As it’s a last resort auction, all funds raised will go into an ICANN pot, the purpose of which has yet to be determined. The winning bid will also be publicly disclosed.
Had the contention set been settled privately, all losing applicants would have made millions of dollars of profit from their applications and the price would have remained a secret.
NDC is the only applicant refusing to go to private auction.
The applicants for .web are NDC, Radix, Donuts, Schlund, Afilias, Google and Web.com. Vistaprint’s bid for .webs is also in the auction.
The RfR decision can he read here (pdf).

One and two-letter .at domains coming soon

Nic.at will next month start selling .at domains shorter than three character domains for the first time.
All one-character and two-character domains will be released, the ccTLD registry said, about 5,000 domains in total.
The released domains include those containing any of the 34 non-Latin letters Nic.at supports, it said.
Holders of trademarks valid in Austria before July 1 get the first crack at the names, during a August 29 to September 23 sunrise period.
During this phase, domains will cost €240 ($265) with a €120 ($132) application fee. Contested sunrise names will be auctioned in October.
Everything not grabbed by trademark interests will be put to a public auction from November 7, where the minimum bid will be €72 ($79).
If there’s anything left after that, it will be released into the general available pool for registration at standard .at prices.
Nic.at plans to dump all registered one and two-character domains into the .at zone file, so they can be used, at the same time on December 6.
Austria has no local presence requirements for ccTLD registration.
Given “at” has some semantic value in English, it could be a popular launch.

Donuts joins fight to delay .web gTLD auction with emergency appeal

Donuts and Radix have filed an “emergency” appeal with ICANN in an attempt to get the forthcoming auction for the .web gTLD delayed.
The companies, both of which have applied for .web, say they have evidence that one of their rival bidders recently changed ownership without telling ICANN, in breach of application rules.
They filed a Request for Reconsideration (pdf) with ICANN (pdf) on Sunday, demanding the delay and an investigation into whether Nu Dot Co LLC is under new control.
The move follows speculation, which we reported last week, that Nu Dot Co is now being controlled by a major legacy gTLD registry player such as Verisign.
The evidence for the the change of ownership comes to light for the first time in the RfR. It’s an email from Nu Dot Co director Jose Ignacio Rasco to Donuts dated June 7. It reads:

Nicolai is at NSR full time and no longer involved with our TLD applications. I’m still running our program and Juan sits on the board with me and several others.

“Nicolai” is Nicolai Bezsonoff, who is listed as an NDC director in its .web application. NSR is presumably Neustar, where Bezsonoff went to work when it acquired .CO Internet.
“Juan” is Juan Calle, the third NDC director, CEO, and former CEO of .CO Internet.
Donuts and Radix believe that Bezsonoff’s departure and the apparent appointment of the unnamed “several others” as NDC directors gave NDC the obligation, under Applicant Guidebook rules, to inform ICANN of the changes.
The Guidebook states:

If at any time during the evaluation process information previously submitted by an applicant becomes untrue or inaccurate, the applicant must promptly notify ICANN via submission of the appropriate forms. This includes applicant-specific information such as changes in financial position and changes in ownership or control of the applicant.

(With that in mind, one wonders whether the acquisition of .blog at auction was strictly legit).
Donuts and Radix now want ICANN to delay the “last resort” auction, which is currently slated for July 27, and “conduct a thorough and transparent investigation into the apparent discrepancies and/or changes in NDC’s .WEB/.WEBS application”.
NDC is believed to be the only one of the eight .web/.webs applicants to be refusing to settle the contention set via a private auction, where the losers get an equal share of the winning bid.
If the set goes to ICANN’s last-resort auction, ICANN gets all the cash.
The final price of .web could easily be in the ball park of $50 million, so each applicant stands to lose several million dollars if the July 27 auction goes ahead as planned.
Radix and fellow .web applicant Schlund had previously written to ICANN to request the delay, but were rebuffed in a letter last week.
The decision outlined in that letter is what the new RfR challenges.
RfRs have a long track record of being dismissed by ICANN’s Board Governance Committee, very often because the requester has not supplied ICANN with any new information with which to change its mind.
That’s a risk here, too, given that ICANN seems to have been in possession of the Rasco email since June 22, before decision to go ahead with the auction was made.
However, that decision seems to have been made by ICANN staff. An RfR makes sure it gets the attention of the ICANN board of directors.

Is Verisign .web applicant’s secret sugar daddy?

The fiercely contested .web gTLD is being forced into a last-resort auction and some people seem to think a major registry player is behind it.
Two .web applicants — Radix (pdf) and Schlund (pdf) — this week wrote to ICANN to demand that the .web auction, currently planned for July 27, be postponed.
They said the sale should be delayed to give applicants time “to investigate whether there has been a change of leadership and/or control” at rival applicant Nu Dot Co LLC.
Nu Dot Co is a new gTLD investment vehicle headed up by Juan Diego Calle, who launched and ran .CO Internet until it was sold to Neustar a couple of years ago.
I gather that some applicants believe that Nu Dot Co’s .web application is now being bankrolled by a larger company with deeper pockets.
The two names I’ve heard bandied around, talking to industry sources this week, are Verisign and Neustar.
Nobody I’ve talked to has a shred of direct evidence either company is involved and Calle declined to comment.
So is this paranoia or not?
There are a few reasons these suspicions may have come about.
First, the recent revelation that successful .blog applicant Primer Nivel, a no-name Panama entity with a Colombian connection, was actually secretly being bankrolled by WordPress, has opened eyes to the possibility of proxy bidders.
It was only after the .blog contention set was irreversibly settled that the .blog contract changed hands and the truth become known.
Some applicants may have pushed the price up beyond the $19 million winning bid — making the rewards of losing the private auction that much higher — had they known they were bidding against a richer, more motivated opponent.
Second, sources say the .web contention set had been heading to a private auction — in which all losing applicants get a share of the winning bid — but Nu Dot Co decided to back out at the last minute.
Under ICANN rules, if competing applicants are not able to privately resolve their contention set, an ICANN last-resort auction must ensue.
Third, this effective vetoing of the private auction does not appear to fit in with Nu Dot Co’s strategy to date.
It applied for 13 gTLDs in total. Nine of those have already gone to auctions that Nu Dot Co ultimately lost (usually reaping the rewards of losing).
The other four are either still awaiting auction or, in the case of .corp, have been essentially rejected for technical reasons.
It usually only makes sense to go to an ICANN last-resort auction — where the proceeds all go to ICANN — if you plan on winning or if you want to make sure your competitors do not get a financial windfall from a private auction.
Nu Dot Co isn’t actually an operational registry, so it doesn’t strictly have competitors.
That suggests to some that its backer is an operational registry with a disdain for new gTLD rivals. Verisign, in other words.
Others think Neustar, given the fact that its non-domains business is on the verge of imploding and its previous acquisition of .CO Internet from Calle.
I have no evidence either company is involved. I’m just explaining the thought process here.
According to its application, two entities own more than 15% of Nu Dot Co. Both — Domain Marketing Holdings, LLC and NUCO LP, LLC — are Delaware shell corporations set up via an agent in March 2012, shortly before the new gTLD application filing deadline.
Many in the industry are expecting .web to go for more than the $41.5 million GMO paid for .shop. Others talk down the price, saying “web” lacks the cultural impact it once had.
But it seems we will all find out later this month.
Responding to the letters from Schlund and Radix, ICANN yesterday said that it had no plans to postpone the July 27 last-resort auction.
All seven applicants had to submit a postponement form by June 12 if they wanted a delay, ICANN informed them in a letter (pdf), and they missed that deadline.
They now have until July 20 to either resolve the contention privately or put down their deposits, ICANN said.
The applicants for .web, aside from Nu Dot Co, are Google, Donuts, Radix, Schlund, Web.com and Afilias.
Due to a string confusion ruling, .webs applicant Vistaprint will also be in the auction.

Donuts invests in Bitcoin startup

Donuts has made an investment in Netki, a company focused on digital wallets used in Bitcoin and other e-money systems.
Netki’s service is designed to make it easier to locate the wallets Bitcoin users use when they send and receive money, which are usually gibberish strings of around 34 characters.
The company service, when integrated into wallet providers’ offerings, converts these impossible-to-remember strings into easy-to-understand domain names.
An example given by Netki on its web site is the wallet name 1CpLXM15vjULK3ZPGUTDMUcGATGR9xGitv, which can instead be rendered as wallet.BruceWayne.rocks.
The company seems to make its money from end users by selling domain names with a higher mark-up than you’d usually expect. A .com via Netki is $20.99, for example.
It offers scores of TLDs, both generic legacy, new, and ccTLD, many of which are in the Donuts stable.
The size of the investment was not disclosed.
It’s the second investment to be announced from Donuts Labs. In May, it invested in “geofencing” startup GeoFrenzy.

After long battle, first Bulgarian IDN domain goes live

Bulgarians finally have the ability to register domain names in their native Cyrillic script, after years of fighting with ICANN.
The domain Имена.бг, which translates as “names.bg” went live on the internet this week, according to local reports.
Bulgaria was one of the first countries to ask for a internationalized domain name version of its ccTLD, almost seven years ago, but it was rejected by ICANN in 2010.
The requested .бг was found too similar to Brazil’s existing Latin-script ccTLD .br. Evaluators thought the risk of phishing and other types of attacks was too high.
The requested string didn’t change, but ICANN processes were adapted to allow appeals and a new method for establishing similarity was established.
On appeal, .бг was determined to be less prone to confusion with .br than existing pairs of Latin ccTLDs are with each other, ergo should be approved.
Имена.бг does not yet directly resolve (for me at least) from the Google Chrome address bar. It’s treated as a web search instead. But clicking on links to it does work.
The new ccTLD, which is .xn--90ae in the DNS, was delegated last week.
The registry is Imena.bg (which also means “names.bg”), based in Sofia and partially owned by Register.bg, the .bg registry.
Despite the long battle, the success of .бг is by no means assured. IDNs have a patchy record worldwide.
It’s true that Russians went nuts for their .рф (.rf for Russian Federation) ccTLD during its scandal-rocked launch in 2010, but Arabic IDNs have had hardly any interest and the current boom in China seems to be largely concentrated on Latin-script TLDs.
.бг is expected to open for general registration in the fourth quarter.
I guess we’ll have to wait until at least next year to discover whether the concerns about confusion with .br were well-founded.