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China approves more Donuts, Afilias gTLDs

Donuts and Afilias have had two batches of new gTLDs approved for use in China.

The Ministry of Industry and Information Technology approved five Afilias TLDs and six Donuts TLDs last month. This means customers of Chinese registrars will now be able to legally use those names in China.

Afilias was approved for .info, .mobi and .pro, which were delegated following the 2000 and 2003 new gTLD application rounds and .kim and .red from the 2012 round.

Donuts simultaneously was cleared for .ltd, .group, .游戏 (“game”), .企业 (“business”), .娱乐 (“entertainment) and .商店 (“store”).

The approvals more than double the number of new gTLDs in Latin script to get the nod from MIIT, in what now appears to be a monthly occurrence.

In February, .ink and four Chinese-script TLDs passed the regulatory process, following .site and .shop in January and .vip, .club and .xyz in December.

MIIT approval means the chance of usage by Chinese registrants should go up, but it also ties these Western registries to relatively Draconian government policies when it comes to Chinese registrations.

New gTLD registries want a $17 million ICANN rebate

Kevin Murphy, March 24, 2017, Domain Registries

Many gTLDs are performing more poorly than expected and their registries want some money back from ICANN to compensate.

The Registries Stakeholder Group this week asked ICANN for a 75% credit on their quarterly fees, which they estimate would cost $16.875 million per year.

The money would come from leftover new gTLD application fee money, currently stashed in an ICANN war chest valued at nearly $100 million.

The RySG, in a letter to ICANN (pdf), also asked for $3 million from the fund to be used to pay for advertising the availability of new gTLDs.

“These measures combined would support ICANN’s mission to promote competition for the public interest and operational interoperability of the internet,” the proposal states.

Currently, all gTLDs on the 2012-round contract have to pay ICANN $25,000 per year, split into quarterly payments, in fixed fees.

Transaction volume over 50,000 transactions per year is taxed at $0.25 per add, renewal or transfer.

The RySG wants the $6,250 quarterly fee reduced by $4,687.50 for a year, with the possibility of the discount being renewed in subsequent years.

In its letter, it cites an example of 900 delegated gTLDs being affected, which would cost $16.875 million per year.

However, that’s only three quarters of the total number of new gTLDs in the root. That currently stands at over 1,200 string, so the actual cost would presumably be closer to £23 million.

Because the new gTLD program, with its $185,000 application fees, was never meant to turn a profit, the RySG thinks it’s fair that the excess money comes back to the companies that originally paid it.

The rationale for the discount is that many new gTLDs (not all, as the RySG is quick to point out) are struggling under poor sales volumes, meaning a 5,000-name TLD, of which there are many, is in effect costing the registry $5 per name per year in fixed ICANN fees.

But that rationale does not of course apply to all new gTLDs. There are currently almost 470 dot-brand gTLDs in the root, which have business models oriented on harder-to-quantify ROI rather than sales volumes and profits.

It’s not clear from the RySG letter whether the discount would apply to all gTLDs or only those with a straightforward old-school profit motive.

DENIC approved as ICANN escrow agent

Kevin Murphy, March 24, 2017, Domain Registries

German ccTLD registry DENIC has been given ICANN approval to provide data escrow services to registrars.

It becomes the seventh company to receive this accreditation, the second in Europe after the UK’s NCC Group.

Denic The company said it signed its ICANN contract and first registrar, Global Village, at the ICANN meeting in Copenhagen last week.

DENIC said the ICANN contract is unique in that it is governed by German or Swiss law, rather than Californian.

It also said that it is in compliance with European Union data protection legislation, which is much stricter than the US equivalent, for the first time.

The deal with ICANN does not extend to data escrow services for gTLD registries, but DENIC said it is working on such a deal.

All registrars are required by their ICANN accreditation to escrow registrant data, to protect customers from catastrophic business failures or de-accreditation.

.feedback gTLD in breach of contract after big brand “fraud” claims

Kevin Murphy, March 17, 2017, Domain Registries

ICANN has slapped .feedback operator Top Level Spectrum with a contract breach notice after a huge complaint about alleged fraud filed by a gang of big brands.

The company becomes the third new gTLD to be hit by a breach notice, and the first to receive one as a result of losing a Public Interest Commitments Dispute Resolution Process case.

While TLS dodged the “fraud” charges on a technicality, the breach is arguably the most serious found by ICANN in a new gTLD registry to date.

The three-person PICDRP panel found TLS was in violation of the following commitment from its registry agreement:

Registry Operator will operate the TLD in a transparent manner consistent with general principles of openness and non-discrimination by establishing, publishing and adhering to clear registration policies.

But TLS dodged the more serious charges of “fraudulent” behavior, which it denied, largely on the technicality that its PICs only require it to bar its registrants from such behavior.

There’s nothing in the PICs preventing the registry from behaving fraudulently, so the PICDRP panel declined to rule on those allegations, saying only that they “may be actionable in another forum”.

The complainants, which filed their 1,800-page complaint in October, were MarkMonitor and a bunch of its clients, including Adobe, American Apparel, Best Buy, Facebook, Levi and Verizon.

They’d claimed among other things that 70% of .feedback domains were trademarked names actually registered by the registry, and that TLS had stuffed each site with reviews either paid for or scraped from services such as Yelp!.

They claimed that Free.Feedback, a free domains service hosted by an affiliated entity, had been set up to auto-populate Whois records with the names of brand owners (or whoever owned the matching .com domain) even when the registrant was not the brand owner.

This resulted in brand owners receiving “phishing” emails related to domains they’d never registered, the complainants stated.

TLS denied all all the allegations of fraud, but the PICDRP panel wound up not ruling on many of them anyway, stating:

the Panel finds that Respondent’s Registry Operator Agreement contains no covenant by the Respondent to not engage in fraudulent and deceptive practices.

The only violations it found related to the transparency of .feedback’s launch policies.

The panel found that TLS had not given 90 days notice of policy changes and had not made its unusual pricing model (which included an extra fee for domains that did not resolve to live sites) transparent.

The registry had a number of unusual launch programs, which I outlined in December 2015 but which were apparently not adequately communicated to registrars and registrants.

The panel also found that Free.Feedback had failed to verify the email addresses of registrants and had failed to make it easy for trademark owners to cancel domains registered in their names without their consent.

Finally, it also found that TLS had registered a bunch of trademark-match domain names to itself during the .feedback sunrise period:

self-allocating or reserving domains that correspond to the trademark owners’ marks during the Sunrise period constitutes a failure by the Respondent to adhere to Clause 6 of its Registration and Launch policies, versions 1 and 2. According to the policies, Sunrise period is exclusively reserved for trademark owners

TLS, in its defense, denied that it had self-allocated these names and told the panel it had “accidentally” released them into the zone file temporarily.

As a result of the PIC breaches found by the panel, ICANN Compliance has issued a breach notice (pdf) against the company.

To cure the breach, and avoid having its Registry Agreement taken away, TLD has to, by April 15:

Provide ICANN with corrective and preventative action(s), including implementation dates and milestones, to ensure that Top Level Spectrum will operate the TLD feedback in a transparent manner consistent with general principles of openness and nondiscrimination by establishing, publishing and adhering to clear registration policies;

That seems to me like it’s probably vague enough to go either way, but I’d be surprised if TLS doesn’t manage to comply.

Schilling expects GoDaddy to return after dumping Uniregistry gTLDs

Kevin Murphy, March 14, 2017, Domain Registries

Uniregistry CEO Frank Schilling has expressed his “surprise” that GoDaddy has decided to stop selling his company’s gTLDs, but said he expects the registrar to return in future.

GoDaddy’s decision to stop new registrations and inbound transfers for Uniregistry’s portfolio of gTLDs came after the registry revealed price increases for 16 strings that ranged from nominal to over 3,000%.

The registrar told Domain Name Wire yesterday that Uniregistry’s move presented “an extremely poor customer experience” and “does not reflect well on the domain name industry”.

Registrars are of course the customer-facing end of the domain name industry, and the burden of explaining renewal price increases of 5x falls on their shoulders.

But Schilling seems to expect the ban to be temporary.

“We are extremely surprised by GoDaddy’s reaction but are pleased that our extensions are available at many other registrars who support our approach. We remain ready to support GoDaddy when they decide on a path which works for their customers,” he told DI today.

“We expect them to return,” he added.

It’s a plausible prediction. GoDaddy’s statement to DNW said Uniregistry had been cut off “until we can assess the impact on our current and potential customers”, which suggests it’s not necessarily permanent.

GoDaddy is Uniregistry’s first or second-largest registrar in most of the affected gTLDs.

But because the gTLDs in question have so few domains in them, the number of GoDaddy-sponsored domains is typically under 1,000 per gTLD.

Even in the much larger zones of .click and .link (which are receiving small price increases and will still wholesale for under $10), GoDaddy’s exposure is just a few thousand domains and it’s nowhere near the market leader.

I wonder how much of GoDaddy’s decision to drop Uniregistry has to do with the reaction from domain investors.

Ever since DI broke the news of the price increases a week ago, there’s been a stream of angry domainer blog and forum posts, condemning Schilling and Uniregistry for the decision and using the move as a stick to batter the whole new gTLD program.

For registrars, it doesn’t necessarily strike me a terrible deal.

While they will have to deal with customer fallout, over the longer term higher wholesale prices means bigger margins.

Registrars are already adding about a hundred bucks to the $300 cost of a .game domain, and the price increase from $10 to $300 of the Spanish equivalent, .juegos, likely means similar margins there too.