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Criminal .uk suspensions down this year

Kevin Murphy, November 26, 2019, Domain Registries

Nominet suspended fewer .uk domain names due to reports of criminality in the last 12 months that in did in the prior period.

The registry said last week that is suspended 28,937 domains in the year to the end of October, down from 32,813 in the 2018 period.

That’s 0.22% of all .uk names, Nominet said.

As usual, complaints about intellectual property infringement — filed by copyright owners to the IP cops and handed to Nominet — account for the vast majority of takedowns, some 28,606 in the period.

The rest were suspended due to complaints about fraud, trading standards, financial conduct and healthcare products.

Only 16 requests were denied by Nominet, down from 114 in the previous year, and only five false-positive suspensions were reversed.

The controversial ban on “rape” domains resulted in 1,600 new regs getting automatically flagged, but zero getting suspended.

There were no requests from the Internet Watch Foundation to take down child sexual abuse material.

Nominet’s newish automated anti-phishing system, which uses pattern recognition to flag potential phishing domains at point of registration, saw 2,668 domains suspended before going live, of which 274 were released after the registrant passed due diligence checks.

Governments kill off another gTLD bid

Kevin Murphy, November 26, 2019, Domain Registries

Another proposed new gTLD has been killed off by governmental intervention.

A Thailand-based company call Better Living Management Company applied for .thai back in 2012, but quickly ran into opposition from the Thai government, which thought the string too culturally sensitive.

The ICANN Governmental Advisory Committee did not object to Thailand’s objection, and issued consensus advice asking ICANN to reject the application, which it did in November 2013.

BLM filed an Independent Review Process complaint in April 2014, alleging irregularities within the GAC, but the appeal was quickly shelved.

Now, five years later, the company has finally withdrawn it application, meaning it gets most of its application fee back as a refund.

Part of the reason the application failed is likely the fact that the Thai ccTLD registry, Thai Network Information Center Foundation, already runs the internationalized domain name ccTLD .ไทย, which means “.thai” in Thai.

Other applications to be killed off by GAC advice include .islam, .halal, .gcc and one of the .africa bids.

Four big developments in the .org pricing scandal

Kevin Murphy, November 26, 2019, Domain Registries

The renewal of Public Interest Registry’s .org contract and its subsequent acquisition by Ethos Capital is the gift that keeps on giving in terms of newsworthy developments, so I thought I’d bundle up the most important into a single article.

First, ICANN has thrown out the appeal filed by Namecheap and provided a (kinda) explanation of how the recent contract renewal came about.

The board of directors voted to reject Namecheap’s Request for Reconsideration on Thursday, as I reported last week, but the decision was not published until last night.

Namecheap had demanded ICANN reverse its decision to remove the 10%-a-year cap on price increases previously in the .org contract, enabling PIR to unilaterally raise its prices by however much it wants.

It said that ICANN had “ignored” the more then 3,000 people and organizations that had submitted comments opposing the lifting of caps.

But the board said:

ICANN org’s Core Values do not require it to accede to each request or demand made in public comments or otherwise asserted through ICANN’s various communication channels. ICANN org ultimately determined that ICANN’s Mission was best served by replacing price caps in the .ORG/.INFO Renewed RAs with other pricing protections to promote competition in the registration of domain names, afford the same “protections to existing registrants” that are afforded to registrants of other TLDs, and treat registry operators equitably.

The board also decided to describe, in a roundabout kinda way, how it conducts renewal talks with pre-2012 legacy gTLDs, explaining that ICANN “prefers” to move these registries to the 2012 contract, but that it cannot force them over. The resolution states:

All registry agreements include a presumptive right of renewal clause. This clause provides a registry operator the right to renew the agreement at its expiration provided the registry operator is in good standing (e.g., the registry operator does not have any uncured breaches), and subject to the terms of their presumptive renewal clauses.

In the course of engaging with a legacy registry operator on renewing its agreement, ICANN org prefers to and proposes that the registry operator adopts the new form of registry agreement that is used by new gTLDs as the starting point for the negotiations. This new form includes several enhancements that benefit the domain name ecosystem such as better safeguards in dealing with domain name infrastructure abuse, emergency backend support, as well as adoption of new bilaterally negotiated provisions that ICANN org and the gTLD Registries Stakeholder Group conduct from time to time for updates to the form agreement, and adoption of new services (e.g., RDAP) and procedures.

Although ICANN org proposes the new form of registry agreement as a starting place for the renewal, because of the registry operator’s presumptive right of renewal ICANN org is not in a position to mandate the new form as a condition of renewal. If a registry operator states a strong preference for maintaining its existing legacy agreement form, ICANN org would accommodate such a position, and has done so in at least one such instance.

I believe the gTLD referred to in the last sentence is Verisign’s .net, which renewed in 2017 without substantially transitioning to the 2012-round contract.

On the acquisition, the board notes:

the Board acknowledges (and the Requestor points out in its Rebuttal) the recently announced acquisition of PIR, the current .ORG registry operator, and the results of that transaction is something that ICANN organization will be evaluating as part of its normal process in such circumstances.

That appears to be a nod to the fact that ICANN has the power to reject changes of control under exceptional circumstances, per the .org contract.

Despite the wholly predictable rejection of Namecheap’s RfR, appeals against the contract’s new terms may not be over.

For some reason I have yet to ascertain, the very similar RfR filed around the same time by the Electronic Frontier Foundation was not considered, despite being on the agenda for last Thursday’s board meeting.

Additionally, I hear Namecheap has applied for Cooperative Engagement Process status, meaning it is contemplating filing an Independent Review Process appeal.

Second, Ethos Capital, PIR’s new owner, launched a web site in which it attempts to calm many of the concerns, criticisms and conspiracy theories leveled its way since the acquisition was announced.

Found at keypointsabout.org, the site tries to clarify the timing and motivation of the deal.

On timing, Ethos says:

Ethos Capital first approached the Internet Society in September 2019, well after PIR’s contract renewal with ICANN had finished… PIR was not for sale at the time the price caps were lifted on .ORG. The removal of .ORG’s price restrictions earlier this year was not unique to .ORG and was in no way motivated by a desire to sell PIR.

The .org contract was signed at the end of July, so while Ethos may well have been lusting after PIR before the renewal, it apparently did not run towards it with its trousers around its ankles until at least a month later.

On its pricing intentions, Ethos says:

The current price of a .ORG domain name is approximately $10 per year. Our plan is to live within the spirit of historic practice when it comes to pricing, which means, potentially, annual price increases of up to 10 percent on average — which today would equate to approximately $1 per year.

This sounds rather specific, but it’s vague enough to give PIR leeway to, say, introduce a 100% increase immediately and then freeze prices until it averages out at 10% per year. I don’t think the company will do something so extreme, but it would technically be possible the way it’s described here.

On the connections to Abry Partners and former ICANN CEO Fadi Chehade, Ethos says that while founder and CEO Erik Brooks is a 20-year veteran of Abry (which also owns Donuts) “Abry Partners is not involved in this transaction.”

It adds, however, that Chehade’s company, Chehade & Company, where Ethos chief purpose officer Nora Abusitta-Ouri has worked “is an adviser to Ethos”.

What this means, at the very least, is that the new owner of .org allowed an outside contractor to register the domain matching its name in the very gTLD it runs, which most domain veterans will recognize as a rookie mistake.

Ethos goes on to list VidMob Inc, Whistle Sports Inc, Adhark Inc and LiquidX Inc as other companies Ethos has invested in, perhaps rubbishing the hypothesis (which I, admittedly, have publicly floated) that Ethos was a vehicle created by Abry purely to buy up PIR.

Third, Ethos may be funded by “billionaire Republicans”.

.eco registry founder Jacob Malthouse, who’s trying to rouse up support for the #SaveDotOrg campaign, dug up an email apparently sent by ISOC CEO Andrew Sullivan to a members mailing list in the wake of the acquisition announcement, which names some of the backers of the deal.

They are: Perot Holdings, FMR LLC and Solamere Capital.

What they have in common is that they’re all — at least according to Malthouse’s since-amended original post — founded/owned/affiliated with prominent billionaire US Republicans. I’m not sure I’d fully agree with that characterization.

Perot was founded by Ross Perot, who stood for US president as an independent a few times but spent the last couple of decades of his life (which ended in July) as a Republican. I’d say his political affiliation died with him.

FMR, or Fidelity Investments, is run by Abigail Johnson, who inherited the role from her father and grandfather. While she’s made donations to Republicans including local senator, Mitt Romney, she also gave Hillary Clinton a tonne of cash to support her 2016 presidential election run, so I’m not sure I’d necessarily characterize her as die-hard GOP.

Romney himself was involved in the founding of Solamere Capital, the third apparent Ethos investor, but according to its web site he stepped down at the start of this year, long before Ethos was even founded, in order to re-join the US Senate.

I’m not sure what the big deal about these connections is anyway, unless you’re of the (often not unreasonable) belief that you don’t get to be a billionaire Republican without being just a little bit Evil.

Fourth, a bunch of non-profits are campaigning to get the deal scrapped.

The #SaveDotOrg campaign now has its matching .org address and web site, savedotorg.org.

It appears to have been set up by the EFF, but its supporters also include the non-profits American Alliance of Museums, American Society of Association Executives, Aspiration, Association of Junior Leagues International, Inc., Creative Commons, Crisis Text Line, Demand Progress Education Fund, DoSomething.org, European Climate Foundation, Free Software Foundation, Girl Scouts of the USA, Independent Sector, Internet Archive, Meals on Wheels America, National Council of Nonprofits, National Human Services Assembly, NTEN, Palante Technology Cooperative, Public Knowledge, R Street Institute, TechSoup, VolunteerMatch, Volunteers of America, Wikimedia Foundation, YMCA of the USA and YWCA USA.

The letter (pdf) states:

Non-governmental organizations all over the world rely on the .ORG top-level domain. Decisions affecting .ORG must be made with the consultation of the NGO community, overseen by a trusted community leader. If the Internet Society (ISOC) can no longer be that leader, it should work with the NGO community and the Internet Corporation for Assigned Names and Numbers (ICANN) to find an appropriate replacement.

It claims that the new .org contract gives PIR powers to “do significant harm” to non-profits, should they be abused.

The campaign has had a little traction on social media and so far has over 8,000 signatures.

Petition launched to fight .org deal

Kevin Murphy, November 21, 2019, Domain Registries

A petition has been opened on Change.org calling for the acquisition of Public Interest Registry by Ethos Capital.

The petition calls on ICANN, the Internet Society and PIR to “suspend” the sale “pending an open, transparent and multi-stakeholder public process about the future of .ORG.”

It was started by Jacob Malthouse, who worked at ICANN over a decade ago but is perhaps better known more recently as a founder and co-CEO of Big Room, the .eco gTLD registry. He appears to have left that company in August.

He blogged last week expressing his dismay with the news of the acquisition.

“This is a very sad day for the progressive movement. We need infrastructure like this and we need it to stay run by and for nonprofits, where it can be managed in a transparent and accountable fashion,” he wrote.

Almost two days in, the petition has attracted a piddling 32 signatures. That’s about 1% of the number of people who chose to email ICANN to protest .org price increases earlier this year, voices that ICANN nevertheless found unpersuasive.

The acquisition, for an undisclosed sum believed to be in the hundreds of millions of dollars at the least, was announced last week.

XYZ buys dormant gTLD from “pyramid scheme” operator

Kevin Murphy, November 19, 2019, Domain Registries

XYZ.com has bought another unused dot-brand to add to its portfolio.

It’s taken over the contract for .quest from original registry Quest ION Ltd, a subsidiary of a Hong Kong-based multi-level marketing company called QNet, according to ICANN records.

The gTLD will become the 13th that XYZ has a stake in, and the second dormant dot-brand that it’s acquired, after .monster.

.quest has been delegated for a few years, but its owner had no live domains beyond the mandatory NIC site.

I have to say I was unfamiliar with the company until today, but QNet’s Wikipedia page makes it sound sufficiently dodgy that I’m surprised nobody raised questions about its suitability to be a registry during the ICANN application process.

Its multi-level marketing business model has been described as a “pyramid scheme” or “Ponzi scheme” by various governments and has seen QNet hit by serious legal challenges in many countries on at least four continents.

Loads of its executives, including at least one listed on the gTLD application, have been arrested over the years.

But I guess that’s water under the bridge now, because XYZ has taken control of .quest.

There’s no word yet on a launch date.

Selling off PIR, did ISOC just throw .org registrants under a bus?

Kevin Murphy, November 13, 2019, Domain Registries

Public Interest Registry is to lose its not-for-profit status, dramatically increasing the chances of .org price increases, under an acquisition deal announced this evening.

The Internet Society is selling PIR to a brand-new private investment firm called Ethos Capital Investors, which is run by two people with ties to the domain industry.

PIR CEO Jon Nevett told DI today that the company is no longer a non-profit following the transaction, and that ISOC will no longer receive a slice of every .org registration fee.

There’s a lot to unpick here.

The biggest concern is arguably that the deal substantially increases risk for .org registrants.

PIR was recently, and very controversially, granted the right to raise its prices from $9.93 per year to whatever-the-hell-it-wants per year, due to a renegotiation of its ICANN contract that scrapped its longstanding 10%-per-year price increase caps.

Many domain investors and non-profits called for the caps to remain. Uncontrolled pricing could lead to smaller charities, for example, being priced out of their decades-held domains, it was claimed.

But PIR repeatedly assured concerned registrants that it was “a mission driven non-profit registry and currently has no specific plans for any price changes”.

That tune has changed, if only a little, today. Nevett told us:

Our goal has always been to make .ORG accessible and reasonably priced — and that will continue under our new ownership. PIR has made reasonable decisions on price in the past, and we will uphold this spirit going forward. We would never make dramatic price increases as we know it would harm our registrants, as well as our registrars.

PIR also says it plans to establish an advisory council and fund to ensure its founding principles are upheld, and to apply for “B Corporation” certification.

B Corp is a private program run by a non-profit called B Lab that certifies companies that meet certain social, environmental and transparency standards, but it has no legal recognition in, for example, the US tax code.

Nevett told us today that he does not know how long ISOC was negotiating the sale, but that neither PIR nor ICANN knew of it during their contract talks.

We know very little about the new owner. Its web site, which appears to have been created very recently, merely provides bios of its two principals.

These are founder and CEO Erik Brooks, who this year quit the private equity firm Abry Partners after 20 years.

Abry, you may recall, is the company that hired former ICANN CEO Fadi Chehade in 2016 and gobbled up new gTLD registry Donuts in September last year.

His second is Nora Abusitta-Ouri, named as “chief purpose officer”, who’s apparently tasked with overseeing the moral “ethos” of the company’s investments.

Abusitta-Ouri is a former ICANN staffer who most recently held the role of senior VP for development and public responsibility programs until her 2016 departure. She’s also executive director of the Digital Ethos Foundation.

In short, based on what little information is publicly available, it appears that Ethos was set up purely for the purpose of acquiring PIR. It’s not at all clear where the money to fund the deal is coming from.

The acquisition price has not been disclosed, but given that PIR was grossing over $90 million a year at the last count, I doubt Brooks and Abusitta-Ouri are paying out of their own pockets.

Whoever’s backing this is going to want a return, and the best way to quickly soup up PIR’s growth would be to take advantage of its newfound ability to raise .org prices arbitrarily.

More than half of PIR’s revenue before today — close to $50 million a year — was handed directly to ISOC, to fund its capacity-building and education projects worldwide.

That’s all over now, which begs the question of how it will continue to fund itself in future. My guess is that, now that it has hundreds of millions of dollars in the bank, and is talking about an “endowment”, it’s going to stash its windfall in high-interest accounts and live off that income.

Meanwhile, whatever assurances .org registrants had that PIR was going to remain a non-profit concern have been utterly trashed.

UPDATE: Thanks to domain lawyer John Berryhill for pointing out in the comments that the domain name ethoscapital.org was registered by Abry’s Fadi Chehadé on May 7 this year. Additionally, a commenter on Domain Name Wire tonight noted that a company called Ethos Capital LLC was formed in Delaware on May 14, a day after ICANN published its summary of the .org contract renewal’s public comment period.

Rival dot-brand bidders in settlement talks, seek auction delay

Kevin Murphy, November 13, 2019, Domain Registries

Two companies called Merck have managed to delay an ICANN auction for the .merck dot-brand top-level domain.

The two companies applied for .merck in 2012 and have spent the last almost eight years conducting a battle for the string using various ICANN conflict and appeals mechanisms.

Earlier this year, ICANN placed the two applications into a “last resort” auction, the proceeds of which would flow into ICANN’s own coffers.

Scheduled for July, it would have been the first time competing brands had fought for the same gTLD at ICANN auction.

But the two Mercks sought and received multiple extensions to the auction date, telling ICANN that they were in private settlement talks, until ICANN seemingly got bored and denied their last extension request.

The auction was set to go ahead in late October, but the two applicants managed to get another delay anyway by filing a Request for Reconsideration with ICANN, asking that the refusal to extend be overturned.

While the request is likely to be rejected, the mere fact of its filing means both applications continue to be in “On Hold” status while the request is processed, buying the companies at least a month of extra time to come to their own less-expensive resolution.

The two companies are US-based Merck Registry Holdings, Inc. and its former parent, Germany-based Merck KGaA. The German company is over 350 years old and split from its American subsidiary when it was seized by the US government during World War I. They’re both in the chemicals business.

Neustar’s .co contract up for grabs

Kevin Murphy, November 6, 2019, Domain Registries

Colombia is looking for a registry operator for its .co ccTLD.

If you’re interested, and you’re reading this before noon on Wednesday November 6 and you’re at ICANN 66 in Montreal, hightail it to room 514A for a presentation from the Colombian government that will be more informative than this blog post.

Hurry! Come on! Move it!

The Ministry of Information Technology and Communications (MinTIC) has published a set of documents describing some of the plan to find a potentially new home for .co.

There doesn’t appear to be a formal RFP yet, but I gather one is imminent.

What the documents do tell us is that Neustar’s contract to run .co expires in February, and that MinTIC is looking into the possibility of a successor registry.

Currently, .co is delegated to .CO Internet, a Colombian entity that relaunched the TLD in 2010 and was acquired by Neustar for $109 million in 2014.

But under a law passed earlier this year, it appears as if MinTIC is taking over policy management for .co and may therefore seek IANA redelegation.

There’s no indication I could see that there’s a plan to reverse the policy of allowing anyone anywhere in the world to register a .co, indeed MinTIC seems quite proud of its international success.

The documents also give us the first glimpse for years into .co’s growth.

It had 2,374,430 names under management in September, after a couple of years of slowing growth. The documents state that .co had an average of 323,590 new regs per year for the first seven years, which has since declined to an average of 32,396.

.co is not the cheapest TLD out there, renewing at around $25 at the low end.

Verisign likely to get its billion-dollar .com pricing windfall

Kevin Murphy, October 28, 2019, Domain Registries

Verisign and ICANN appear to be on the verge of signing a new .com registry contract that could prove extremely lucrative for the legacy gTLD company.

Speaking to analysts following the announcement of Verisign’s third-quarter results late last week, CEO Jim Bidzos said talks with ICANN, which have their first anniversary this week, are “nearly complete”.

The new contract will take on the terms of the Cooperative Agreement between Verisign and the US Department of Commerce, which was amended a year ago to scrap an Obama-era price freeze.

Under the future contract, Verisign is expected to be able to raise its .com fee from its current $7.85 by 7% in four of the six years of the deal. As I wrote at the time, this could be worth close to a billion dollars.

This, for a company that already enjoys profit margins so generous that I regularly receive phone calls from perplexed analysts asking me to help explain how they get away with it.

Bidzos said on Thursday night:

let me remind you that under the 2016 amendment to our .com registry agreement with ICANN, which extended the term of the agreement, we and ICANN also agree to negotiate in good faith to do two things; first, we agree to reflect changes to the Cooperative Agreement in the com agreement, including pricing terms. Second, we agree to amend the com agreement to include terms to preserve and enhance the security and stability of the com registry or the internet.

We believe these discussions with ICANN are nearly complete. While it will be inappropriate at this time to provide more details, I can say that we were satisfied with the results so far. As noted, this is an ICANN process and we expect that before long ICANN will be publishing for public comment the documents we have been discussing.

The Cooperative Agreement also allows Verisign to launch a registrar business, just as long as that registrar does not sell .com domains.

Potentially, Verisign could get the right to launch a customer-facing registrar focused on selling .net, .org and newer gTLDs and ccTLDs.

Given we already pretty much know what the new pricing regime is going to be, the big mystery right now is why it’s taken ICANN and Verisign so long to renegotiate the contract.

One analyst asked Bidzos on Thursday whether ICANN has talked its way into getting a bigger slice of the registry fee, currently set at $0.25 per annual domain transaction.

That’s in-line with what almost all the other gTLD registries pay, and I can’t see ICANN demanding more without attracting a tonne of criticism. Verisign is already by some margin its biggest funding source.

Could ICANN have demanded that Verisign adopt the Uniform Rapid Suspension anti-cybersquatting policy, which would be guaranteed to enrage domain investors?

Whatever else is to be added to the contract, it appears to be related to that amorphous term “security and stability”, which could mean basically anything.

When ICANN and Verisign agreed to talk about new terms “to preserve and enhance the security and stability of the Internet or the TLD”, what on Earth where they talking about?

It looks like we won’t have to wait too much longer to find out.

Form an orderly queue: New Zealand wants a new back-end

Kevin Murphy, October 23, 2019, Domain Registries

New Zealand is looking to possibly outsource its .nz ccTLD registry back-end for the first time, and has invited interested parties to get in touch.

Registry manager InternetNZ today published a request for expressions of interest in what it’s calling its “registry replacement project”.

It won’t be as straightforward as most registry migrations, as .nz is currently running essentially two different back-ends.

Today, about 65% of its registrations are based on an outdated custom Shared Registration System protocol, with the remainder on the industry standard Extensible Provisioning Protocol.

The proportion of registrars running SRS versus EPP is roughly the same, with about 65% on SRS, according to the REOI.

But the registry wants to get rid of SRS altogether, forcing all SRS-only registrars to adopt the EPP, and the new back-end provider will have to support this transition.

While registrars always have a bit of implementation work to do when a TLD changes back-ends, it’s not usually as complicated as adopting a completely different protocol with which they may not be unfamiliar.

So the risk of issues arising during the eventual handover — which will probably take a bit longer than usual — is probably a bit higher than usual.

But .nz is an attractive TLD. At the start of the month, it had 711,945 domains under management, a pretty good penetration on a per-capita basis when compared to the biggest ccTLDs.

It’s in the top 50 of the 1,338 TLDs for which I have data.

The deadline for responses to the REOI is November 29, a little over a month from now, InternetNZ said.

The registry is taking briefings at ICANN 66 in Montreal from November 2, and the following week in New Zealand.

UPDATE: This article originally stated that InternetNZ has decided to outsource its back end. In fact, outsourcing is just one of a number of options.