Uniregistry and Neustar have TLDs approved in China

China’s April batch of approved TLDs has been released, featuring three domains from Neustar and Uniregistry.
Neustar had its longstanding, 2000-round .biz pass regulatory scrutiny, while Uniregistry’s .link and .auto have also been approved.
While .auto is managed by Cars Registry, a joint venture with XYZ.com, its stablemates .car and .cars do not appear to have yet been approved.
The rubberstamping was made by China’s Ministry of Industry and Information Technology, which administers the country’s stringent regulatory framework.
Clearance means that customers of Chinese registrars will actually be able to deploy and use the names they buy.
The registries have also agreed to strict takedown policies for Chinese registrants.
While MIIT appears to be announcing newly approved TLDs on a monthly basis, it’s a slow drip-feed. I believe there are still fewer than 20 Latin-script gTLDs currently cleared for use in China.

Chinese to invade .africa? CEO thinks so

While .africa finally went on sale last week after years of legal fights, it seems Africans may find themselves in the minority of registrants.
A combination of awareness, pricing and anticipated interest from Chinese domain investors, means that Africans could account for as few as 1 in 10 .africa registrations, according to Lucky Masilela, CEO of .africa registry ZA Central Registry.
The domain went into its sunrise period last week, and has a multi-phased launch planned out that will last until July 1, 2018.
After the trademark owners have had their crack at the domain — Masilela tells us that South Africa brands such as Nando’s are among the first to grab theirs — there will be five phases in which domains will be open to all but priced at a premium.
Starting June 5 there will be five landrush periods of five day, each a kind of hybrid between the traditional landrush period and the kind of Early Access Period offered by Donuts and others.
Each landrush will see all names priced at a certain amount, with the amount going down at the start of each period — $5,000 to $2,000 to $1,000 to $500 (all USD).
In the event that any name is claimed by more than one registrant, there will be an auction for that name at the end of the period.
Then on July 4 comes the first period of “general availability”, from which point all domains will be first-come, first-served.
But for the first 28 days of GA, domains will be priced at $150, other than domains categorized by the registry as premium.
Domains then come down to a more affordable $18 wholesale.
But that’s not the end. ZACR has baked in a price reduction to $12.50 wholesale, due to kick in July 1 2018. From then on out, it’s business as usual.
Unlike similar TLDs such as .eu, there are to be no geographic restrictions on who can register .africa names, and Masilela said he expects registrants from Africa to be in a minority.
“I think were are looking at about 10% from the continent, growing gradually over the years,” Masilela said. “The next wave is going to be international registrars.”
“We have a big suspicion that we will probably see a huge uptake coming from the east, which is the China market,” he said. “They’ll probably come in and grab a large number of domain names.”
He said that Chinese investment in Africa offline is likely to be mirrored online.
Pricing is also likely to be a factor. While .africa will bottom out, ignoring periodic discounts, at $12.50, that’s still quite a lot more than you’d expect to pay for African ccTLDs. ZACR’s own .za costs about $4 per year.
The relatively high price of becoming ICANN accredited has also meant that while Africa has 50-something countries, there are currently only about half a dozen gTLD registrars based there.
ZACR proposes to counter this by offering a gateway service rather like the one it already offers in .joburg and .capetown, that would help bring its own .za registrars on board.

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.

ICANN reveals $500 million gTLD buyback program

ICANN is to spend its half-billion dollar auction war chest on a buyback program for failing new gTLDs, DI can reveal.
Inspired by the “Cash for Clunkers” program that provided stimulus during the economic downturn in the US a decade ago, the new program will see ICANN offer $1 million per gTLD to any registry whose heart simply isn’t in it any more.
The scheme will work rather like a stock buyback, ICANN explained in a 489-page document (PDF).
Registries opting to sell back their gTLDs will see their strings abruptly removed from the DNS root and their contracts torn up and burned on a great big bonfire.
Any domains registered in these gTLDs will stop resolving to parking pages immediately.
“We believe this program offers the most equitable distribution of auction funds and the fairest way to ensure new gTLD program participants see a return on their investment,” ICANN chair Steve Crocker said in a statement.
Portfolio registries including Donuts, Uniregistry, MMX, Radix and XYZ.com are already believed to have expressed an interest in the scheme, and were already forming a disorderly queue outside ICANN’s Los Angeles headquarters last night.
While Verisign also qualifies for the program, much of the funding will be provided by the $130 million it spent at the .web auction.
The company said it welcomed the deal and plans to sell .web back to ICANN as soon as possible. It added that it will cover the $129 million loss by fueling its data center generators with ten-dollar bills, rather than twenties, for the first three weeks of April.
But registrant groups were outraged by the proposal, which will see millions of domain names erased from the internet.
Dr General President Colonel Lucky Mfwamba (Esq), chair of the New gTLD Registrants Association, said he expects the bottom to fall out of the penis enlargement market overnight.
And in China, thousands of domain investors flocked to forums to complain that the randomly generated domains they bought at $0.20 each and hoped to sell to other investors for $0.30 each are suddenly worthless.

Government anger over two-letter domains

ICANN’s Governmental Advisory Committee has clashed with its board of directors over the lack of protections for two-letter domain names that match country codes.
The board has now formally been urged to reconsider its policy to allow registries to sell these names, after angry comments and threats from some GAC members.
Governments from Brazil, Iran, China and the European Union are among at least 10 angered that the names are either not adequately protected or only available for exorbitant prices,
The debate got very heated at ICANN 58 here in Copenhagen on Wednesday morning, during a public session between the GAC and the board, with Iran’s outspoken GAC rep, Kavous Arasteh, almost yelling at Chris Disspain, the board’s point man on the topic.
Arasteh even threatened to take his concerns, if not addressed, to the International Telecommunications Union when it convenes for a plenipotentiary next year.
“Your position is not acceptable. Rejected categorically,” he said.
“The multistakeholder process was not easily accepted by many countries. Still people have difficulty with that,” he said. “We have a plenipotentiary coming in 2018, and we will raise the issue if the matter is not resolved… It is not always commercial, government also has some powers, and we exercise our powers.”
Invoking the ITU is a way to turn a relatively trivial disagreement into an existential threat to ICANN, a typical negotiating tactic of governments that don’t get what they want from ICANN.
The relatively trivial disagreement in this case is ICANN’s decision to allow gTLD registries to release all previously reserved two-letter strings.
In November, ICANN approved a policy that released all two-letter strings on the proviso that registrants have to assert that they will not pass themselves off as affiliated with the countries concerned.
Registries also were given a duty to investigate — but not necessarily act upon — governmental complaints about confusion.
ICANN thinks that this policy is perfectly compliant with the GAC’s latest official advice, supplied following the Helsinki meeting last June, which asked ICANN to:

urge the relevant Registry or the Registrar to engage with the relevant GAC members when a risk is identified in order to come to an agreement on how to manage it or to have a third-party assessment of the situation if the name is already registered.

Disspain patiently pointed out during Wednesday’s session that governments have no legal rights to their ccTLD strings at the second level, and that most of the complaining governments don’t even protect two-letter strings in their own ccTLDs.
But some GAC reps disagreed.
China stated (via the official interpreter): “We believe the board doesn’t have the right or the mandate to decide whether GAC members have the right over two-character domain names.”
While no government spoke in favor of the ICANN policy on Wednesday, the complaining governments do appear to be in a minority of the GAC.
Despite this, they seem to have been effective in swaying fellow committee members to issue some stern new advice. The Copenhagen communique, published last night (pdf), reads:

a. The GAC advises the ICANN Board to:
I. Take into account the serious concerns expressed by some GAC Members as contained in previous GAC Advice
II. Engage with concerned governments by the next ICANN meeting to resolve those concerns.
III. Immediately explore measures to find a satisfactory solution of the matter to meet the concerns of these countries before being further aggravated.
IV. Provide clarification of the decision-making process and of the rationale for the November 2016 resolution, particularly in regard to consideration of the GAC advice, timing and level of support for this resolution.

ICANN is being compelled to retroactively revisit a policy that was issued in compliance with previous GAC advice, it seems.
The next ICANN meeting is being held in Johannesburg in June, so the clock is ticking.
Two-letter domains are valuable properties even in new gTLDs. With each expected to sell for thousands, two-letter names are likely to be a multimillion dollar windfall for even moderately sized portfolio registries.

CentralNic says revenue more than doubled in 2016

CentralNic’s revenue was up 110% in 2016, according to the company.
The registry today released its unaudited results for last year, showing EBITDA up 65% at £5.5 million ($6.7 million) on revenue of £22.1 million ($26.9 million)
The company, which has expanded into registrar services via acquisition in the last few years, said its recurring revenue — mainly domain registrations — now account for about 80% of revenue.
CentralNic has about a third of the new gTLD back-end market, primarily because it’s the provider for .xyz’s millions of cheapo registrations.
In its statement, it said it hopes to focus on growing more in China, where clients including .xyz were recently licensed.
It also intends to make more acquisitions, where the deals “meet clear strategic criteria including being earnings accretive in the short term with a strong recurring revenues base”.

How .com became a restricted TLD

Verisign has been given approval to start restricting who can and cannot register .com and .net domain names in various countries.
Customers of Chinese registrars are the first to be affected by the change to the registry’s back-end system, which was made last year.
ICANN last week gave Verisign a “free to deploy” notice for a new “Verification Code Extension” system that enables the company to stop domains registered via selected registrars from resolving unless the registrant’s identity has been verified and the name is not on China’s banned list.
It appears to be the system Verisign deployed in order to receive its Chinese government license to operate in China.
Under Verification Code Extension, Verisign uses ICANN records to identify which registrars are based in countries that have governmental restrictions. I believe China is currently the only affected country.
Those registrars are able to register domains normally, but Verisign will prevent the names from resolving (placing them in serverHold status and keeping them out of the zone file) unless the registration is accompanied by a verification code.
These codes are distributed to the affected registrars by at least two verification service providers. Verisign, in response to DI questions, declined to name them.
Under its “free to deploy” agreement with ICANN (pdf), Verisign is unable to offer verification services itself. It must use third parties.
The company added the functionality to its .com and .net registry as an option in February 2016, according to ICANN records. It seems to have been implemented last July.
A Verisign spokesperson said the company “has implemented” the system.
The Verification Code Extension — technically, it’s an extension to the EPP protocol pretty much all registries use — was outlined in a Registry Services Evaluation Process request (pdf) last May, and approved by ICANN not long after.
Verisign was approved to operate in China last August in the first wave of gTLD registries to obtain government licenses.
Under Chinese regulations, domain names registered in TLDs not approved by the government may not resolve. Registrars are obliged to verify the identities of their registrants and names containing certain sensitive terms are not permitted.
Other gTLDs, including .vip, .club, .xyz .site and .shop have been granted approval over the last few months.
Some have chosen to work with registration gateway providers in China to comply with the local rules.
Apart from XYZ.com and Verisign, no registry has sought ICANN approval for their particular implementation of Chinese law.
Because Chinese influence over ICANN is a politically sensitive issue right now, it should be pointed out that the Verification Code Extension is not something that ICANN came up with in response to Chinese demands.
Rather, it’s something Verisign came up with in response to Chinese market realities. ICANN has merely rubber-stamped a service requested by Verisign.
This, in other words, is a case of China flexing market muscle, not political muscle. Verisign, like many other gTLD registries, is over-exposed to the Chinese market.
It should also be pointed out for avoidance of doubt that the Chinese restrictions do not apply to customers of non-Chinese registrars.
However, it appears that Verisign now has a mechanism baked into its .com and .net registries that would make it much easier to implement .com restrictions that other governments might choose to put into their own legislation in future.

Verisign report deletes millions of domains from history

Verisign has dramatically slashed its estimates for the number of domains in existence in its quarterly Domain Name Industry Brief reports, two of which were published this week.
The headline number for the end of the fourth quarter is 329.3 million, a 0.7% increase sequentially and a 6.8% increase annually.
But it’s actually a lower number than Verisign reported in its second-quarter report just five months ago, which was 334.6 million.
The big swinger, as you may have guessed if you track this kind of thing, was .tk, the Freenom ccTLD where names are given away for free and then reclaimed and parked by the registry when they are deleted for abuse expire.
It seems a change in the way .tk is counted (or estimated) is the cause of the dip.
Verisign gets its gTLD data for the report from ICANN-published zone files and its ccTLD data from independent researcher Zooknic.
Problem is, Zook hasn’t had up-to-date data on .tk for a couple of years, so every DNIB published since then has been based on its December 2014 numbers.
But with the Q3 report (pdf), Zook revised its .tk estimates down by about six million names.
In earlier reports, the ccTLD was being reported at about 25 million names (exact numbers were not given), but now that’s been slashed to 18.7 million, relegating it to the second-largest ccTLD after China’s .cn, which has 21.1 million.
I’ve asked Freenom to confirm the latest numbers are correct and will update this post if I get a response.
Verisign does not say what caused the decision to scale down .tk’s numbers, but explains what happened like this:

In Q3 2016, Zooknic reported a significant decline in the .tk zone and restated the estimated zone size of .tk for each quarter from Q4 2014 through Q3 2016 using a proprietary methodology. As a result, for comparative purposes of this DNIB to the Q3 2016 DNIB and the Q4 2015 DNIB, Verisign has applied an updated estimate of the total zone size across all TLDs for Q3 2016 of 327.0 million and Q4 2015 of 307.7 million and an updated estimate of the total ccTLD zone size for Q3 2016 of 140.1 million and Q4 2015 of 138.1 million.

Apples-to-apples comparisons in the Q4 report show the ccTLD universe was up to 142.7 million names, a 1.8% sequential increase and up 3.1% on 2015. Excluding .tk, annual growth was 6.9%.
Verisign’s own .com and .net combined grew 1.7% to 142.2 million names at the end of the year, one percentage point smaller than their 2015 growth.
The full Q4 report can be read here (pdf).

Five more new gTLDs, one in English, get the nod from China

Top Level Design’s .ink has become the sixth new gTLD in the Latin alphabet to be approved for sale in China.
It was one of four new gTLDs given regulatory approval to begin operating properly in the country late last week. The others were all in Chinese script.
From Finnish-founded TLD Registry, .中文网 (“Chinese web site”) and .在线 (“Chinese online”) gained approval.
From local outfit Guangzhou Yuwei Information Technology Co, .集团 (“group”) and .我爱你 (“I love you”) were given the nod.
It’s the third batch of new gTLDs to get Chinese government approval since .vip, .club and .xyz in December. In January, .site and .shop joined their ranks.
Under China’s Draconian domain name regulations, only domains registered via local registries and registrars may be used.
Registries from outside the country have had to set up a local corporate presence and agree to China’s censorship policies in order to be compliant.

MMX billings double even as some volumes slide

MMX has reported a 100% increase in billings for 2016, despite its number of domains under management dropping in some TLDs.
The company, until recently known as Minds + Machines, said billing were $15.8 million in the year to December 31, compared to $7.9 million for in 2015.
Billings is an up-front measure of sales growth that does not take into account the way domain revenue is recognized over the life of the registration.
The company said, in a trading update to the London markets today, that billings and domains under management do not necessarily correlate. The former can be up even if the latter is down:

For example, in 2016 .work generated $392,000 off 81,000 registrations compared to $206,000 off 102,000 registrations in 2015 reflecting the use of a promotional initiative to drive registrations that year.

MMX also disclosed that China now accounts for more than half of its billings: 59%, compared to 24% for the US and 17% for Europe.
That’s largely based on its launch of .vip, which launched last May and has half a million names mainly because of the resonance of the string in China.
The company said it intends to imitate its focus on .vip in 2016 by only launching two TLDs — .boston and one other — in 2017.
MMX’s formal, audited 2016 financial results will be published in April.