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ICM puts $7.7 million of .xxx domains up for sale

Kevin Murphy, October 24, 2012, Domain Sales

Having already sold over $5 million worth of premium .xxx domains names, ICM Registry is putting another 1,000 names on the market, with a total purchase price of over $7.7 million.

Unusually for registry-reserved names, which usually end up at auction, all of the names are priced to sell.

Prices range from $220,000 for girls.xxx to $330 for provide.xxx.

Along with the full list of available names, ICM has also published some rough guides to likely traffic, based on its data gleaned from running search.xxx for the last few weeks.

A “Search Rank” stat ranks the popularity of the relevant keyword in search.xxx queries, while “Traffic Rank” divides the list into five categories by likely traffic volume.

ICM privately sold about $4 million of premium .xxx domains during its pre-launch Founders Program. Domainer Frank Schilling is believed to have invested seven figures.

Its biggest single sale to date is believed to be gay.xxx, which was snapped up for $500,000 last year.

ICM CEO Stuart Lawley told DI that the company still has about 500 premium names — including cams.xxx and tube.xxx — held in reserve to be released at a later date.

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CoCCA withdraws from APTLD over support for AusRegistry “monopoly”

Kevin Murphy, October 24, 2012, Domain Registries

Registry services provider CoCCA has pulled out of the Asia Pacific Top Level Domain Association after APTLD gave support to AusRegistry in its campaign to continue to run .au.

The company claims that APTLD — the Hong Kong-based association of ccTLD operators from the region — backed AusRegistry because AusRegistry is one of its largest donors.

The allegations center on a consultation run by AuDA, the policy overseer for Australia’s .au domain.

AuDA is currently deciding whether to renegotiate AusRegistry’s longstanding registry back-end contract — which is its preferred option — or open it up to public tender.

Draft recommendations published for comment last month suggest that the contract should remain with AusRegistry when it expires in 2014, albeit with renegotiated terms.

CoCCA is mad with APTLD for submitting a comment in support of these recommendations without first consulting its membership, suspecting AusRegistry’s sponsorship of APTLD might have something to do with it.

(October 24 Update: APTLD has submitted a revised comment here. The original submission can be found here.)

In an email to APTLD last week, CoCCA director Garth Miller said:

That AusRegistry, a large for-profit company that is an associate member of APTLD can simply make a phone call to a board member and get the board to make a public submission on behalf of all members that a scheduled public tender be cancelled and AusRegistry be awarded the contract – worth as much as several hundred million dollars, because they have made substantial contributions to the APLTD in the past and are likely to do so in the future if awarded the contract is, in my view, disturbing.

CoCCA, which already provides registry services for a few ccTLDs in the region and runs the .cx (Christmas Island) ccTLD, reckons the .au back-end contract should be opened to competitive bidding.

Judging by the other submissions to AuDA’s consultation, which are published here, it’s a minority view.

Every other comment — most of which were sent by .au registrars, even newcomers such as Go Daddy — supports the recommendation that AusRegistry should keep the deal.

And AusRegistry says that everything is above board. CEO Adrian Kinderis said in a statement sent to DI:

AusRegistry has been actively seeking acknowledgments and recommendations from valued partners and industry leaders over the past month. This included an approach to APTLD to seek a reference from them to acknowledge the positive industry engagement and continued support and participation of AusRegistry in the Asia Pacific domain name industry. APTLD responded positively to our request. AusRegistry has made no secret of such, and to suggest that clandestine calls have taken place is simply not true.

APTLD also denied that it has done anything wrong, though it does not appear to be denying that AusRegistry contributions may have played a part in its decision.

In a statement, APTLD told DI:

The allegation on APTLD must be a misunderstanding and is untrue. APTLD has no comments to make on the tendering process and whether a public tender should be conducted. APTLD does not have sufficient local knowledge to provide any constructive comments. All APTLD can provide is a reference for AusRegistry as an active and positive player in the domain name industry in the Asia Pacific region. Past contributions to APTLD is just one of the many factors when the Board considers whether to provide a reference to a particular member.

AusRegistry has been running the .au registry under contract with AuDA since 2001. It’s used its experience to launch ARI Registry Services, a pretty big player in the new gTLD back-end market.

Last time its .au deal was renegotiated, prices came down.

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Here’s how Donuts wants to resolve its 158 new gTLD contention fights

Kevin Murphy, October 23, 2012, Domain Registries

Donuts is backing a private auction model designed and managed by Cramton Associates as its preferred solution for resolving its 158 new gTLD contention sets.

The proposals, spelled out by auction design expert Peter Cramton during private sessions with new gTLD applicants, caused a bit of a buzz — not all of it positive — at the ICANN meeting in Toronto last week.

But Donuts co-founder Jon Nevett told DI today that Cramton has addressed rivals’ concerns and that Donuts wants to handle as many of its contention sets as possible via private auction.

The idea is that private auctions will be faster and cheaper for applicants than the process set out by ICANN as the “last resort” method for resolving contention sets.

In the ICANN model, all of the proceeds of the auction would go to ICANN, to be distributed to worthy causes at a later date. But with a private auction, the winning bidder pays the losers.

This makes it more attractive to applicants, according to Donuts.

“The cost of losing an ICANN auction is greater than the cost of losing a private auction,” Nevett said. “If you lose an ICANN auction you get nothing, zero, you lose your asset.”

But with private auctions, “it doesn’t hurt as much to lose, so the theory is the second-place guys won’t stretch as much,” he said.

Cramton is a professor of economics at the University of Maryland. A long-time auction specialist, he’s been involved in designing processes for selling off wireless spectrum around the world.

For new gTLDs, Cramton proposes an “ascending clock” auction. At each stage, the price is increased by the auctioneer and the bidders/sellers can either commit to pay that amount or drop out.

The last man standing wins the gTLD, paying the amount that the second-highest bidder was willing to pay.

The money would be divided equally between all the losing applicants. According to Cramton, the advantage over proportional distribution is that it does not encourage applicants to over-bid, keeping costs down.

Cramton’s original plan, which left some applicants scratching their heads last week, was to run the auctions in the first quarter of 2013, before ICANN announces the results of Initial Evaluation.

That would mean that losing bidders would get a 70% refund of their ICANN application fee, which may be an attractive percentage in the case of low-value strings.

But it also means that an applicant could win an auction and later discover its application has been rejected. The other applicants would have withdrawn, so the gTLD would just disappear into the ether.

Judging by a series of videos shot last week and published on Cramton’s YouTube account, many applicants are in favor of running the auctions after IE results have been announced.

Another complaint expressed by Donuts’ competitors last week is Cramton’s “all or nothing” approach, in which Donuts’ rivals would have to commit to use the auctions for their entire portfolio of applications.

According to Nevett, that idea is no longer on the table.

“In the beginning he was discussing that it would have to be all your TLDs or none, and I think a lot of applicants told him that was unacceptable, so he changed his view,” he said.

The idea now is that the auctions would proceed on a TLD-by-TLD basis.

Given that winning bidders are giving money to their competitors, another concern is the ordering of the auctions. You don’t necessarily want to give your rivals a big wedge of cash they can use to out-bid you on the next lot.

The preferred solution here appears to be a simultaneous auction, with all the participating contention sets being resolved at the same time.

There was also a deal of suspicion in Toronto about whether Cramton would be biased towards Donuts, given that Donuts is responsible for finding Peter Cramton and introducing him to the gTLD program.

But Nevett said that Donuts has not contracted with Cramton. Peter Cramton showed up in Toronto on his own dime and has not required an up-front payment from Donuts, Nevett said.

“Every applicant has a veto on whether to participate, and it won’t happen unless every applicant wants to do it,” Nevett said. “Our incentive is to have an auction provider who is attractive to every applicant.”

“Our goal is to get as many applicants to participate in a private auction, so we need the auction to be designed in a way that is simple, fair and inclusive,” he said.

But there’s no denying that Donuts has a greater incentive than most to have a consolidated auction. By its own admission, it’s an eight-person operation without the manpower to negotiate 158 contention sets.

Cramton’s materials from last week’s Toronto sessions can be found at applicantauction.com or here.

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ICANN 45: Super-Fadi targets Trademark Clearinghouse and RAA talks

Kevin Murphy, October 22, 2012, Domain Policy

There can be no denying that ICANN’s new CEO was well received at the Toronto meeting last week.

From his opening speech, a sleeves-rolled-up address that laid out his management goals, and throughout the week, Fadi Chehadé managed to impress pretty much everybody I spoke to.

Now Chehadé has turned his attention to the formative Trademark Clearinghouse and the Registrar Accreditation Agreement talks, promising to bring the force of his personality to bear in both projects.

“I’m coming out of Toronto with two priorities for this year,” he said during an interview with ICANN’s media relations chief, Brad White, last Friday.

“The first one is obviously to get the Trademark Clearinghouse to work as best as possible, for all parties to agree we have a mechanism that can satisfy the interests of the parties.”

“The second one is the RAA,” he said. “Without question I’m going to be inserting myself personally into both these, including the RAA.”

These are both difficult problems.

Work on the TMCH hit a snag early last week when ICANN chief strategy officer Kurt Pritz told the GNSO Council that the “community consensus” implementation model proposed by registries presented a big problem.

The “live query model” proposed for the Trademark Claims service, which would require the TMCH to sit in the live domain registration path, should be taken “off the table”, he said.

ICANN is/was worried that putting a live database of trademark checks into the registration model that has functioned fairly well for the last decade is a big risk.

The TMCH would become a single point of failure for the whole new gTLD program and any unanticipated downtime, ICANN has indicated, would be hugely embarrassing for ICANN.

“I’m personally concerned that once you put the Clearinghouse in the path for that it’s very difficult to unring the bell, so I’d rather proceed in a way that doesn’t change that,” Pritz said.

His remarks, October 14, angered backers of the community model, who estimated that the live query model would only affect about 10% to 15% of attempted domain registrations.

“Taking it off the table is a complete mistake,” said Jeff Neuman of Neustar, one of the authors of the alternative “community” TMCH model.

“It is a proven fact that the model we have proposed is more secure and, we believe, actually looks out much more in favor of protecting trademark holders,” he said.

He noted that the community model was created in a “truly bottom-up” way — the way ICANN is supposed to function.

NetChoice’s Steve DelBianco, in a rare show of solidarity between the Business Constituency and the registries, spoke to support Neuman and the centralized community model.

“The BC really supports a centralized Trademark Clearinghouse model, and that could include live query,” DelBianco said. “I’m disturbed by the notion that an executive decision took it off the table.”

“My question is, was that the same executive decision that brought us the TAS and its glitches?” he added. “Was it the same executive decision process that gave us Digital Archery that couldn’t shoot straight?”

Pritz pointed out the logical flaw in DelBianco’s argument.

“The group that brought you TAS and Digital Archery… you want to put that in the critical path for domain names?” he said. “Our job here is to protect trademark rights, not change the way we register domain names.”

But Neuman and DelBianco’s dismay was short-lived. Within a couple of hours, in the same room, Chehadé had told the GNSO Council, in a roundabout sort of way, that the live query model was not dead.

Chehadé’s full remarks are missing from the official transcript (pdf), and what remains is attributed to GNSO Council chair Stephane Van Gelder, but I’ve taken a transcript from my own recording:

The very first week I was on the job, I was presented with a folder — a very nice little folder — and little yellow thing that said “Sign Here”.

So I looked at what I’m signing, as I normally do, and I saw that moving forward with a lot of activities related to the Trademark Clearinghouse as really what I’m being asked to move forward with.

And I’ll be frank with you, my first reaction was: do all the people who will be affected by this agreement… did we hear them all about this before we sign this? Are they all part of the decision-making that led us here?

And the answer was muddled, it was “Yes… and…”. I said: No, I want to make sure that we use the time we have in Toronto make sure we listen to everybody to make sure before I commit any party — any party — to anything, that this party is very much part of the process and part of the solution.

I know I wasn’t the only person in the room to wonder if the anecdote described an incident in which an ICANN executive attempted to pull a fast one on his new, green boss.

A day later, after private discussion with ICANN board and staff, supporters of the community TMCH model told me they were very encouraged that the live query model was still in play.

The problem they still face, however, is that the Intellectual Property Constituency — ostensibly representing the key customers of the TMCH — is publicly still on the fence about which model it prefers.

Without backing from the IPC, any TMCH implementation model would run the risk of appearing to serve contracted parties’ cost and risk requirements at the expense of brand owners.

Getting the IPC to at least take a view will likely be Chehadé’s first priority when it comes to the TMCH.

Finding common ground on the Registrar Accreditation Agreement could be an even more complex task.

While the bulk of the work — integrating requests from certain law enforcement agencies and the Governmental Advisory Committee into the contract — has been completed, Whois remains a challenge.

European registrars claim, in the light of correspondence from a EU privacy watchdogs, that implementing ICANN’s demanded Whois data re-verification and retention rules would make them break the law.

Registrars elsewhere in the world are less than impressed with ICANN’s proposed ‘opt-out’ solution, which would essentially create a two-tier RAA and may, they say, have some impact on competition.

Privacy advocates in Toronto told ICANN that if certain governments (largely, I suspect, the US) want their own local registrars to retain and re-verify Whois data, they should pass laws to that effect, rather than asking ICANN to enforce the rule globally.

The GAC told ICANN’s board of directors last Tuesday that the privacy letters emerging from the EU did not represent the views of the European Commission or the GAC, and nothing more was said on the matter.

How ICANN reacts to the European letters now seems to be rest with ICANN’s executive negotiating team.

While everyone at ICANN 45 seemed to be super-impressed by Chehadé’s competence and vision for sorting out ICANN, the other recurring meme is that actions speak louder than words.

During his first 40 days in the job he managed to persuade India into an about-face on its support for an intergovernmental replacement for ICANN, an impressive feat.

Can he chalk up more early wins by helping resolve the TMCH and RAA deadlocks?

“There’s frankly universal agreement that if I participate personally in these activities I would help these activities come to hopefully a reasonably conclusion that we can bank on,” he said in the White interview.

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GAC gives reprieve to four at-risk new gTLD bids

Kevin Murphy, October 22, 2012, Domain Policy

ICANN’s Governmental Advisory Committee has given four new gTLD applicants cause to breath a sigh of relief with its official advice following last week’s meeting in Toronto.

The last-minute reprieve comes in the form of a list of specially protected strings matching the names of intergovernmental organizations that is much shorter than previously demanded.

Led by a US proposal, the GAC has told ICANN to protect the name of any IGO that qualifies for a .int domain name.

As .int is the smallest, most restricted gTLD out there, it only has about 166 registrations currently. More IGOs are believed to qualify for the names but have not claimed them.

If ICANN eventually implements the GAC advice — which seems likely — these 166-plus strings could be placed on a second-level reserved list that all new gTLD registries would have to honor.

While some may object to such a move, it’s a much shorter list than requested by the United Nations and other agencies earlier this year.

In July, the UN and 38 other IGOs said that any name found on the so-called “6ter” list of Paris Convention organizations maintained by WIPO should be protected — over 1,100 strings in total.

The UN had also asked for protection at both top and second levels immediately, which would have killed off four paid-up applications.

Corporate Executive Board Company (.ceb), Platinum Registry Limited (.fit) Top Level Domain Holdings (.fit) and Dot Latin (.uno), all have applications for strings on the 6ter list.

Crucially, the Toronto GAC advice only asks for the names to be protected at the top level from the second round of new gTLD applications.

The Toronto communique states:

in the public interest, implementation of such protection at the second level must be accomplished prior to the delegation of any new gTLDs, and in future rounds of gTLDs, at the second and top level.

This means that applications for strings on the .int list are probably safe.

We ran a recent .int zone file against the DI PRO database of new gTLD applications and found three applications that would have been affected by a first-round prohibition on .int strings.

The two applications for .gdn (Guardian Media and Navigation Information Systems) and the one for .iwc (Richemont DNS) appear to be safe under the rules proposed by the GAC.

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