US judge freezes .africa gTLD

A US court has blocked ICANN from delegating the .africa gTLD for at least another month.
At the request of failed .africa applicant DotConnectAfrica, a California judge handed ICANN a temporary restraining order, enjoining it from “issuing” .africa.
The ruling came two days after the ICANN board of directors voted to allow .africa to be delegated to successful applicant ZACR.
The decision seems to be based on the fact that a delegation is essentially irreversible, so even if DCA were to win the lawsuit it would not be able to get its hands on the gTLD.
“Plaintiff has demonstrated that once the tGLD [sic] is issued, it will be unable to obtain those rights elsewhere,” the judge wrote (pdf).
DCA’s lawsuit, filed despite the that that it waived its right to sue under the new gTLD application agreement, basically makes the same arguments that its successful Independent Review Process made.
The court is due to hold a hearing on April 4 to decide whether ICANN can delegate .africa or will have to wait until the lawsuit is fully resolved.
The company, incidentally, appears to have changed lawyers since its original complaint against ICANN was filed. It’s now with Brown Neri & Smith, having briefly been with Brandon Schantz.

1 Comment Tagged: africa, dca, delegation, dotconnectafrica, ICANN, zacr

Governments split on IANA transition

ICANN’s Governmental Advisory Committee is unlikely to provide its full backing to accountability proposals supporting the IANA transition.
In meetings at ICANN 55 in Marrkech over the weekend, a handful of GAC delegates publicly stated that they would block consensus over concerns the proposals reduce government power in ICANN.
The most vocal opposition came from Brazil, but it was backed up by the countries including Peru and Russia.
The proposals currently up for debate would make it harder for the ICANN board to disagree with consensus GAC advice, but it clarifies that non-consensus advice does not carry the same weight.
Currently, the ICANN board can reject GAC advice by a simple majority vote, but doing so kick-starts a bilateral negotiation process where the board and GAC have to try to resolve their differences.
The new accountability proposals would raise the threshold to 60% of the board, and the negotiations would only have to take place if the advice carried the full consensus of the GAC.
Under the GAC’s current operating rules, consensus means no one government formally objected to the advice. The accountability proposals would enshrine that definition in the ICANN bylaws.
The proposal was drafted like this to handle what is known as “Stress Test 18” — a scenario in which the GAC switched its decision-making mechanism to a simple majority vote, enabling it to more easily issue potentially more extreme advice.
Brazil finds the whole idea of Stress Test 18 “insulting”. Its delegate told the GAC yesterday:

We consider Stress Test 18 unacceptable. We have said this from the beginning. We think this contaminates the full proposal. I think there are many positive aspects in the proposal coming forward that we could accept, that we could support… I think this compounds a very ugly picture in which it is very clear that the real intent was to circumvent the possibility of governments having meaningful participation unless there is full consensus among its members.

Brazil was one of nine governments to put its name to a letter (pdf) last month criticizing the post-transition accountability proposals.
The letter points out that the current definition of GAC consensus would allow a single government to block consensus, even in the face of overwhelming support from other governments, simply by formally objecting.
This could lead to GAC “paralysis”, the letter stated.
Indeed, we saw something like this a couple of years ago when the US blocked GAC advice against the .amazon gTLD, before eventually withdrawing its objection.
Once it became clear yesterday that the GAC might not be able to provide full consensus on the accountability proposals, some GAC delegates worried aloud about what kind of message that would send to the rest of the world.
The proposals are inextricably linked to the IANA transition, which would see ICANN management of the DNS root zone become independent from US government oversight for the first time.
Some on the hard right of US politics, such as presidential hopeful Ted Cruz, are convinced that the transition will allow China to start censoring the internet.

Comment Tagged: gac, iana, icann 55, marrakech, transition

Amazon files appeal on rejected .amazon domain

Amazon has appealed the rejection of its proposed .amazon new gTLD.
The company this week told ICANN that it has invoked the Independent Review Process, after 18 months of informal negotiations proved fruitless.
Amazon’s .amazon application was controversially rejected by ICANN in May 2014, due to advice from the Governmental Advisory Committee.
The GAC, by a consensus, had told ICANN that .amazon should be rejected.
South American nations that share the Amazonia region of the continent had said the string was “geographic” and should therefore be unavailable to the US-based company.
The word “Amazon” is not protected by ICANN’s geographic string rules, because “Amazon” is not the name of a region, and was only rejected due to governmental interference.
The GAC’s decision came only after the US, which had been preventing consensus in order to protect one of its biggest native internet companies, decided to step aside.
Amazon has been in ICANN’s Cooperative Engagement Process — an informal set of talks designed to avoid the need for too many lawyers — since July 2014.
Those talks have now ended and Amazon has told ICANN that an IRP is incoming, according to ICANN documentation published on Tuesday (pdf).
The IRP documents themselves have not yet been published by ICANN.
UPDATE: This article originally incorrectly stated that the US withdrew its objection to the GAC consensus on .amazon after the IANA transition was announced. In fact, it did so several months prior to that announcement.

7 Comments Tagged: amazon, dot-brands, ICANN, new gTLDs

Amazon plotting registrar workaround?

Amazon has given an early hint at how it may manage its new gTLD registries.
The company seems to be planning to make its own web site the place to go to for its new gTLD domains, relegating registrars to secondary players in the sales path.
It also seems to be planning to up-sell registrants with services, possibly including hosting, before they even get to the registrar’s storefront.
Amazon has filed a Registry Services Evaluation Process request with ICANN, relating to its gTLD .moi (French for “.me”) covering a “Registration Authentication Platform”.
.moi isn’t a brand, but Amazon says it plans to verify registrant “eligibility” before allowing a registration to take place.
To date, it has not revealed what the eligibility requirements for .moi are.
Its RSEP filing says that it intends to offer registrants a suite of optional add-on “technology tools or applications” at the point of verification.
Crucially, that’s before they get bounced to their registrar of choice to actually register the name.
Amazon is basically putting its up-sell pitch into the sales path before registrars get to do the same.
The RSEP explains it like this:

After the customer selects the Technology Tools of interest and/or ancillary products or services (if any), the customer will select its registrar of choice from among the complete list of .MOI-accredited registrars and be directed to that registrar’s site to permit that registrar to collect the required registrant information for the domain name registration, and to submit payment for the selected .MOI domain name. Upon completion of these steps, the registrar, through the normal EPP processes, shall transmit the required registration information to the Registry and the .MOI domain name shall be registered. A customer that first visits a .MOI-accredited registrar’s website will be directed to the Registry’s .MOI website to undergo the process noted above. After pre-registration policy verification, those customers will be transitioned back to the originating registrar’s site.

The RSEP does not explain what the “technology tools” are, but I’d be very surprised if they did not include for example web hosting, a staple higher-margin registrar product.
It’s not entirely clear what, if any, consultations Amazon has had with registrars regarding its proposals. The RSEP language is evasive:

Amazon Registry reached out to several registrars to have general discussions about their experience with pre-registration policy verification and how that experience (including customer experience) could be improved. Any consultations that may have occurred regarding the Technology Tools and the ancillary products and services would have occurred subject to a Mutual Non-Disclosure Agreement and cannot be disclosed.

Currently, the RSEP only covers .moi. Amazon would have to file additional RSEPs if it wanted the new service applied to its 32-TLD-strong portfolio, which includes the likes of .book, .song and .tunes.
ICANN has already made a preliminary determination that the RSEP “does not raise significant competition, security or stability issues”.
As usual, there’s a public comment period, which ends April 14.

1 Comment Tagged: .moi, amazon, hosting, ICANN, new gTLDs, rsep

Schilling agrees with activist Rightside investor

Uniregistry boss Frank Schilling agrees to a large extent with the fellow Rightside investor who was revealed today to be threatening a boardroom coup at Rightside.
Schilling, who is believed to have paid $8.4 million for 6.1% of Rightside, told DI tonight that he believes Rightside’s management has not done a good job over the last few years.
He said he agrees with 7.32% shareholder J Carlo Cannell, who says that Rightside should get rid of some of its weaker new gTLDs.
Cannell, of Cannell Capital, is demanding Rightside lay off one in five of its staff, dump its weakest new gTLDs, and refocus the company on its eNom registrar business.
He’s threatening to launch a proxy fight at the company in order to replace the Rightside board of directors with his own slate if management does not do what he wants.
Cannell’s letter called out .democrat, .dance, .army, .navy, and .airforce as “irrelevant” or “garbage” gTLDs in Rightside’s portfolio that should be sold or simply “abandoned” in order to focus on its better gTLDs, such as .news, and its cash-generating registrar business.
Schilling told DI tonight that he agrees with Cannell, at least partly.
He said that if Cannell’s proposal for the company is good for shareholders and the company he would support it.
It may sound counter-intuitive for Schilling, one of the most ardent proponents of new gTLDs, to support somebody encouraging Rightside to invest less in marketing its new gTLD portfolio.
After all, Uniregistry has a couple dozen new gTLDs — including .sexy, .christmas, .pics and .link — in its stable
But Schilling has form when it comes to advocating portfolio rationalization.
Today he pointed to comments he made on a DI article in December
“Operators may make the decision to give away or sunset unprofitable strings,” he said in those comments. “I don’t view that as such a bad thing.”
Schilling said that weaker strings should be “bootstrapped” rather than aggressively invested in.
One of Cannell’s beefs with Rightside is that the company is focusing too much on new gTLDs. He’s not opposed to new gTLDs in general — in fact, he likes them — but he wants Rightside to put money only into those gTLDs he considers worthwhile.
Cannell also wants Name.com rebranded to eNom and moved to Rightside’s Seattle headquarters, for two of its directors to be replaced and for 20% of Rightside’s “weakest” staff to be laid off.
I asked Schilling whether he agreed with Cannell that that 20% of Rightside’s staff should be let go.
He said: “I do not think it is healthy to name arbitrary numbers but I do think some wrong people are in the wrong seats.”
Schilling also said that he believes Rightside has been “subservient” to Donuts, and has given Donuts too much for too little.
Donuts is the portfolio gTLD registry play that uses Rightside as its back-end registry provider.
Donuts has a much better portfolio, in my irrelevant opinion.
Another notable investor in Rightside is XYZ.com CEO Daniel Negari and his COO Michael Ambrose, who collectively invested roughly $8.5 million in Rightside at around the same time as Schilling and Cannell bought their stakes.
Like Schilling, they’re an obviously pro-new-gTLD play. I’ve asked Negari for his opinion on Cannell’s letter and will update should I ever receive a response.

2 Comments Tagged: calle, cannell, donuts, new gTLDs, rightside, uniregistry

Activist investor slams Rightside over “garbage” new gTLDs, looking for blood

A hedge fund manager known for causing trouble at the companies he invests in has savaged Rightside, saying its focus on new gTLDs at the expense of its registrar business is ruining the company.
J Carlo Cannell of Cannell Capital is looking for some serious bloodletting.
He wants Rightside to cut 20% of its staff, close offices, unify its products under the eNom brand and replace two of its directors.
He’s threatening to wage a proxy war to replace the Rightside board if he doesn’t get what he wants.
He wrote a scathing letter to Rightside chair Dave Panos last month, which was published in a Securities and Exchange Commission filing today.

NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.

NAME is Rightside’s Nasdaq ticker symbol.
Cannell revealed he owned a 7% share of Rightside last month — paying reportedly just shy of $11 million for 1,389,953 shares.
He wants Rightside to sell off “or even abandon” some of its weaker gTLDs, which “should not consume all the resources of our Company at the expense of the assets that are currently profitable”, while keeping “gems” such as .news.
His letter doesn’t pull any punches.
Cannell is perhaps best known for his widely publicized tussle with Jim Cramer, TV show host and co-founder of financial news site TheStreet.

14 Comments Tagged: activist, cannell, enom, new gTLDs, proxy battle, rightside

Registrars object to “unreasonable” .bank demands

Registrars are upset with fTLD Registry Services for trying to impose new rules on selling .bank domains that they say are “unreasonable”.
The Registrar Stakeholder Group formally relayed its concerns about a proposed revision of the .bank Registry-Registrar Agreement to ICANN at the weekend.
A key sticking point is fTLD’s demand that each registrar selling .bank domains have a dedicated .bank-branded web page.
Some registrars are not happy about this, saying it will “require extensive changes to the normal operation of the registrar.”
“Registrars should not be required to establish or maintain a “branded webpage” for any extension in order to offer said extension to its clients,” they told ICANN.
i gather that registrars without a full retail presence, such as corporate registrars that sell mainly offline, have a problem with this.
There’s also a slippery slope argument — if every gTLD required a branded web page, registrars would have hundreds of new storefronts to develop and maintain.
fTLD also wants registrars to more closely align their sales practices with its own, by submitting all registration requests from a single client in a single day via a bulk registration form, rather than live, or pay an extra $125 per-name fee.
This is to cut down on duplicate verification work at the registry, but registrars say it would put a “severe operational strain” on them.
There’s also a worry about a proposed change that would make registrars police the .bank namespace.
The new RRA says: “Registrar shall not enable, contribute to or willing aid any third party in violating Registry Operator’s standards, policies, procedures, or practices, and shall notify Registry Operator immediately upon becoming aware of any such violation.”
But registrars say this “will create a high liability risk for registrars” due to the possibility of accidentally overlooking abuse reports they receive.
The registrars’ complaints have been submitted to ICANN, which will have to decide whether fTLD is allowed to impose its new RRA or not.
The RrSG’s submission is not unanimously backed, however. One niche-specializing registrar, EnCirca, expressed strong support for the changes.
In a letter also sent to ICANN, it said that none of the proposed changes are “burdensome”, writing:

EnCirca fully supports the .BANK Registry’s efforts to ensure potential registrants are fully informed by Registrars of their obligations and limitations for .BANK.  This helps avoid confusion and mis‐use by registrants, which can cause a loss of trust in the Registry’s stated mission and commitments to the banking community.

fTLD says the proposed changes would bring the .bank RRA in line with the RRA for .insurance, which it also operates.
The .insurance contract has already been signed by several registrars, it told ICANN.

2 Comments Tagged: .bank, .insurance, ftld, ICANN, new gTLDs, rra, rrsg

First new gTLD deleted from the net

.doosan today became the first new gTLD to be removed from the domain name system.
It’s no longer showing up in the DNS root zone file, and IANA’s record lists it as “retired”.
.doosan was a dot-brand managed by Korean conglomerate Doosan Group. The company never did anything with it before deciding to kill the TLD off last September.
A month ago, ICANN used the pending deletion to test its Emergency Back-End Registry Operator safety net.
If memory serves, it’s the only gTLD to be ever be removed from the root zone, excluding test internationalized TLDs previously operated by ICANN.
ccTLDs are removed somewhat regularly, when international borders are redrawn.

6 Comments Tagged: doosan, iana, new gTLDs, retirement, revocation

Krueger sues M+M over five million “missing” shares

Former Minds + Machines chair Fred Krueger has taken the company to court, claiming he’s owed shares worth over half a million dollars.
In a lawsuit filed in Los Angeles this week, Krueger says the shares were promised to him in 2007 but have subsequently gone “missing”.
The suit also names as defendants M+M chief financial officer Michael Salazar and Antony Van Couvering, who until last week was CEO.
Krueger himself was asked to leave the company by its board of directors in May last year.
He was one of the company’s founders in 2007. According to his lawsuit, he was promised 25 million shares, which were to be delivered to his Goldman Sachs account in a batch of 20 million and a batch of five million.
Krueger now claims that Goldman has no record of the five-million batch arriving and that M+M has failed to figure out whether the shares were ever even issued.
His complaint says he paid $400,000 for the shares. Judging by M+M’s current share price, they’re now worth around £437,500 ($609,000).
Krueger says that he didn’t notice the shares were missing until forensic accountants picked over his net worth as part of his 2013 divorce.
The suit alleges breach of contract, negligence, and other claims related to the shares. In total, he’s looking for at least $1.5 million in damages.
It also sheds a bit of light on Krueger’s actions immediately following his May 2015 dismissal from the company.
When he “resigned”, he issued a statement via the company that said among other things “my goal is to keep the vast majority of my shares”.
But within a couple of weeks he had started selling and in a matter of months he had disposed of all of his 104 million shares.
Now, according to his lawsuit, his May 2015 “Exit Agreement” with M+M’s board actively incentivized him to sell all of his shares. It says:

In May 2015, Plaintiff Krueger left Minds + Machines Board of Directors under an agreement Plaintiffs Krueger and Needly made with Minds + Machines Group that if Plaintiff Krueger would sell all of his shares in Minds + Machines Group, Minds + Machines Group would return to Needly all of the stock it was holding in Needly.

Needly is (or possibly was, judging by its web site) Krueger’s side project, a web site content management software company.
Krueger says M+M agreed to pay $800,000 and take 1% of Needly’s shares under a consulting agreement. Now, he says the company is refusing to return those shares, as agreed, until he admits that he’s already sold the five million “missing” M+M shares.
Here’s his complaint in PDF format.
It’s a strange old case, and no doubt a distraction for new CEO Toby Hall, who took over from Van Couvering last week with a pledge to boost sales by focusing more on the registrar channel.

6 Comments Tagged: Minds + Machines, needly

Cruz says Chehade is in China’s pocket

Terrifying US presidential candidate Ted Cruz has told outgoing ICANN CEO Fadi Chehade to recuse himself from crucial decisions, claiming Chehade is conflicted.
Republican Cruz yesterday said that Chehade can’t be trusted to make decisions related to the IANA transition because he’s already signed up to a Chinese internet governance committee.
Chehade said in December that he’s become co-chair of an advisory committee of the World Internet Conference.
Also known as the Wuzhen Summit, it’s a China-led talking shop that has been criticized for pushing China’s agenda of limiting free speech and promoting governmental control over the internet.
Cruz quizzed Chehade about his involvement in a letter earlier this month, basically fishing for evidence that Chehade was in some way conflicted.
In response (pdf), Chehade said he wasn’t being paid for the committee role, but that his travel expenses would probably be picked up.
Aha! Cruz seized on that admission, writing yesterday:

Travel compensation from the Chinese government can be a form of personal conflict of interest, which could impair Chehade’s ability to act impartially and in the best interest of the [US] government when performing under the [IANA] contract. As such, Chehade should recuse himself from all ICANN decisions that could impact the Chinese government, which include all negotiations and discussions pertaining to the Internet Assigned Numbers Authority (IANA) transition.

Chehade, who says he only joined the committee in order to promote the notion of multi-stakeholder internet governance, makes $900,000 a year at ICANN in salary and bonuses.
With pay so criminally low, it’s easy to see how he could be tempted to subvert his principles for any foreign government who offered him a free business-class flight and a few nights in a swanky Beijing hotel.
He has kids to feed and clothe, after all.
Cruz, on the other hand, has raised a mere $54 million in campaign contributions over the last five years, and not a single dollar of that will influence his political positions in any way whatsoever.

3 Comments Tagged: iana, ICANN, ted cruz, transition