Verisign warns about Chinese .com boom

Verisign has warned investors that the current boom in .com sales is largely coming from Chinese domainers and may not be sustainable.
The company has added an unprecedented 4.1 million domain in .com and .net so far during the fourth quarter.
“While there continues to be demand for domain names globally, the recent increased volume for Verisign’s top level domains, as well as top level domains of other registries, during the fourth quarter is coming largely through registrars in China,” the company said in a Securities and Exchange Commission filing.
It listed several factors that are likely responsible for the sudden uptick, but warned that renewal rates are typically not great.

In the past, Verisign has discussed many factors that affect the demand for domain names, including, but not limited to economic, social, and regulatory conditions, Internet adoption, Internet penetration, and increasing e-commerce. In addition to these factors affecting demand, Verisign is also evaluating additional potential factors unique to China that may also be responsible for the recent increased volume of new registrations in China.
In no particular order, these potential factors, or combination of factors, could include, but may not be limited to, government initiatives in China to develop their online economy such as ‘Internet Plus;’ registry and registrar regulatory requirements; cultural influences such as the popularity of numeric domain names; increasing competition amongst Chinese registrars; potential increases in domain name investment activity; and recent capital markets volatility and access to capital in China.
Verisign cannot predict if or how long this increased pace of gross additions will continue and we cannot at this time predict what the renewal rate for these domain names will be. Verisign has noted in the past that renewal rates for domain names registered in emerging markets, such as China, have historically been lower than those registered in more developed markets.

It’s difficult to imagine that Chinese investors have managed to find four million unregistered domains worth keeping.
There are currently 123,497,852 domains in the .com zone file, according to Verisign’s web site.
Verisign is not the only registry that appears to be benefiting from a deluge of registrations from China.
XYZ.com has seen over 440,000 domains added to its .xyz zone file in the last three weeks, bringing its total to over 1.5 million, which appear to be largely coming through Chinese registrars.

1 Comment Tagged: .com, .net, .xyz, china, verisign, xyz.com

Verisign v XYZ judge confirms both companies suck

Verisign and XYZ.com have both come out of a US lawsuit looking like scumbags.
Explaining his dismissal of Verisign’s false advertising lawsuit against .xyz registry XYZ.com, Virginia judge Claude Hilton today said that XYZ.com’s statements about its registration numbers were “verifiably true”.
At the same time, he confirmed that they came about as a result of a bullshit deal with Network Solutions to bolster .xyz’s launch numbers.
The judge’s ruling confirms for the first time the financial details of the deal between XYZ and Web.com (Network Solutions) that saw .xyz’s registration volume rocket in its first few weeks of general availability. He wrote:

Web.com purchased 375,000 domain names for a price of $8 each totaling $3 million dollars. In exchange, XYZ purchased advertising from Web.com in the form of 1,000 impressions for $10 each, at a total cost of $3 million dollars. Instead of cash exchanging hands, advertising credit was given to XYZ and the .xyz domain names were given to Web.com, who subsequently gave them away as free trials to their subscribers.

In other words, XYZ bought $10,000 of advertising for $3 million and paid for it with $3 million of free .xyz domains — 375,000 of them.
That bogus deal enabled XYZ to report big reg volume numbers without actually, legally, lying,
“The statements regarding Defendants’ revenue and number of registrations are statements of fact that are verifiably true,” the judge wrote.

When the Defendants [XYZ.com] stated they were a market leader in new TLD’s and that they had the most new registrations than any other TLD, they were basing that information off of an accurate zone file. Further, the zone file confirms that there are over 120 million .com registrations and one {1) million .xyz registrations. These statements are also true.

The judge said he was dismissing the suit not just because XYZ wasn’t lying, but also because Verisign couldn’t show that it had been harmed.
The number of .com registrations has actually been going up, he noted.
Much of Verisign’s complaint centered on this ad:

Verisign said the ad lied about the availability of .com domains, which XYZ denied.
The judge said:

The video posted to YouTube is puffery and opinion. It displays no actual domain names, and communicates a subjective measure of value and superiority, not capable of being proven false.

“Puffery” is a term with legal weight in false advertising cases under US law. It basically means that advertisers are allowed to exaggerate. XYZ had in fact used the “puffery” defense.
The judge seems to have relied heavily on zone file analysis to reach his conclusions. He wrote.

according to Plaintiff’s [Verisign’s] own data, .com names are largely unavailable. In a given month, Plaintiff reports that it receives about two (2) billion requests to register <.com> domain names, yet fewer than three (3) million are actually registered.

I believe that “two billion” number refers to how many “attempted adds” Verisign gets every month for .com domains, as reported in its monthly reports with ICANN.
That number would include every automated attempt to register a dropping domain by every registrar.
It’s not a reflection of how many actual human beings attempt and fail to register .com domains and, in my view, it’s worrying that the judge took it to mean that.
In summary, the lawsuit managed to unearth the dirty reality behind XYZ’s launch “success”, whilst also making Verisign look like a petty, petulant, child.
Everybody loses.
Except the lawyers, obviously, who have been paid millions.

13 Comments Tagged: false advertising, lawsuit, new gTLDs, veriign, xyz.com . xyz

ICANN reveals 12 more data breaches

Twelve more new gTLD applicants have been found to have exploited a glitch in ICANN’s new gTLD portal to view fellow applicants’ data.
ICANN said last night that it has determined that all 12 access incidents were “inadvertent” and did not disclose personally identifiable information.
The revelation follows an investigation that started in April this year.
ICANN said in a statement:

in addition to the previous disclosures, 12 user credentials were used to access contact information from eight registry operators. Based on the information collected during the investigation it appears that contact information for registry operators was accessed inadvertently. ICANN also concluded that the exposed registry contact information does not appear to contain sensitive personally identifiable information. Each of the affected parties has been notified of the data exposure.

The glitch in question was a misconfiguration of a portal used by gTLD applicants to file and view their documents.
It was possible to use the portal’s search function to view attachments belonging to other applicants, including competing applicants for the same string.
Donuts said in June that the prices it was willing to pay at auction for gTLD string could have been inferred from the compromised data.
ICANN told compromised users in May that the only incidents of non-accidental data access could be traced to the account of Dirk Krischenowski, CEO of dotBerlin.
Krischenowski has denied any wrongdoing.
ICANN said last night that its investigation is now over.

Comment Tagged: donuts, dotberlin, glitch, ICANN, new gTLDs, portal, security

ICANN reveals $1m of not-lobbying lobbying expenses

ICANN has revealed how much it has spent so far on a few controversial professional services firms that have been accused of “lobbying” the US government on behalf of the organization.
It said today that between July 2015 and September 2015 it spent $1,070,438 on six companies providing “Education/Engagement” services related to the transition of IANA from US government oversight.
Two of the payees are consulting firms run by former high-level US officials.
One is Albright Stonebridge Group LLC, founded by Clinton-era secretary of state Madeleine Albright.
The other is Rice Hadley Gates LLC, which counts W-era officials Condoleeza Rice, Stephen Rice and Robert Gates as its principles.
The $1 million figure also includes payouts to PR firm Edelman, which has been working with ICANN for as long as I can remember, a video production company, and two other consultants.
It’s substantially less than the $2.4 million spend estimated by Kieren McCarthy, whose public-forum questions at the last two ICANN meetings and subsequent The Register article seem to be responsible for the latest disclosures.
McCarthy, in heated public clashes with ICANN CEO Fadi Chehade, had argued that these payouts were essentially “lobbying” expenses that had not been disclosed because they fall into a “loophole” in US regulations that require lobbyists to disclose their clients.
ICANN said it spent $765,829 on external lobbying services — both related to the IANA transition and not — over the same period.
Its in-house lobbyist, James Hedlund, has separately disclosed a spend of $890,000 over the period.
McCarthy had argued that ICANN was trying to hide the true extent of its lobbying, because it’s trying to make a case with US authorities for ICANN the organization that is at odds with what the community-led IANA transition process is trying to achieve.
Today’s disclosures show that ICANN spent $4,809,949 — almost half of its transition-related professional services spend — on the two law firms that have been advising the two volunteer groups developing the IANA transition proposals.
It spent a more modest $1,150,213 on its own legal advisers, Jones Day.

3 Comments Tagged: iana, ICANN, lobbying, transition

English beats Portuguese in $2.2m .hotels auction

Booking.com has won the right to operate .hotels after an auction concluded a protracted fight over the gTLD.
In an ICANN-run auction yesterday, Booking.com prevailed with a winning bid of $2.2 million.
Its sole competitors was Travel Reservations (formerly Despegar Online), which had applied for the Portuguese word .hoteis.
In 2012, a String Similarity Review panel concluded that .hotels and .hoteis look too similar to coexist, due to the likelihood of confusion between I and l in sans-serif fonts.
Neither applicant agreed with that decision, knowing that it would result in a expensive auction, and Booking.com filed a Request for Reconsideration and then, in March 2013, an Independent Review Process complaint.
After two years, it lost the IRP. But the panel said it had “legitimate concerns” about the fairness of the SSR process and ordered ICANN to pay half of its costs.
Now, Booking.com has had to fork out another $2.2 million for the string.
That’s not particularly expensive as ICANN-auctioned gTLDs go. Eight of the 13 other strings ICANN has auctioned have sold for more.
ICANN’s auction proceeds to date now stands at $63,489,127, which is being held in a separate bank account for purposes yet to be determined.

2 Comments Tagged: .hoteis, .hotels, auctions, booking.com, ICANN, new gTLDs, string confusion

How one registrar allegedly dodges ICANN Compliance

A Chinese registrar has been accused by ICANN of playing games to avoid complying with Whois policy.
In a breach notice from ICANN Compliance last week, Beijing-based 35 Technology is told that it has failed to verify Whois records as required by its accreditation agreement.
The domain in question was shoesbbalweb.com, which DomainTools’ archived screenshots show was once used to sell branded running shoes.
I understand that 35 is believed to have suspended the domain when ICANN first referred a Whois accuracy complaint to it.
It is then said to have un-suspended the domain, without any change to the Whois record, as soon as ICANN closed the complaint.
The breach notice (pdf) instructs 35 to:

Provide records and information demonstrating that 35 Technology took steps to verify and validate the Whois information of the domain name since 23 March 2015, or provide ICANN with an explanation why the domain name suspension was removed without verifying and validation Whois information

The switcheroo appears to have been brief enough that its suspended state was not recorded by DomainTools.
ICANN has a monitoring program, however, that randomly spot-checks previously complained-about domains for ongoing compliance.
The registrar, which does business at 35.com, is not tiny. It had over 450,000 domains under management, in legacy gTLDs and a handful of Chinese-script new gTLDs, at the last count.
It has until the end of the month to explain itself or risk termination.

1 Comment Tagged: 35 technology, compliance, ICANN, whois

.pro now open to all

Afilias today made the .pro gTLD available to anyone, regardless of their professional qualifications.
The previously restricted TLD was able to do so as a result of its six-week-old contract with ICANN, which loosened many of the conditions former registry RegistryPro originally agreed to when the TLD was delegated 13 years ago.
Under the original Registry Agreements, RegistryPro — since acquired by Afilias — had to verify the professional credentials of potential registrants.
Now that .pro has been brought under something that looks a lot like the 2012 new gTLD RA, it’s pretty much a free-for-all.
The registry said in a press release:

despite demand from registrants and registrars alike, .PRO names have historically been denied to professionals from a wide range of fields such as policemen, firefighters, journalists, programmers, artists, writers, and many others.

In my personal experience, it has been possible to register a .pro domain without providing credentials. I’ve been paying for one for a few years, though I’ve been unable to actually use it.
The gTLD was approved in the original, first round of new gTLD applications, back in 2000.
Part of the original deal was that it would be restricted to three classes of professions — lawyer, doctor, accountant — and only available to buy at the third level.
The third-level limitation was lifted many years ago, but .pro continued to be restricted to people who could show a credential.
However, even as recently as 2012 then-RegistryPro-CEO Karim Jiwani was telling DI that the secret to growth was more restrictions, not less.
He’s no longer with the company.
.pro’s registration numbers have have been suffering the last few years.
The registry peaked at roughly 160,000 names in July 2012, and has been on a downward track ever since. It started this July with about 122,000 registrations.
As part of its new deal with ICANN, Afilias no longer has price caps — previously set around .com prices — and has had to implement some of the provisions of the new gTLD Registry Agreement.
One such provision is the Uniform Rapid Suspension policy, which continues to cause controversy in the industry.

3 Comments Tagged: .pro, afilias, registrypro, sponsored

.feedback regs Fox trademark to itself during sunrise

Top Level Spectrum, the new .feedback registry, has painted a second gigantic target on itself by registering to itself a .feedback domain matching one of the world’s largest media brands.
The company has registered fox.feedback and put up a web site soliciting comment on Fox Broadcasting Company.
This has happened whilst .feedback is still in its sunrise period.
The intellectual property community is, I gather, not particularly happy about the move.
The domain fox.feedback points to a web site that uses TLS’ standard feedback platform, enabling visitors to rate and comment on Fox.
The site has a footnote: “Disclaimer: This site is provided to facilitate free speech regarding fox. No direct endorsement or association should be conferred.”
Fox had no involvement with the registration, which Whois records show is registered to Top Level Spectrum itself.
Registry CEO Jay Westerdal said that the domain is one of the 100 “promotional” domains that new gTLD registries are allowed to set aside for their own use under the terms of their ICANN contracts.
Registries usually register names like “buy.example” or “go.example”, along with the names of early adopter anchor tenant registrants, using this mechanism.
I’m not aware of any case where a registry has consciously registered a famous brand, without permission, as part of its promotional allotment.
“The website is hosted automatically by the Feedback platform,” Westerdal said. “Fox Television Network has raised no concerns and has not applied for the domain during sunrise. We are testing out promotion of the TLD with the domain as per our ICANN contract.”
Fox may still be able to buy the domain during sunrise, he said.
“This is a Registry Operation name. During sunrise, If we receive an application from a sunrise-eligible rights holders during sunrise for a Registry Operations name we may release the name for registration,” he said.
Fox’s usual registrar is MarkMonitor. Matt Serlin, VP there, said in an email that the TLS move could be raised with ICANN Compliance:

I find it curious that this branded domain name would have been registered to the registry prior to the sunrise period which is restricted to the 100 registry promotional names. The fact that the domain is actually resolving to a live site soliciting feedback for The Fox Broadcasting Company is even more troubling. MarkMonitor may look to raise this to ICANN Compliance once the registry is able to confirm how this domain was registered seemingly outside of the required process.

The IP community originally fought the introduction of the 100-domain pre-sunrise exception, saying unscrupulous registries would use it to stop trademark owners registering their brands.
While there have been some grumblings about registries reserving dictionary terms that match trademarks, this may be the first case of a registry unambiguously targeting a brand.
Top Level Spectrum courted controversy with the trademark community last week when it told DI that it plans to sell 5,000-brand match domains to a third party company after .feedback goes into general availability in January.
Westerdal told us this is not “cybersquatting”, as the sites contain disclaimers and are there to facilitate free speech.
What do you think about this use of brands as “promotional” domains?
It’s indisputably pushing the envelope of what is acceptable, but is it fair? Should registries be allowed to do this?

1 Comment Tagged: .feedback, .promotion, fox, ICANN, markmonitor, new gTLDs, sunrise, top level spectrum, trademarks

Web.com just gave itself another reason to bid high for .web gTLD

Registrar group Web.com is changing its stock market ticker symbol to WEB tomorrow, in another sign that it really, really wants to be identified with the string.
The switch from WWWW may indicate that the NASDAQ-listed company’s six rivals for the new gTLD .web have a fight — and a possible big payday — on their hands when .web finally goes to auction.
Web.com is competing with Nu Dot Co, Radix, Google, Donuts, Afilias and Schlund for the gTLD.
The company has already fiercely defended its “right” to .web, filing successful String Confusion Objections against .webs applicant Vistaprint.
Vistaprint subsequently filed an ICANN Independent Review Process complaint to appeal its SCO loss.
Last month, the IRP was won by ICANN, but the panel left the door open for ICANN to reconsider its decision.
The .web auction is not likely to go ahead until the Vistaprint issue is resolved.
If ICANN decides the two strings can be delegated separately, what I think is the last barrier to the .web auction going ahead disappears.
If not, then Vistaprint finds itself as the seventh contender in the auction, which may give it the impetus to carry on challenging the ruling.
ICANN’s board plans to discuss the issue at its next meeting, December 10.
Which way it leans will give an indication of how long it will be before .web goes to auction.

3 Comments Tagged: .web, .webs, auctions, ICANN, new gTLDs, vistaprint, web.com

Most US presidential hopefuls use Whois privacy despite begging for cash

More than half of the remaining US presidential candidates could have risked losing their official campaign web sites under proposed Whois privacy rules.
Today I carried out Whois queries on all 18 candidates to discover that 10, or over 55%, use a Whois privacy service.
Of the three remaining Democrat candidates, only Bernie Sanders uses privacy. Martin O’Malley and Hillary Clinton do not.
Here’s a table of the Republican candidates and their chosen privacy services. N/A means their campaigns are using what appears to be genuine contact information.
[table id=38 /]
The results are interesting because rules under discussion at ICANN earlier this year — which are apparently still on the table in other international fora — would have banned the use of privacy services for commercial web sites that allow financial transactions.
All 18 candidates — even Trump — solicit donations on their campaign sites, and many sell T-shirts, bumper stickers and such.
Back in May, a minority of ICANN’s Privacy & Proxy Services Accreditation Issues Working Group (PPSAI) were in favor of banning privacy for such registrants.
The rationale was that criminals, such as those selling counterfeit drugs, should not be allowed to mask their Whois details.
Judging by a working group report at the ICANN meeting in Dublin last month, the proposed new rules have been killed off by the PPSAI after a deluge of comments — around 22,000 — that were solicited by registrars and civil rights groups.
However, according to the Electronic Frontier Foundation, at the exact same time as the PPSAI was revealing its change of heart, the US government was pushing for virtually identical policy at a meeting of the OECD, the Organization for Economic Cooperation and Development.
The EFF says the proposed OECD Recommendation “would require domain name registration information to be made publicly available for websites that are promoting or engaged in commercial transactions with consumers.”
It’s remarkable that the US government is apparently pushing for rules that are being violated by most of its own hopeful commanders-in-chief as part of the democratic process.
Clearly, fake pharmacies are not the only class of crook to find value in privacy.

Comment Tagged: eff, ICANN, oecd, ppsai, privacy, usg, whois