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Joint venture bids for Aussie city gTLDs

Kevin Murphy, November 21, 2011, Domain Registries

Cloud Registry, CoCCA and Sedari have teamed up to bid for the proposed Australian city top-level domains .melbourne and .sydney.

Sedari announced today that it has responded to the recently closed requests from proposals, which were opened by the state governments of New South Wales and Victoria a month ago.

The bid would see Cloud Registry operate the registry back-end itself, with Sedari handling back-office functions such as the ICANN contracts. CoCCA is on board for its country-code TLD experience.

While Sedari is UK-based, the venture has links to the continent.

CoCCA is based in New Zealand and has a NOC in Sydney, Cloud Registry is based in Sydney, and Sedari founder Liz Williams was once a board member of .au administrator auDA.

While no other firms have announced bids, you can expect that the usual suspects in the registry service provider market will have also applied.

I’d be surprised if local firm ARI Registry Services (formerly AusRegistry International), whose parent runs .au, is not a strong contender.

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CADNA asks for new gTLDs second round

Kevin Murphy, November 18, 2011, Domain Policy

The Coalition Against Domain Name Abuse, having spent quite a lot of time and effort opposing ICANN’s new top-level domains program, wants ICANN to name the date for a second round.

In a letter to president Rod Beckstrom today, which was inspired by discussions at the recent What’s At Stake conference, CADNA president Josh Bourne writes:

We ask that the ICANN Board request an Issues Report to formally initiate a policy development process to determine when the next round of new gTLD applications will occur, thereby affirming its commitment to opening a second round in a timely manner.

As I’ve noted previously, ICANN has not named the date for the second round so far because it’s promised the Governmental Advisory Committee that it will review the first round first.

But businesses from outside the domain name industry are feeling like they’re being pressured into making a decision whether to apply for a gTLD they don’t necessarily want, Bourne says.

By not disclosing when it will open future rounds of new gTLD applications, ICANN is creating a condition of scarcity that will inevitably result in a massive land rush, where entities will scramble to apply for new gTLDs for the sole purpose of hypothetically “future-proofing” their identities in the new domain name space, without any immediate intentions to use their new gTLDs for innovative means.

Disclosing when it will open a second application round will not only alleviate the anxiety that businesses are feeling, it will give ICANN the chance to quell the animosity that has developed toward it among the business community.

The whole letter is worth a read. No matter what you think of CADNA, it’s difficult to argue with Bourne’s points (though please do so in the comments if you disagree).

Scare sales tactics are already a key source of mainstream hatred for the domain name industry at the second level. Now would be a good time to prevent the same thing happening at the top level too.

It will look very bad for ICANN in a few years’ time if the root is cluttered with useless, unused gTLDs created just because companies felt pressured into defensive applications.

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Another 2,000 .uk fraud domains taken down

Kevin Murphy, November 18, 2011, Domain Policy

Nominet has suspended over 2,000 .uk domain names allegedly being used to sell counterfeit goods on the instruction of the Metropolitan Police.

The Met said in a statement today that the crackdown was designed to protect online shoppers in the run-up to Christmas. It did something similar last year and the year before.

The sites were allegedly selling bootleg products purportedly from brands such as Ugg, Nike and Tiffany.

Nominet said that it worked with is registrars to coordinate the suspensions, and that the registrants were all informed before their domains were taken down.

All the registrants were in breach of terms and conditions, it said.

A Nominet working group is currently in the final stages of creating a policy that will streamline the process of law enforcement domain suspensions, as I reported for The Register today.

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YouPorn challenges new gTLDs with review demand

Kevin Murphy, November 17, 2011, Domain Registries

YouPorn operator Manwin is demanding a review of .xxx, and ICANN’s top-level domains program by association, in a new Independent Review Panel request.

It becomes only the second company ever, after .xxx manager ICM Registry, to file an IRP request with ICANN. The filing came at the same time as Manwin sued ICANN and ICM in California.

The IRP demand ostensibly focuses on .xxx, but it also suggests that the forthcoming new gTLD program has many of the same flaws as the process that led to .xxx’s approval.

IRP is the final, and most expensive, appeals process available within ICANN for companies that believe they’ve been wronged by the organization’s decisions.

It was first used by ICM in 2008-2009 to have the rejection of its .xxx application overturned.

To win an IRP, complainants have to convince an International Centre for Dispute Resolution panel (probably three retired judges) that ICANN violated its own bylaws when it made a harmful decision.

The only reason .xxx is in the root today is that an IRP decided by majority that ICANN broke the bylaws when it approved and then rejected the .xxx bid filed in the 2004 new gTLD round.

Manwin’s IRP claims that ICANN failed to “adequately address issues including competition, consumer protection, malicious abuse and rights protection prior to approving the .xxx TLD”.

It also claims that ICANN failed to enforce ICM’s compliance with its registry contract, allowing it to engage in “anticompetitive conduct” and help violate IP rights.

The company is basically miffed that it felt it was being forced to spend money in ICM’s sunrise period, and that it was not allowed to block its trademarks and variations of its trademarks.

One of its oddest claims, which is in the IRP as well as the lawsuit, is that ICM was selected in a “closed process” that did not consider alternative .xxx operators.

The 2004 gTLD round was of course open to any applicant, so there was nothing stopping anybody else from applying for .xxx. One gTLD, .tel, did in fact have multiple bidders.

Essentially, the IRP demand cuts to the heart of the domain name industry and the new gTLD concept in general, challenging many practices that have become norms.

Sunrise

Sunrise is “extortion”, according to Manwin.

As well as being opposed to the idea of paying for defensive registrations in general, Manwin also thinks that typos and brand+keyword domains should be eligible for blocking, presumably for free.

It also believes that porn companies should have been able to defensively block some .xxx domains (which ICM called “Sunrise B”) and register others for active use (“Sunrise A”).

Speculation

Manwin’s IRP says that ICM did not act in the best interests of its sponsored community (ostensibly the porn industry) when it sold premium .xxx domains to “known domain name speculators”.

Well-known domainers Frank Schilling and Mike Berkens have invested millions in .xxx, but Manwin says their profit motives show ICM broke its commitment to serve the adult industry only.

Schilling, who signed up to buy domains 33 domains including amateur.xxx before ICM’s registry contract had even been approved, is reportedly already leasing out some of his .xxx names to porn companies for five figures a month.

New gTLDs

Manwin seems to support what you might call a ‘string first, registry later’ model for delegating gTLDs.

It states in its lawsuit and IRP that ICANN should have opened up .xxx for competitive bidding, apparently ignoring the fact that the .xxx string was proposed by ICM, not ICANN.

In the IRP demand, it suggests that allowing gTLD applicants to select their own strings is in violation of ICANN’s bylaws. The complaint states:

[ICANN] gave ICM a permanent monopoly over the .XXX TLD without considering other candidates for registry operator and without making provision for considering other potential registry operators at the end of the initial term of the .xxx Registry Agreement.

If Manwin wins, ICANN could be forced into a situation where it must ask for string proposals from new gTLD applicants and then open up each proposed string to competitive bidding.

That’s not necessarily a bad idea, but it’s pretty much exactly the opposite of how the ICANN-approved new gTLD program is going to work.

The IRP and the lawsuit are also notable in that they target the alleged lack of economic studies that support .xxx and new gTLDs in general.

It states that ICANN “failed to conduct proper economic studies of the impact of the introduction of new TLDs, including the .xxx TLD”.

This is a frequent criticism leveled at ICANN by opponents such as the Association of National Advertisers and the newly formed Coalition for Responsible Internet Domain Oversight.

Manwin is being represented in the suit and IRP by the law firm Mitchell Silberberg & Knupp, the employer of Steve Metalitz, a well-known figure in ICANN’s intellectual property constituency.

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YouPorn sues ICANN and ICM over .xxx

Kevin Murphy, November 16, 2011, Domain Registries

One of the biggest porn companies in the world has filed an antitrust lawsuit against ICANN and ICM Registry over the introduction of the .xxx top-level domain.

Luxembourg-based Manwin Licensing and California-based Digital Playground allege “monopolistic conduct, price gouging, and anti-competitive and unfair practices”.

Manwin runs YouPorn, Brazzers and, under license, several Playboy-branded web sites, while Digital Playground is among the largest porn production companies in the world.

Together they are demanding an injunction on .xxx altogether, for ICANN to be forced to impose price constraints on ICM, and to open up the .xxx contract for competitive rebidding.

The complaint, apparently filed in California today, essentially alleges that everything ICM has done to date, from its application with ICANN to its sunrise period policies, is wrong and bad.

It claims ICM’s sunrise period amounted to extortion and that ICANN willfully created a monopoly by agreeing to a registry contract with presumptive renewal but no price caps.

ICM, the complaint says, reacted to the approval of .xxx earlier this year “with the anti-competitive behavior expected of a monopolist”.

It has, for example, improperly exploited the newly created market for .XXX defensive registrations by making such registrations unreasonably expensive and difficult, and by placing onerous burdens on parties seeking to protect their intellectual property rights.

Manwin claims that the recently ended sunrise period, which saw over 80,000 defensive registrations, was priced too high given that ICM handed out free domain blocks to thousands of celebrities.

It also claims that ICM should have enabled companies to defensively block typos of their trademarks, and that porn companies without trademarks should have been able to block their brands.

It takes ICANN to task for not operating a competitive bidding process for .xxx, and claims ICM used “misleading predatory conduct and aggressive litigation tactics” to push through its approval.

I’m not a lawyer, but often antitrust cases swing on the way the court decides to define the relevant “market”.

Manwin claims .xxx is the market, whereas it could be argued that because porn sites are free to use .com or almost any other TLD, that the domain industry as a whole is the market.

The complaint states:

The market for blocking services or defensive registrations in the .XXX TLD is a distinct and separate market in part because there is no reasonable substitute for such registrations. For example, blocking or preventing others’ use of names in a non-.XXX TLD is not such a substitute. Blocking use of a name in a non-.XXX TLD does not prevent use of the name in the .XXX TLD.

ICM has a complete monopoly in the market for the sale of .XXX TLD blocking or defensive registration services through registrars.

I’m not sure if my legal thinking holds water, but this sounds rather like arguing that BMW has a monopoly on making BMWs or Coca-Cola has a monopoly on Cherry Coke.

But Manwin says that .xxx is the only porn gTLD and ICANN has basically ruled out the creation of any future porn-centric TLDs with clauses in ICM’s registry contract.

It also notes that .sex and .porn would be unlikely to be approved in the next round of new gTLDs due to the restrictions on controversial strings imposed by the Governmental Advisory Committee.

ICM president Stuart Lawley said in a statement:

The claims are baseless and without merit and will be defended vigorously. They also show an apparent lack of understanding of the ICANN process and the rigorous battle we went through with ICANN over eight years in full public scrutiny to gain approval.

The .xxx story really is the gift that keeps on giving.

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