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How many defensive registrations is too many?

Kevin Murphy, February 24, 2012, Domain Policy

How will ICANN measure the success of its new top-level domains program, and how many defensive registrations is too many?

These questions are now firmly on the ICANN agenda, following the publication of 37 draft recommendations for how to measure the success or otherwise of new gTLDs.

The advice of the Consumer Trust Working Group, published last night and now open for public comment, is a must-read for anyone interested in the emerging new gTLD market.

The recommendations describe myriad ways ICANN could benchmark the performance of new gTLDs three years from now, to fulfill its promise to the US Department of Commerce to study the effect of the program on consumer choice and competition.

While it’s a broad document covering a lot of bases, I’m going to be disappointingly predictable here and immediately zero in on the headline wedge issue that I think will get most tongues wagging over the coming weeks and months:

Defensive registrations.

The working group decided to recommend that, as a measure of success, domain name registrations in new gTLDs should be no more than 15% defensive* three years after launch.

Defensive in this case would mean they were registered during the mandatory Sunrise period.

The idea is that consumer choice can be demonstrated by lots of registrations in new gTLDs, but that defensive registrations should not count toward that goal.

The 15%-Sunrise baseline number was chosen fairly arbitrarily – other suggestions were 20% and 12% – and is designed to spur community discussion. It’s not final.

Still it’s interesting.

It implies that if a registry has 15,000 Sunrise registrations, it needs to sell another 85,000 domains in three years to be seen as having made a successful contribution to consumer choice.

By way of an example, if it were to be retroactively applied to .xxx, the most recent gTLD to launch, ICM Registry would have to get its total registrations up to 533,000 by the end of 2014.

Is 15% too low? Too high? Is it even a useful metric? ICANN wants to know.

Whatever the ultimate number turns out to be, it’s going to be handy for plugging into spreadsheets – something opponents of new gTLDs will find very useful when they try to make the case that ICANN endorses a certain dollar value of trademark extortion.

Because many registries will also accept defensive registrations after Sunrise, two more metrics are proposed.

The group recommends that domains in new gTLDs that redirect to identical domains in legacy TLDs – strongly implying a defensive registration – should be no more than 15% after three years.

It also recommends that ICANN should carry out a survey to see how many registrants own matching second-level domains in legacy TLDs, and that this should also be lower than 15%.

I’ve only outlined three of the working group’s recommendations here. Many of the other 34 are also interesting and will be much-debated as the new gTLD program continues.

This is vitally important stuff for the future of new gTLDs, and applicants would be well advised to have a good read — to see what might be expected of them in future — before finalizing their applications.

* It should be noted that the recommendation as published confusingly reads “Post-Sunrise registrations > 15% of total registrations”, which I think is a typo. The > operator implies that non-defensive registrations only need to be over 15% of total registrations, which I’m certain is not what the working group intended to say.

(UPDATE: this typo has now been corrected).

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Europe to warn consumers about .bank “risks”

Kevin Murphy, February 23, 2012, Domain Policy

The European Banking Authority has told ICANN it believes that proposed financially-oriented gTLDs such as .bank are dangerous and should be banned.

The EBA, the European Union’s central banking regulator, said it plans to issue consumer alerts, warning people about “the risks of these new naming conventions”.

In a letter to ICANN published today, EBA chair Andrea Enria said that a global gTLD such as “.bank” would not give consumers a good guide as to whether the bank was regulated in their own country.

Financial gTLDs have a “not-yet-identified benefit” and could create a “moral hazard”, Enria wrote. The EBA is also worried about the cost of trademark enforcement, he said.

the EBA believes that it is not feasible to address most of the supervisory concerns of its members on the risks of misuse of the proposed gTLDs and calls the ICANN to reconsider its plans for allowing the such of the above mentioned gTLDs and ban the establishment of such gTLDs altogether.

The EBA was formed just over a year ago as the successor to the Committee of European Banking Supervisors. Its members are the heads of the financial regulators of the EU member states.

The letter could come as a blow to the American-led .bank application proposed by the American Bankers Association and the Financial Services Roundtable’s BITS division.

The BITS project envisages a tightly controlled namespace for banks, governed by a fairly strenuous set of security measures.

But the establishment of a .bank gTLD is one area where we are almost guaranteed to see ICANN’s Governmental Advisory Committee exercising its new-found objection powers.

If the Europeans and the Americans do not see eye to eye, .bank will not see the light of day.

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UniForum selected for .africa gTLD app

Kevin Murphy, February 23, 2012, Domain Registries

UniForum, the South African .za domain name registry operator, has reportedly been selected to run the proposed .africa generic top-level domain.

The African Union announced the appointment today, following a December tender, according to a report on MyBroadband.co.za.

In a sane world, the deal would sound the death-knell for DotConnectAfrica’s long-running campaign to run .africa, but DCA recently has been making noises about applying with or without AU support.

The ICANN Applicant Guidebook is pretty clear when it comes to .africa – it’s a protected geographic term that will require the support of 60% of the affected nations to be approved.

It’s less clear whether AU backing can proxy for individual letters of support from all of those nations, but it’s certainly better than no government support at all.

However, if DCA can get two African governments to object to the AU-backed bid, it might stand a chance at getting a piece of the .africa action.

DCA had a letter of support from the AU dated August 2009, but it was retracted last year. The company has spent the last several months alleging cronyism as a result.

UniForum doesn’t have the best technical reputation in the world. It has managed the .za registry since 1995 but it only switched to an automated, EPP-based shared registry system last year.

Before August 2011, .co.za registrations apparently had to be carried out via email. Let’s hope its new EPP system is up to ICANN’s exacting standards for new gTLDs.

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DomainTools.co sells for $2,500

Kevin Murphy, February 23, 2012, Domain Sales

Somebody has just paid out $2,500 for the domain name domaintools.co, according to Sedo.

I guess not even the most savvy domain name industry companies are immune to typosquatting.

Given that the price is just below what you might expect to pay for a cheap UDRP complaint, but more than the domain is probably worth alone, I assume the buyer is DomainTools itself.

According to DomainTools (the historical Whois service, not the company), domaintools.co has been in the hands of a Chinese registrant since .co went live in July 2010.

The domain, which is parked, is currently in escrow.

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Architelos makes $1 million in first year

Kevin Murphy, February 23, 2012, Domain Services

The new gTLD consultancy Architelos took in revenue of over $1 million in its just-concluded first year of operations, according to the company.

That impressive sum came from a combination of consulting fees and software licenses for its Business Case Builder, which helps new gTLD applicants model their financial outlook.

Named clients include Verisign, Nominet, .music applicant Far Further and the Canadian Internet Registry Authority, according to Architelos.

Company founder and CEO Alexa Raad earned her chops leading the .mobi and .org registries before going independent.

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