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Donuts plays the genericide card in showdown with Belgian government over .spa

Kevin Murphy, March 19, 2014, Domain Policy

Donuts has asked ICANN to approved its .spa new gTLD application over the objections of the Belgian government, saying the town of Spa no longer has exclusive rights to the string.
As we reported at the weekend, Spa is asking Donuts and rival applicant Asia Spa and Wellness Promotion Council for an up to 25% cut of profits from .spa, as well as the right to help manage the TLD at the registry’s expense.
ASWPC has agreed to these terms, but Donuts has not. It says it offered Spa extra protections for sensitive names, but does not want to hand over any managerial control or profit.
Yesterday, Donuts wrote to ICANN (pdf) to say that “spa” is now so generic that no interest would be served by ICANN enforcing the city’s demands. Here’s the meat of it:

While the City of Spa maintains a historical link to the word “spa”, that word long ago evolved as a globally recognized generic term by people who have never even heard of the city of its origin. The public interest served by making that term available to a global community of spa users far outweighs any risk of confusion with the city of the same name. And for those names that may cause confusion, Donuts has provided a rigorous series of additional protections and controls.
The City of Spa gave the word “spa” to the world many centuries ago, and the world has done a great deal with it. Just as attorneys for the City of Spa don’t fly around the world handing cease-­and-desist notices to resort operators and hot-­tub manufacturers, we do not believe it is appropriate for them to overrun ICANN procedure to try to exert control over how that term is used in the Internet’s global addressing system.

I’m going to raise my hand to say that I’d never heard of Spa before this particular controversy arose, and I expect that goes for most of the people reading this article. Donuts surely has a point.
But that’s not to say Spa doesn’t have a point too. There are plenty of governments that managed to squeeze concessions out of applicants for gTLDs matching place names in their territories, with little complaint from applicants; it’s just that the line was drawn at capital cities, something which Spa is not.
Donuts urges ICANN to give no weight to the Spa-ASWPC deal and to move both applications forward to the next stage of the process — contention resolution.
We may see some progress at the ICANN meeting in Singapore next week, when ICANN will surely press the Governmental Advisory Committee for further advice on this string.

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TLD Registry sells 20k+ IDN gTLD names to Chinese gov

Kevin Murphy, March 19, 2014, Domain Registries

TLD Registry has sold 20,452 new gTLD domain names to the Chinese government as it prepares to launch .中文网 (“.chinesewebsite”) and .在线 (“.online”) tomorrow.
The deal, signed this week with the Service Development Center of the State Council Office for Public Sector Reform (SCOPSR) is for 10,226 names in each gTLD.
The domains include the Chinese-script names of every city in China with a population of over 200,000, as well as counties, municipalities and other regional names.
Strings that translate to things like “invest in [place name]” and “tourism [place name]” have also been registered to the government in both TLDs, according to the company.
It looks like this is the first significant anchor tenant deal we’ve seen in the new gTLD program.
Assuming China actually uses these names, it could be great publicity for the new registry’s gTLDs. The government has a policy of transitioning all of its services to fully IDN.IDN domains.
If not, it still means that both gTLDs stand to launch with over 10,000 names in each zone file on day one, even before regular registrants have had a chance to buy them.
The company is also set to auction a bunch of premium names in both namespaces on Friday simultaneously via Sedo and a live event at a private members’ club in Macau.
I’m posting this from Hong Kong airport, en route to the Macau event. As a matter of disclosure: TLD Registry is paying for my flights and accommodation.

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Weirdest new gTLD launch yet? .wed launches with a single registrar

Kevin Murphy, March 18, 2014, Domain Registries

The new gTLD .wed went into sunrise yesterday with the strangest pricing model yet and a stringent Registry-Registrar Agreement that seems to have scared off all but one registrar.
Atgron is positioning .wed as a space for marrying couples to celebrate their weddings, but only temporarily.
It seemingly has little interest in domain investors or ongoing customer relationships beyond one or two years.
If you register a second-level .wed domain, you can have it for $150 a year for the first two years, according to the Atgron web site. After that, the price rockets to $30,000 a year.
Registrars, resellers and wedding-oriented businesses are allowed to opt out of the third-year spike on their own .wed names if they join Atgron’s reseller program and sell at least 10 a year.
Unlike Vox Populi, which is actively marketing .sucks domains at $25,000 as a reasonable value proposition, Atgron jacks the price up as a deterrent to registrants holding on to names too long. It says:

.WED domain names are sold to couples for one or two years to celebrate their wedding. The domain names then become available to another couple… Mary and John can have MaryandJohn.WED and then YES the next Mary and John can have MaryandJohn.WED a year or two later and so on and so on.

That alone would be enough to put off most registrars, which value the recurring revenue from ongoing annual renewals, but I gather that the .wed RRA contains even more Draconian requirements.
Incredulous registrars tell me that Atgron wants them to create an entirely new web site to market .wed domains — they’re not allowed to sell the names via their existing storefronts.
The only registrar to bite so far is EnCirca, known historically for promoting obscure gTLDs such as .pro and .travel, which is selling .wed via a new standalone site at encirca.wed.
I also gather that Atgron won’t let registrars opt out of selling its third-level .wed domains, which are expected to go for about $50 a year with no third-year spike.
That didn’t work well for .name — registrars hated its three-level structure, forcing the registry to ultimately go two-level — and I don’t think it’s going to work for .wed either.
Registrars also tell me that Atgron wants to ban them from charging a fee for Whois privacy on .wed domains. They can offer privacy, but only if it’s free to the registrant.
With privacy a relatively high-margin value-add for registrars, it’s hardly surprising that they would balk at having this up-sell taken away from them.
As weird as this all sounds, it is of course an example of the kind of innovative business models that the new gTLD program was designed to create. Mission accomplished on that count.
Another thing the program was designed to create is competition, something Atgron will soon encounter when Minds + Machines arrives with .wedding and eats .wed’s lunch. In my view.
The .wed launch period is also quite unusual.
Atgron is running a landrush period concurrently with its 30-day sunrise period.
Even if you don’t own a trademark, you can apply for a .wed domain today. You’ll get a refund if your name is registered by a trademark owner during sunrise, and names won’t go live until April 20.
The registry has extended the 90-day Trademark Claims period to cover the sunrise period too, so it appears to be in compliance with ICANN rights protection rules on that count.
It’s a 30-day sunrise, so it’s first-come, first served if you’re a trademark owner.
As for sunrise pricing, the third-year spike appears to apply too.
Atgron documentation does say there’s going to be an option to purchase a 10-year trademark block for a one-time fee, but I couldn’t find any way to do this on the EnCirca.wed web site today.

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Registrars screwing up new gTLD launches?

Kevin Murphy, March 18, 2014, Domain Registrars

Some of the largest domain name registrars are failing to support new gTLDs properly, leading to would-be registrants being told unregistered names are unavailable.
The .menu gTLD went into general availability yesterday, gathering some 1,649 registrations in its first half day.
It’s not a great start for the new gTLD by any stretch, but how much of it has to do with the channel?
I tested out searches for available names at some of the biggest registrars and got widely different results, apparently because they don’t all properly support tiered pricing.
Market leader Go Daddy even refuses to sell available names.
The .menu gTLD is being operated by a What Box? subsidiary, the inappropriately named Wedding TLD2.
The company has selected at least three pricing tiers as far as I can tell — $25 is the baseline registry fee, but many unreserved “premium” names are priced by the registry at $50 and $65 a year.
For my test, I used noodleshop.menu, which seems to carry the $65 fee. Whois records show it as unregistered and it’s not showing up in today’s .menu zone file. It’s available.
This pricing seems to be accurately reflected at registrars including Name.com and 101domain.
Name.com, for example, says that the name is available and offers to sell it to me for $81.25.
Name.com
Likewise, 101domain reports its availability and a price of $97.49. There’s even a little medal icon next to the name to illustrate the fact that it’s at a premium price.
101domain
So far so good. However, other registrars fare less well.
Go Daddy and Register.com, which are both accredited .menu registrars, don’t seem to recognize the higher-tier names at all.
Go Daddy reports the name is unavailable.
Go Daddy
And so does Register.com.
Register.com
For every .menu name that carried a premium price at Name.com, Go Daddy was reporting it as unavailable.
With Go Daddy owning almost half of the new gTLD market, you can see why its failure to recognize a significant portion of a new gTLD’s available nice-looking names might impact day-one volumes.
The experience at 1&1, which has pumped millions into marketing new gTLD pre-registrations, was also weird.
At 1&1, I was offered noodleshop.menu at the sale price of $29.99 for the first year and $49.99 thereafter, which for some reason I was told was a $240 saving.
1&1
Both the sale price and the regular price appear to be below the wholesale cost. Either 1&1 is committed to take a $15 loss on each top-tier .menu name forever, or it’s pricing its names incorrectly.
A reader informed me this morning that when he tried to buy a .menu premium at 1&1 today he was presented with a message saying he would be contacted within 24 hours about the name.
He said his credit card was billed for the $29.99, but the name (Whois records seem to confirm) remains unregistered.
I’d test this out myself but frankly I don’t want to risk my money. When I tried to register the same name as the reader on 1&1 today I was told it was still available.
If I were a new gTLD registry I’d be very worried about this state of affairs. Without registrars, there’s no sales, but some registrars appear to be unprepared, at least in the case of .menu.

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Full TMCH database published by registry?

Kevin Murphy, March 17, 2014, Domain Policy

DotBerlin seems to have published the full list of trademarks and other strings protected by the Trademark Clearinghouse.
The list, published openly on nic.berlin as the .berlin new gTLD went through its sunrise period, contains 49,989 .berlin domain names that the registry says are protected.
Neither the TMCH nor DotBerlin have yet responded to a request for comment, so I can’t be 100% certain it’s the TMCH list, but it certainly appears to be. You can judge for yourself here (pdf).
UPDATE: DotBerlin told DI that it is “not the full list but part of a registry-reserved names list” that was published “accidentally” and has now been removed from its web site.
The DotBerlin web site calls the list “MarkenSchutzEngel-Domains” which I believe translates to something like “Trademark Guardian Angel Domains”.
While the TMCH says it has 26,802 listed marks, the document published by DotBerlin seems to also include thousands of strings that are protected under the “Trademark +50” rule.
That allows companies that have won UDRP complaints to have those domains’ second-level strings added to their TMCH records. I see plenty of UDRP’d domains on this list.
The list also seems to include hundreds, possibly thousands, of variant strings that put hyphens between different words. For example, Santander appears to have registered:

a-bank-for-your-ideas
a-bank-for-yourideas
a-bank-foryour-ideas
a-bank-foryourideas
a-bankfor-your-ideas
a-bankfor-yourideas
a-bankforyour-ideas
a-bankforyourideas

I spotted dozens of examples of this, which is permitted under ICANN’s TMCH rules.
There are 2,462 internationalized domain names on the list.
I gather that the full TMCH list today is over 50,000 strings, a little larger than the DotBerlin document.
I took the liberty of comparing the list to a dictionary of 110,000 English words and found 1,941 matches. Strings such as “fish”, “vision”, “open”, “jump” and “mothers” are all protected.
A listing in the TMCH means you get the right to buy a domain matching your mark during new gTLD sunrise periods. Anyone else trying to register a matching name will also generate a Trademark Claims notice.
According to some registries I’ve spoken to today, the TMCH forbids the publication of the full database under the contract that all new gTLD registries must sign.
I’ve no idea whether the publication of a list of .berlin names means that DotBerlin broke its contract.
While the TMCH rules were being developed, trademark owners were adamant that the full database should not be published and should not be easily reverse engineered.
They were worried that to publish the list would reveal their trademark enforcement strategies, which may leave them open to abuse.
(Hat tip to Bart Mortelmans of bNamed.net for the link.)

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Verisign stock punished after US move from root control

Kevin Murphy, March 17, 2014, Domain Registries

Verisign’s share price is down around 8% in early trading today, after analysts speculated that the US government’s planned move away from control of the DNS root put .com at risk.
The analyst firm Cowan & Co cut its rating on VRSN and reportedly told investors:

With less US control and without knowledge of what entity or entities will ultimately have power, we believe there is increased risk that VRSN may not be able to renew its .com and .net contracts in their current form.

It’s complete nonsense, of course.
The US announced on Friday it’s intention to step away from the trilateral agreements that govern control of the root between itself, ICANN and Verisign. But that deal has no dollar value to anyone.
What’s not affected, as ICANN CEO Fadi Chehade laboriously explained during his press conference Friday, are the contracts under which Verisign operates .com and .net.
The .com contract, through which Verisign derives most of its revenue, is slightly different to regular gTLD contracts in that the US has the right to veto terms if they’re considered anti-competitive.
The current contract, which runs through 2018, was originally going to retain Verisign’s right to increase its prices in most years, but it was vetoed by the US, freezing Verisign’s registry fee.
So not only has the US not said it will step away from .com oversight, but if it did it would be excellent news for Verisign, which would only have to strong-arm ICANN into letting it raise prices again.
Renewal of the .com and .net contracts shouldn’t be an issue either. The main rationale for putting .com up for rebid was to improve competition, but the new gTLD program is supposed to be doing that.
If new gTLDs, as a whole, are considered successful, I can’t see Verisign ever losing .com.
Verisign issued a statement before the markets opened today, saying:

The announcement by NTIA on Friday, March 14, 2014, does not affect Verisign’s operation of the .com and .net registries. The announcement does not impact Verisign’s .com or .net domain name business nor impact its .com or .net revenue or those agreements, which have presumptive rights of renewal.

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Panel doesn’t consider TLD in the first-ever new gTLD UDRP case

Kevin Murphy, March 17, 2014, Domain Policy

The first new gTLD domain name has been lost to a UDRP complaint.
The famous German bike maker Canyon Bicycles won canyon.bike from a registrant who said he’d bought the name — and others — in order to protect the company from cybersquatters.
The panelist in the case, WIPO’s Andrew Lothian, declined to consider the fact that the TLD was related to Canyon’s business in making his decision. Finding confusing similarity, he wrote:

The Panel finds that, given the advent of multiple new gTLD domain names, panels may determine that it is appropriate to include consideration of the top-level suffix of a domain name for the purpose of the assessment of identity or similarity in a given case, and indeed that there is nothing in the wording of the Policy that would preclude such an approach. However, the Panel considers that it is not necessary to do so in the present case.

Canyon had argued that the fact that it’s a .bike domain reinforced the similarity between the domain and the mark, but it’s longstanding WIPO policy that the TLD is irrelevant when determining confusing similarity.
The domain was registered under Whois privacy but, when it was lifted, Canyon looked the registrant up on social media and discovered he was very familiar with the world of bikes.
The registrant told WIPO that he’s registered Canyon’s mark “with the best of intentions”.
Apparently, he’s registered more than one famous brand in a new gTLD in the belief that the existence of the program was not wildly known, in order to transfer the domains to the mark holders.
He claimed “that many companies have been content with his actions” according to the decision.
But the fact that he’d asked for money from Canyon was — of course — enough for Lothan to find bad faith.
He also chose to use the fact that the registrant had made no attempt to remove the default Go Daddy parking page — which the registrar monetizes with PPC — as further evidence of bad faith.
The domain is to be transferred.

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Roundup: industry reaction to US giving up IANA role

Kevin Murphy, March 16, 2014, Domain Policy

Members of the domain name industry and ICANN community reacted generally positively to the news Friday night that the US will step aside from its central role in ICANN oversight.
Several companies, organizations and individuals issued early statements in response. We present a summary of those to hit the wires so far here.
First, the so-called I* organizations (IETF, IAB, RIRs, ccTLD ROs, ISOC, and W3C), which manage the internet’s various technical functions and standards, issued a joint statement via ICANN:

Our organizations are committed to open and transparent multi-stakeholder processes. We are also committed to further strengthening our processes and agreements related to the IANA functions, and to building on the existing organizations and their roles. The Internet technical community is strong enough to continue its role, while assuming the stewardship function as it transitions from the US Government.

The Domain Name Association’s executive director Kurt Pritz said this:

The DNA welcomes a deliberate, thoughtful process, inclusive of all stakeholder views to determine the future of the IANA function. As our members are some of the most widely recognized customers of IANA, we will be playing an active role in the process moving forward. The US government performs admirably in this role and it is important that any new oversight mechanism perform as reliably and consistently, and in a manner that prevents the Internet from onerous regulations and/or content controls.

New gTLD portfolio applicant Donuts said:

The IANA function is very important to Internet stability, and Donuts supports the multistakeholder approach to managing this vital resource. As the largest applicant for new top-level domains, we look forward to providing a constructive contribution in this multi-stakeholder discussion. It’s critical that any new mechanisms for IANA oversight ensure not only stability and accountability but also uphold the vital public sector role in promoting Internet innovation and openness.

Lisa Hook, CEO of back-end registry provider Neustar, said in a press release:

We share the US government’s view that the time has come for ICANN to convene global stakeholders to develop the policies, procedures, and accountability framework needed to transition ultimate responsibility for the IANA functions, and we look forward to participating in that process.

Back-end and portfolio applicant Afilias said in its own press release:

We endorse the statements of the NTIA and the organizations noted above [the I*s] with respect to the maturation of these organizations and processes, and we are committed to continuing to contribute to the stewardship of the Internet as part of a globally inclusive, open and transparent multi-stakeholder community.

Michele Neylon, CEO of domain name registrar Blacknight Solutions said:

This is an incredibly historic and important day for Internet governance. As a member of the International governance and infrastructure communities I applaud this move away from a single government to a regulating body that represents the interests of the global community. However, the real challenge now lies ahead in identifying and implementing a strong, diverse community to oversee these crucial organizations.

Milton Mueller, the principal academic behind the Internet Governance Project blogged:

IGP has been leading the call for the US government to be consistent about its non-governmental approach to Internet governance since 2005. Naturally, we were gratified to see the Commerce Department finally come around to that position. Far from “giving up” something or “losing control,” the U.S. is sure to find that its policy has gained strength. We have just made it a lot harder for opponents of a free and open Internet to pretend that what they are really against is an Internet dominated by one hegemonic state.

The news broke rather late on a Friday night, with an NTIA press release and hastily convened ICANN press conference, after the story was leaked to the Washington Post.
There hasn’t been much time for formal written reactions yet, but I’m sure more will be forthcoming as people get into work on Monday morning.

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Belgians do want a piece of Donuts’ new gTLD action

Kevin Murphy, March 16, 2014, Domain Policy

The Belgian government is blocking approval of Donuts’ bid for the new gTLD .spa until the company agrees to hand over up to 25% of its .spa profits to the community of the city of Spa.
It emerged in a letter from Spa published by ICANN this weekend that the city is also demanding a role in managing the TLD at the registry operator’s expense.
The gTLD has been applied for by Donuts and the Asia Spa and Wellness Promotion Council.
Not only does the string .spa match the name of the city, but also the English dictionary word “spa” is actually named after Spa, which has been known for centuries for its “healing” springs.
Despite this, Spa is not a capital city — it has roughly 10,000 inhabitants — so it does not qualify as a protected geographic string under the rules of ICANN’s new gTLD program.
Spa nevertheless wants a role in the TLD’s management, in order to protect the interests of itself and its local community, and wants some of the profits to benefit its local businesses.
According to the letter (pdf) from Spa outside attorney Phillippe Laurent, ASWPC has already signed a memorandum of understanding with the city. That MoU, published with the letter, states:

The turnover generated by the exploitation of the .SPA registry will be used in priority to defray reasonable out-of-pocket expenses incurred by the City as a result of its participation in the SPARC or any other of its activity related to the management and governance of the .SPA extension.
Additionally, 25% of the net profit generated by the domain names registered in the .SPA registry by any Belgian, Dutch, Luxembourgish, French or German person or entity will be earmarks to be contributed towards Internet and spa & wellness activities development in and for the City of Spa and its region, especially as related to the scope of the “.SPA” TLD, to be directed by the City of Spa.

The deal would also see ASWPC reserve 200 .spa domain names (included potential premiums such as poker.spa and golf.spa) for the city to do with as it pleases.
Donuts has refused to sign the MoU, saying it’s inconsistent with the Applicant Guidebook and sets a “bad precedent”. Spa has therefore refused to endorse its application.
The city has its national government on its side. In the April 2013 Beijing communique of the ICANN Governmental Advisory Committee, the GAC listed .spa as one of several bids needing “further consideration”.
This was reiterated in its Durban and Buenos communiques, with the GAC noting that “discussions” between “relevant parties” were “ongoing”.
Essentially, the GAC is delaying .spa from approval while Spa tries to get Donuts to agree to hand over part of its of .spa profits.
There was a somewhat testy exchange at the Buenos Aires meeting in November, after an ICANN director asked the GAC if it was appropriate for a governmental entity to try to get a financial benefit from an applicant.
The Belgian GAC representative responded later that “no money will flow to the city of Spa”, conceding that “a very small part of the profits of the registry will go to the community served by .spa”.
That now seems to be not entirely accurate.
The MoU sees Spa getting reimbursed for its self-imposed cost of inserting itself into the management of the registry, so some money will flow to it. But it will presumably be revenue-neutral to the city.
The issue of the 25% profit cut is a bit ambiguous though.
While the money would not flow directly into city coffers, the city would get the ability to direct how it was spent. Presumably, it could be spent on projects that Spa locals would otherwise look to the city to pay for.
With Donuts and Spa apparently at an impasse, ICANN recently told the GAC that it won’t sign contracts with either applicant, yet, but that it wants “a timeline for final consideration of the string”.
It also wants the GAC to “identify the ‘interested parties’ noted in the GAC advice.”
With Laurent’s letter and the MoU seemingly spelling out exactly what Spa wants and why, perhaps ICANN can move the issue closer to resolution at the Singapore meeting next week.
Is it a shakedown? Is it appropriate behavior for the GAC to hold an application hostage while it tries to obtain financial benefit for its local businesses? Or is Donuts unreasonably trying to exploit a city’s centuries-old cultural heritage for its own economic gain?

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US to give up control over ICANN

Kevin Murphy, March 15, 2014, Domain Policy

In what can only be described as an historic announcement, the United States government tonight said that it will walk away from its control of the DNS root zone.
ICANN CEO Fadi Chehade said during a press conference tonight that the organization has begun a consultation to figure out “accountability mechanisms” that will replace the US role as ICANN’s master.
The news comes in the wake of Edward Snowden’s revelations about US spying, but Chehade and ICANN chair Steve Crocker said that the changes would have been made sooner or later anyway.
So what just happened?
Earlier this evening, the US National Telecommunications and Information Administration announced its “intent to transition key Internet domain name functions to the global multistakeholder community.”
That’s basically referring to the IANA contract, the US government procurement contract under which ICANN has the ability to make changes — essentially by recommendation — to the DNS root zone.
The current version of the contract is due to expire next year, and the hope is that when it does there won’t be any need for a renewal.
Between now and then, the ICANN community (that’s you) is tasked with coming up with something to replace it.
It’s going to be the hottest topic at the ICANN 49 meeting in Singapore, which kicks off a week from now, but it’s expected to be under discussion for much longer than that.
Chehade said during the press conference tonight that the idea is not to create a new oversight body to replace the NTIA. We seem to be talking about “mechanisms” rather than “organizations”.
He also said that the US government has made it plain that any attempt to replace the US with an intergovernmental body (ie, the International Telecommunications Union) will not be considered acceptable.
Whatever oversight mechanism replaces NTIA, it’s going to have to be “multistakeholder” — not just governments.
The root zone is currently controlled under a trilateral relationship between the NTIA, ICANN and Verisign.
Essentially, ICANN says “add this TLD” or “change the name servers for this TLD” and, after the NTIA has approved the change, Verisign implements it on its root zone servers. The other root zone operators take copies and the DNS remains a unique, reliable namespace.
The NTIA has said that it’s going to withdraw from this relationship.
One question that remains is whether Verisign will retain its important role in root zone management.
Chehade appeared slightly (only slightly) evasive on this question tonight, spending some time clarifying that Verisign’s root zone management contract is not the same as its .com contract.
I assume this prevarication was in order to not wipe billions off Verisign’s market cap on Monday, but I didn’t really get a good sense of whether Verisign’s position as a root zone manager was in jeopardy.
My guess is that it is not.
A second question is whether the US stepping away from the IANA function means that the Affirmation of Commitments between the US government and ICANN also has its days numbered.
Apparently it does.
Chehade and ICANN chair Steve Crocker pointed to the ICANN board’s decision a few weeks ago to create a new board committee tasked with exploring ways to rewrite the AoC.
And they said tonight that there’s no plan to retire the AoC. Rather, the idea is to increase the number of parties that are signatories to it.
The AoC, it seems, will be ICANN’s affirmation to the world, not just to the US government.

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