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SnapNames settles shill-bidder class action

Kevin Murphy, October 26, 2010, Domain Sales

Domain name auctioneer SnapNames said that it has settled the class action lawsuit filed against it by disgruntled domainers after one of its employees was found to be a shill bidder.

It seems to have had a bit of a result, too. Class members will receive exactly the same amount they would have had they accepted its rebate offer, according to a statement released by the company today.

The case was filed almost a year ago, after it emerged that Nelson Brady, a SnapNames employee, had been posing as a bidder in domain name auctions in order to bump up the final sale price.

Posing as “Hank Alvarez” or “halverez”, Brady stood to gain bonuses based on performance targets as a result of SnapNames’ acquisition by Oversee.net, its current owner.

After the abuse was discovered, SnapNames offered affected customers a rebate equivalent to the money they would have saved on a winning bid had “halvarez” not outbid them.

SnapNames said today:

Class members (which are United States residents who were extended the rebate offer but have not yet accepted) have been or shortly will be notified of the settlement terms and amounts (which are identical to the amounts affected bidders were offered in the rebate offer we extended last November).

This seems to mean that anybody who was holding out for a bigger settlement is out of luck.

The deadline for accepting the rebate expires November 4, but the deadline to become part of the class action is not until December 17.

SnapNames will have paid out $2 million to customers in total.

(I wonder how much the class action attorneys are to receive).

More info can be found at snapsettlement.com.

SnapNames has also settled its lawsuit against Brady for an undisclosed amount. The company sued him for $33 million in May.

Oversee said it “believes the financial penalty is appropriate considering the seriousness of the improper activity”.

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Survey reveals demand for .brand TLDs

Kevin Murphy, October 26, 2010, Domain Registries

Almost half of trademark-conscious companies are considering a “.brand” top-level domain, according to a survey carried out by World Trademark Review magazine.

The survey also found that there is much more interest in new TLDs among marketing folk than lawyers, which is perhaps not surprising.

So far, only a few potential .brand applicants have been revealed. Canon has been the most brazen about its plans, but others including IBM and Nokia have also dropped hints.

The WTR reported:

WTR’s survey of in-house trademark counsel, attorneys in law firms and marketing professionals found that an average of 54% responded “Yes”, “It’s likely” or “Maybe” when asked whether their company/client would apply for a new gTLD. Of these, 81% confirmed, like Canon, that the string would be their master brand.

A break-down of these numbers kindly provided by WTR show that “Yes” was easily the least common response, but that marketing professionals expressed more interest than lawyers.

Asked whether their company would apply to run a new TLD, only 6.8% and 9.5% of in-house counsel responded “Yes” or “It’s likely”, compared to 19.6% and 15.2% for marketers.

About 54% and 33% responded “No” to the same question, respectively. The remainder were on the fence with a “Maybe” response.

Lawyers in private practice, when asked the same question, were more confident than their in-house counterparts, with 18.9% saying it was “likely” at least one client would want a gTLD

Whichever way you cut it, this adds up to a pretty decent chunk of .brand applicants. ICANN has previously said it expects between 100 and 200 such applications in the first round.

About 350 people responded to the survey in total. The full results and analysis are published in the latest edition of WTR.

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Former ICANN chief speaks out against new TLD morality veto

Kevin Murphy, October 26, 2010, Domain Policy

Former ICANN president and CEO Paul Twomey has expressed his support for rules curbing the ability of international governments to object to new top-level domains.

Twomey’s suggestions could be seen as going even further to limit government powers in the new TLD process than previous recommendations from the community.

The advice came during the ICANN comment period on the so-called “Rec6” recommendations, which previously sought to create an objection process based on “morality and public order” or “MOPO” concerns.

There had been a worry from some elements of the ICANN community that backwards governments could use Rec6 to arbitrarily block controversial new TLDs on national interest grounds.

But a cross-constituency working group, which included a few members of ICANN’s Governmental Advisory Committee, instead developed recommendations that would create a much narrower objections process with a greater emphasis on free speech.

Twomey, who quit ICANN in June 2009, has now expressed broad support for the working group’s recommendations, and suggests a few tweaks to make the process less open to abuse.

He said ICANN “should be careful not to view one government alone as having veto power over any particular gTLD string which is designed to serve a global or at least international user group”.

Notably, Twomey has urged ICANN to steer clear of the phrase “national interest”, which appears in the current Rec6 recommendations, and instead use “national law”.

He reasons that giving weight to “national interests” could enable fairly junior civil servants to object to new TLDs without the full backing of their governments or legislation.

phrases such as “perceived national interest” reflect a degree of political consideration which can be more fleeting, be expressed by very junior officials without Ministerial or Parliamentary approval, and often is a matter of debate between different groups within the country and government. In some respects it is similar to the phrase “public policy”. I remember a GAC member many years ago stating that “public policy is anything I decide it is”.

Twomey then recommends that even when a government has an objection based on an actual national law, that law “should only derive from a national law which is in accordance with the principle of international law.”

A law which violated human rights treaties, for example, or which was hurriedly passed specifically in order to scupper a TLD bid, would therefore not be valid grounds for objection.

Twomey’s reasoning here is fascinating and a little bit shocking:

without such a linkage, a unique, one-off power to a government would be open to gaming by well-funded commercial interests with political influence.

I am aware of some commercial entities involved in the ICANN space in years past that quietly boasted of their ability to get laws passed in certain small jurisdictions which would suit their commercial interests in competing with other players. This is not behaviour the ICANN Board should inadvertently incent.

I’ll leave it for you to speculate about which companies Twomey is referring to here. I don’t think there are many firms in the domain name space that well-funded.

Prior to becoming ICANN’s president, Twomey chaired the GAC as the Australian representative. He’s currently president of Leagle and managing director of Argo Pacific, his own consulting firm.

His full commentary, which delves into more areas than I can get into here, can be found here. The Rec6 working group’s recommendations can be found here (pdf). My previous coverage of the Rec6/MOPO issue can be found here.

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NameJet to auction three-letter .pro domains

Kevin Murphy, October 25, 2010, Domain Sales

NameJet has inked a deal with RegistryPro to auction off eleven “premium” three-letter .pro domain names next month.

The domains themselves have not yet been revealed, but the auction is scheduled to kick off November 19, according to a press release today.

RegistryPro, a subsidiary of HostWay, received the the right to start selling previously-restricted one-, two- and three-character .pro domains from ICANN in May 2009.

This June, it allocated nine such domains, including top.pro and 411.pro, via an RFP process.

After it has finished auctioning off its selected short domains, the company plans to put the remainder back into the pool for first-come, first-served registrations.

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Review reveals ccTLD fast-track criticisms

Kevin Murphy, October 25, 2010, Domain Registries

ICANN has launched a review of its internationalized domain name fast-track process, revealing a number of criticisms its country-code domain applicants have apparently had.

The IDN ccTLD Fast Track Process is a way for ccTLD operators to quickly start selling fully non-Latin domains in their own local script.

It’s so far been successfully used to delegate IDN ccTLDs in Arabic, Chinese and Cyrillic scripts, among others.

ICANN now wants to know if it should make any improvements to the process and has opened a 60-day public comment period to solicit suggestions.

Because quite a lot of the Fast Track takes place behind closed doors, ICANN has also offered up a fairly revealing list of possible discussion topics.

It appears that the process has created new pressure points between ICANN and international governments, which are often formally affiliated with their ccTLDs.

For example, some governments dislike the fact that Fast Track requires the applicant to show support for its chosen string from its local community. ICANN reported:

Some [applicants] do not find it necessary to demonstrate community support for the string nor the manager. The reason being that such decisions can be made by government entities, and the need for support undermines the authority of the government in the country or territory.

There also appears to have been a bit of push-back from governments on the issue of “meaningfulness”, where applicants have to show their requested string adequately represents their territory’s name.

ICANN said:

Some requesters have stated that this requirement is not necessary in cases where the strings requested are agreed to by the government and otherwise seem obviously meaningful.

In a concession to governments with sovereignty or financial concerns, ICANN does not charge an up-front fee for handling IDN ccTLD requests under the Fast Track.

Instead, it “recommends” a processing fee of $26,000 per string, which it invoices toward the end of the process, plus an ongoing 1-3% of IDN registration revenue.

So far, it has received $106,000 (covering presumably four strings, accounting for exchange rates), indicating that there are 11 IDN ccTLDs currently in the root that have not yet been paid for.

It will be interesting to see how many ccTLDs ultimately choose to pay up, and how many are happy for ICANN’s costs to be covered by fees paid by gTLD registrants like me and you.

The Fast Track review may also cover the topic of disputes and appeals. Currently, there is no dedicated mechanism by which a ccTLD that has had its requested string rejected can ask for reconsideration.

ICANN asks whether this should be changed.

Earlier this year, Bulgaria had its request for .бг (.bg) declined on the grounds that it looks too much like Brazil’s Latin ccTLD, .br and said it planned to appeal.

The ICANN public comment period, with the full list of suggested discussion topics, can be found here.

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Trademark lobby keeps up pressure on ICANN

Kevin Murphy, October 24, 2010, Domain Policy

The International Trademark Association is continuing to press ICANN into commissioning a study of the potential economic “harms” its new top-level domain program could cause.

INTA executive director Alan Drewsen earlier this month sent ICANN a quick reminder (pdf) that it expects to see the study carried out before the new TLD application round launches.

The trademark lobby believes that new TLDs will increase costs to brand-conscious businesses through an increase in the number of defensive registrations and dispute proceedings they have to pay for.

ICANN hired some third-party analysts to look into the issue, and published a preliminary report in July that basically just speculated about studies that could be carried out in future.

The plan was to carry out a second-phase study, which was to begin after public comments on the first report had been analyzed and summarized by ICANN staff.

Three months after the public comment period closed, this analysis has not been published and there’s no news on phase two.

INTA’s latest missive also notes that the ICANN board does not appear to have discussed the economic study at its Trondheim meeting in September.

Drewson also refers back to previous correspondence, sent in early September by INTA president Heather Steinmeyer, in which she wrote:

trademark owners believe that such a study is not only a sensible recommendation, but an essential prerequisite before any rollout of new gTLDs.

It’s not clear to me whether ICANN also thinks the study needs to be completed before the new TLD program launches.

Such a study would presumably take some considerable time to compile, and noises from ICANN currently point to the program becoming finalized at some point in the next six months.

If the study were to conclude that new TLDs would be hugely financially damaging, after three years of work… well, red faces would be the very least concern.

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Native American domain gives .jobs critics ammo

Kevin Murphy, October 22, 2010, Domain Registries

The coalition of companies opposed to the expansion of the .jobs top-level domain seems to think it has found a ‘gotcha’ in the recent registration of nativeamerican.jobs.

The domain leads to a site listing jobs that are identified, for whatever reason, as being particularly suitable for Native Americans. It’s based on an earlier site at ndianjobs.com

The .jobs TLD was originally intended to allow human resources departments to list their corporate job openings using only their own company name or brand in the domain.

The .JOBS Charter Compliance Coalition, made up of a number of jobs portals including Monster.com, now points to nativeamerican.jobs as an example of .jobs registry Employ Media breaking its charter commitments.

The Coalition wrote to ICANN yesterday in support of its effort to get ICANN to overturn its recent decision on .jobs liberalization.

In August, ICANN told the registry that it could start accepting non-company-name .jobs registrations through a “phased allocation process” that involves an RFP and possibly auctions.

But the Coalition contends that the amended registry contract does not allow Employ Media to break its Charter commitment to restrict registrations to purely human resources registrants.

It could not be clearer that Employ Media is using the Board’s approval of the Phased Allocation Program to transform the fundamental nature of the .JOBS sponsored top level domain from a site for employers to link directly with job seekers to a generic employment services theme park – in clear violation of the .JOBS charter, and without the smallest consideration of third party rights.

These “third-party rights” include the owner of nativeamericanjobs.com, who presumably did not have the chance to register the contested domain.

It’s not clear whether the Coalition statement is entirely correct, however.

Judging from Whois records, the domain nativeamerican.jobs was registered in May, prior to ICANN’s board approving the .jobs registry contract changes.

It was certainly registered prior to the closure of the initial RFP stage of Employ Media’s phased allocation program.

The Coalition has a Reconsideration Request pending. ICANN earlier this week asked Employ Media to respond to 13 questions about its plans.

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New TLDs dominate ICANN board agenda

Kevin Murphy, October 22, 2010, Domain Policy

ICANN has published the agenda for next Thursday’s board meeting and unsurprisingly the new top-level domain process dominates.

The agenda breaks the discussion into several bullet points.

Of interest to absolutely everybody watching the new TLD process is the first bullet – “Update on Timeline”. Everyone wants to know when the Applicant Guidebook will be finalized.

Recently, it became apparent that ICANN seems to view the next draft of the guidebook as a possible candidate for “final” status. As I blogged earlier this week, it could be published in the next two weeks.

The issues of vertical integration of registry and registrar functions, the “Rec 6” objections process, and the Governmental Advisory Committee advice on geographic names are also on the agenda.

The meeting will also discuss the approval of Qatar’s internationalized domain name country-code TLD and the redelegation of the .qa ccTLD to a new entity.

Qatar’s chosen Arabic string was approved back in March, at the same time as other strings that have already been added to the root, so I can only assume that the redelegation issue was what caused the hold-up.

The perennially controversial .xxx application is also due to be wheeled out for another hearing.

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ICANN asks .jobs registry to explain itself

Kevin Murphy, October 20, 2010, Domain Registries

ICANN has asked .jobs registry manager Employ Media to clarify its plan to lift restrictions on who can register names in its top-level domain.

The ICANN board committee which handles Reconsideration Requests – essentially ICANN’s first-stop appeals court – has sent the registry a list of 13 questions (pdf), apparently distilled from a much longer list (pdf) supplied by the .JOBS Charter Compliance Coalition.

Employ Media wants to be able to start allocating premium generic .jobs domain names to companies via an RFP process and possibly auctions, dropping the rule which states that only companyname.jobs domains are permitted in the TLD.

ICANN’s board of directors approved the company’s plan in August, and Employ Media opened its RFP process shortly thereafter. Then the Compliance Coalition filed its Reconsideration Request.

This ad-hoc coalition comprises a number of employment web sites, such as Monster.com, and the Newspapers Association of America, which believe Employ Media’s plans fall outside its remit and could pose a competitive threat.

It’s common knowledge that the registry was planning to allocate a big chunk of premium real estate to the DirectEmployers Association, which wants to run a massive jobs board called universe.jobs, fed traffic by thousands of generic industry or geographic .jobs names.

Essentially, the Coalition’s questions, echoed by the Board Governance Committee, seem to be a roundabout way of asking whether this violates the .JOBS Charter, which limits the registrant base to corporate human resources departments.

Notably, the BGC wants to know when a universe.jobs promotional white paper (pdf) was produced, how much input Employ Media had in it, and whether the ICANN board got to see it before making its decision.

(A bit of a ludicrous question really, given that the BGC is comprised of four ICANN directors)

It also wants to know which purported “independent job site operators” have welcomed the Employ Media plan (a situation reminiscent of the recent unsuccessful calls for ICM Registry to disclose its .xxx supporters.)

The BGC’s Question 9 also strikes me as interesting, given that it does not appear to be inspired directly by the Coalition’s list of questions:

Please state whether Employ Media took any steps to prevent or interfere with any entity or person’s ability to state its position, or provide information, to the Board regarding amendment of the .JOBS Registry Agreement before or during the 5 August 2010 Board meeting.

I’m now beginning to wonder whether we may see a rare reversal of an ICANN board decision based on a Reconsideration Request.

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Sex.com to sell for $13m

Kevin Murphy, October 20, 2010, Domain Sales

Sex.com is set to be sold for $13 million, after Sedo managed to find a buyer from among about a dozen bidders.

I reported the story for The Register today.

The buyer is Clover Holdings Ltd, based in St Vincent. The deal is subject to approval by the California bankruptcy court that is overseeing the assets of Escom, the current owner.

Go read the story. Or, if you’re interested in more detail, here’s the motion Escom filed this week, which includes the sales contract as Exhibit A (pdf).

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