Neustar loses most of its Amazon back-end biz to Nominet

Amazon has switched two thirds of its large portfolio of new gTLDs over to Nominet’s back-end registry services, replacing Neustar.

Judging by changes to IANA records this week, Amazon has moved 35 gTLDs to Nominet, leaving 17 at Neustar.

A Neustar spokesperson confirmed the changes, telling DI:

in an effort to diversify their back-end support, Amazon has chosen to move some, but not all, of their TLDs to another provider. Neustar will still manage multiple Amazon TLDs after the transition and we look forward to our continued partnership.

The switch more than doubles Nominet’s number of TLDs under management. Its biggest customer to date was MMX, which pushed 20 of its TLDs to the .uk registry in a restructuring a few years ago.

The Amazon loss, and a few others recently, also mean that Neustar is by my back-of-the-envelope calculation no longer the largest back-end when measured by the number of TLDs under management.

Those bragging rights would go to Donuts, which self-manages its own rather large portfolio of 241 TLDs. Neustar would remain the largest provider in terms of service provided to third-party clients.

The Neustar-to-Nominet technical migration appears to have kicked off a couple of weeks ago and emerged Wednesday when Nominet’s Technical Contact information replaced Neustar’s in most of Amazon’s IANA records.

Customers will not have noticed, because the TLDs in question barely have any customers.

The only one of the 35 affected TLDs with any registrations at all is .moi, which has just a couple hundred domains in its zone.

The other affected TLDs, none of which have launched, are: .moi, .yamaxun, .author, .book, .buy, .call, .circle, .fast, .got, .jot, .joy, .like, .pin, .read, .room, .safe, .smile, .tushu, .wanggou, .spot, .tunes, .you, .talk, .audible, .deal, .fire, .now, .kindle, .silk, .save, .hot, .pay, .secure, .wow and .free.

The TLDs remaining with Neustar are: .bot, .zero, .ポイント, .書籍, .クラウド, .ストア, .セール, .coupon, .zappos, .ファッション, .食品, .song, .家電, .aws, .imdb, .prime, and .通販.

Six of the TLDs staying with Neustar have launched, but only one, .bot, has more than 100 registrations.

.bot is a tightly restricted, experimental space currently in a long-term “limited registration period” which is not due to end until next January. It has around 1,500 names in its zone file.

Four of Amazon’s dot-brands are staying with Neustar, which is probably the most enthusiastic cheerleader for dot-brands out there, and four are going to Nominet.

Neustar appears to be keeping all of Amazon’s internationalized domain names. Nominet currently manages no IDNs.

How important the adjustment is from a dollar perspective would rather depend on what the per-domain component of the deals were, and whether Amazon ever plans to actually make its gTLDs commercially available.

In recent weeks, XYZ.com also moved its recently acquired .baby gTLD from Neustar, where it had been an unused dot-brand, to preferred provider CentralNic, while .kred and .ceo, both under the same ownership, also switched to CentralNic.

.music update: I’m calling it for Costa

Amazon has pulled out of the fight for the .music gTLD, and I’m ready to call the race.

In full knowledge that this could be my “Dewey Defeats Truman” moment, it seems to me the balance of evidence right now is strongly pointing to a win for DotMusic over sole remaining rival bidder MMX.

The contention set originally had eight applicants, but six — Google, Donuts, Radix, Far Further, Domain Venture Partners and last night Amazon — have withdrawn over the last week or so.

This is a sure sign that the battle is over, and that the rights to .music have been auctioned off.

The two remaining applicants yet to withdraw are DotMusic Ltd, the Cyprus-based company founded and managed by music enthusiast and entrepreneur Constantinos Roussos, and Entertainment Names Inc, a joint venture managed by MMX (aka Minds + Machines).

One of them will withdraw its application soon, and my money’s on MMX.

Neither company will talk to me about the result.

But, as I observed Monday, DotMusic has recently substantially revamped its web site, and appears to be accepting “pre-registrations” for .music domains. These are not the actions of a loser.

MMX, on the other hand, has never shared Roussos’ public enthusiasm for .music and has never been particularly enthusiastic about winning private gTLD auctions, usually preferring instead to enjoy the proceeds of losing.

There are only two wildcard factors at play here that may soon make me look foolish.

First, the joint venture partner for Entertainment Names is an unknown quantity. Its two directors, listed in its .music application, are a pair of Hollywood entertainment lawyers with no previous strong connection to the ICANN ecosystem. I’ve no idea what their agenda is.

Second, MMX did not mention .music once in the “Post Period Highlights” of its recently filed 2018 financial results statement. It did mention the resolution of the .gay and .cpa contention sets, but not .music.

That filing came out April 3, at least a few days after the contention set had been won, but I’m assuming that the tight timing and/or non-disclosure agreements are probably to blame for the lack of a mention for .music.

So, on balance, I’m calling it for Roussos.

With a bit of luck we’ll have confirmation and maybe a bit of detail about potential launch dates before the week is out.

ICANN plays tough over Amazon dot-brands

ICANN has given Amazon and the governments of the Amazon Cooperation Treaty Organization less than a month to sort out their long-running dispute over the .amazon gTLD.

The organization’s board of directors voted on Sunday to give ACTO and the e-commerce leviathan until April 7 to get their shit together or risk not getting what they want.

But both parties are going to have to come to an agreement without ICANN’s help, with the board noting that it “does not think that any further facilitation efforts by ICANN org will be fruitful”.

Attempts by ICANN to meet with ACTO over the last several months have been agreed to and then cancelled by ACTO on at least two separate occasions.

The eight ACTO governments think the string “Amazon” more rightfully belongs to them, due to it being the English name for the rain forest region they share.

Amazon the company has promised to safeguard culturally sensitive terms in .amazon, to assist with future efforts to secure .amazonas or similar for the Amazonian peoples, and to donate services and devices to the nations concerned.

Now, the two parties are going to have to bilaterally decide whether this deal is enough, whether it should be sweetened or rejected outright.

If they can’t come to a deal by ICANN’s deadline (which could be extended if Amazon and ACTO both ask for more time), ICANN will base its decision on whether to approve .amazon based on how Amazon unilaterally proposes to address ACTO’s concerns.

While a rejection of the .amazon application is still on the table, my read is that this is a bigger win for Amazon than it is for ACTO.

The internet is about to get a lot gayer

Seven years after four companies applied for the .gay top-level domain, we finally have a winner.

Three applicants, including the community-driven bid that has been fighting ICANN for exclusive recognition for years, this week withdrew their applications, leaving Top Level Design the prevailing bidder.

Top Level Design is the Portland, Oregon registry that already runs .ink, .design and .wiki.

The withdrawing applicants are fellow portfolio registries Donuts and MMX, and community applicant dotgay LLC, which had been the main holdout preventing the contention set being resolved.

I do not yet know how the settlement was reached, but it smells very much like a private auction.

As a contention set only goes to auction with consent of all the applicants, it seems rather like it came about after dotgay finally threw in the towel.

dotgay was the only applicant to apply as a formal “community”, a special class of applicant under ICANN rules that gives a no-auction path to delegation if a rigorous set of tests can be surmounted.

Under dotgay’s plan, registrants would have to have been verified gay or gay-friendly before they could register a .gay domain, which never sat right with me.

The other applicants, Top Level Design included, all proposed open, unrestricted TLDs.

dotgay, which had huge amounts of support from gay rights groups, failed its Community Priority Evaluation in late 2014. The panel of Economist Intelligence Unit experts awarded it 10 out the 16 available points, short of the 14-point prevailing threshold.

Basically, the EIU said dotgay’s applicant wasn’t gay enough, largely because its definition of “gay” was considered overly broad, comprising the entire LGBTQIA+ community, including non-gay people.

After dotgay appealed, ICANN a few months later overturned the CPE ruling on a technicality.

A rerun of the CPE in October 2015 led to dotgay’s bid being awarded exactly the same failing score as a year earlier, leading to more dotgay appeals.

The .gay set was also held up by an ICANN investigation into the fairness of the CPE process as carried out by the EIU, which unsurprisingly found that everything was just hunky-dory.

The company in 2016 tried crowdfunding to raise $360,000 to fund its appeal, but after a few weeks had raised little more than a hundred bucks.

Since October 2017, dotgay has been in ICANN’s Cooperative Engagement Process, a form of negotiation designed to avert a formal, expensive, Independent Review Process appeal, and the contention set had been on hold.

The company evidently decided it made more sense to cut its losses by submitting to an auction it had little chance of winning, rather than spend six or seven figures on a lengthy IRP in which it had no guarantee of prevailing.

Top Level Design, in its application, says it wants to create “the most safe, secure, and prideful .gay TLD possible” and that it is largely targeting “gay and queer people as well as those individuals that are involved in supporting gay cultures, such as advocacy, outreach, and civil rights.”

But, let’s face it, there’s going to be a hell of a lot of porn in there too.

There’s no mention in the winning bid of any specific policies to counter the abuse, such as cyberbullying or overt homophobia, that .gay is very likely to attract.

Top Level Design is likely to take .gay to launch in the back end of the year.

The settlement of the contention set is also good news for two publicly traded London companies.

MMX presumably stands to get a one-off revenue boost (I’m guessing in seven figures) from losing another auction, while CentralNic, Top Level Design’s chosen back-end registry provider, will see the benefits on an ongoing basis.

Right of the colon? IDN getting killed over dot confusion

An internationalized domain name ccTLD is reportedly getting buried because of a confusion about how many dots should appear.

Armenia’s .հայ (.xn--y9a3aq) today has fewer than 300 registered domains, well under 1% of the volume enjoyed by the Latin-script .am, apparently due to a unique quirk of the Armenian language.

According to a report in the local tech press, sourcing a registry VP, .հայ domains are not working because of how the Armenian script uses punctuation.

In Armenian, a full-stop or period is represented by two vertically aligned dots called a verjaket that looks pretty much identical to a colon in English and other Latin-based languages.

A single dot, looking and positioned exactly like a Latin period, is called a mijaket and is used in the same way English and other languages use a colon.

It’s not entirely clear whether the problem lies with the user, the keyboards, the browsers, or elsewhere, but it’s plain to see how confusion could arise when you have Armenian-script characters on both sides of a Latin-script dot.

The registry, ISOC Armenia, is today reporting just 298 .հայ domains, compared to 34,354 .am domains.

The Latin-script ccTLD has benefited in the past from its association elsewhere with AM radio. It’s also sometimes used as a domain hack, including by Instagram’s URL shortener.

It’s probably worth noting that while Armenia seems to have a unique problem, it’s far from unusual for an IDN ccTLD to perform poorly against its Latin stablemate.

.հայ, which transliterates to “.hay”, is an abbreviation of the Armenian name for Armenia, Հայաստան or “Hayastan”. It was delegated by ICANN in 2015 as part of its IDN ccTLD fast-track program.

Armenian has fewer than seven million speakers worldwide. Armenia has roughly three million inhabitants.

Another bundle of joy for XYZ as Johnson & Johnson throws out the .baby

XYZ.com seems to have acquired the .baby gTLD from Johnson & Johnson.

ICANN records show that the .baby registry contract was assigned to the growing portfolio registry November 19.

The news, which has yet to be announced by buyer or seller, arrives four years after J&J paid $3,088,888 for .baby at an ICANN last-resort auction, beating off five other applicants.

.baby is not what you’d call a roaring success. It has about 600 domains under management after almost two years of general availability.

It typically retails for about $80.

While the plan for .baby was to keep it quite tightly controlled, with J&J giving itself broad rights to refuse registration of any domain that did not appear to fit within its family-friendly mission, it does not seem that regime was strictly enforced.

Explain realdonaldtrump.baby

I would expect XYZ, with its come-all attitude to domains, to be even more relaxed about the namespace.

IANA records show that the gTLD under J&J was (and still is) managed by FairWinds, with a Neustar back-end. Neither are typical partners for XYZ, which tends to use CentralNic.

I think this makes it 12 gTLDs for the XYZ stable, including those it runs in partnership. It has 10 listed on its web site and it picked up former dot-brand .monster from Monster.com a couple months back.

J&J also owns the dot-brand .jnj, which has about 100 domains in its zone but no publicly facing web sites to speak of.

Verisign says Afilias tried to “rig” $135 million .web auction

Verisign has jumped back into the fight for the .web gTLD, all guns blazing, with a claim that Afilias offered millions in an attempt to “rig” a private auction for the string.

The .com behemoth accused Afilias last week of “collusive and anti-competitive efforts to rig the [.web] auction in its favor”.

It claims that Afilias offered rival bidder — and secret Verisign stooge — Nu Dot Co up to $17 million if it would participate in a private auction, and then tried to contact NDC during the auction’s “Blackout Period”.

The claims came in an amicus brief (pdf) filed by Verisign as part of Afilias’ Independent Review Process proceeding against ICANN.

The IRP is Afilias’ attempt to overturn the result of the July 2016 .web auction, in which NDC paid ICANN $135 million of Verisign’s money in exchange for the exclusive rights to .web

While neither Verisign nor NDC are parties to the IRP, they’re both attempting to become amicus curiae — “friends of the court” — giving them the right to provide evidence and arguments to the IRP panel.

Verisign argues that its rights would be seriously impacted by the proceeding — Afilias is looking for an emergency ruling preventing .web being delegated — because it won’t be able to bring .web to market.

But it’s also attempting to have the IRP thrown out altogether, on the basis of claims that Afilias broke the auction rules and has “unclean hands”.

Verisign’s brief states:

Afilias and other bidders proposed that a private auction be performed pursuant to collusive and potentially illegal terms about who could win and who would lose the auction, including guarantees of auction proceeds to certain losers of the auction.

NDC CFO Jose Rasco provides as evidence screenshots (pdf) of a text-message conversation he had with Afilias VP of sales Steve Heflin on June 7, 2016, in which Heflin attempts to persuade NDC to go to a private auction.

Every other member of the contention set at that point had agreed to a private auction, in which the winning bid would be shared out among the losers.

NDC was refusing to play along, because it had long ago secretly agreed to bid on behalf of Verisign, and was forcing a last-resort ICANN auction in which ICANN would receive the full sum of the winning bid. 

In that SMS conversation, Heflin says: “Can’t give up…how about I guarantee you score at least 16 mil if you go to private auction and lose?” followed by three money-bag emojis that I refuse to quote here on general principle.

Rasco responds with an offer to sell Afilias the .health gTLD, then just weeks away from launch, for $25 million.

Heflin ignores the offer and ups his .web offer to $17.02 million.

Given that it was a contention set of seven applicants, that suggests Afilias reckoned .web was going to sell for at least $100 million.

Verisign claims: “Afilias’s offers to ‘guarantee’ the amount of a payment to NDC as a losing bidder are an explicit offer to pay off NDC to not compete with Afilias in bidding on .web.”

Rasco also provides evidence that Schlund, another .web applicant, attempted to persuade NDC to join what it called an “Alternative Private Auction”.

This process would have divided bidders into “strong” and “weak” categories, with “strong” losing bidders walking away with a greater portion of the winning bid than the “weak” ones.

Verisign and NDC also claims that Afilias broke ICANN’s auction rules when VP John Kane texted Rasco to say: “If ICANN delays the auction next week would you again consider a private auction?”

That text was received July 22, four days before the auction and one day into the so-called “Blackout Period”, during which ICANN auction rules (pdf)  prohibit bidders from “cooperating or collaborating” with each other.

At that time, .web applicants Schlund and Radix already suspected Verisign was bankrolling NDC, and they were trying to get the auction delayed.

According to Verisign, Kane’s text means Afilias violated the Blackout rules and therefore it should lose its .web application entirely.  

The fact that these rules proscribe “collaborating” during the Blackout suggests that collaborating at other times was actually envisaged, which in turn suggests that Heflin’s texts may not be as naughty as Verisign claims.

Anyway, I think it’s fair to say the gloves, were they ever on, have come off.

Weighing in at over 1,000 pages, the combined amicus briefs and attached exhibits reveal some interesting additional facts that I don’t believe were in the public domain before now and may be worth noting here.

The Verisign filing reveals, I believe for the first time, that the final Verisign bid for .web was $142 million. It only paid $135 million because that was runner-up Afilias’ final bid.

It also reveals that Verisign and NDC signed their “executory agreement” — basically, NDC’s promise to sign over .web if Verisign bankrolled its bid — in August 2015, nearly a year before the auction took place. NDC evidently kept its secret for a long time before rivals got suspicious.

The IRP panelist is scheduled to rule on Afilias’ request for a “stay of all ICANN actions that further the delegation of the .WEB gTLD” on January 28.

No .web until 2021 after Afilias files ICANN appeal

Afilias has taken ICANN to arbitration to prevent .web being delegated to Verisign.

The company, which came second in the $135 million auction that Verisign won in 2016, filed Independent Review Process documents in late November.

The upshot of the filing is that .web, considered by many the best potential competitor for .com — Afilias describes it as “crown jewels of the New gTLD Program” — is very probably not going to hit the market for at least a couple more years.

Afilias says in in its filing that:

ICANN is enabling VeriSign to acquire the .WEB gTLD, the next closest competitor to VeriSign’s monopoly, and in so doing has eviscerated one of the central pillars of the New gTLD Program: to introduce and promote competition in the Internet namespace in order to break VeriSign’s monopoly

Its beef is that Verisign acquired the rights to .web by hiding behind a third-party proxy, Nu Dot Co, the shell corporation linked to the co-founders of .CO Internet that appears to have been set up in 2012 purely to make money by losing new gTLD auctions.

Afilias says NDC broke the rules of the new gTLD program by failing to notify ICANN that it had made an agreement with Verisign to sign over its rights to .web in advance of the auction.

The company says that NDC’s “obligation to immediately assign .WEB to VeriSign fundamentally changed the nature of NDC’s application” and that ICANN and the other .web applicants should have been told.

NDC’s application had stated that .web was going to compete with .com, and Verisign’s acquisition of the contract would make that claim false, Afilias says.

This means ICANN broke its bylaws commitment to apply its policies, “neutrally, objectively, and fairly”, Afilias claims.

Allowing Verisign to acquire its most significant potential competitor also breaks ICANN’s commitment to introduce competition to the gTLD market, the company reckons.

It will be up to a three-person panel of retired judges to decide whether these claims holds water.

The IRP filing was not unexpected. I noted that it seemed likely after a court threw out a Donuts lawsuit against ICANN which attempted to overturn the auction result for pretty much the same reasons.

The judge in that case ruled that new gTLD applicants’ covenant not to sue ICANN was valid, largely because alternatives such as IRP are available.

ICANN has a recent track record of performing poorly under IRP scrutiny, but this case is by no means a slam-dunk for Afilias.

ICANN could argue that the .web case was not unique, for starters.

The .blog contention set was won by an affiliate of WordPress maker Automattic under almost identical circumstances earlier in 2016, with Colombian-linked applicant Primer Nivel paying $19 million at private auction, secretly bankrolled by WordPress.

Nobody complained about that outcome, probably because it was a private auction so all the other .blog applicants got an even split of the winning bid.

Afilias wants the .web IRP panel to declare NDC’s bid invalid and award .web to Afilias at its final bid price.

For those champing at the bit to register .web domains, and there are some, the filing means they’ve likely got another couple years to wait.

I’ve never known an IRP to take under a year to complete, from filing to final declaration. We’re likely looking at something closer to 18 months.

Even after the declaration, we’d be looking at more months for ICANN’s board to figure out how to implement the decision, and more months still for the implementation itself.

Barring further appeals, I’d say it’s very unlikely .web will start being sold until 2021 at the very earliest, assuming the winning registry is actually motivated to bring it to market as quickly as possible.

The IRP is no skin off Verisign’s nose, of course. Its acquisition of .web was, in my opinion, more about restricting competition than expanding its revenue streams, so a delay simply plays into its hands.

Hebrew .com off to a slow start

The Hebrew transliteration of .com has only sold a couple hundred domains since it went into general availability.

Verisign took the new gTLD קום. (Hebrew is a right-to-left script, so the dot comes after the string) to market November 5, when it had about 3,200 domains in its zone file. It now stands around the 3,400 mark.

The pre-GA domains are a combination of a few hundred sunrise regs and a few thousand exact-match .coms that were grandfathered in during a special registration period.

It’s not a stellar performance out of the gates, but Hebrew is not a widely-spoken language and most of its speakers are also very familiar with the Latin script.

There are between seven and nine million Hebrew speakers in the world, according to Wikipedia. It doesn’t make the top 100 languages in the world.

The ccTLD for Israel, where most of these speakers live, reports that it currently has 246,795 .il domains under management. That’s a middling amount when compared to similarly sized countries such as Serbia (about 100,000 names) and Switzerland (over 2 million).

Verisign’s original application for this transliteration had to be corrected, from קום. to קוֹם. If you can tell the difference, you have better eyesight than me.

In the root, the gTLD is Punycoded as .xn--9dbq2a.

Trump gives Verisign almost $1 billion in free money

The Trump administration may have just handed Verisign close to $1 billion in free money.

That’s according to the back of the envelope I’m looking at right now, following the announcement that the National Telecommunications and Information Administration is reinstating Verisign’s right to increase .com registry fees.

As you may have read elsewhere already (I was off sick last week, sorry about that) a new amendment to the Verisign-NTIA Cooperative Agreement restores Verisign’s ability to raise prices by 7% per year in four of the six years of the deal.

The removal of the Obama-era price freeze still needs to be incorporated into Verisign’s ICANN contract, but it’s hard to imagine ICANN, which is generally loathe to get into pricing regulation, declining to take its lead from NTIA.

Verisign would also have to choose to exercise its option to increase prices in each of the four years. I think the probability of this happening is 1 in 1.

Layering this and a bunch of other assumptions into a spreadsheet, I’m coming up with a figure of roughly an extra $920 million that Verisign will get to add to its top line over the next six years.

Again, this isn’t an in-depth study. Just back-of-the-envelope stuff. I’ll talk you through my thinking.

Not counting its occasional promotions, Verisign currently makes $7.85 for every year that a .com domain is added or renewed, and for every inter-registrar transfer.

In 2017, .com saw 40.89 million add-years, 84.64 million renew-years and 3.79 million transfers, according to official registry reports.

This all adds up to 129,334,643 revenue events for Verisign, or just a tad over $1 billion at $7.85 a pop.

Over the four-year period of the price increases transaction fees will go up to $8.40, then $8.99, then $9.62, then $10.29. I’m rounding up to the nearest penny here, it’s possible Verisign may round down.

If we assume zero transaction growth, that’s already an extra $762.2 million into Verisign’s coffers over the period of the contract.

But the number of transactions inevitably grows each year — more new domains are added, and some percentage of them renew.

Between 2016 and 2017, transaction growth was 3.16%.

If we assume the same growth each year for the next six years, the difference between Verisign’s total revenue at $7.85 and at the new pricing comes to $920 million.

Verisign doesn’t have to do anything for this extra cash, it just gets it.

Indeed, the new NTIA deal is actually less restrictive on the company. It allows Verisign to acquire or start up an ICANN-accredited gTLD registrar, something it is currently banned from doing, just as long as that registrar does not sell .com domains.

Verisign’s .net contract also currently bans the company from owning more than 15% of a registrar, so presumably that agreement would also need to be amended in order for Verisign to get into the registrar business.

I say again that my math here is speculative; I’m a blogger, not a financial analyst. There may be some incorrect assumptions — I’ve not accounted for promotions at all, for example, and the 3.16% growth assumption might not be fair — and there are of course many variables that could move the needle.

But the financial markets know a sweetheart deal when they see one, and Verisign’s share price went up 17.2% following the news, reportedly reaching heights not seen since since the dwindling days of the dot-com bubble 18 years ago.

The reason given for the lifting of the price freeze was, for want of a better word, bullshit. From the NTIA’s amendment:

In recognition that ccTLDs, new gTLDs, and the use of social media have created a more dynamic DNS marketplace, the parties agree that the yearly price for the registration and renewal of domain names in the .com registry may be changed

Huh?

This seems to imply that Verisign has somehow been disproportionately harmed by the rise of social media, the appearance of new gTLDs and some unspecified change in the ccTLD marketplace.

While it’s almost certainly true that .net has taken a whack due to competition from new gTLDs, and that the domain marketplace overall may have been diminished by many small businesses spurning domains by choosing to set up shop on, say, Facebook, .com is still a growing money-printing machine with some of the fattest margins seen anywhere in the business world and about a 40% global market share.

If the Trump administration’s goal here is to make some kind of ideological statement about free markets, then why not just lift the price caps altogether? Give Verisign the right to price .com however it pleases?

Or maybe Trump just wants to flip the bird to Obama once more by reversing yet another of his policies?

Who knows? It doesn’t make a lot of sense to me.