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Registrar terminated after what looks like domain hijacking

Kevin Murphy, January 10, 2020, Domain Registrars

ICANN has canned its first registrar of the year.

Los Angeles-based World Biz Domains will be going out of bizness after ICANN terminated its registrar contract earlier this week, following its non-responsiveness to what appears to be case of domain hijacking.

It’s a nothing registrar, with fewer than 100 domains under management, but it once had over 5,000.

The termination comes following the suspension I blogged about in October, which was related to the transfers to World Biz of 15 potentially valuable domains in late 2018.

The names were all either short numerics or the names of famous places in Singapore and Malaysia.

ICANN spent most of last year demanding records showing that the transfers were legit, but was ghosted.

World Biz allegedly also had failed to deliver Whois records in the proper format, and was behind on its ICANN accreditation fees.

The company will lose its accreditation officially on January 22.

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NamesCon publishes full agenda for debut Austin conference

Kevin Murphy, January 10, 2020, Domain Services

NamesCon Global is coming up at the end of the month, and yesterday the organizers published the final agenda for the three-or-four day event, including a keynote by GoDaddy’s new CEO.

Aman Bhutani, who took over the top job in September, will speak after lunch on day two of the conference, Thursday January 30, with an as-yet-untitled presentation. I imagine he was an easy booking, given that NamesCon has been owned by GoDaddy for the last few years.

Elsewhere on the agenda, there are plenty of sessions that look sufficiently interesting — covering topics such as data-driven market analysis, DNS abuse, and emerging technologies — that I kinda wish I was attending this year.

I’d be particularly interested in learning more about DNS over HTTPS and blockchain, two emerging “threats” to regular DNS that have sessions devoted to them during the conference.

It’s the first time NamesCon Global has been held outside of Las Vegas since the event debuted in 2003. It’s happening at the Omni Hotel in Austin, Texas, instead.

There’s a fair bit of doubling or tripling up in terms of speakers — some are sitting on multiple panels or keynotes spread over the three days of presentations — but that’s par for the course at NamesCon if memory serves.

Thursday evening sees the now-traditional domain auction, organized by NamesCon and RightOfTheDot. There are some pretty cool names up for sale this year, including add.com, laptop.com, shirts.com and offices.com.

If the auctioneer is anything like the ones hired in Vegas in previous years, you might want to bring along some ear protectors.

Finally, in terms of socializing, male attendees worried that the Friday night networking event is a “Ladies Only” affair can rest assured that Saturday is a day-long literal sausage fest, a seven-hour piss-up at the Banger’s Sausage House and Beer Garden.

NamesCon runs from January 29 to February 1. Tickets on the door are $999, but booking in advance online knocks the price to $699. Previous attendees are currently being offered an additional 30% discount on pre-booking too. Check your email.

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.gay prices and availability revealed as registry promises to give 20% of revenue to charity

Kevin Murphy, January 10, 2020, Domain Registries

The long-fought, once-controversial gTLD .gay is to launch a month from now.

Top Level Design, which won the string at auction against three other applicants last February, this week informed registrars that its sunrise period will begin February 10 this year. General availability will start May 20.

The registry, which beat a mission-focused, restricted “community” applicant for .gay, also said that it will give 20% of its top-line registration revenue to two LGBT charities — GLAAD and CenterLink.

With base registry fee of $25 per domain, that’s at least $5 going to gay charities for every domain sold. Registrars are being encouraged to match that donation at the retail level.

There will also be six tiers of “premium” domains — $100, $250, $650, $2,000, $5,000 and $12,500 — for which the 20% donation will also apply. Premium domains will renew at premium prices.

Top Level Design also says it is to enforce an anti-bullying policy. Any registrant using a .gay domain for “harassment, threats, and hate speech” will stand to lose their name. It’s a complaint-based enforcement policy; the registry will not actively monitor content.

Registrants who have forums on their .gay web sites will also have to police their user-generated content, to keep it in line with registry policy.

Its official policy even includes helpline numbers for bullied gay people who are feeling suicidal.

The registry appears to be making the right noises when it comes to calming concerns that an unrestricted, non-community .gay space could do more harm than good.

The key area where it diverges from the community application, which had been backed by dozens of gay-rights groups, is the lack of a ban on pornography. I’d hazard a guess that a good chunk of registration volume will come from that space.

The launch will comprise two sunrise periods and an early access period, before .gay goes to GA.

The first sunrise is the ICANN-mandated period, open only to those trademark owners with listings in the official Trademark Clearinghouse. That will run from February 10 to March 31. A second sunrise will be open to other trademarks, validated by back-end provider CentralNic. That runs from April 6 to May 6.

Both sunrise periods will include the automatic reservation of 10 potentially confusing Latin internationalized domain name variants, generated by CentralNic algorithm. This will include strings that transpose 0 and O or e and ë, for example.

EAP, the period in which early birds can grab the names they want for premium fees that decrease every day, runs from May 11 to May 17. Prices are not yet available.

GA is May 20.

Top Level Design originally planned to launch .gay last year, timed to coincide with National Coming Out Day in the US.

The new GA date appears to land on the anniversary of a landmark gay rights ruling in the US Supreme Court, Romer v Evans, but this may just be a coincidence.

.gay is launching about a month before the 50th anniversary of the Stonewall Riots, in June, so we might see some marketing around that event.

Registrars signing up to sell .gay domains are also being given some schooling, apparently courtesy of GLAAD, about what language is currently cool and uncool to use in marketing.

Apparently, the terms “homosexual”, “sexual preference” and “transvestite” are considered offensive nowadays and are therefore verboten in registrar marketing. “Queer”, as a partially reclaimed offensive term, should be used with caution.

I suppose Top Level Design had better hope the word “gay” is not added to this list any time soon, otherwise it has a serious problem on its hands.

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Now .org critics actually want to take over the registry, blocking billion-dollar sale

Kevin Murphy, January 8, 2020, Domain Registries

A group of ICANN alumni and non-profits want to block the $1.135 billion sale of .org manager Public Interest Registry and for ICANN to hand over the reins to a new not-for-profit entity.

The Cooperative Corporation of .ORG Registrants was reportedly formed in California this week, supported by a long list of opponents of the .org deal, which would see the Internet Society sell PIR to a new private equity company called Ethos Capital.

Currently not-for-profit .org would become commercial again, answerable to shareholders who want to see a return on their investment. PIR recently had its 10%-a-year price caps lifted by ICANN, enabling it to increase its annual registry fees by as much as it wants.

Founding directors of the new co-op reportedly include ICANN founding chair Esther Dyson and founding CEO Mike Roberts, neither of whom have been heavily involved in ICANN or the domain name industry for the better part of two decades.

According to Reuters, Also on the board are Wikimedia Foundation CEO Katherine Maher, Jeff Ubois of the MacArthur Foundation, and Bill Woodcock, executive director of Packet Clearing House, which provides .org, via back-end Afilias, with DNS resolution services.

Dyson told the New York Times: “If you’re owned by private equity, your incentive is to make a profit. Our incentive is to serve and protect nonprofits and the public.”

The new registry would not have a profit motive, and excess funds would be returned to the non-profit community.

While the new group has yet to make a formal, public proposal, the idea is reportedly to persuade ICANN to block the sale of PIR to Ethos — something nobody can seem to agree is even within its powers — and instead transfer stewardship to this new co-op.

It’s a crazily ambitious goal.

The group would be basically asking ICANN to cut off ISOC’s primary funding source. PIR currently gives tens of millions of dollars a year to its owner, and after the Ethos deal ISOC intends to live off the interest of its billion-dollar windfall.

If ICANN canceled the PIR contract and handed .org to a third party, ISOC would get nothing, potentially crippling it and subsidiaries such as the IETF.

I can’t imagine such a decision, on the outside chance ICANN actually went down this path, not resulting in litigation.

The Cooperative Corporation of .ORG Registrants is reportedly also being backed by other supporters of the #SaveDotOrg campaign (which now has over 20,000 supporters), including the free speech advocates at the Electronic Frontier Foundation and NTEN, a conference/community hub for non-profits.

This campaign last month managed to persuade a group of four Democrat members of Congress — Ron Wyden, Richard Blumenthal, Elizabeth Warren and Anna Eshoo — to express their concerns about the Ethos deal and ask ISOC/Ethos/PIR a series of pointed questions about its potential ramifications.

In its response this week (pdf), the leaders of the three entities avoided directly answering the bulleted questions, but did make some commitments that I believe are new.

Notably, they said that the registry would reincorporate as a Public Benefit LLC before the acquisition closes. This is a relatively new form of legal entity, which has been described like this:

A Public Benefit LLC is a for-profit entity; however, in operating a Public Benefit LLC, the LLC’s management can take into account social, economic and political considerations without violating its fiduciary duty to act in the best interests of the company.

In other words, PIR would be free to place the needs of .org’s non-profit registrants ahead of the needs of its own shareholders without opening itself up to legal action.

A “statement of public benefit” would be in its certificate of formation, and would include a commitment “to limit any potential increase in the price of a .ORG domain registration to no more than 10% per year on average”.

I’ve noted before that this is worded vaguely enough to give Ethos some flexibility to raise prices by over 10%, but the fact that it’s offering to bake a commitment on pricing into its corporate DNA may be seen as a step in the right direction by critics.

It’s also proposing a “Stewardship Council”, which would be “an independent and transparent body” tasked with providing policy guidance to PIR and overseeing a new “Community Investment Fund” that would be used for initiatives such as the annual .org awards program.

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Verisign pays ICANN $20 million and gets to raise .com prices again

Kevin Murphy, January 3, 2020, Domain Registries

Verisign is to get the right to raise the price of .com domains by 7% per year, under a new contract with ICANN.

The deal, announced this hour, will also see Verisign pay ICANN $20 million over five years, starting in 2021, “to support ICANN’s initiatives to preserve and enhance the security, stability and resiliency of the DNS”.

According to ICANN, the pricing changes mean that the maximum price of a .com domain could go as high as $10.26 by October 2026.

Verisign getting the right to once more increase its fees — which is likely to be worth close to a billion dollars to the company’s top line over the life of the contract — was not unexpected.

Pricing has been stuck at $7.85 for years, due to a price freeze imposed by the Obama-era US National Telecommunications and Information Administration, but this policy was reversed by the Trump administration in late 2018.

The amendment to the .com registry agreement announced today essentially takes on the terms of the Trump appeasement, so Verisign gets to up .com prices by 7% in the last four years of the six-year duration of the contract.

ICANN said:

ICANN org is not a price regulator and will defer to the expertise of relevant competition authorities. As such, ICANN has long-deferred to the [US Department of Commerce] and the United States Department of Justice (DOJ) for the regulation of pricing for .COM registry services.

But ICANN will also financially benefit from the deal over and above what it receives from Verisign under the current .com contract.

First, the two parties have said they will sign a binding letter of intent (pdf) committing Verisign to give ICANN $4 million a year, starting one year from now, to help fund ICANN’s activities:

conducting, facilitating or supporting activities that preserve and enhance the security, stability and resiliency of the DNS, which may include, without limitation, active measures to promote and/or facilitate DNSSEC deployment, Security Threat mitigation, name collision mitigation, root server system governance and research into the operation of the DNS

That’s basically describing one of ICANN’s core missions, which is already funded to a great extent by .com fees, so quite why it’s being spun out into a separate agreement is a little bit of a mystery to me at this early stage.

Don’t be surprised if you hear the words “bung” or “quid pro quo” being slung around in the coming hours and days by ICANN critics.

The second financial benefit to ICANN comes from additional payments Verisign will have to make when it sells its ConsoliDate service.

This is the service that allows .com registrants, via their registrars, to synchronize the renewal dates of all of the domains in their portfolio, so they only have to worry about renewals on a single day of the year. It’s basically a partial-year renewal.

Under the amended .com contract, ICANN will get a piece of that action too. Verisign has agreed to pay ICANN a pro-rated fee, based on the $0.25 per-domain annual renewal fee, for the number of days any given registration is extended using ConsoliDate.

I’m afraid to say I don’t know how much money this could add to ICANN’s coffers, but another amendment to the contract means that Verisign will start to report ConsoliDate usage in its published monthly transaction reports, so we should get a pretty good idea of the $$$$ value in the second half of the year.

The amended contract — still in draft form (pdf) and open for public comment — also brings on a slew of new obligations for Verisign that bring .com more into line with other gTLDs.

There’s no Uniform Rapid Suspension policy, so domain investors and cybersquatters can breath a sigh of relief there.

But Verisign has also agreed to a new Registry-Registrar Agreement that contains substantial new provisions aimed at combating abuse, fraud and intellectual property infringement — including trademark infringement.

It has also agreed to a series of Public Interest Commitments, along the same lines as all the 2012-round new gTLDs, covering the same kinds of dodgy activities. The texts of the RRA addition and PICs are virtually identical, requiring:

a provision prohibiting the Registered Name Holder from distributing malware, abusively operating botnets, phishing, pharming, piracy, trademark or copyright infringement, fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law and providing (consistent with applicable law and any related procedures) consequences for such activities, including suspension of the registration of the Registered Name;

There are also many changes related to how Verisign handles data escrow, Whois/RDAP and zone file access. It looks rather like users of ICANN’s Centralized Zone Data Service, including yours truly, will soon have access to the humongous .com zone file on a daily basis. Yum.

The proposed amendments to the .com contract are now open for public comment here. You have until February 14. Off you go.

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ICANN predicts shrinkage in new gTLD sector

Kevin Murphy, January 3, 2020, Domain Policy

ICANN will make less money from new gTLDs in its fiscal 2021 because fewer domains will be registered and renewed, according to its recently published draft budget.

The budget, released the day ICANN broke up for its Christmas holidays, shows that the organization expects to bring in $140.4 million in FY21, up a modest $300,000 on its FY20.

But it’s expecting the amount of money contributed by registries and registrars in the new gTLD sector to decline.

For FY21, it expects new gTLD registry transaction fees — the $0.25 paid to ICANN whenever a domain is registered, renewed or transferred — to be $5.1 million. That’s down from the $5.5 million currently forecast for FY20.

It expects registrar transaction fees for new gTLD domains to dip from $4.6 million to $4.3 million.

But at the same time, ICANN is predicting growth from its legacy gTLD segments, which of course are primarily driven by .com sales. All the other legacy gTLDs of note, even .org and .net, are currently on downward trajectories in terms of volumes.

For FY21, ICANN is forecasting legacy gTLD registry transaction fees to come in at $52.6 million, versus the $50.5 million it expects to see in the current FY20. In percentage terms, it’s about double the growth it’s predicting for the current FY.

Legacy gTLD registrar transaction fees are estimated to grow, however, from $31.2 million to $32.7 million.

In terms of fixed fees — the $25,000 every new gTLD registry has to pay every year regardless of transaction volume — ICANN is also predicting shrinkage.

It reckons it will lose a net seven registries in FY21, dropping from 1,170 to 1,163 by the end of June 2021. These are most likely dot-brand gTLDs that could follow the path of 69 predecessors and flunk out of the program.

ICANN also expects its base of paying registrars to go down by 100 accreditations, with no new registrar applications, causing fees to drop from $10.7 million this year to $9.6 million in FY21.

In short, it’s not a particularly rosy outlook for the gTLD industry, unless you’re Verisign.

ICANN’s financial year runs from July 1 to June 30 this year, and usually the December release of its draft budget includes some mid-year reevaluations of how it sees the current period playing out. But that’s not the case this time.

ICANN appears to be on-budget, suggesting that it’s getting better at modeling the industry the more years of historical transaction data it has access to.

The budget (pdf) is now open for public comment. I spotted a few errors, maybe you can too.

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ASO uses super powers to demand ICANN turn over .org buyout docs

Kevin Murphy, January 2, 2020, Domain Policy

In an unprecedented move, ICANN’s Address Supporting Organization has exercised its special powers to demand ICANN hand over documents relating to the Ethos Capital acquisition of .org’s Public Interest Registry.

There’s a possibility, however small, that this could be the first shot in a war that could see the PIR acquisition scrapped.

Fair warning, this story is going to get pretty nerdy, which may not be compatible with the fuzzy-headedness that usually accompanies the first working day of the year. We’re heading into the overgrown weeds of the ICANN bylaws here, for which I apologize in advance.

The ASO — the arm of the ICANN community concerned with IP address policy — has asked ICANN Org for access to records concerning the $1.135 billion acquisition of PIR, which has attracted lots of criticism from non-profits, domainers and others since it was announced.

It’s unprecedented, and of interest to ICANN watchers, for a few reasons.

First, this is the ASO making the request. The ASO comprises the five Regional Internet Registries, the bodies responsible for handing out chunks of IP address space to ISPs around the world. It doesn’t normally get involved in policy related to domain names such as .org.

Second, it’s invoking an hitherto untested part of ICANN’s new bylaws that allows the certain community entities that make up the “Empowered Community” to make “Inspection Requests” of ICANN Org.

Third, and perhaps most importantly, there’s a hint of a threat that the ASO and other members of the EC may use their extraordinary powers to attempt to prevent the PIR acquisition from going ahead.

Before we unpick all of this, this is what the ASO has sent to ICANN, according to its December 31 statement:

As a Decisional Participant in the Empowered Community and pursuant to ICANN Bylaws section 22.7, the ASO hereby submits this Inspection Request to inspect the records of ICANN, including minutes of the Board or any Board Committee, for the purpose of determining whether the ASO’s may have need to use its empowered community powers in the near future relating to the potential assignment of the .org Registry Agreement. For this purpose, the ASO seeks to inspect any ICANN records which pertain to or provide relevant insight to the process by which ICANN will consider (and potentially approve) the assignment of the .org Registry Agreement, including the process by which input from the affected community will be obtained prior to ICANN’s consideration and potential approval of the assignment.

The Empowered Community is the entity that replaced the US government as ICANN’s primary overseer, following the IANA transition in late 2016.

Its members cover the breadth of the ICANN community, comprising the ASO, Generic Names Supporting Organization, Country Code Names Supporting Organization, Governmental Advisory Committee and At-Large Advisory Committee. Each member is a “Decisional Participant”.

Since the transition, its only real functions have been to approve appointments to the ICANN board of directors and to rubber-stamp the budget, but it does have some pretty powerful tools at its disposal, such as the nuclear ability to fire the entire board.

One of the powers enjoyed by each Decisional Participant, which has never been invoked publicly, is to make an Inspection Request — a demand to see ICANN’s accounts or documents related to the board’s decisions.

In this case, the ASO wants “records which pertain to or provide relevant insight to the process by which ICANN will consider (and potentially approve) the assignment of the .org Registry Agreement”.

But will it get this information? It seems the Inspection Request bylaw is a little bit like ICANN’s longstanding freedom-of-information commitment, the Documentary Information Disclosure Policy, with some key differences that arguably make the IR process less transparent.

Like DIDP, the IR process gives ICANN Org a whole buffet of rejection criteria to choose from. It can refuse requests for reasons of confidentiality or legal privilege, for example, or if it thinks the request is overly broad.

It can also reject a request if “is motivated by a Decisional Participant’s financial, commercial or political interests, or those of one or more of its constituents”, which makes the fact that this request is coming from the ASO particularly interesting.

If the GAC or the GNSO or the ccNSO, or even the ALAC, had made the request, ICANN could quite reasonably have thrown it out on the basis of “commercial or political interests”.

That’s not the case with the ASO, which makes me wonder (aloud, it seems) whether the ASO had received any nudges from other members of the EC before filing the request.

Inspection Requests also differ from DIDP in that any documents that are turned over are not necessarily published, and ICANN can also force the Decisional Participant to file a non-disclosure agreement covering their contents.

ICANN can even demand that an ASO member shows up at its Los Angeles headquarters in person to read (and, if they want, copy) the docs in question.

In short, ICANN has a lot of wriggle room to refuse or frustrate the ASO’s request, and it has a track record of not being particularly receptive to these kinds of demands.

The grey-hairs out there will recall that Karl Auerbach, one of its own directors, was forced to sue the organization back in 2002, just in order to have a look at its books.

But what’s perhaps most tantalizing about the ASO’s request is its excuse for wanting to inspect the documents in question.

It says it need the info “for the purpose of determining whether the ASO’s [sic] may have need to use its empowered community powers in the near future relating to the potential assignment of the .org Registry Agreement”.

One way of interpreting this is that the ASO needed to state a reason for its request and this is pretty much all it’s got.

But what powers does the Empowered Community have that could potentially cover the acquisition of PIR by Ethos? It certainly does not have the power to directly approve or reject the transfer of control of a gTLD contract.

The EC has nine bulleted powers in the ICANN bylaws. Some of them are explicitly about things like budgets and bylaws amendments, which could not possibly come into play here. I reckon only four could feasibly apply:

(i) Appoint and remove individual Directors (other than the President);

(ii) Recall the entire Board;

(viii) Initiate a Community Reconsideration Request, mediation or a Community IRP; and

(ix) Take necessary and appropriate action to enforce its powers and rights, including through the community mechanism contained in Annex D or an action filed in a court of competent jurisdiction.

Short of lawyering up or having the entire board taken out and shot, it seems like the most likely power that could be invoked at first would be the Community Reconsideration Request.

Judging by the bylaws, this is virtually identical to the normal Request for Reconsideration process, a process which very rarely results in ICANN actually reconsidering its decisions.

The major difference is that at least three of the five members of the Empowered Community has to vote in favor of filing such a request, and no more than one may object.

If they manage to muster up this consent — which could take many weeks — the fact that the reconsideration request comes from the “Community” rather than a single entity appears to make substantially no difference to how it is rejected considered by ICANN.

Threatening ICANN with a Community Reconsideration Request is a little like threatening to jump through an increasingly narrow series of hoops, only to find the last one leads into a pit filled with ICANN lawyers with laser beams attached to their heads.

A Community Independent Review Process, however, is a different kettle of snakes.

It’s substantially the same as a regular IRP — where ICANN’s fate is decided by a panel of three retired judges — except ICANN has to pay the complainant’s legal fees as well as its own.

ICANN’s track record with IRPs is not fantastic. It can and does lose them fairly regularly.

Could the ASO’s letter be the first portent of a community-led IRP bubbling up behind the scenes? Could such a move delay the PIR acquisition, putting Ethos’ plan for a profit-driven, price-raising .org on hold for a year or two? It’s certainly not impossible.

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Now PIR rubbishes .org “downtime” claims

Kevin Murphy, December 30, 2019, Domain Registries

Two of Public Interest Registry’s top geeks have come out swinging against recent claims that .org will suffer days of downtime if PIR is acquired by Ethos Capital.

Chief technology officer Joe Abley and Susanne Woolf, senior director of technology community engagement, have penned a blog post calling the recent assertions by subcontractor Packet Clearing House “baffling” and “wrong”.

PCH claimed earlier this month that should PIR fall into for-profit hands, donations made to PCH would dry up, giving Ethos no choice but to either significantly increase .org prices or risk over three days of downtime per year.

PCH is a not-for-profit provider of DNS resolution services that contracts with Afilias to support .org and a couple hundred other Afilias-managed TLDs.

But PIR’s technologists today wrote:

PCH is a contractor to Afilias and has no business relationship with PIR; consequently PCH has no access to non-public financial information. We’re more concerned with the assertions that the current costs of maintaining DNS services are only sustainable if PIR remains a non-profit, and that a for-profit PIR will need to make deep cuts to funding for operations. These inferences are at odds with our knowledge and experience regarding the costs of providing solid DNS service. To be clear – they are wrong.

They go on to say “we find that PCH’s claims about their operational costs and funding models are baffling” and to suggest that if PCH is unhappy with .org’s forthcoming for-profit status, Afilias has plenty of competitors to choose from, writing:

If PCH is unable or unwilling to continue to provide service to Afilias at current pricing, Afilias has many options to ensure that .ORG continues to function at the high levels the technical community expects.

Afilias has already rubbished PCH’s claims in a letter to ICANN.

The $1.135 billion acquisition of PIR from the Internet Society is expected to close in the first quarter, but it’s currently undergoing some scrutiny by ICANN, which has to first approve the change of control.

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DI Leaders Roundtable #4 — Big predictions for 2020

Hindsight is 2020, right? Not this time!

We’re rolling up to the end of the year, so for the fourth DI Leaders Roundtable I thought I’d task my panel of industry experts with the wholly original and unpredictable question:

What do you think will be the major trends or developments in the domain name industry in 2020?

I’m wonderfully happy to report that the panel grasped the opportunity with both hands and delivered an absolute smorgasbord (selection of open sandwiches) of informed opinion about how they reckon 2020 will play out.

From potential changes to security practices to ongoing consolidation to increased government regulation to the death of new gTLDs to the growth of new gTLDs, 2020 is certainly going to be a fun year to report on.

In no particular order, this is what they said:

Rick Schwartz, domain investor

Mugshot2020 is going to be just a fabulous year.

It comes down to two words: re-branding and upgrading.

Businesses that have gotten domains that may have not been prime to begin with want prime domains now to help them grow and be taken more seriously.

Businesses, especially global businesses that made the mistake of using non-dotcom domains, have realized their mistake and want to upgrade to a dotcom domain because of their own self-interest. They don’t care what domainers think! They only care about what they think and their bottom line, and in that regard they only have one choice and they all know it.

It’s mandatory if they want to grow and become part of the largest franchise ever known to mankind. The dotcom franchise.

If you add up all the net worth of every company on earth using the dotcom brand, the number is unfathomable.

As we go into the seventh year of the new gTLD experiment, they are meaningless. They haven’t been adopted by almost anybody. Circulation is poor. So many registrations are questionable or penny-promotional. The majority are parked and not in use nor will they ever be. And 99.9% of the people on this planet could not name a single one of them! Not a one!

The poor roll-out, poor marketing, poor circulation, questionable tactics and rolling out hundreds of extensions at one time was a death wish. A demolition derby as I have described and look at the HUNDREDS that are truly dying on the vine. They are not viable!

The registries themselves wanted the same result as dotcom but they smothered their own product by holding back anything they deemed to have any value whatsoever. They wanted the same result as dotcom but they certainly didn’t use the same playbook. There was no such thing as premium domains with Network Solutions. That was what gave life to the aftermarket.

They changed the recipe and it is what it is. Instead of replacing dotcom domains they should have marketed them as an on-ramp to their main dotcom website. That was a fatal choice.

Country-code extensions with dual purposes have outperformed all the new gTLDs put together.

.org has legs. Even .net domains seem to be in better shape than any of the new extensions.

According to NTLDStats.com there are 400 extensions with less than 20,000 registrations. Not viable! Over 300 of them have less than 10,000 and more than 200 have less than 5,000 and most of those have 2,000 or less.

On the other hand, there have been a lot of gimmicks used by the top 10 to gain HOLLOW registrations. Those 10 control 63% of all new gTLD registrations. Leaving the other 37% to be divided by over 500 other extensions. It’s laughable.

And when it comes to aftermarket sales, 2019 was worse than 2018 and 2017. Wrong direction for something that is supposed to be “emerging.”

According to TheDomains.com reported sales, of new gTLD’s are in a nosedive for 2019 vs 2018 and 2017. And most were done by registries themselves and not individual domain investors. Wrong direction!

2017

1,007 Total Sales
$5.2m Dollar Volume
$5,118 Average Price
$500.3k High Price

2018

1,490 Total Sales
$5.7m Dollar Volume
$3,847 Average Price
$510k High Price

2019

865 Total Sales
$3.4m Dollar Volume
$3,940 Average Price
$335k High Price

To me, 2020 is a year of total clarity. The experiment is over.

Get on board or get run over.

Sandeep Ramchamdani, CEO, Radix Registry

Mugshot

Within the new domains space, we will see a clear separation between the top 10 most popular extensions, and everything else. Many new TLDs have been able to jump volumes by operating at ultra-low prices. As the reality of renewals hit next year, the top TLDs by DUMs will more closely represent the most popular strings overall. Registrars will naturally tend towards focusing on these strings at the cost of everything else.

We will continue to see the normalization of new strings, as its visibility driven by legitimate end-user usage, rises. Our hope is that more registries play an active role in driving adoption by highly visible end-users and accelerate this evolution.

Jeff Neuman, Senior VP, Com Laude

MugshotLooking into my domain name industry crystal ball for 2020, I can see the continuation of some of the same activities, the start of some new debates, and even more maturation of the industry. Here are my views on three of the policy issues likely to be center-stage in 2020 (in no particular order).

Transitioning to a new Steady State of New TLDs.

OK, so the next round of new gTLDs will not open in 2020. However, there will be some real progress made towards the next round. The Subsequent Procedures PDP will complete its policy work on its review of the 2012 round and deliver it to the Council, who in turn will approve (hopefully) the policy work and submit to the Board.

The ICANN Board will put out the report for public comment and we will see those that oppose any new more new TLDs come back out of the woodwork to file the same type of comments reminiscent of 2009/2010. They will claim that more TLDs are not needed, we should not be moving too fast (despite nearly a decade between rounds), and that we should not be adding new TLDs until we solve DNS Abuse, Name Collision, WHOIS/SSAD/GDPR/RDAP/UAM, (insert your own issue), etc.

Despite the likely negativity from some, the community will realize that there is value to additional new gTLDs and maintaining a competitive landscape. There is still value in innovation, encouraging consumer choice and competition. The community will rise above the negativity to realize that many of the issues we experience in the industry are in fact related to the artificial scarcity of TLDs and that we need to continue to push forward towards completing one of the original missions of ICANN.

Rights Protection Mechanisms move to Phase 2.

Admittedly most of the community has not been paying attention to the Rights Protection Mechanisms (RPMs) Policy Development Process PDP. Currently it is working on Phase 1: Reviewing the RPMs introduced for the 2012 Round of New gTLDs. This work includes looking at the Trademark Clearinghouse, Sunrise Processes, the URS and the Trademark Claims process.

2020 may likely see the beginning of its second phase, the first ever review of the Uniform Dispute Resolution Policy (UDRP).

The UDRP was the first of ICANN’s Consensus Policies, and one that has been in place for more than to decades. Great care must be taken in the review of this policy which most will argue has been ICANN’s most successful policy in its relatively young history. The UDRP not only protects the intellectual property community by going after the bad faith registration and use of gTLD domains, but it also has been instrumental for registries and registrars to stay out of the middle of domain name disputes.

Prior to the UDRP, the one domain name registry/registrar was constantly in court defending itself against claims of contributory infringement and hoping that courts would not impose liability on it for allowing the registration of domain names by cybersquatters and not taking back names when notified about the abuse that was occurring on those names.

The passage of the UDRP drastically changed all of that. Registries and Registrars could extricate themselves from domain name disputes by referring the parties to the UDRP and agreeing to following/implementing the decisions. Courts agreed that following the UDRP served as a shield of liability for those registries and registrars that faithfully followed the policy. The bottom line in my view is that domain name registries and registrars need the UDRP as much as the IP Community.

The DNS Abuse Debate continues.

Although some progress has been made in defining and mitigating DNS Abuse with a number of registries and registrars signing a Framework to Address DNS Abuse, more discussions by the ICANN community will continue to take place both within and outside of ICANN. In my opinion, those registries and registrars that are serious of addressing true DNS abuse, will continue to educate the community on the already positive steps that they have been taking to combat phishing, pharming, malware, botnets, etc. as well a number of other non-DNS abuse issues (illegal pharmaceuticals, child exploitation, etc.).

Other groups will continue to press registries and registrars to do more to combat all sorts of other non-DNS forms of abuse, while others will strenuously argue that the more that is done, the more we threaten the civil liberties of domain name registrants. The community will realize that there is no right side or wrong side in this debate. Each side of those complicated debate is right.

Hopefully, a true sense of “multi-stakeholderism” will arise where domain name registries and registrars continue to mitigate abuse while disassociating themselves from those that are not as serious about combating abuse, ICANN will develop tools that will constructively assist with mitigating abuse (as opposed to focusing on contractual regulations), and the rest of the community will work on how to combat the growing problem without trampling on the rights of registrants. At the end of the day, all of us have a role in protecting end users on the Internet.

Note: I know the ePDP work on Universal Access will of course be ongoing, but I am sure others will give their thoughts on that. From a non-policy perspective, the domain name industry will continue to consolidate. We may very well see more registry/registrar combinations, registries purchasing other registries and private equity investment. We will see some more innovative uses of brand TLDs and others following suit.

Christa Taylor, CMO, MMX

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  1. The predicted 2020 recession will reward agile organizations who embrace machine learning to enhance operational efficiencies, customer experiences and protect corporate profit margins. Naturally, organizations with high operating costs will be the hardest hit with impacts being felt in the second half of 2020.
  2. The potential recession combined with mounting pressures to increase efficiency will lead to a renewed focus on reaching niche markets to expand business.
  3. Protection and representation movement of identities will continue to gain strength and momentum in 2020 as more and more people recognize the importance of controlling their own personal data.
  4. Horizontal and vertical consolidation along with increased synergies will continue throughout the industry.
  5. The 4th industrial revolution (IoT, VR, AI, BC) will gather momentum and provide additional opportunities for the use of domain names.
  6. The next round of new gTLD applications will encounter unanticipated challenges causing delays.
  7. New gTLDs registrations will continue to grow in 2020.

Michele Neylon, CEO, Blacknight

MugshotI suspect we’ll see more consolidation across the domain and hosting space. Afilias will probably acquire a few more under-performing registry operators. Some will already be on their platform, while others will be using their competitors. CentralNic will continue to acquire companies that fit with their portfolio of services.

There’ll be more mergers and acquisitions across the hosting and domain registrar space with a small number of companies dominating most developed markets.

The PIR acquisition by Ethos Capital will close and the sky won’t fall. PIR will increase their wholesale price by a few percentage points which will upset domain investors. There’ll be increased calls on ICANN to take action, but these will be rebutted.

More country code operators will start using AI to combat abusive registrations. In some cases I suspect we’ll see more stringent registrant validation and verification policies being introduced, though many ccTLD operators will find it hard to balance maintaining new registration volumes while also increasing the overall “quality” of the registration base.

There’ll be an increase in internet shutdowns in less-developed democracies, while governments in Europe and elsewhere will increase pressure on social media companies to stop the spread of propaganda. Internet infrastructure companies will come under more pressure to deal with content issues.

As we enter a new decade the role of the internet in our daily lives, both business and personal will continue to grow.

The big challenges that lie ahead are going to be complex. Without increasing security there’s a tangible risk that consumers will lose trust in the system as a whole and governments will want to impose more regulations to ensure that. One of the challenges is going to be balancing those increased levels of security and consumer confidence while not stifling innovation.

It’s going to be a fun future!

Dave Piscitello, Partner, Interisle Consulting Group

MugshotExpect increased scrutiny of the domain registration business. Our study and others to follow will continue to expose enormous concentrations of abuse and criminal domain registrations at a small number of registrars.

Domains registered using bulk registration services will attract the most attention. We call these “burner domains”, because cybercriminals use these in a “register, use, and abandon” fashion that’s similar to how drug dealers use disposable or burner mobile phones.

Governments will become more insistent that ICANN does more than acknowledge their recommendations and then defer adoption. They will increase pressure to validate domain registration data and legitimate businesses will happily comply with the additional validation overhead because of the abuse mitigation benefits they’ll receive.

There’s a possibility that a government other than the EU will adopt a data protection regulation that exposes the flawed logic in the ill-conceived Temp Spec “one redaction fits all”. Having decided to “run with GDPR”, what will ICANN do when faced with a government that insists that email addresses be made public?

The governance model will also fall under scrutiny, as the “multi” in multi-stakeholder appears to be increasingly dominated by two stakeholder interests and public interest barely receives lip service.

Ben Crawford, CEO, CentralNic

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  • There will be more creative ways to bake identity, cyber security, crime prevention and policing, and IP protection measures into domains and registration services
  • More registries will be auctioning their own deleting domains
  • Large tech firms, finance players and telcos will play and increasing role in the domain industry
  • Further consolidation of gTLDs as the bigger registry operators continue to acquire some of the smaller ones
  • More regulations impacting the domain name industry
  • Smart independents like .XYZ, Radix and .ICU (which went from zero to 4+ million DUMs in 18 months) will continue to dominate the nTLD space (without blowing $100m on the rights to their TLDs)

Jothan Frakes, Executive Director, Domain Name Association

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Consolidation will continue — look for a lot of M&A activity and corporate development. Lots of moves and role changes with people changing companies as the consolidation occurs. With change comes great opportunity, and there will be a lot of change.

The industry is kicking off the year with oomph — the new location and format for NamesCon, billed as as the Domain Economic Forum in Austin. The event looks promising, as it begins refreshed and demonstrates the strengths of the team who produce Cloudfest. Austin, like Las Vegas, is a mecca for tech startups, but larger, so hopefully the convenience of the venue to the local tech companies, along with with GoDaddy demonstrating a heavier presence at the event this year will be a big lure to attract more new faces to this great industry (and event).

There will be more focus on making things easier for new customers to use and activate services on domain names. Cool technologies such as DomainConnect or other methods that enable “app store” type activation of domain names will continue to make it simpler for a domain name owner to activate, build and use their domains. This is a crucial evolutionary step in the business, as it plays a significant role in renewal rates and overall customer growth.

We’ll see further innovation in the use of domain names become more mainstream. IoT, GPS/Geo, AI, Bots, voice, AR/VR and other technologies will drive expanded use of domain names. Even Blockchain, which seems to have gotten more pragmatic about purpose, has a lot of promise with how it can interact with DNS now that the hype has scaled back and the designated drivers that remain are plowing forth with their efforts to deliver on the core purpose/benefits they set out to deliver.

Domains, as well as the cool things that you can do with them, will continue to be a growing business that enables people and organizations to build and do great things.

A very happy new year to all DI readers and supporters!

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Afilias denies .org will go down post-acquisition

Kevin Murphy, December 23, 2019, Domain Registries

.org domains will not suffer downtime as a result of Ethos Capital’s acquisition of Public Interest Registry, according to Afilias.

Afilias, which provides PIR’s back-end registry services, wrote to ICANN (pdf) last week to reject claims by DNS resolution subcontractor Packet Clearing House that .org could suffer more than three days a year of downtime if .org moves into commercial hands.

Chief technology officer Ram Mohan wrote:

Afilias — not PCH — is responsible for ensuring that .org names remain available 100% of the time. The Afilias global DNS network is diverse and robust; PCH is a contracted secondary DNS provider. Since Afilias began supporting .org in 2003, we have maintained an exemplary record of uptime, and will continue performing at world-standard levels.

Afilias states for the record that, for .org and PIR’s other TLDs, we will continue our exemplary performance at pricing consistent with our current contract with PIR.

Not-for-profit PCH had claimed that US tax law would see almost $30 million of annual donations dry up if .org became a for-profit enterprise again.

Ethos would be forced to increase .org prices dramatically or under-invest in DNS and see days of downtime, the organization claimed.

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