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ICANN asks the US to cut it loose

Kevin Murphy, March 25, 2011, Domain Policy

ICANN has officially requested the loosening of its contractual ties to the US government.

In a letter to the National Telecommunications and Information Administration (pdf), ICANN president Rod Beckstrom said the US should finally make good on its promise to privatize the management of the internet’s naming and addressing resources.

Currently, ICANN manages the so-called IANA functions, which give it powers over the domain name system’s root zone, under a no-fee procurement deal with the NTIA.

That contract is up for renewal in September, and the NTIA recently issued a Notice Of Inquiry, soliciting public comments on how the IANA functions should be handled in future.

In Beckstrom’s response to the NOI, he says that a US government procurement contract is not the most suitable way to oversee matters of global importance.

Its close links to the NTIA are often cited by other governments as proof that ICANN is an organization that operates primarily in the interest of the US.

Beckstrom said there is “no compelling reason for these functions to be performed exclusively pursuant to a U.S. Government procurement contract.”

He noted that the original plan, when ICANN was formed by the Clinton administration in 1998, was to transition these functions to the private sector no later than September 2000.

The privatization of the DNS is, in effect, 11 years late.

Beckstrom wrote:

The IANA functions are provided for the benefit of the global Internet: country code and generic top-level domain operators; Regional Internet Registries; the IETF; and ultimately, Internet users around the world. Applying U.S. federal procurement law and regulations, the IANA functions should be performed pursuant to a cooperative agreement.

His position was not unanticipated.

At the start of ICANN’s San Francisco meeting last week, Beckstrom and former chairman Vint Cerf both said that a “cooperative agreement” would be a better way for the US to manage IANA.

VeriSign’s role in root zone management is currently overseen by this kind of arrangement.

The NTIA has specifically asked whether IANA’s three core areas of responsibility – domain names, IP addresses and protocol parameters – should be split between three different entities.

Beckstrom also argued against that, saying that there are “many examples of cross-functional work”, and that ICANN already has the necessary expertise and relationships in place to handle all three.

The NOI (pdf) is open until end of play next Thursday, March 31. Half a dozen responses have already been filed here.

At least one respondent believes the IANA powers could be broken up.

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.xxx reservations pass half a million

Kevin Murphy, March 24, 2011, Domain Registries

ICM Registry has now taken over 500,000 reservations for .xxx domain names.

The counter on its web site ticked up by about 150,000 overnight. This was apparently due to the bulk uploading of large requests from several dozen enthusiastic potential registrants.

ICM tells me that these are all requests for unique domains, not counting duplicates, and that over 100,000 requests were not added because they did not appear to come from legit sources.

The counter was around the 200,000 mark last Friday, before ICANN approved ICM’s .xxx registry contract. The deal generated substantial media interest.

Again, it’s worth noting that none of these reservations are guaranteed to convert into sales, they’re basically just requests to be notified when the domains become available.

The price of a .xxx domain is expected to be at least $70 a year, which could scare off some buyers.

Still, coupled with landrush and Founders Program sales, I’m fairly confident that ICM, which spent about $12 million fighting ICANN for .xxx, will recoup its investment before the end of the year.

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Microsoft spends $7.5 million on IP addresses

Kevin Murphy, March 24, 2011, Domain Tech

It’s official, IP addresses are now more expensive than domain names.

Nortel Networks, the bankrupt networking hardware vendor, has sold 666,624 IPv4 addresses to Microsoft for $7.5 million, according to Delaware bankruptcy court documents (pdf).

That’s $11.25 per address, more than you’d expect to pay for a .com domain name. Remember, there’s no intellectual property or traffic associated with these addresses – they’re just routing numbers.

This, I believe, is the first publicly disclosed sale of an IP address block since ICANN officially announced the depletion of IANA’s free pool of IPv4 blocks last month.

The deal came as part of Nortel’s liquidation under US bankruptcy law, which has been going on since 2009. According to a court filing:

Because of the limited supply of IPv4 addresses, there is currently an opportunity to realize value from marketing the Internet Numbers, which opportunity will diminish over time as IPv6 addresses are more widely adopted.

Nortel contacted 80 companies about the sale a year ago, talked to 14 potential purchasers, and eventually received four bids for the full block and three bids for part of the portfolio.

Microsoft’s bid was the highest.

The Regional Internet Registries, which allocate IP addresses, do not typically view IP as an asset that can be bought and sold. There are processes being developed for assignees to return unused IPv4 to the free pool, for the good of the internet community.

But this kind of “black market” – or “gray market” – for IP addresses has been anticipated for some time. IPv4 is now scarce, there are costs and risks associated with upgrading to IPv6, and the two protocols are expected to co-exist for years or decades to come.

In fact, during ICANN’s press conference announcing the emptying of the IPv4 pool last month, the only question I asked was: “What is the likelihood of an IPv4 black market emerging?”.

In reply, Raul Echeberria, chair of ICANN’s Number Resource Organization, acknowledged the possibility, but played down its importance:

There is of course the possibility of IPv4 addresses being traded outside of the system, but I am very confident it will be a very small amount of IPv4 addresses compared to those transferred within the system. But it is of course a possibility this black market will exist, I’m not sure that it will be an important one. If the internet community moves to IPv6 adoption, the value of the IPv4 addresses will decrease in the future.

I doubt we’ll hear about many of these sales in future, unless they come about due to proceedings such as Nortel’s bankruptcy sale, but I’m also confident they will happen.

The total value of the entire IPv4 address space, if the price Microsoft is willing to pay is a good guide, is approximately $48.3 billion.

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Facebook files 21 domain name complaints

Kevin Murphy, March 23, 2011, Domain Policy

Facebook has filed a UDRP complaint covering 21 domain names that include its trademark.

All seem to belong to the same domainer: Mike Mann. His company, Domain Asset Holdings, which has over 162,000 domains to its name, is listed in the Whois for each.

It’s the largest single UDRP filing by Facebook to date, and only its second to include brand+keyword domains.

The contested domains include: aboutfacebook.com, facebookbabes.com, facebookcheats.com, facebookclub.com, facebookdevelopment.com, killfacebook.com and many more.

All 21 covered by the UDRP are currently available for sale at Mann’s DomainMarket.com, with list prices between $350 and $8,000 and above.

A quick search on that site for other well-known social media brands returned dozens of results.

Mann is known as co-founder of BuyDomains, and more recently as one of the former owners of sex.com, which sold for $13 million last year.

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Canon’s sexy reason for .canon?

Kevin Murphy, March 21, 2011, Domain Policy

Canon made headlines and gave a small amount of momentum to the idea of “.brand” top-level domains when it announced, a year ago, that it would apply to ICANN to manage .canon.

There are plenty of good reasons why the company would want the TLD.

Beyond the more obvious search-oriented branding opportunities, some say Canon could try to boost customer loyalty and create new revenue streams by offering camera buyers services such as photo hosting at personalized .canon domains.

But here’s another reason that doesn’t seem to have received many column inches: as I recently discovered from a few continental friends, “canon” also means “sexy” in French slang.

I expect this coincidence was the very least of Canon’s concerns when its executives met to discuss their .brand TLD strategy, but it does highlight a major issue that some companies will have to deal with when the ICANN new gTLD program gets underway.

They may think their brand is unique, but unless they’ve done their homework they may find themselves competing with, or blocked by, equally legitimate applicants from other nations.

Companies planning to participate in the program – even only as a challenger – will need to have done a fairly daunting audit of their key brands if they want to avoid nasty surprises.

Ensuring a brand is a unique, registered trademark in one’s home territory is only the beginning.

Companies need to also ask themselves what, if anything, their mark means in other languages, what it looks like in non-Latin scripts such as Arabic and Chinese, and whether it has similarity of “appearance, phonetic sound, or meaning” to any other potential new TLD string.

We already have at least one double entendre in the DNS – the ccTLD for the tiny Pacific island of Niue, .nu, means “.naked” in French, as the registry discovered to its benefit many years ago.

If Canon had not decided to apply for .canon, could a French-speaking pornographer have applied for the TLD instead, on the quite reasonable basis that it is also a “generic” string?

ICANN’s trademark protection policies would make such a delegation highly unlikely, but Canon would have found itself forced into a defensive fight to protect its mark.

Of more immediate concern to the company is of course the question of who gets to register canon.xxx.

It seems likely that ICM Registry’s sunrise policy is strong enough to ensure that this particular .xxx domain is never used for pornography, but only if a) no existing pornographer has a trademark on the string and b) Canon remembers to defensively register.

In the unlikely event that Canon forgets to defend its mark, a pornographer who registered canon.xxx for a legitimate French porn site could well find himself with a UDRP-winning domain.

And don’t get me started on Virgin…

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