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ICANN smacks new gTLDs for pre-sunrise auctions

Running a premium domain name auction before you’ve finished your new gTLD sunrise period is Officially Not Cool, according to ICANN’s compliance department.

People who won premium new gTLD domains in auctions that took place before sunrise periods now face the possibility of losing their names to trademark owners.

.CLUB Domains, and probably XYZ.com, operators of .club and .xyz, two of the highest-volume new gTLDs to launch so far, appear to be affected by the ICANN decision.

ICANN told .CLUB that its “winter auction“, which took place in late February, may have violated the rules about allocating or “earmarking” domains to registrants before sunrise takes place.

Meanwhile, NameJet has cancelled the auction for deals.xyz, which “sold” for $8,100 late last year, suggesting that .xyz’s pre-sunrise auction is also considered ultra vires.

ICANN told .CLUB that its auction sales “constitute earmarking” in violation of the rule stating that registries “must not allow a domain name to be allocated or registered prior to the Sunrise period”.

.CLUB had told its auction winners that a sunrise period registration would prevent them from getting the domain they wanted and that they would be refunded if a sunrise registrant emerged.

But ICANN evidently told the registry:

Irrespective of whether “[a]llocation was expressly conditioned upon any Sunrise claim,” or whether any Sunrise claim was made, the pre-selection, pre-registration or pre-designation to third parties, in this case via .Club Domains’ “winter auction,” constitutes improper allocation.

I kinda thought this would happen.

Back in November, when XYZ.com ran its first .xyz auction — about six months before its sunrise even started — CEO Daniel Negari told us he believed it was “comfortably within the rules“.

We said the auction “seems to be operating at the edge of what is permissible under the new gTLD program’s rights protection mechanisms, which state that no domains may be allocated prior to Sunrise.”

I’ve not yet been able to definitively confirm that .xyz is affected by this ICANN decision, but .club definitely is.

.CLUB Domains told its auction winners today that the names they won are now subject to a 60-day period during which they could be obtained by trademark owners.

If no trademark owner claims the name, .CLUB said it will give the auction winner a 10% rebate on their purchase price.

The email states:

We are placing the domain on hold for 60 days, during which time a Trademark Clearinghouse (TMCH) holder will have the opportunity to purchase the domain at Sunrise rates. Although, the domain is not currently in the TMCH, if a trademark holder should file in the TMCH over the next 60 days, the domain will be offered to that registrant. However, if the name is not claimed by filing in the TMCH over the next 60 days, your transaction will move forward as planned.

Although we disagree with ICANN compliance’s position on this matter, the actions we are taking are necessary to ensure that we are not offside with ICANN compliance in any way. We understand that you have been caught in the middle of this issue due to no fault of your own. Given these circumstances, we are offering you two options:

1) Should you decide to complete this transaction, we will issue you a payment of 10% of the purchase price after the transaction closes in 60 days, assuming the name is not registered by a TMCH mark holder because of the delay.

2) At any time during the 60 day period you have the option to rescind the auction bid and not purchasing the domain.

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dotBERLIN pulls plug on free domain giveaway

The .berlin registry has apparently halted the promotion that has given away tens of thousands of free domain names, citing unexpectedly high demand.

According to 101domain, a registrar that started giving away .berlin domains for free yesterday:

As of 1pm PST today, June 18th, the free .BERLIN promotion will unfortunately come to an end.

According to the dotBERLIN registry, demand was exceedingly above their anticipated volumes, so they have decided to pull the plug early.

The promotion, which led to domainers registered tens of thousands of names, was due to end on Friday.

Why has dotBERLIN pulled the plug? I have to wonder whether it is related to the company’s own registration policies, which are not particularly domainer-friendly.

The .berlin TLD started today at 121,193 names, according to its zone file, up 5,227 on the day.

Over 70,000 of those names were registered in the last two days, and most of those are believed to be freebies handed out by InternetX and, as of yesterday, 101domain.

As we reported yesterday, one domainer, DomainProfi, is responsible for over 23,000 of these registrations.

Another massive registrant, as DNW reported today, is Sedo-affiliated DomCollect, part of the same group (United Internet) as InternetX. It has over 30,000 .berlin names.

It’s difficult to see any of these names being developed or used in any meaningful way — they seem to be currently parked — yet the dotBERLIN registration policy may require it.

The English translation of the policy (pdf) states:

5.2. Conditions for the content and use of domain names

As the gTLD .BERLIN is a so-called “community based” gTLD, where the registration of domain names is subject to restrictions, a domain name must be put into use within 12 months of registration.

If the registrant sets up a web site which can be reached via the registered domain name, the content of this site must have be directly related to the authorisation to register

The first part of that seems simple: you have to “use” the domain within a year or risk losing it.

The “authorisation to register” appears to be the registrant’s self-declared “economic, cultural, historical, social or other connection to the German capital, Berlin”.

I interpret the two paragraphs together to read: “You must use the name in a manner that reflects your connection to Berlin”.

Does this mean parking is prohibited? There’s nothing explicit banning it, but I’d say it’s definitely a grey area. It seems to be down to the decision of the registry.

I asked dotBERLIN for clarification this morning but have not yet received one.

For the registrants, there seems to be little risk, however. They haven’t paid for their names and probably don’t intend to renew any that they can’t sell before renewal time.

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Are you ready to sell your new gTLD yet?

Applicant Auction wants to know.

The company, which was set up to help resolve new gTLD contention sets, has started pitching its services to the owners of gTLDs that are already delegated.

An email sent out to applicants this week says:

Many people approach us with interest in purchasing strings, so we are offering a new auction where gTLD owners can sell their string in a open auction.

I gather that the company is targeting both live registries and applicants for uncontested strings.

It’s sad to say, but I think there might even be a market for it.

The laid-back “if we build it, they will come” mentality among applicants seems to have been a lot more prevalent than I had anticipated, which has resulted in depressing sales for some new gTLDs.

Will any of them decide to cash out early rather than putting in the time and money to make their businesses work over the long haul? It remains to be seen.

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London meeting already ICANN’s second-biggest

Kevin Murphy, June 17, 2014, Domain Policy

Over 2,200 people have already registered for ICANN 50, which kicks off this coming weekend in London.

According to ICANN, that puts the upcoming meeting second only to last year’s one in Beijing, which had 3,141 pre-registrations and 2,532 eventual attendees.

London’s a pretty convenient “hub” city to fly to, but I suspect a lot of the interest might be related to the IANA transition process, which has put a new spotlight on ICANN in recent months.

ICANN has already laid on overflow viewing rooms for discussions related to the IANA topic.

The meeting officially starts with the welcome ceremony on Monday, but the work begins as usual on Saturday, when the various constituencies gather to decide what they want to moan about this time.

As usual, you don’t have to actually be in London to “attend” the meeting — there’s a full schedule of remote participation opportunities if your diary, bandwidth and time zone permits.

It’s a packed schedule as usual, and it could look overwhelming to a newbie.

A good trick is to simply follow the board of directors around on the Tuesday, when it invites each constituency into the room in turn for some passive-aggressive feedback sessions.

You’ll get a relatively concise breakdown of the top three or four issues on the mind of ICANN participants in that way, but probably not a great deal of insight into the board’s thought process.

The public forum on Thursday is also a highlight. Anyone can take to the mic to say or ask anything (relevant) they please. Comments and questions can also be submitted remotely.

For ICANN 50 the forum has actually been shortened to two hours to accommodate discussions of the IANA process, causing some in the community to question whether ICANN is trying to stifle the crazy.

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CentralNic pays up to $7.5m for Internet.bs

CentralNic has acquired the unfortunately named Bahamas-based registrar Internet.bs for up to $7.5 million, in an effort to bolster its registrar business.

The deal is for a mixture of cash ($2.7 million), newly issued shares ($2.5 million) and a delayed performance-related payout of up to $2.3 million.

CentralNic is best known as a registry and back-end provider, but it also has a registrar, TLD Registrar Solutions, which is aimed primarily at registries that want to vertically integrate.

The acquisition means the company now has a medium sized ICANN-accredited retail registrar arm too.

Internet.bs has well over half a million gTLD names under management, according to registry reports. According to CentralNic, it has 28,000 customers in 199 countries.

The company made a profit of $730,000 last year, CentralNic said.

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