Correction: UNR’s trademark block service

The registry or registries that buy UNR’s portfolio of new gTLDs at its firesale auction next month will be obliged to honor domains blocked by subscribers to its UniEPS brand protection service.

That’s contrary to what I reported yesterday, which was pretty much the opposite. I apologize for the error.

I asked UNR CEO Frank Schilling for comment about the post-auction UniEPS service, but did not receive a reply. Today, I learned that Schilling had in fact sent a lengthy reply, but it wound up in my email spam folder. Apparently my emails to him also wound up in his spam folder. The filtering gods clearly do not approve of our relationship.

According to Schilling, bidders for each of the 23 auctioned TLDs have been told “blocked names have to remain blocked, banned, or reserved after acquisition, even if they do not participate in our blocking service”.

Registrars were told:

Should an auction winner elect to withdraw the Asset(s) from UNR’s blocking services, the blocked domains will have to remain blocked, reserved, or banned in the acquired Registries until the expiry dates below. This is no different than a new owner honoring prepaid domains under management with expiry dates in the future. Once a block expires, the associated domains can be released for any registrant to purchase (fees from future registrations will be paid to the new owner).

Schilling also said that UNR is forgoing revenue from UniEPS auto-renews after March 15 until the gTLDs change hands. The new owners will be able to cancel these free renewals, he said.

The new owners will be able to continue to use UniEPS if the gTLDs remain on its registry platform. They could also choose to migrate them to their own blocking service, should they have one.

UniEPS, like other products on the market, blocks trademarks and variants such as IDN homographs from registration. It works out cheaper than defensively registering domains, but the domains cannot be used.

UNR, the former Uniregistry, will auction all of its 23 gTLD contracts April 28, as the company refocuses on back-end registry services.

Donuts boss discusses shock Afilias deal

Afilias is to spin off its registrar business and also its contested application for the .web gTLD, following its acquisition by Donuts, according to Donuts CEO Akram Atallah.

Speaking to DI last night, Atallah explained a little about how the deal, which creates a registry with about 450 strings under management, came about.

Rather than a straightforward bilateral negotiation, is seems like Afilias was shopping itself around for a buyer. Several companies were invited to bid, and Donuts won. Atallah said he does not know how many, or which, bidders Donuts was competing against.

Afilias was making over $100 million a year in revenue last time its accounts were published in 2017, but its largest gTLDs are in decline and it took a big hit when Public Interest Registry renegotiated its back-end contract for .org in 2018.

The acquisition, the value of which has not been disclosed, does not include Afilias’ registrar or mobile businesses, which Atallah said will be spun off.

He also revealed that the deal does not include Afilias’ .web gTLD application, which came second in an ICANN auction won by a Verisign-backed bidder a few years back.

Afilias is currently waiting for the results of an Independent Review Process case that seeks to overturn the winning $135 million bid and award the potentially lucrative gTLD to Afilias. The case was heard in August and a decision is surely not many months away.

What the deal does include are all of Afilias’ registry assets, including its owned gTLDs and its back-end service provider contracts.

I asked Atallah what the plans are for migrating or integrating the two registry platforms. While Afilias runs its own data centers, Donuts migrated its registry to Amazon’s AWS cloud service earlier this year.

“We have to make sure whatever we do is as painless as possible to our registrar channel and partners,” he said. “We believe that at least on the new gTLDs that they have it will probably be easier for us to move them to our back-end, which is on the cloud already… We’ll probably do that fairly quickly.”

“But remember they have other registries and ccTLDs that don’t own that they run on their back-end, so there’ll be business issues and negotiations there to see what we can do there,” he added.

While he’s not expecting anyone to notice any big changes immediately, Atallah said that over time features such as the companies’ different EPP commands will be merged, and that valued-added services will start to cross-pollinate.

“All of the features we have on our TLDs will migrate to their TLDs and vice versa,” he said.

That means things like the Domain Protected Marks List, a defensive registration service for trademark owners, will start to show up in Afilias gTLDs before long, he said.

I asked about the possibility of layoffs, something that is no doubt worrying staff at both companies right now and seems quite possible given the move to the cloud, but Atallah said it was too early to say. Nothing will change until the deal closes at the end of the year, he said.

“Once we actually close, we’ll sit down with the management of the Afilias registry team and look at all the different assets that we have and try to pick the best in class in technology and services,” he said.

Having seen some mutterings about competition concerns, I put that question to Atallah. He laughed it away, pointing out that, even combined with Afilias, Donuts will have fewer than 15 million domains under management.

Rival dot-brand bidders in settlement talks, seek auction delay

Two companies called Merck have managed to delay an ICANN auction for the .merck dot-brand top-level domain.
The two companies applied for .merck in 2012 and have spent the last almost eight years conducting a battle for the string using various ICANN conflict and appeals mechanisms.
Earlier this year, ICANN placed the two applications into a “last resort” auction, the proceeds of which would flow into ICANN’s own coffers.
Scheduled for July, it would have been the first time competing brands had fought for the same gTLD at ICANN auction.
But the two Mercks sought and received multiple extensions to the auction date, telling ICANN that they were in private settlement talks, until ICANN seemingly got bored and denied their last extension request.
The auction was set to go ahead in late October, but the two applicants managed to get another delay anyway by filing a Request for Reconsideration with ICANN, asking that the refusal to extend be overturned.
While the request is likely to be rejected, the mere fact of its filing means both applications continue to be in “On Hold” status while the request is processed, buying the companies at least a month of extra time to come to their own less-expensive resolution.
The two companies are US-based Merck Registry Holdings, Inc. and its former parent, Germany-based Merck KGaA. The German company is over 350 years old and split from its American subsidiary when it was seized by the US government during World War I. They’re both in the chemicals business.

Amazon and Google have been BEATEN by a non-profit in the fight for .kids

One of the longest-fought new gTLD contests has finally been resolved, with a not-for-profit bid beating out Google and Amazon.
Amazon last week withdrew its application for .kids, leaving Hong Kong-based DotKids Foundation the only remaining applicant.
DotKids now has a clear run at the gTLD, with only ICANN contracting and technical testing before .kids goes live in the DNS root. We could be looking at a commercial launch within a year.
It’s a surprising outcome, not only because Amazon has all the money in the world, but also because it actually has a product called the Echo Dot Kids Edition, a candy-striped, parentally-controlled version of its creepy corporate surveillance device.
The fight between the two applicants was settled privately.
While ICANN has scheduled them in for a “last resort” auction more than once, the contention set was “On Hold” due to DotKids’ repeated use of ICANN appeals processes to delay.
My understanding is that it was not an auction. I don’t know whether any money changed hands to settle the dispute. It may just be a case of DotKids beating Amazon in a war of attrition.
DotKids, much like ultimately successful .music applicant DotMusic, pulled every trick in the book to delay .kids going to auction.
It’s filed no fewer than four Requests for Reconsideration with ICANN over the last five years, challenging almost every decision the organization made about the contention set.
Last year, DotKids (which had a reduced application fee under ICANN’s applicant support program) even asked ICANN for money to help it fight Amazon and Google at auction, then filed an RfR when ICANN refused.
The company has been in a Cooperative Engagement Process — a precursor to more formal appeals — with ICANN since February.
DotKids until recently also faced competition from Google, which had applied for the singular .kid but withdrew its application last October.
DotKids Foundation is run by Edmon Chung, perhaps best-known as the founder and CEO of 2003-round gTLD .asia.
I can’t help but feel that he has grasped a poison chalice.
The two examples we have of child-friendly domains to date are .kids.us, which was introduced by point-scoring US politicians under the Bush administration and promptly discarded when (almost literally) nobody used it, and .дети, the Russian equivalent, which usually has fewer than a thousand names in its zone file.
I believe that would-be registrants are broadly wary of signing up to vague content restrictions that could prove PR disasters if inadvertently violated.
In its 2012 application, DotKids said that .kids “will have a core mandate to advocate the production and publishing of more kids friendly content online”.
But what is a “kid”? DotKids said it would adopt the United Nations Convention on the Rights of Child definition as “every human under 18 years old”.
Because the parents of every five-year-old would be happy for their kid to view sites designed for 17-year-olds, right?
It’s going to be challenging to get this one right, I think.

ICANN redacts the secrets of Verisign’s .web deal

Afilias thinks it has found the smoking gun in its fight to wrestle .web out of the hands of rival Verisign, but for now the details are still a closely guarded secret.
The company recently filed an amended complaint in its Independent Review Process case against ICANN, after it managed to get a hold of the deal that Verisign struck with Nu Dot Co, the company that spent $135 million of Verisign’s money to win .web at auction in 2016.
The Domain Acquisition Agreement, which apparently set out the terms under which NDC would bid for .web on Verisign’s behalf, was revealed during disclosure in December.
But in publishing the amended complaint (pdf) (which seems to have happened in the last week or two), ICANN has whited out all references to the contents of this document.
Afilias claims that the DAA proves that NDC broke the rules of the new gTLD program by refusing to disclose to ICANN that it had essentially become a Verisign proxy:
It claims that ICANN should therefore have disqualified NDC from the .web auction.

Based on the terms of the DAA, it is evident that NDC violated the New gTLD Program Rules. ICANN, however, has refused to disqualify NDC from the .WEB contention set, or to disqualify NDC’s bids in the .WEB Auction.

Afilias came second in the 2016 auction, bidding $135 million. NDC/Verisign won with a $142 million bid, committing it to pay the amount Afilias was willing to pay.
While Verisign has said that it plans to market .web, Afilias believes that Verisign’s primary motivation at the auction was to essentially kill off what could have been .com’s biggest competitor. It says in its amended complaint:

ICANN has eviscerated one of the central pillars of the New gTLD Program and one of ICANN’s founding principles: to introduce and promote competition in the Internet namespace in order to break VeriSign’s monopoly

Whether the DAA reveals anything we do not already know is an open question, but Afilias reckons ICANN’s prior failure to disclose its contents represents a failure of its commitment to transparency.
Reading between the lines, it seems Afilias is claiming that ICANN got hold of the DAA some time before it was given to Afilias in discovery last December, but that ICANN “had refused to provide the DAA (or even confirm its existence)”.
By redacting its contents now, ICANN is helplessly playing into the narrative that it’s trying to cover something up.
But ICANN is probably not to blame for the redactions. It was ICANN holding the axe, yes, but it was Verisign that demanded the cuts.
ICANN said in its basis for redactions document (pdf) that it “has an affirmative obligation to redact the information designated as confidential by the third party(ies) unless and until said third party authorizes the public disclosure of such information.”
Afilias has also managed to put George Sadowsky, who for the best part of the last decade until his October departure was one of ICANN’s most independent-minded directors, on the payroll.
In his testimony (pdf), he apparently reveals some details of the ICANN boards private discussions about the .web case.
Guess what? That’s all redacted too, unilaterally this time, by ICANN.

AlpNames could get PAID for abandoning its customers

So it turns out selling domain names for peanuts to spammers isn’t a viable business model. Who’d have thunk?
As you’ll have no doubt already read elsewhere, ICANN has shut down AlpNames, the deep-discounting registrar with an unenviable reputation for attracting abusive registrants.
But there’s a chance that the company might actually get paid for its customer base, under ICANN rules.
ICANN today terminated AlpNames’ contract, effective immediately, having discovered the “discontinuance of its operations”.
It’s a rare case of ICANN going straight to richly deserved termination, skipping over the breach notice phase.
The former registrar’s web site has been down for the best part of a week, resolving to a Cloudflare error message saying the AlpNames web server is missing its SSL certificate.
But it appears its customers may have been experiencing problems accessing their accounts even earlier.
Judging by ICANN’s termination notice, the organization has had just about as much luck contacting AlpNames management as DI, which is to say: none.
CEO Iain Roache appears to have simply stopped paying attention to the company, for reasons unknown, allowing it to simply fade away.
At least three members of senior staff have left the company over the last several months, with former COO Damon Barnard telling DI he was asked to leave as a cost-cutting measure as Roache attempted to relocate the company from Gibraltar to the UK.
I gather that Roache is also currently tied up in litigation related to the failure of his old registry management business, Famous Four Media, which was removed by gTLD portfolio owner Domain Venture Partners last year.
So what happens now to AlpNames customers?
Fortunately, most of them should suffer only minor inconvenience.
ICANN has initiated its De-Accredited Registrar Transition Procedure, which will see all of AlpNames’ domains forcibly transferred to another registrar.
This often uses the data that registrars are obliged to periodically escrow, but in this case AlpNames uses LogicBoxes as a registrar back-end, so presumably LogicBoxes still has fresh, live data.
AlpNames had 532,941 domain names across all gTLDs on its IANA tag at the last official count, at the end of November. It’s believed to be closer to 700,000 today.
In November, its top two gTLDs were .top and .gdn, which had 280,000 names between them. It had over 19,000 .com names under management
Almost 700,000 names is a big deal, making AlpNames a top 40 registrar, and would make a nice growth spurt for any number of struggling registrars.
The portfolio could be a bit of a poisoned chalice, however, containing as it likely does a great many low-quality and some possibly abusive registrations.
At least one registrar, Epik, has publicly stated its desire to take over these domains, but due to the volume of AlpNames DUM it could be a competitive bidding process between multiple registrars.
Under the ICANN rules (pdf), a “full application process” is generally favored for defunct registrars with over 1,000 domains, when the de-accredited registrar has not named a successor.
The scoring system used to pick a winner has many criteria, but it generally favors larger registrars. They have to show they have the scale to handle the extra technical and customer support load required by the transition, for example.
It also favors registrars with breadth of gTLD coverage. They have to be accredited in all the gTLDs the dead registrar was. AlpNames supported 352 gTLDs and had active domains in 270 of them, according to November’s registry reports.
Language support may be an issue too, in case for example a substantial chunk of AlpNames business came from, say, China.
All applying registrars that score above a certain threshold are considered tied, and the tie-breaker is how much they’re willing to pay for the portfolio.
Unlike gTLD auctions, ICANN does not receive the proceeds of this auction, however. According to the policy (with my emphasis):

This procedure is not intended to create a new form of revenue for ICANN. To the extent payment is received as part of a bulk transfer, ICANN will apply funds against any debt owed by the registrar to ICANN and forward the remaining funds, if any, to the de-accredited registrar.

That’s right, there’s a chance AlpNames might actually get a small windfall, despite essentially abandoning its customers.
Think about it like the government using eminent domain to buy a house it wishes to demolish to make way for a new road. Except the house’s cellar is full of kidnapped children. And it’s on fire.
Of course, this might not happen. ICANN might decide that there’s not enough time to run a full application process without risk to AlpNames’ customers and instead simply award the dead registrar’s portfolio to one of the registrars in its pre-approved pool of gaining registrars.
That choice would be partly based on ICANN judgement and partly on which registrar is next in the round-robin queue of pre-qualified registrars.
Here’s a handy diagram that shows the procedure.

UPDATE August 12 2020: Roache recently wrote to DI and stated the following:

Alpnames itself worked closely with ICANN for months to arrange for its exit from the Registrar business and with a number of Registrars to arrange for the transfer of the customers. Your article does not reflect the detail of what transpired and is inaccurate.

O.com might be a one-off for Verisign

Verisign today was finally given approval to auction off o.com, the first single-character .com domain to hit the market since the early 1990s.
The ICANN board of directors voted to approve a contractual amendment that will lift the ban on single-character .coms in this instance, but it may not necessarily mean more will be sold in future.
The resolution passed in Japan states that the approval is “limited to the unique circumstances of this particular domain name, and the approval of the amendment does not establish a precedent that applies in other circumstances.”
So if Verisign decides it wants to sell off the remaining 22 one-letter .com domains in future, it’s going to have to go through the same lengthy approval process again, with no guarantee that ICANN will give it the nod.
Still, if the o.com proposal is hunky-dory this time around, I fail to see why ICANN would reject an identical proposal to sell a different domain.
As I explained in a blog post a week ago, Verisign will only get $7.85 a year for the domain, regardless of how many millions it raises.
The rest of the money will be distributed to non-profit causes by an independent third party.
While the auction has already cost Verisign far more money than it will make, it’s a nice PR win for the next time its .com price-raising powers are questioned.
Overstock.com, which has been lobbying ICANN and Verisign for the release of o.com for years is a virtually guaranteed bidder.
Former ICANN bigwig Kurt Pritz said recently that Overstock offered to pay ICANN $1 million to $2 million for the domain (somewhat shadily, it has to be said) over a decade ago.
Other O trademark owners that may show up include sporting goods vendor Oakley and future President of the United States Oprah Winfrey.
I hope bidders have to sign a no-suing covenant, as this is the kind of thing that could easily wind up in court.

Donuts loses to ICANN in $135 million .web auction appeal

Donuts has lost a legal appeal against ICANN in its fight to prevent Verisign running the .web gTLD.
A California court ruled yesterday that a lower court was correct when it ruled almost two years ago that Donuts had signed away its right to sue ICANN, like all gTLD applicants.
The judges ruled that the lower District Court had “properly dismissed” Donuts’ complaint, and that the covenant not to sue in the Applicant Guidebook is not “unconscionable”.
Key in their thinking was the fact that ICANN has an Independent Review Process in place that Donuts could use to continue its fight against the .web outcome.
The lawsuit was filed by Donuts subsidiary Ruby Glen in July 2016, shortly before .web was due to go to an ICANN-managed last-resort auction.
Donuts and many others believed at the time that one applicant, Nu Dot Co, was being secretly bankrolled by a player with much deeper pockets, and it wanted the auction postponed and ICANN to reveal the identity of this backer.
Donuts lost its request for a restraining order.
The auction went ahead, and NDC won with a bid of $135 million, which subsequently was confirmed to have been covertly funded by Verisign.
Donuts then quickly amended its complaint to include claims of negligence, breach of contract and other violations, as it sought $22.5 million from ICANN.
That’s roughly how much it would have received as a losing bidder had the .web contention set been settled privately and NDC still submitted a $135 million bid.
As it stands, ICANN has the $135 million.
That complaint was also rejected, with the District Court disagreeing with earlier precedent in the .africa case and saying that the covenant not to sue is enforceable.
The Appeals Court has now agreed, so unless Donuts has other legal appeals open to it, the .web fight will be settled using ICANN mechanisms.
The ruling does not mean ICANN can go ahead and delegate .web to Verisign.
The .web contention set is currently “on-hold” because Afilias, the second-place bidder in the auction, has since June been in a so-called Cooperative Engagement Process with ICANN.
CEP is a semi-formal negotiation-phase precursor to a full-blown IRP filing, which now seems much more likely to go ahead following the court’s ruling.
The appeals court ruling has not yet been published by ICANN, but it can be viewed here (pdf).
The court heard arguments from Donuts and ICANN lawyers on October 9, the same day that DI revealed that ICANN Global Domains Division president Akram Atallah had been hired by Donuts as its new CEO.
A recording of the 32-minute hearing can be viewed on YouTube here or embedded below.

Chutzpah alert! DotKids wants ICANN handout to fight gTLD auction

New gTLD applicant DotKids Foundation has asked ICANN for money to help it fight for .kids in an auction against Amazon and Google.
The not-for-profit was the only new gTLD applicant back in 2012 to meet the criteria for ICANN’s Applicant Support Program, meaning its application fee was reduced by $138,000 to just $47,000.
Now, DotKids reckons ICANN has a duty to carry on financially supporting it through the “later stages of the process” — namely, an auction with two of the world’s top three most-valuable companies.
The organization even suggests that ICANN dip into its original $2 million allocation to support the program to help fund its bids.
Because .kids is slated for a “last resort” auction, an ICANN-funded winning bid would be immediately returned to ICANN, minus auction provider fees.
It’s a ludicrously, hilariously ballsy move by the applicant, which is headed by DotAsia CEO Edmon Chung.
It’s difficult to see it as anything other than a delaying tactic.
DotKids is currently scheduled to go to auction against Google’s .kid and Amazon’s .kids application on October 10.
But after ICANN denied its request for funding last month, DotKids last week filed a Request for Reconsideration (pdf), which may wind up delaying the auction yet again.
According to DotKids, the original intent of the Applicant Support Program was to provide support for worthy applicants not just in terms of application fees, but throughout the application process.
It points to the recommendations of the Joint Applicant Support working group of the GNSO, which came up with the rules for the support program, as evidence of this intent.
It says ICANN needs to address the JAS recommendations it ignored in 2012 — something that could time quite some time — and put the .kids auction on hold until then.

.kids gTLD auction probably back on

Amazon, Google and a small non-profit appear to be headed to auction to fight for ownership of child-friendly new gTLDs.
ICANN last week defrosted the contention set for .kids/.kid; DotKids Foundation’s bid for .kids is no longer classified as “On-Hold”.
This means an ICANN-managed “last resort” auction is probably back on, having been cancelled last December in response to a DotKids request for reconsideration.
The RfR was thrown out by the ICANN board of directors, on the recommendation of its Board Accountability Mechanisms Committee, in May.
.kids and .kid are in the same contention set because DotKids fought and won a String Confusion Objection against Google’s .kid application.
It’s also directly competing with Amazon for .kids.
A last-resort auction would mean that proceeds would be deposited in a special ICANN bank account currently swollen with something like a quarter-billion dollars.