Domain drop-catching service DropCatch.com has added five hundred new registrar accreditations to its stable over the last few days.
The additions give the company a total accreditation count of at least 1,252, according to DI data.
That means about 43% of all ICANN-accredited registrars are now controlled by just one company.
DropCatch is owned by TurnCommerce, which is also parent of registrar NameBright and premium sales site HugeDomains.
Because gTLD registries rate-limit attempts to register names, drop-catchers such as DropCatch find a good way to increase their chances of registering expiring names is to own as many registrars as possible.
DropCatch is in an arms race here with Web.com, owner of SnapNames and half-owner of NameJet, which has about 500 registrars.
The new accreditations would have cost DropCatch $1.75 million in ICANN application fees alone. They will add $2 million a year to its running costs in terms of extra fixed fees.
That’s not counting the cost of creating 500 brand new LLC companies — named in the new batch DropCatch.com [number] LLC where the number ranges from 1046 to 1545 — each of which is there purely for the purpose of owning the accreditation.
In total, the company is now paying ICANN fixed annual fees in excess of $5 million, not counting its variable fees and per-transaction fees.
Because the ICANN variable fee is split evenly between all registrars (with some exceptions I don’t think apply to DropCatch), I believe the addition of 500 new registrars means all the other registrars will be paying less in variable fees.
There’s clearly money to be made in expiring names.
ICANN ended its fiscal 2016 with just shy of $400 million on its balance sheet, according to its just-released financial report.
As of June 30, the organization had assets of $399.6 million, up from $376.5 million a year earlier, the statement (pdf) says.
Its revenue for the year was actually down, at $194.6 million in 2016 compared to $216.8 million in 2015.
That dip was almost entirely due to less money coming in via “last-resort” new gTLD auctions.
The growth of the gTLD business led to $74.5 million coming from registries, up from $59 million in 2015.
Registrar revenue grew from $39.3 million to $48.3 million.
Money from ccTLD registries, whose contributions are entirely voluntary, was down to $1.1 million from $2.1 million.
Expenses were up across the board, from $143 million to $131 million, largely due to $5 million increases in personnel and professional services costs.
The results do not take into account the $135 million Verisign paid for .web, which happened after the end of the fiscal year.
Auction proceeds are earmarked for some yet-unspecified community purpose and sit outside its general working capital pool. Regardless, they’re factored into these audited financial reports.
ICANN has to date taken in almost a quarter of a billion dollars from auctions. Its board recently decided to diversify how the money is invested, so the pot could well grow.
Donuts is demanding ICANN pay up the $22.5 million it reckons it is owed from the auction of the .web gTLD, which sold late last month for $135 million.
The company yesterday amended its existing California lawsuit against ICANN to allege that Verisign tried to avoid regulatory scrutiny by secretly bankrolling successful bidder Nu Dot Co.
The updated complaint (pdf) reads:
VeriSign’s apparent acquisition of NDC’s application rights was an attempt to avoid allegations of anti-competitive conduct and antitrust violations in applying to operate the .WEB gTLD, which is widely viewed by industry analysts as the strongest competitor to the .COM and .NET gTLDs.
Donuts wants a minimum of $22.5 million, which is roughly what each of the six losing .web applicants would have received if the contention set had been resolved via private auction.
(I previously reported that number as $18.5 million, because I accidentally counted .webs applicant Vistaprint as losing .webs applicant, when in fact it won .webs, paying $1.)
The company’s claims are still based around the allegation that ICANN breached its duties by failing to root out Verisign as the puppet-master.
The complaint alleges breach of contract, negligence, unfair competition and other claims. It says:
ICANN allowed a third party to make an eleventh-hour end run around the application process to the detriment of Plaintiff, the other legitimate applicants for the .WEB gTLD and the Internet community at large.
ICANN intentionally failed to abide by its obligations to conduct a full and open investigation into NDC’s admission because it was in ICANN’s interest that the .WEB contention set be resolved by way of an ICANN auction.
The irony here is that Ruby Glen LLC, the Donuts company that applied for .web, is subject to an arrangement not dissimilar to NDC’s with Verisign.
Ruby Glen is owned by Covered TLD LLC, in turn a wholly-owned Donuts subsidiary.
It’s well-known that fellow portfolio registry Rightside has rights to acquire Covered TLD’s over 100 applied-for strings, but this is not disclosed in its .web application.
ICANN will no doubt make use of this fact when it files its answer to the complaint.
Verisign itself has not been added as a defendant, but much of the new text in the complaint focuses on its now-confirmed involvement with NDC. The suit reads:
Had VeriSign’s apparent acquisition of NDC’s application rights been fully disclosed to ICANN by NDC… the relationship would have also triggered heightened scrutiny of VeriSign’s Registry Agreements with ICANN for .COM and .NET, as well as its Cooperative Agreement with the Department of Commerce.
The fact that Verisign is allowed to collect over half a billion dollars cash every year as a result of its state-endorsed monopoly is a longstanding cause of embarrassment for the Department of Commerce.
It has taken an interest in regulating Verisign’s .com contract in the past — it’s the only reason Verisign has not been able to raise .com prices in the last few years.
But the US government is not a party to the .web contract (unlike .com, where it has a special relationship with Verisign) and is not involved in the new gTLD program’s management or policies.
The complaint also makes reference to a completely unrelated Independent Review Process declaration from last week, which slammed ICANN for its lack of accountability and transparency.
Donuts faces the additional problem that, like all new gTLD applicants, it signed a covenant not to sue ICANN when it applied for its new gTLDs.
A judge in the DotConnectAfrica v ICANN can has allowed that lawsuit to proceed, regardless, but it may prove a stumbling block for Donuts.
It all looks a bit flimsy to me, but I’ve learned not to second-guess American judges so we’ll just have to see how it plays out.
Uniregistry has emerged as the successful registry-to-be of .shopping from the convoluted .shop/.shopping new gTLD contention set.
Donuts, the only competing applicant for the string, withdrew its application late last week.
As we previously reported, the .shop/.shopping contention sets were joined at the hip due to a bizarre string similarity challenge, making the scheduled auction very complex.
But Donuts and Uniregistry seem to have come to a private arrangement about .shopping, outside of the ICANN auction process, making .shop a straightforward nine-way fight.
Donuts tells me the auction, in which it is participating, is still scheduled for January 27.
The controversial new gTLD .cam has been won at auction by Dutch porn site operator AC Webconnecting, putting an end to over two years of back-and-forth objections.
Rival applicants Rightside and Famous Four Media both withdrew their applications earlier this week.
The contest for .cam was marked by several objections and appeals.
In 2013, Verisign filed and lost String Confusion Objections against AC Webconnecting and Famous Four, but won its near-identical objection against Rightside.
Verisign had claimed that .cam and .com are so similar-looking that confusion among internet users is bound to arise.
Because the SCO panels in the three cases returned differing opinions, Rightside was one of two applicants given the right to appeal by ICANN in October 2014.
I never quite understood why Verisign wasn’t also given the right to appeal.
Rightside won the right to stay in the .cam contention set almost a year later.
Despite all that effort, it did not prevail in the resulting auction.
Separately, back in 2013, AC Webconnecting filed and lost Legal Rights Objections against its two rivals, based on a “.cam” trademark it acquired purely for the purpose of fighting off new gTLD competitors.
I’d be lying if I said I knew a lot about the soon-to-be registry.
Based in Rotterdam, its web site comes across as a wholly safe-for-work web design firm.
However, it seems to be mainly in the business of operating scores, if not hundreds, of webcam-based porn sites.
Its application for .cam states that it will be for everyone with an interest in photography, however.
When it goes live, its most direct competitor is likely to be Famous Four’s .webcam, which already has an 18-month and 70,000-domain head start.
It remains to be seen whether its clear similarity to .com will in fact cause significant confusion.