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Domainers could lose their names as .au loophole closes

Kevin Murphy, June 14, 2018, Domain Policy

Domain investors dabbling in the .au space could face losing their names under new policies set to be proposed.

The .au Policy Review Panel, which helps set policy for Australian ccTLD registry auDA, said this week it is thinking about closing a loophole related to domain monetization that has allowed “speculation and warehousing” in violation of longstanding rules.

Monetized domains are “largely detrimental” to .au and rules permitting the practice should be scrapped, the panel is expected to formally conclude.

Anyone currently monetizing domains could be given as little as a day to comply with the new rules or face losing their names.

The expected recommendations were outlined in a memo (pdf) penned by panel chair John Swinson, an intellectual property lawyer, who wrote:

the Panel received a lot of feedback and information from the public that Domain Monetisation is largely detrimental to the name space. Feedback, including from sophisticated businesses, domain brokers and portfolio owners, was one could register almost any domain name under the Domain Monetisation rule, and that the current rules were unclear, and that domain names were being registered under the cover of Monetisation primarily for the purposes of resale or warehousing (which is contrary to the current policy).

Current auDA policy on domaining, dating from 2012, is pretty clear when it comes to domainers: “A registrant may not register a domain name for the sole purpose of resale or transfer to another entity.”

However, there’s a loophole when it comes to domains that are monetized with ad links. If a domain is monetized, reselling no longer becomes its “sole purpose”.

Another auDA policy also from 2012 specifically permits monetization as a valid reason for owning a .com.au or .net.au name.

It says that monetized domains must carry ad content relevant to the topic of the domain, and that there should be no brand infringement in the domain itself.

Swinson’s panel agreed in a May 1 meeting (pdf) that this rule should be scrapped.

It’s not entirely clear what would come to replace it, as the panel doesn’t seem likely to actually ban monetization as such. Swinson wrote:

Because the current rules are outdated, inconsistent and unclear, it is difficult to enforce the current rules that prevent the registration of domain names for domain speculation and warehousing.

The Panel’ s current view is that Domain Monetisation will not be banned, but of itself will not be a basis to meet the allocation criteria.

The “allocation criteria” refers to the eligibility requirements for .au domains, which currently require a “close and substantial” link between the registrant and the name.

The panel’s memo states that there would be a “grandfathering” period during which domainers whose sites do not comply with the new policy would have time to update them:

The Panel’s current view is to recommend that any new eligibility and allocation rules should apply on the next renewal of a domain name license. This will give domain name licensees who meet the current rules, but who will not meet any new rules, time to deal with the non-compliance.

The problem here of course is that the “next renewal” could be anywhere from a day to two years away, depending on the domain. That’s probably an area the panel needs to look at.

The monetization issue is one of several addressed in the panel’s interim report (pdf), which also looks at the possibility of direct, second-level domain registration.

Any new policy on either issue is still many months away.

auDA wins brief reprieve from boardroom battle

Kevin Murphy, April 30, 2018, Domain Registries

Australian ccTLD registry auDA has managed get a small delay, smaller than it wanted, to the deadline for a special member meeting at which the fate of its chair, CEO and two directors will be decided.

After more than 5% of its membership signed a petition calling for the vote, it had until June 7 to open the polls.

But then it was stung by the findings of a governmental review of its structure, which concluded it was “no longer fit for purpose” and ordering a board shake-up of its own.

Deciding that it had to prioritize the government review, auDA last week sued the main organizer of the petition and former board member Josh Rowe, asking a court to allow it to delay the meeting from June 7 until mid-September, to coincide with its annual general meeting.

But the court told the organization it instead has until July 27 to hold the meeting.

auDA said it was “pleased” with the ruling, but Rowe wrote that auDA had “in effect lost” the case.

Rowe called the brief litigation a “disgraceful waste of tens of thousands of dollars of .au domain name registrant’s money”.

auDA may sue to delay boardroom bloodbath

Kevin Murphy, April 23, 2018, Domain Registries

auDA is thinking about taking its membership to court in order to delay a vote on the jobs of four of its directors.

The Australian ccTLD registry has also delayed further consideration of its policy to introduce direct, second-level registrations in .au until late 2019.

Both announcements came in the wake of a government review of the organization, which found it “no longer fit-for-purpose”.

auDA last week asked its members to agree to a postponement of the special general meeting, called for by a petition of more than 5% of its members, at which there would be votes on whether to fire the CEO, its chair, and two independent directors.

Under the law, auDA has to hold the SGM by June 7 at the latest, according to a letter (pdf) sent to members on Friday.

But auDA wants to delay the meeting until mid-September, at the earliest, to coincide with its regular Annual General Meeting.

If its members do not consent to the delay — it gave them a deadline of 4pm local time today, meaning responses would have to be drafted over the weekend — auDA said it “intends to apply for a court order… extending the time for calling the requested SGM”.

The delay is needed, auDA said, in order to give the organization the breathing space to start to implement the reforms called for by the government review.

The government wants the makeup of the auDA board substantially overhauled within a year to better reflect the stakeholder community and to ensure directors have the necessary skills and experience.

In response, auDA has told the government (pdf) that it agrees with the need for reform, but that it will not be able to hit its deadlines unlesss the SGM is delayed.

It also said calling the SGM on time would cost it somewhere in the region of AUD 70,000, based on the cost of a similar meeting last year.

auDA announced separately last week that it is delaying any more discussion on second-level registrations — something the reform campaigners largely are opposed to — “until the second half of 2019 at the earliest”.

Josh Rowe, coordinator of the Grumpier.com.au petitioners, said in his response that he found the request for the SGM delay “extremely disappointing”, adding:

auDA is at an important juncture following the Australian Government’s review. However, it is critical that people with the right skills and experience lead auDA through its reform.

Members have lost confidence in the auDA CEO, and the three auDA independent directors. They do not have the right skills and experience to lead auDA through its reform.

He noted that members do not have the resources to fight auDA in court.

Government gives auDA reform-or-die ultimatum

Kevin Murphy, April 18, 2018, Domain Registries

auDA has just months to either implement sweeping reforms or risk being dissolved and replaced.

That’s the outcome of a review of the Australian ccTLD administrator by the Department of Communications and Arts, published today, that found the organization as it stands today is “no longer fit-for-purpose”.

Among its 29 recommendations, the government is demanding that auDA refresh its board of directors within a year and scrap its “outdated” membership structure.

Minister Mitch Fifield said in a statement:

The central finding of the review is that auDA’s current management framework is no longer fit-for-purpose and reform is necessary if the company is to perform effectively and meet the needs of Australia’s internet community.

He added in a letter to auDA chair Chris Leptos:

In the event that auDA fails to demonstrate progress in achieving the necessary reforms, I will instruct my Department to undertake a public expression of interest process in the future to identify other entities that could administer .au

A failure to reform could even lead to the government itself taking over .au, the report says.

The review did not look at the claims of lavish spending by staff and directors, reported on earlier this week.

Nor does it express any views on the controversial decision to start selling direct second-level .au domains, or to transition the back-end from Neustar to Afilias.

What it does say is that the board of directors needs to be be replaced within a year, using a new membership structure that gets rid of the current “supply” and “demand” classes of member, which differentiate between those who sell domains and those who buy them.

The current system is open to capture or “stacking”, the review says, with it being too easy for individuals to move seamlessly between classes and a lack of clarity on whether domainers should be supply or demand-class members.

Today, the 12-person board comprises the non-voting CEO, three independent directors and four directors elected by each class.

The review states that the board should not get any bigger, but that the majority of directors should be independent, selected by a new six-person Nomination Committee modeled slightly on ICANN’s Nominating Committee.

Directors should be picked on the basis on their experience and skills, limited to two three-year terms, and subject to background screening, the review states.

The government also says that auDA should either replace its current membership classes with either a single membership class open to all or a “functional constituency model” reflecting groups such as consumers, registrars, government, etc.

Fifield said he expects to see “significant” progress on implementing these reforms in the next three to six months.

In a statement, auDA said it welcomed the report and has already begun work on an implementation plan.

Former CEO Chris Disspain, who was fired by the board in 2016, after running the company for 16 years, a move that arguably catalyzed the last two years of chaos at auDA, told DI:

I am pleased that the review has called out a number of important structural issues especially the matter of membership stacking, something that I had raised with the board on a number of occasions towards the end of my tenure and that may have led, at least in part, to my departure.

Leaked memo alleges lavish travel spending at auDA

Kevin Murphy, April 16, 2018, Domain Registries

A report into .au registry auDA’s historical travel expenses has leaked to the Australian media, the latest apparent salvo in the organization’s increasingly personal civil war.

The Sydney Morning Herald this evening reports on “allegations of lavish spending and misuse of expense accounts by some former directors and employees”.

The primary individual targeted (for want of a better word) by the story is Paul Szyndler, former head of public affairs at auDA and one of the three people behind the Grumpier.com.au campaign to ouster auDA’s current CEO and chair.

It seems the Herald has managed to scoop a leaked copy of an audit compiled by PPB Advisory, which has been looking into spending practices at auDA under its previous management.

The existence of this report has been known for some time, but little about its contents had made it into the public domain beyond a slide deck (pdf) alluding to slack controls on travel expenditure.

The newspaper reports that PPB claims Szyndler racked up several thousand dollars of expenses on a family trip to Disneyland to coincide with ICANN 51 in Los Angeles in 2014.

Shortly before the Herald published (overnight in Australia), Szyndler took to an Aussie domainer forum to admit the truth of the allegation, but explain that it was fully compliant with auDA’s expenses policy at the time.

“auDA had a very clear and well understood policy at the time, whereby staff — after receiving best-available business class airfare and accommodation quotes, could spend up to, but NOT MORE THAN that figure on personal arrangements,” Szyndler wrote.

“My family joined me on a number of international trips. None cost any more than it would have cost to send me alone,” he said.

In other words, if he’d left his family at home and skipped Disneyland, he would have spent the exact same amount on a business-class flight for himself.

The Herald also says that PPB identified thousands of dollars being spent on family member travel to exotic locations, credit card cash withdrawals, expensive restaurants and even a “butler service”.

It does not say which specific staffers or directors are alleged to have spent auDA money on those things.

Indeed, Szyndler is the only person connected to specific spending in the Herald’s report.

There’s no mention of any allegations against former CEO and current ICANN vice-chair Chris Disspain — under whose watch these expenses will have been incurred — though the piece does include his blanket denial of wrongdoing.

auDA’s new chair Chris Leptos — who also sits on the PPB board — revealed last week that “several” former directors have been referred to state police over “a number of practices” upon which he did not elaborate.

Szyndler and his other Grumpier auDA members have managed to rack up enough signatures on their petition to force auDA into a special members meeting, date to be determined, that will vote on whether to get rid of Leptos, CEO Cameron Boardman and two other independent directors.

The Australian government has also been probing the organization’s antics since October, and the Herald reports that its findings could be published as soon as tomorrow (today in Australia).

Could auDA be about to get Nominetted?