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Shocker! After 15 years, Afilias kicks Neustar out of Australia

Kevin Murphy, December 18, 2017, Domain Registries

Afilias has been awarded the contract to run .au, Australia’s ccTLD, kicking out incumbent Neustar after 15 years.

It’s currently a 3.1 million-domain contract, meaning it’s going to be the largest back-end transition in the history of the DNS.

It’s also very likely going to see the price of a .au domain come down.

Neustar, via its 2015 acquisition of AusRegistry, has been the back-end provider for .au since 2002. That deal is now set to end July 1, 2018.

auDA, the ccTLD manager, said today that Afilias was selected from a shortlist of three bidders, themselves whittled down from the initial pool of nine.

It’s not been disclosed by auDA who the other shortlisted bidders were, and Afilias execs said they do not know either. I suspect Neustar would have been one of them.

The contract was put up for bidding in May, after auDA and Neustar failed to come to terms on a renewal.

At 3.1 million domains under management, .au is currently bigger than .org was when Afilias took over the back-end from Verisign in 2003.

Back then, .org was at 2.7 million names. It’s now at over 10 million.

“It’s the biggest transition ever, but not by much,” Afilias chief marketing officer Roland LaPlante said.

CTO Ram Mohan said that it should actually be easily than the .org transition, which had the added wrinkle of switching registrars from Verisign’s legacy RPP protocol to the now-standard EPP.

auDA said that Afilias will start reaching out to the 40-odd current .au registrars about the transition “as early as this week”.

About half of registrars are already on Afilias’ back-end and about half are ICANN-accredited, LaPlante said.

“We don’t expect to have many changes for registrars, but we have plenty of time to prepare them for what is needed,” Mohan said. “It ought to be a fairly easy glide path.”

There will be a live test environment for registrars to integrate with prior to the formal handover, he said.

There are several local presence requirements to the contract, so Afilias will open up a 20-person office in Melbourne headed by current VP of corporate services John Kane, who will shortly move there.

The company will also have to open a data center there, as the contract requires all data to be stored in-country.

Mohan, LaPlante and Kane said they’re all jumping on planes to Melbourne tonight to begin transition talks with local interested parties.

Financial terms of the deal are not being disclosed right now, but LaPlante said that .au registrars should see prices come down. This could lead to lower prices for registrants.

They currently pay AUD 17.50 ($13.44) per domain for a two-year registration, and I believe Neustar’s cut is currently around the $5 (USD) per year mark.

Afilias is not known for being a budget-end back-end provider, but it seems its slice of the pie will be smaller than Neustar’s.

LaPlante said that fees charged to registrars will be set by auDA, but that it now has flexibility to reduce prices that it did not have under the incumbent.

“Some savings should flow down to registrars as part of this,” he said.

The term of the contract is “four or five years” with options to renew for additional years, he said.

The loss of .au has no doubt come as a blow to Neustar, which paid $87 million for AusRegistry parent Bombrra just two years ago.

While Bombora also had dozens of new gTLD clients, many dot-brands, .au was undoubtedly its key customer.

Domain blogger O’Meara elected to auDA board

Kevin Murphy, November 27, 2017, Domain Registries

Domainer-blogger Ned O’Meara, one of the fiercest critics of auDA, has been elected to the organization’s board of directors.

He was one of four directors elected at the Australian ccTLD registry’s Annual General Meeting today.

auDA splits its board into “demand” and “supply” classes. The former are registrants, the latter registrars and resellers.

O’Meara, a domain investor who blogs at Domainer.com.au, was elected as a demand class director, along with Nicole Murdoch, a trademark lawyer who O’Meara backed when he was prevaricating about his own run.

On the supply side, members elected Canadian-born chair of the Australian Web Industry Association and founder of 1300 Web Pro, James Deck, and Grant Wiltshire.

Wiltshire, who works for the government of the Australian state of Victoria, has been a demand-class director for the last two years. There’s no indication in his candidate statement where in the domain industry he has worked.

The election came a week after auDA named its new chair and a new independent director.

Chris Leptos is the new chair. He replaces Stuart Benjamin, who was forced out earlier this year after a “Grumpy” campaign led by O’Meara.

Leptos is deputy chair of financial advisory firm Flagstaff Partners and sits on the board of PPB Advisory. That’s the company that conducted an audit of auDA following the departure of its former CEO last year.

O’Meara landing on the board means he will of course become privy to all the information he’e been campaigning for auDA to be more transparent about recently. How this will affect his blogging remains to be seen, he has yet to write a post about his election.

Aussie gov refuses to spill the beans on ICANN vice chair’s firing

Kevin Murphy, November 21, 2017, Domain Policy

The Australian government has refused to release documents concerning alleged “financial irregularities” at local ccTLD manager auDA that have been linked to the firing of former CEO Chris Disspain.

A request under the Freedom of Information Act sought documents detailing Disspain’s March 2016 termination, as well as high levels of travel expenses and apparent under-reporting of “fringe benefit tax” under his watch.

The request was filed in September by by industry consultant Ron Andruff, who is known to have beef with Disspain after having been passed over for an important ICANN leadership role.

One of the specific documents sought by Andruff was an unpublished audit by PPB Advisory known to have uncovered slack historical expenses management practices and high levels of travel expenditure.

While rumors have circulated, there have been no substantiated allegations of wrongdoing by Disspain.

The Australian Department of Communications and the Arts told Andruff this weekend that 13 relevant documents had been identified and reviewed, but that all were exempt from disclosure under the FOI Act.

Reasons given include the right to privacy of the individual concerned and the fact that the information could fuel “unsubstantiated allegations of misconduct”.

The Department also thought that disclosing the documents could make it harder to it to obtain information from auDA in future, particularly relevant given that it recently kicked off a review of the organization.

While acknowledging there were some public interest reasons to publish the documents, on balance it said that the public interest reasons not to publish were more numerous.

auDA has been plagued by problems such as high turnover of staff and board, unpopular policies, and the member-instigated ouster of its chair, since Disspain left.

Separately, Disspain became ICANN’s vice chair earlier this month, having sat on the board for the last seven years as a representative of the ccTLD community.

He’s one of four community-nominated ICANN directors who have agreed to undergo the same background checks as their Nominating Committee-appointed counterparts, in part due to pressure applied by Andruff.

The FOI response can be viewed here (pdf).

ICANN beefs up background checks on directors amid concerns about vice-chair

Kevin Murphy, November 6, 2017, Domain Policy

ICANN is to beef up background screening procedures for its own board of directors after concerns were raised about financial integrity.

Directors in four seats that were not previously subject to screening have voluntarily agreed to checks “immediately” and ICANN has urged two of its supporting organizations to bring in such checks as standard.

Chris Disspain and Mike Silber, selected by the Country Code Names Supporting Organization, and Generic Names Supporting Organization selectees Becky Burr and Matthew Shears are these volunteers.

Neither the GNSO nor ccNSO currently screen their director picks to the same standard as other supporting organizations and the Nominating Committee.

ICANN said that they will be checked for “negative indicators such as discrepancies on a resume (including licenses, educational history and employment history), or publicly reported issues of financial mismanagement, fraud, harassment and mishandling of confidential information”.

The board passed a resolution last Thursday calling for the two SOs to bring in “the same or similar” screening procedures for future directors.

The resolution was passed minutes before the formal handover of power from outgoing chair Steve Crocker to new chair Cherine Chalaby. Disspain is the new vice-chair, replacing Chalaby.

ICANN had been put under pressure to widen its director due diligence earlier in the week by consultant and long-time ICANN community member Ron Andruff, who is known to have concerns about Disspain’s financial integrity.

Andruff spoke at an open-mic session with the board last Monday to recommend that the four anomalous directors face screening before the board was re-seated just a few days later.

“We’re talking about risk,” he said. “We’re talking about making sure that we do not put our institution that we’ve worked so hard to put into ICANN 2.0 in a place where we have four people that might have something, or not. And quite frankly, I don’t expect we’re going to find anything. I just want to make sure that we’ve checked that box,” Andruff said.

“We have the resources to do four background screenings between now and Thursday. No one expects any issues to surface. But this simple act will ensure that the institution is properly protected,” Andruff said.

Then-chair Crocker responded that it would not be possible to do the checks so quickly, but agreed in principle with the need for screening and said the board had had “substantial discussions” on the matter.

Andruff is former chair-elect of the Nominating Committee, which chooses eight directors and subjects all of its appointees to background screening.

He recently made a Freedom of Information Act request in Australia related to the circumstances leading to Disspain getting fired as CEO of local ccTLD administrator auDA in March 2016.

Disspain was let go after his relationship with the auDA board became “increasingly strained over issues of process, transparency and accountability”, according to an external review published by auDA in October last year.

auDA’s practices had “not kept pace with auDA’s growth in scale and importance to the Australian community, nor with evolving good practice in governance and accountability”, this review found.

The review did not directly allege any wrongdoing by Disspain.

A separate and currently unpublished review around the same time by PPB Advisory found that auDA had been “under-reporting” so-called “fringe benefit tax” to the Aussie tax authorities, according to auDA board meeting minutes.

FBT is tax companies must pay on employee benefits such as a company car or payment of private expenses.

There’s no clear indication in the public record that this under-reporting was directly related to benefits Disspain received, though the under-reporting very likely happened at least partially during his 15 years as CEO.

A slide deck discussing the PPB review published by auDA identified “a lack of formal policies and procedures governing how travel and expenses were managed”.

It added: “There were high levels of expenditure on international travel and reimbursement arrangements with international bodies that lacked transparency, which should have warranted a more robust process”.

All expenses incurred by ICANN’s directors and reimbursed in relation to their duties are a matter of public record.

Disspain receives not only a $45,000 annual salary but also tens of thousands of dollars in reimbursements each year, much of which is related to directors’ extensive travel obligations, these records show.

In its last reported tax year, to June 30, 2016, he received $68,437 in reimbursements, according to a published document (pdf). ICANN directly paid another $32,951 on his behalf.

A number of allegations have been made to DI (and, I believe, to other bloggers) over the last few months about alleged wrongdoing by Disspain in connection to these nuggets of information, but they’ve come from sources who refuse to identify themselves or provide corroborating evidence.

Despite efforts, I’ve been unable to independently verify these anonymous claims, which come amid turbulent times for auDA and its members, so I’ve chosen not to repeat them.

Andruff, meanwhile, has used FOI law to ask the Australian government, which has oversight of auDA, for the full PPB report, as well as documents related to the FBT issue, Disspain’s termination and his travel expenses.

Andruff and Disspain are known to have a history of friction.

Two years ago, Andruff expressed his anger after having been passed over for the job of chair of the NomCom, a role that be believes should have gone to him as chair-elect.

He lost the opportunity after the ICANN board, exercising its bylaws-permitted discretion, accepted the recommendation of its Board Governance Committee — at the time chaired by Disspain — that it be given to Stephane Van Gelder instead.

The original deadline for the Australian government response to Andruff’s FOI request was October 16, but this has been extended twice, now to November 19, due to the complexity of the request.

The eventual response will no doubt be read with interest.

Aussie govt probes .au amid member revolt

Kevin Murphy, October 25, 2017, Domain Registries

The Australian government has announced a review of local ccTLD .au, to see whether its current oversight by auDA is “fit for purpose”.

The review was announced last week, not too many weeks after a member revolt resulted in the ouster of auDA’s chairman and a number of significant policy U-turns.

The Department of Communications and the Arts said it will “examine the most appropriate framework for the domain” and “identify risk and mitigation strategies for the security and stability of the .au domain.”

The government already has reserve powers over .au under previous legislation.

So far, the exact details of what is to be reviewed are vague.

auDA has faced criticism recently over its increasingly secretive management style — something already being addressed — as well as its decision to open .au up to registrations at the second level.

The membership-based organization has also suffered serious staff churn and the departure of several board members.

auDA said in a statement that it welcomed the review, with interim chair Erhan Karabardak quoted as saying: “It is critical that we have the best possible model for managing the domain, and that our risk and mitigation strategies are among the best in the world.”

The Department said that it expects to “shortly” publish a discussion paper and for the review to conclude early next year.

Who should have rights to direct .au names?

Kevin Murphy, October 10, 2017, Domain Registries

Australian ccTLD registry auDA wants to know what you think about its plans to open up .au to direct second-level domain registrations.

It’s no longer a question of if the change should happen, but how it should be implemented.

A public consultation launched yesterday poses a series of questions about issues such as grandfathering, trademark rights and banning certain strings from registration.

It’s already been decided that existing third-level .au registrants should get first dibs on the matching second-level, but auDA has yet to decide what the eligibility cut-off date should be and for how long the names should be reserved before being released for registration by others.

The cut-off date is important because auDA has already seen some data suggesting possible domain investor gaming.

There were 193,645 strings that were registered as third-level domains in two zones at April 18, 2016, when the direct registration policy was announced, but that had risen to 255,909 as of September 1 this year.

That could be indicative of speculators obtaining low-value domains in .net.au or .org.au in the hope of beating the matching .com.au registrant to the possibly more valuable direct second-level .au domain.

If the April 2016 date is used, up to 14% of .au registrations will be subject to competing claims. The data shows that 90% of the conflicts are between .net.au and .com.au domains.

auDA has declined to draw any conclusions about gaming, however, saying that many of the conflicts could be defensive registrations made by the same registrant.

Where there are conflicts, a number of solutions have been posed. Among them: the longest continuous registration, priority for .com.au registrants, auction or lottery.

The consultation paper spends little time discussing the rights of trademark owners, something submissions from the IP lobby will no doubt seek to rectify.

Many of the questions auDA is posing are similar to those posed by the likes of .uk’s Nominet in previous ccTLD consultations.

There’s an additional wrinkle in the .au system as many state government and educational entities are required to register fourth-level names. So auDA wants to know what kind of rights these guys should have too.

The consultation is open until November 10 and all the relevant information can be found here.

Nine registries fighting for .au contract

Kevin Murphy, October 4, 2017, Domain Registries

Nine domain name companies are battling it out for the right to run Australia’s .au ccTLD.

That’s according to auDA, the .au registry, providing an update on the latest stage of its “registry transformation” project today.

A decision on which company to select could be made as soon as a month from now, though the process does seem to be running a week behind schedule due to contenders asking for more time to write their tenders.

One company that will certainly have applied for the job is incumbent Neustar, which has been running .au for the last 15 years (through its relatively AusRegistry acquisition).

Having earlier indicated that it was looking for somebody to build an in-house registry, auDA later clarified (or U-turned) that it wanted to stick with an outsourced back-end provider.

The apparent decision to bring the service in-house came in for some criticism from some auDA members, which waned when it emerged outsourcing was the only solution on the table.

There are about 3.1 million .au domains today, and the back-end gets roughly $5 a year (USD) per name.

Another auDA director quit in secret

Kevin Murphy, September 5, 2017, Domain Registries

Australian ccTLD registry auDA, in the midst of a transparency controversy, reportedly lost another of its directors last month.

According to a report in Australia’s Financial Review newspaper, Leonie Walsh stepped down August 14.

The paper cited Australian Securities and Investments Commission documents as its source.

Embattled auDA did not disclose her departure at the time, despite the fact that it did disclose that fellow director Michaella Richards had also quit the same week.

Richards had been accused by some auDA members, noting her previous professional relationship with CEO Cameron Boardman, of lacking experience in the domain industry.

No reason for Walsh’s departure has been given.

The two directors left just a couple of weeks after chairman Stuart Benjamin, who was facing a member vote of no-confidence he did not think he could win, quit.

auDA has come under criticism from members, such as those organized at Grumpy.com.au, for several policy shifts that seemed to make the organization more secretive and less responsive to members’ interests.

The organization has since done U-turns on most of controversial policies.

Another auDA director quits after conflict claims

Kevin Murphy, August 16, 2017, Domain Registries

Australian ccTLD manager auDA has lost its second director in two week with the resignation of Michaella Richards, announced today.

Richards’ position had been subject to criticism by disgruntled auDA members.

It had been speculated that her appointment to the board last December was less due to her experience in the domain industry, reportedly lacking, than due to her friendship with CEO Cameron Boardman.

The two had worked together in the Victorian state government, as DomainPulse uncovered.

Richards had been appointed a “demand class” director, meaning it was her role to represent domain buyers, rather than registrars, on the board. But critics doubted her credentials in this regard.

No reason was given for her resignation today. auDA simply said:

The auDA Board is seeking nominations, including from its demand class membership, for the Demand Class Director casual vacancy resulting from the resignation of Dr Michaella Richards.

Richards follows chairman Stuart Benjamin, who resigned at the end of July just a few days members were due to vote on an motion to oust him.

auDA has in recent weeks reversed its positions on a number of controversial policies after member outcries.

Grumpy campaign claims victory after auDA U-turns

Kevin Murphy, August 7, 2017, Domain Registries

Australian ccTLD administrator auDA has scrapped two unpopular policies following the ouster of its chairman last week, allowing campaigning domainers to claim victory.

auDA said it has done away with its member code of conduct and has reinstated its policy of publishing its board meetings’ minutes.

These were two of the key demands of Grumpy.com.au, a member-driven campaign orchestrated by domainer-blogger Ned O’Meara.

Grumpy had called for the unilaterally imposed code of conduct to be replaced by one created in consultation with members, and that’s what auDA is now promising.

auDA said:

A membership consultation process on a new Code of Conduct will be held, and a revised Code will be submitted to the 2017 AGM. A Code of Conduct for Board members will be developed as part of the next phase of governance work and members will have the opportunity to provide input prior to any final decisions.

The code banned members, under pain of losing their memberships, from harassing or abusing staff. But it also banned them from bad-mouthing the registry in public or via the media — effectively gagging criticism.

auDA also said it will reinstate the practice of publishing minutes. It had recently agreed to restore previously published minutes, but it appears than meetings in future will also be publicly minuted.

Reversing these two policies were two of four demands the Grumpy campaign had made.

Another, calling for the head of chairman Stuart Benjamin, was rendered moot when Benjamin, apparently fearing that he could not win a simply majority of votes, quit just a few days before a member vote was due to take place.

The fourth, which called for auDA to scrap its plan to build and operate an in-house registry infrastructure, also appears to be moot. The company now seems to be talking about outsourcing to a third-party back-end provider.

auDA had refused, citing legal reasons, to include anything but the vote of confidence in the chair on its agenda for last week’s special members meeting.

O’Meara, in a blog post Friday, welcomed the U-turns. He wrote:

Before a group of members ever took this massive step of calling a special meeting, we pleaded with auDA to sort these issues out. We were ignored; then rebuffed.

And here we are today – with every single resolution now resolved (hopefully) in the members favour.

That’s what you call a strategy that backfired spectacularly on auDA.

auDA also said that it has commenced the process of seeking out a new independent director/chair.