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ICANN gives Verisign’s .com contract the nod

ICANN’s board of directors has approved Verisign’s .com registry agreement for another six years.

In a closed meeting on Saturday, the results of which have just been published, the board decided against making any of the changes that had been suggested by the community.

There had been a small uproar over the fact that Verisign will retain the right to increase its .com registry fee by 7% in four out of the next seven years.

The new contract also rejiggers the fees Verisign pays ICANN to bring them more into line with other registry agreements. As a result, ICANN will net millions more in revenue.

Other parties had also asked for improved rights protection, such as a mandatory Uniform Rapid Suspension system, and for the current restrictions on single-character domain names to be lifted.

But the board decided that “no revisions to the proposed .COM renewal Registry Agreement are necessitated after taking into account the thoughtful and carefully considered comments received.”

The agreement will now be forward to the US government for approval. Unlike most registry contracts, the Department of Commerce has the right to review the .com deal.

The current contract expires November 30.

ICANN may renew Verisign’s .com deal this weekend

ICANN’s board of directors is set to vote on Verisign’s .com registry agreement at a meeting in Prague this Saturday.

The meeting is scheduled for June 23, the day before ICANN 44 officially kicks off. Read the agenda here.

The contract has been controversial because it will continue to allow Verisign to raise prices by 7% in four out of the six years of its duration.

Opportunistic intellectual property interests have also called for Verisign to be obliged to follow new rights protection mechanisms such as the Uniform Rapid Suspension policy.

But I’m not predicting any big changes from the draft version of the agreement that was published in March.

If and when the ICANN board approves the contract, it will be sent off to the US Department of Commerce for, I believe, another round of public comment and eventual ratification.

If Verisign is to run into any problems with renewal, it’s in Washington DC where it’s most likely to happen.

Verisign selected for 220 new gTLDs

Kevin Murphy, April 26, 2012, Domain Registries

Verisign is the appointed back-end registry operator for 220 new generic top-level domain applications, according to the company.

Verisign itself has applied to ICANN for 14 new gTLDs, 12 of which are transliterations — ie, internationalized domain names — of .com and .net.

During its first-quarter 2012 earnings conference call, ongoing right now, CEO Jim Bidzos disclosed the numbers, saying:

VeriSign applied directly for 14 new gTLDs. Twelve of these 14 are transliterations of .com and .net. Also, applicants for approximately 220 new gTLDs selected Verisign to provide back-end registry services.

Many of these are dot-brands, Bidzos said.

Neustar, which also reported earnings yesterday, did not disclose how many applications it is involved in, other than to say that it has not applied for any as a front-end operator.

Timing of .com contract renewal is telling

Kevin Murphy, March 28, 2012, Domain Registries

The timing of the publication of the renegotiated .com registry contract may give Verisign and ICANN the chance to duck some criticism about its price-raising powers.

According to ICANN’s announcement last night, the draft contract is up for public comment until April 26, a week before we find out how much new gTLD business Verisign has won.

Verisign is expected to have secured a large share of the burgeoning market for new gTLD back-end registry services.

It is whispered that a great many North American brands planning to apply for their own dot-brand gTLDs prefer Verisign as their registry provider, due to its reputation for stability.

That up-time is of course provided by a robust, distributed infrastructure paid for over the years by the same .com registrants now facing four more years of price increases.

It’s debatable whether Verisign can continue to make a convincing public interest case for .com price hikes if it’s also profiting by hosting dot-brands on the same boxes and pipes.

But because the public comment period closes April 26 and ICANN does not plan to publish the new gTLD applications until May 2, the argument that Verisign is using .com buyers to subsidize its dot-brand business will have to be made without hard data to back it up.

I doubt such arguments would be heard anyway, frankly. ICANN pretty much has its hands bound by the 2006 contract when it comes to messing around with pricing controls.

For those opposed to price increases, a more effective lobbying strategy might head straight to Washington DC, where the Departments of Commerce and Justice will both study the deal from September.

New .com contract revealed: Verisign gets to raise prices, ICANN makes millions more

Kevin Murphy, March 27, 2012, Domain Registries

ICANN and Verisign both stand to make oodles of cash from their renewed .com registry contract.

A proposed draft of the next .com Registry Agreement was published by ICANN late this evening.

It would enable Verisign to carry on raising its .com registry fee by 7%, in four of the next six years. This provision, which was in the 2006 agreement also, was not unexpected.

But the deal will also see Verisign pay ICANN millions of dollars more in transaction fees.

Instead of a quarterly lump sum, which is capped at $4.5 million in the current contract, ICANN will instead get a $0.25 fee for every year of a .com registered, renewed or transferred.

According to my quick-and-dirty calculations, that would have brought ICANN approximately $6 million in extra revenue — roughly $24 million in total — from .com domains last year.

(The most recent .com registry reports show billable transactions per month worth about $2 million to ICANN, using the new agreement’s calculation. However, under the current agreement ICANN can only collect $18 million per year, according to its last approved budget.)

The revised contract contains several other changes also. I’ll have more coverage of those tomorrow.

The deal, which is not expected to come into effect until the end of November, is now open for public comment until April 26.

It needs to be approved by the ICANN board of directors, the Verisign board and the US Department of Commerce before it is finally signed.

Thick .com Whois policy delayed

Kevin Murphy, February 16, 2012, Domain Registries

ICANN’s GNSO Council has deferred a decision on whether Verisign should have to thicken up the Whois database for .com and its other gTLDs.

A motion to begin an official Policy Development Process on thick Whois was kicked down the road by councilors this afternoon at the request of the Non-Commercial Users Constituency.

It will now be discussed at the Council’s face-to-face meeting in Costa Rica in March. But there were also calls from registries to delay a decision for up to a year, calling the PDP a “distraction”.

Verisign’s .com registry contract and the standard Registrar Accreditation Agreement are currently being renegotiated by ICANN, both of which could address Whois in some way.

Today, all contracted gTLD registries have to operate a thick Whois, except Verisign with its .com, .net, .jobs, etc, where the registrars manage the bulk of the Whois data.

Verisign: our DNS was not hacked

Kevin Murphy, February 3, 2012, Domain Tech

Verisign today reiterated that the recently revealed 2010 security breaches on its corporate network did not affect its production domain name system services.

In a statement, Verisign said:

After a thorough analysis of the attacks, Verisign stated in 2011, and reaffirms, that we do not believe that the operational integrity of the Domain Name System (DNS) was compromised.

We have a number of security mechanisms deployed in our network to ensure the integrity of the zone files we publish. In 2005, Verisign engineered real-time validation systems that were designed to detect and mitigate both internal and external attacks that might attempt to compromise the integrity of the DNS.

The statement followed several news reports that covered the hacks and speculated about the mayhem that could ensue if Verisign’s root or .com zone systems were ever breached.

The information the company has released so far suggests that the attacks were probably against back-office targets, such as user desktops, rather than its sensitive network operations centers.

.com passed 100 million mark in October

Kevin Murphy, February 2, 2012, Domain Registries

Verisign’s .com registry passed the 100 million domains under management milestone in October, the company’s monthly ICANN registry report revealed today.

The exact number of domains under management in .com on October 31 was 100,540,971, having increased by a net 690,243 registrations over the course of the month.

That’s a pretty big deal, but for some reason Verisign didn’t make any announcements about it at the time.

ICANN registry reports, which all contracted gTLDs must submit, are filed three months after the fact, for competitive reasons.

The number of domains in the .com zone file – which is what most people track to follow the fortunes of TLD operators — differs from the total number in the registry.

Domains which do not have name servers or are in special registry status codes such as Pending Delete do not show up in the zone file.

Today, RegistrarStats reports 100,052,046 domains in the .com zone, while HosterStats’ count yesterday was 100,045,666. The registry is likely to have about 1.5 million more, however.

Verisign to apply for a dozen new gTLDs

Kevin Murphy, January 27, 2012, Domain Registries

Verisign plans to apply to ICANN for about 12 new generic top-level domains, according to the executive in charge of registry services.

“We intend to do about 12. Most of those will be transliterations of .com,” senior vice president Pat Kane said on the company’s fourth-quarter earnings call yesterday.

This does not mark a significant change of strategy – the company has been open about its intention to apply for internationalized domain name variants of .com for over a year – but I believe it’s the first time it’s put a number on it.

It will be interesting to see which gTLDs – if any – Verisign will go for which are not .com IDNs.

My view is that it would make more sense for the company to apply for potentially high-volume .com competitors, such as .web or .blog. It has the capacity, the channel and the cash.

Smaller niche gTLDs may not be worth the distraction and risk, and would be better suited to dedicated registries that can concentrate on more focused marketing.

In any event, we’re going to see some major consolidation in the new gTLD space four or five years from now, and Verisign could well vacuum up cash-making registries at that time.

CEO Jim Bidzos also said on the call that Verisign has been retained to provide the registry for “several” dot-brand applications, but that it will not see any material revenue until 2013.

The major event for 2012, he noted, is the renewal of the .com Registry Agreement with ICANN, which expires at the end of November.

Verisign is already “engaging” with ICANN on this, Bidzos said.

This contract will be posted for public comment and sent to the US Department of Commerce for approval.

I’m expecting controversy, particularly if the contract continues to allow Verisign to increase prices.

It’s going to be harder for Verisign to argue that it needs the extra cash to invest in its infrastructure if it’s also leveraging that infrastructure to win lucrative dot-brand contracts.

Fight brewing over thick .com Whois

Kevin Murphy, January 3, 2012, Domain Policy

This year is likely to see a new fight over whether Verisign should be forced to create a “thick” Whois database for .com and its other generic top-level domains.

While Verisign has taken a deliberately ambivalent position on whether ICANN policy talks should kick off, the community is otherwise split on whether a mandatory thick Whois is a good idea.

Currently, only .com, .net, .name and .jobs – which are all managed on Verisign’s registry back-end – use a thin Whois model, in which domain name registrars store their customers’ data.

Other gTLDs all store registrant data centrally. Some “sponsored” gTLD registries have an even closer relationship with Whois data — ICM Registry for example verifies .xxx registrants’ identities.

But in a Preliminary Issue Report published in November, ICANN asked whether it should kick off a formal Policy Development Process that could make thick Whois a requirement in all gTLDs.

In comments filed with ICANN last week, Verisign said:

As the only existing registry services provider impacted by any future PDP on Thick Whois, Verisign will neither advocate for nor against the initiation of a PDP.

Verisign believes the current Whois model for .com, .net, .name and .jobs is effective and that the proper repository of registrant data is with registrars — the entities with direct connection to their customers. However, if the community, including our customers, determines through a PDP that “going thick” is now the best approach, we will respect and implement the policy decision.

Thick Whois services make it easier to find out who owns domain names. Currently, a Whois look-up for a .com domain can require multiple queries at different web sites.

While Whois aggregation services such as DomainTools can simplify searches today, they still face the risk of being blocked by dominant registrars.

The thin Whois model can also make domain transfers trickier, as we witnessed just last week when NameCheap ran into problems processing inbound transfers from Go Daddy.

ICANN’s Intellectual Property Constituency supports the transition to a thick Whois. It said in its comments:

Simplifying access to this information through thick Whois will help prevent abuses of intellectual property, and will protect the public in many ways, including by reducing the level of consumer confusion and consumer fraud in the Internet marketplace. Thick Whois enables quicker response and resolution when domain names are used for illegal, fraudulent or malicious purposes.

However, Verisign noted that a thicker Whois does not mean a more accurate Whois database – registrars will still be responsible for collecting and filing customer contact records.

There are also concerns that a thick Whois could have implications for registrant privacy. Wendy Seltzer of the Non-Commercial Users Constituency told ICANN:

Moving all data to the registry could facilitate invasion of privacy and decrease the jurisdictional control registrants have through their choice of registrar. Individual registrants in particular may be concerned that the aggregation of data in a thick WHOIS makes it more attractive to data miners and harder to confirm compliance with their local privacy laws.

This concern was echoed to an extent by Verisign, which noted that transitioning to a thick Whois would mean the transfer of large amounts of data between legal jurisdictions.

European registrars, for example, could face a problem under EU data protection laws if they transfer their customer data in bulk to US-based Verisign.

Verisign also noted that a transition to a thick Whois would dilute the longstanding notion that registrars “own” their customer relationships. It said in its comments:

As recently as the June 2011 ICANN meeting in Singapore, Verisign heard from several registrars that they are still not comfortable with Verisign holding their customers’ data. Other registrars have noted no concern with such a transition

ICANN staff will now incorporate these and other comments into its final Issue Report, which will then be sent to the GNSO Council to decide whether a PDP is required.

If the Council votes in favor of a PDP, it would be many months, if at all, before a policy binding on Verisign was created.