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War of words over .jobs “breach” claims

Employ Media and ICANN have come to blows again over ICANN’s threat to shut down the .jobs registry for allegedly selling domain names in breach of its Charter.

Both parties are currently talking through their outside counsel, and the possibility of litigation has raised its head in public for the first time.

In the latest set of correspondence published by ICANN, Employ Media sharply (and ironically) criticized ICANN’s decision to publish an earlier set of correspondence on its web site.

The earlier email exchange, which I blogged about here, revealed that ICANN had asked the company to amend its Charter.

Two days later, Employ Media’s lawyers wrote to ICANN’s lawyers to express disappointment with the decision to post these emails, questioning ICANN’s commitment to good faith negotiations.

In light of this apparent bad faith action on ICANN’s part, Employ Media is questioning whether any hope remains for a full and fair exchange of ideas regarding a resolution of its dispute with ICANN.

[ICANN has] substantially hindered Employ Media’s ability to engage in productive and honest negotiations: all future communications will necessarily be more guarded and less open, given the expectation that they will be published to a larger audience

ICANN and Employ Media are currently in a “cooperative engagement” process – a less formal way to resolve their dispute than heading to an arbitration forum or court.

ICANN claims the registry is breaking its Charter commitments to the human resources industry by allocating tens of thousands of .jobs domain names to the Universe.jobs project, which is run by a partner, the DirectEmployers Association.

Independent jobs boards, represented by the the .JOBS Charter Compliance Coalition, believe that Universe.jobs is unfair and not compliant with Employ Media’s own policies.

Employ Media’s latest letter (pdf), which it demanded ICANN publish, drops hints about some of the behind-the-scenes talks (with my emphasis):

Had we known that any part of our communication was to be published, we would have certainly memorialized, in writing, your statements to us that ICANN very much wants to avoid an arbitration over this dispute, and that ICANN was therefore willing to agree to a process for approving a Charter amendment in order to do so. We would also have memorialized our positions, including our position that a Charter amendment is neither necessary nor desirable, but that we were considering acceding to ICANN’s request solely in the hopes of avoiding arbitration

ICANN’s lawyers’ response (pdf), sent April 26, says ICANN was merely fulfilling its transparency obligations by informing the community about the extension of the talks deadline.

They also said that the Employ Media should stop pretending to be surprised that ICANN issued the breach notice and is now asking for a Charter amendment.

ICANN further accused the registry’s lawyers of legal “posturing” which was “seemingly geared solely towards use in future litigation”.

Employ Media was due to deliver a proposed amendment to its Charter by yesterday. ICANN has said it will not take any further actions based on its breach notice until May 6.

Registry avoids .jobs shut-down

Kevin Murphy, April 20, 2011, Domain Registries

Employ Media has come to a deal with ICANN to avoid having its .jobs registry contract revoked, at least for the next few weeks.

Following discussions with ICANN’s lawyers, the company plans to amend its Charter, and has agreed to stop allocating non-company-name .jobs domain names until May 6.

ICANN threatened to terminate the .jobs registry deal in February, after Employ Media started allocating thousands of premium vocational and geographic domains to a partner, the DirectEmployers Association, to act as entry points for Universe.jobs.

In a breach notice (pdf), ICANN said that this use of .jobs domains “is inconsistent with the purpose stated in the .JOBS Charter and represented to the ICANN community”.

The .JOBS Charter ostensibly restricts registrations to human resources professionals, but in practice there’s a great big loophole that allows anybody to cheaply qualify for a domain.

In February, ICANN general counsel John Jeffrey told Employ Media:

By not establishing any meaningful restrictions on who may register second level registrations in the .JOBS TLD, Employ Media put in operation a TLD where anyone can register names, thus defeating the purpose for which the sponsored TLD came into existence.

In its response, the registry noted that it had followed ICANN’s proper procedures for introducing new “registry services”, such as the Phase Allocation Plan that allowed it to seed Universe.jobs.

It accused ICANN of bending to the wishes of the .JOBS Charter Compliance Coalition, a group of independent jobs sites operators that had objected to Universe.jobs.

Employ Media’s chief executive Brian Johnson wrote:

This is a sad day for both the Internet community and the international human resource management community. ICANN should be promoting competition and working cooperatively with its contractual parties, but instead is choosing to ignore the plain meaning of its contract with Employ Media in order to appease some apparently well‐financed and well‐connected provocateurs.

Since that letter (pdf) was sent, ICANN and the registry have been engaged in private discussions aimed at resolving the conflict, as allowed by the registry agreement.

In the latest set of correspondence, exchanged over the last week, it has emerged that ICANN has agreed to give Employ Media time to remedy the situation by amending its Charter.

The letters do not reveal whether the amendments will allow Employ Media to continue to offer Universe.jobs or not. I suspect they will.

The amendments may require the company to consult with its nominal sponsor, the Society for Human Resource Management.

ICANN wants a proposed Charter amendment on its desk by May 2. It has agreed to take no further action related to the breach of contract allegations until May 6.

Registry objects to .jobs shutdown threat

Employ Media will appeal ICANN’s threatened termination of its .jobs registry contract.

The company released a statement (pdf) late yesterday, following ICANN’s unprecedented threat, in which it said ICANN’s claims are “utterly without merit”.

“We view the substance of this notice to be a surprising reversal of position and contradictory to prior decisions issued by its Board of Directors,” the company said.

ICANN yesterday gave Employ Media until the end of the month to cancel its agreement to provide 40,000 .jobs domains to the DirectEmployers Association for its Universe.jobs employment board.

The organization said the allocation of the domains for non-human-resources purposes went against the letter, spirit and intent of the registry’s contract and Charter.

It essentially boils down to a claim that Employ Media hacked its contract to allow it to start making money on names beyond the limited scope of its original “sponsored” community TLD.

The .jobs TLD was originally pitched as a space for corporate HR pages, not independent jobs sites. With Universe.jobs, half of the namespace is an independent jobs site. Employ Media is believed to have a revenue-sharing arrangement with DirectEmployers.

The ICANN breach notice was welcomed by the .JOBS Charter Compliance Coalition, the ad hoc trade group formed by major commercial jobs sites to fight Universe.jobs.

Peter Weddle, executive director of the International Association of Employment Web Sites, said in a press release:

the Dot Jobs Universe was not an innovation but rather an unprecedented attempt by a registry operator to misappropriate an entire TLD for itself and its alliance partner in blatant disregard of ICANN’s rules.

Employ Media disagrees, of course, saying that Universe.jobs came about as a result of its “Phased Allocation” liberalization plan, which was approved by ICANN’s Registry Services Evaluation Process and then survived a Reconsideration Request filed by the Coalition.

The company said: “it is imperative for registry operators to have predictability in the performance of duties and that ICANN has a responsibility to honor its commitments with contracted parties.”

Its registry contract contains a dispute resolution procedure that first calls for bilateral talks and, failing agreement, arbitration via the International Chamber of Commerce.

ICANN threatens to shut down .jobs

Kevin Murphy, February 28, 2011, Domain Registries

In an unprecedented move, ICANN has threatened to cancel a top-level domain registry operator’s contract.

Employ Media, the .jobs registry, faces losing its TLD if it does not shut down Universe.jobs, the controversial jobs board operated by its partner, the DirectEmployers Association.

In a letter to the company (pdf), ICANN general counsel John Jeffrey wrote:

By not establishing any meaningful restrictions on who may register second level registrations in the .JOBS TLD, Employ Media put in operation a TLD where anyone can register names, thus defeating the purpose for which the sponsored TLD came into existence.

We are calling on Employ Media to take immediate actions to implement restricted registration policies that support the purpose for which the .JOBS top-level domain was established, and to cancel registrations and/or disavow themselves of the benefits of any registrations that are owned by related parties, if any.

The move comes following a complaint filed by the so-called .JOBS Charter Compliance Coalition, made up of jobs board such as Monster.com and CollegeRecruiter.com.

They’re annoyed that the registry licensed 40,000 premium geographic and vocational .jobs domains to DirectEmployers for Universe.jobs, which has started to compete with them.

Jeffrey wrote:

It appears that Employ Media and SHRM, through the Direct Employers Association, intend to use the .JOBS TLD primarily to compete with other internet job boards. Such use is inconsistent with the purpose stated in the .JOBS Charter and represented to the ICANN community.

The deal came as a result of a change to the .jobs registry contract, made through ICANN’s Registry Services Evaluation Process, that allowed Employ Media to lift a rule that restricted registered domain names only to the names of companies.

What the RSEP didn’t do was change the .jobs Charter, which restricts “who” may register .jobs domains. Yet, weirdly, the Charter is partly the basis for ICANN’s threat.

Jeffrey refers to the Charter restrictions, which are easily circumvented, as “specious” and “do not serve the international human resource management community”.

This is the Charter that ICANN approved back in 2005, and which hasn’t changed since, remember.

To come back into compliance, ICANN wants Employ Media to shut down Universe.jobs and get back to selling company-name registrations.

I think it’s likely Employ Media will appeal, possibly by taking the case to arbitration, as its contract allows.

Trojan TLDs to get more scrutiny

Kevin Murphy, February 22, 2011, Domain Registries

ICANN has proposed a new policy for its new top-level domain program that would make it harder for community-based TLDs to liberalize their registration policies after they launch.

The idea is to prevent a replay of the recent .jobs controversy, in which registry Employ Media substantially altered its business model after failing to sell enough .jobs domains.

Because the Applicant Guidebook gives “community” TLD applications an opportunity to avoid a potentially costly auction if their TLD is contested by multiple applicants, there’s a risk of gaming.

Under the current rules, a company could win a contested TLD without paying big bucks, by promising to restrict it to a narrowly defined community of registrants.

It could later attempt to change its rules via ICANN’s Registry Services Evaluation Process to broaden or limit its potential customer base, potentially harming others in the community.

I call these Trojan TLDs.

Employ Media, for example, restricted .jobs domains to the names of companies, but now has licensed thousands of geographical and vocational generic names to a partner, over the objections of major jobs search engines such as Monster.com.

Under ICANN’s proposed policies (pdf), community TLDs would still have to pass through the RSEP, but they’d also be subject to a review under the Community Priority Evaluation.

The CPE is already in the Guidebook. It will be used to score applications based on the strength of community support. To avoid an auction, you need to score 14 out of 16 points.

ICANN now suggests that the CPE criteria could also be used to evaluate what it calls a “Community gTLD Change proposal” made by a TLD registry post-launch.

The new score would be used to determine whether to accept or reject the change:

If the sum of all identified score changes for the first three CPE criteria is zero or positive, the recommendation would be to accept the proposal, regardless of any relevant opposition identified. If the sum is minus one, the recommendation would be to accept the proposal, unless there is relevant opposition from a group of non-negligible size, in which case the recommendation would be to reject the proposal. If the sum is minus two or lower, the recommendation would be to reject the proposal.

The ICANN board would be able to deviate from the CPE recommendation, as long as it stated its reasons for doing so, and the registry would have the right to appeal that decision under the existing Reconsideration Request process.

These rules would apply to all new TLDs that designate themselves as community-based, apparently regardless of whether they successfully passed the CPE during the application process.

The rules are presented as a “discussion draft”, but I don’t think they’re going to be opened to official public comment.