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After long fight, Donuts adds .charity to its gTLD stable

Kevin Murphy, March 13, 2018, Domain Registries

Snatching victory from the jaws of defeat, Donuts has prevailed in the two-horse race for the .charity gTLD.

The company appears to have privately resolved its contention set, paying off rival bidder Famous Four Media, judging by updates to ICANN’s web site today.

The gTLD had been scheduled for an ICANN “last resort” auction in April, but that’s now off.

Famous Four has also withdrawn its application, leaving Donuts the only remaining applicant.

I believe it will be Donuts’ 239th 240th gTLD.

But for a while it looked like Famous Four had a slam-dunk on its hands.

Back in 2014, the Independent Objector of the new gTLD program had filed an Community Objection against Donuts’ application, saying it was too risky to unleash a .charity domain onto the world without registration eligibility restrictions.

The fear was (and probably still is) that fraudsters could use the domains to lend an air of credibility to their online scams.

The IO prevailed, pretty much gifting Famous Four — which had proposed restrictions — the TLD.

But Donuts embarked upon an arduous set of appeals, including an Independent Review Process case, that culminated, last December, in a ruling (pdf) that reversed the original Community Objection decision.

That cleared the way for Donuts back into the application process and, now, the private auction it seems to have won.

Due to ICANN’s adoption of Governmental Advisory Committee advice on sensitive strings, Donuts will be obliged to put some Public Interest Commitments into its .charity contract, with the aim of reducing abuse.

Tech giants gunning for AlpNames over new gTLD “abuse”

A small group of large technology companies including Microsoft and Facebook have demanded that ICANN Compliance take a closer look at AlpNames, the budget registrar regularly singled out as a spammers’ favorite.

The ad hoc coalition, calling itself the Independent Compliance Working Party, wrote to ICANN last week to ask why the organization is not making better use of statistical data to bring compliance actions against the small number of companies that see the most abuse.

AlpNames, the Gibraltar-based registrar under common ownership with new gTLD portfolio registry Famous Four Media, is specifically singled out in the group’s letter.

The letter, sourcing the August 2017 Statistical Analysis of DNS Abuse in gTLDs (pdf), says there “is a clear problem with one particular contracted party”.

AlpNames was the registrar behind over half of the new gTLD domains blacklisted by SpamHaus over the study period, for example, the letter states.

The tiny territory of Gibraltar also frequently ranks unusually highly on abuse lists due to AlpNames presence there, the letter and report say.

The ICWP letter also says that the four gTLDs .win, .loan, .top, and .link were used by over three quarters of abusive domains over the SADAG study period.

The letter calls the abuse rates “troublesome” and says:

We are alarmed at the levels of DNS abuse among a few contracted parties, and would appreciate further information about how ICANN Compliance is using available data to proactively address the abusive activity amongst this subset of contracted parties in order to improve the situation before it further deteriorates.

It goes on to wonder whether high levels of unaddressed abuse could amount to violations of new gTLD Registry Agreements and Registrar Accreditation Agreements, and to ask whether there any barriers to ICANN Compliance pursuing breach claims against such potential violations.

The ICWP comprises Adobe, DomainTools, eBay, Facebook, Microsoft and Time Warner. It’s represented by Fabricio Vayra of Perkins Coie.

Other than the letter (pdf), the Independent Compliance Working Party does not appear to have any web presence, and a spokesperson has not yet responded to DI’s request for more information.

The SADAG report also singled out Chinese registrar Nanjing Imperiosus Technology Co, aka, as having particularly egregious levels of abuse, but noted that this abuse disappeared after ICANN terminated its RAA last year.

AlpNames has not to date had any public breach notices issued against it, but this is certainly not the first time it’s been singled out for public censure.

In November last year, ICANN’s Competition, Consumer Trust, and Consumer Choice Review Team (CCT) named it in a report that claimed: “Certain registries and registrars appear to either positively encourage or at the very least willfully ignore DNS abuse.”

AlpNames seems to have been used often by abusers due to its bargain-basement, often sub-$1 prices — making disposable domains more cost effective — and its tool that allowed up to 2,000 domains to be registered simultaneously.

If not actively soliciting abusive behavior, these factors certainly don’t make abuse any more difficult.

Bur will ICANN Compliance take action in response to the criticism leveled by CCT and now ICWP?

The main problem with the ICWP letter, and the SADAG report it is based upon, is that the data it uses is now rather old.

The SADAG report sourced abuse databases only up to January 2017, a time when AlpNames’ total gTLD domains under management was at its peak of around three million names.

Since then, the company has been hemorrhaging DUM, losing hundreds of thousands of domains every month. At the end of November 2017, the most recent data compiled by DI shows that it was down to around 838,000 domains.

It’s quite possible that AlpNames’ customer base is no longer the den of abuse it once was, whether due to natural attrition or a proactive purge of bad actors.

A month ago, in a press release connected with a $5.4 million buy-out of an co-founder, AlpNames chairman Iain Roache said he has a “10-year strategic plan” to turn AlpNames into a “Tier-1” registrar and “bring the competition to the incumbents”.

Famous Four chair pumps $5.4 million into AlpNames to settle COO lawsuit

Kevin Murphy, February 8, 2018, Domain Registrars

Famous Four Media chair Iain Roache has bought out his former COO’s stake in AlpNames, its affiliated registrar, settling a lawsuit between the two men.

He’s acquired Charles Melvin’s 20% stake in the company for £3.9 million ($5.4 million), according to a press release.

A spokesperson confirmed that the deal settles a lawsuit in the companies’ home territory of Gibraltar, which we reported on in December.

Roache said in the press release that he has a plan to grow AlpNames into a “Tier 1 registrar”:

“I’ve got a 10 year strategic plan, which includes significant additional investment, to set the business up for future growth and success,” he said. “We’re going to bring the competition to the incumbents!”

AlpNames is basically the registrar arm of Famous Four, over the last few years supporting the gTLD portfolio registry’s strategy of selling domains in the sub-$1 range and racking up huge market share as a result.

But it’s on a bit of a slide, volume-wise, right now, as hundreds of thousands of junk domains are allowed to expire.

According to today’s press release, AlpNames has 794,000 gTLD domains under management. That’s a far cry from its peak of 3.1 million just under a year ago.

Seller Melvin, according to the press release, “has decided to pursue other interests outside of the domain name industry”.

It appears he left his COO job at Famous Four some time last year, and then sued Roache and CEO Geir Rasmussen (also an AlpNames investor) over a financial matter. Previous attempts to buy him out were rebuffed.

Last October, the Gibraltar court ruled that the defendants has supplied the court with “forged documents” in the form of inaccurately dated invoices between the registry and AlpNames.

The pair insisted to the court that the documents were an honest mistake and their lawyer told DI that there was no “forgery” in the usual sense of the word.

But it appears that Melvin’s split from the companies was less than friendly and the £3.9 million buyout should probably be viewed in that light.

Famous Four bosses gave “forged documents” to court

Kevin Murphy, December 28, 2017, Domain Registries

The leaders of Famous Four Media produced “forged documents” during a lawsuit filed by the company’s former chief operating officer, according to Gibraltar’s top judge.

The new gTLD registry’s chairman and CEO were both, along with four other unidentified former employees, involved to some degree in “forging” invoices to an affiliated registrar and/or documents relating to a rights issue, according to a ruling by Chief Justice Anthony Dudley.

The ruling was made in October, but appears to have been published more recently.

Former Famous Four COO Charles Melvin is suing CEO Geir Rasmussen and Iain Roache, chair of parent Domain Venture Partners, over a rights issue that diluted his holdings in a related company, according to a court document.

There’s little in the public record about the specifics of the suit. The complaint is not available publicly and neither man wished to comment while the trial is still ongoing.

But Dudley’s ruling shows that the original claims seem to have been sidetracked by Melvin’s new allegations that the “forged” documents demonstrate that Roache, Rasmussen and others engaged in “fraud” and “conspiracy to pervert the course of justice”.

Nick Goldstone, a partner at Gordon Dadds and a lawyer for Rasmussen and Roache, told DI that they both deny any dishonest behavior and that there has been no finding of dishonesty by the court.

He said in an emailed statement: “both of the individual defendants deny (if it be alleged) that they are dishonest and both deny that they have been engaged in the creation of any forged documents in the wider sense, as alleged by counsel for the opponents in the Court case, or at all.”

According to Dudley’s ruling, the defendants’ trial lawyers have claimed that errors in the invoices provided to the court were the result of “honest incompetence”, which the judge said has “a ring of truth” to it.

Dudley, having decided Roache and Rasmussen “have historically been guilty of serious shortcomings in relation to their disclosure obligations” at some point ordered that metadata be gathered from various documents handed over during the disclosure phase of the trial.

This metadata showed that some documents “were created after (in some instances long after) the date on the face of the documents”, which led the judge to conclude they were technically “forged documents”.

But Goldstone told DI that the documents in question were “forged” only in “explicitly a narrow characterisation of the term”, adding that they had been created by former employees who have all since been fired.

The documents included 10 invoices from Famous Four to AlpNames, also based in Gibraltar, the affiliated registrar responsible for selling hundreds of thousands of cheap names in Famous Four gTLDs.

They also included documents concerning a rights issue in a company called Myrtle Holdings that reduced Melvin’s stake to a negligible amount. Again, dating seems to have been an issue.

Dudley wrote in his decision (pdf):

It is accepted by the respondents that the material produced by them contained inaccurate and misleading information; and that the forged documents have been deployed in the litigation and relied upon in pleadings and witness statements. It also formed part of the material provided to the expert witnesses, whose opinions are consequently tainted.

But Goldstone told DI: “no conclusion has been reached in the ruling as to any ‘dishonesty’ or ‘forgeries’ in the wider sense.”

The trial had been due to kick off in October, but it’s been delayed due to the fact that a lot of evidence and testimony has to be reevaluated.

Roache and Rasmussen had proposed to settle the case with a buy-out offer earlier this year, but that offer was rebuffed by Melvin, according to Dudley’s ruling.

Famous Four runs 16 new gTLDs including .science, .download, .loan and .bid.

Many of its TLDs have been offered at super-cheap prices that have boosted sales volumes but have often attracted high levels of abuse.

ICANN urged to crack down on new gTLD abuse

Kevin Murphy, November 29, 2017, Domain Registries

Registries selling dirt-cheap new gTLD domains should be rewarded with lower ICANN fees when they get proactive about abuse, while registrars that turn a blind eye to spammers should be suspended, an ICANN working group will recommend.

In its second batch of findings, the Competition, Consumer Trust, and Consumer Choice Review Team (CCT) said that financial incentives and a new complaints procedure should be used to persuade registries and registrars to fight DNS abuse.

The CCT said it “proposes the development of incentives to reward best practices preventing technical DNS abuse and strengthening the consequences for culpable or complacent conduits of technical DNS abuse” in a paper published today.

The review, which drew on multiple sources of market and abuse data, original research, and analysis of third-party research, is probably the most comprehensive study into the impact of the new gTLD program to date.

It concluded that overall rates of DNS abuse did not increase as a result of the program, but that bad actors are increasingly migrating away from legacy gTLDs such as .com to 2012-round TLDs such as .top, .gdn and Famous Four Media’s stable.

Indeed, much of the paper appears to be a veiled critique of FFM’s practices.

The registrar AlpNames, known to be affiliated with FFM and responsible for most of its retail sales, is singled out as the currently accredited registrar particularly favored by abusers.

The CCT report notes that AlpNames regularly sells domains for under $1, or gives them away for free, and offered a tool allowing registrants to randomly generate up to 2,000 available domains in 27 different gTLDs, pretty much inviting abuse.

“Certain registries and registrars appear to either positively encourage or at the very least willfully ignore DNS abuse. Such behavior needs to be identified rapidly and action
must be taken by ICANN compliance as deemed necessary,” the paper says.

The review found that gTLDs with no registration restrictions and the lowest prices had the most abuse. Duh.

“Generally, the DNS Abuse Study indicates that the introduction of new gTLDs did not increase the total amount of abuse for all gTLDs,” its report says. “[F]actors such as registration restrictions, price, and registrar-specific practices seem more likely to affect abuse rates.”

Drawing on data provided by 11 domain block-lists (SURBL, SpamHaus, etc), the paper states that at least one TLD (FFM’s .science) had an abuse rate excess of 50%.

Using SpamHaus data, the paper identities FFM’s .science, .stream, .trade, .review, .download and .accountant as having over 10% abuse during the period of its study. Also on that list: Uniregistry’s low-price .click and the China-based .top and .gdn.

One thing they all have in common is that AlpNames is a leading registrar, usually accounting for at least a quarter of domains under management.

There’s no way AlpNames/FFM is not aware of the amount of bad actors in its customer base, the question is what can ICANN do about it?

The CCT team recommends that registries and registrars with over 10% of their names used for abusive purposes should be tasked by ICANN with proactively cleaning up their zones. Those that fail to do so should be subject to a new Domain Abuse Dispute Resolution Process, it said.

These companies should have their contracts suspended when they’re “associated with unabated, abnormal and extremely high rates of technical abuse”, the report recommends.

There’s a big boilerplate specifying, tellingly, that registry operators that control registrars are affected by this recommendation too.

It should be noted that there was not a full consensus of support for the idea of a DADRP. Half a dozen working group members filed minority statements opposing it.

It’s not all stick in the report, however. There’s some carrot, too.

The CCT report recommends financial incentives such as fee reductions for registries that have “proactive anti-abuse measures” in place.

It noted that there is precedent for ICANN doing this kind of thing when it implemented an anti-tasting policy that seriously restricted registrars’ ability to get registry refunds.

The CCT Review Team was formed to figure out what impacts the 2012 new gTLD round had on the domain name market.

The completion of its work is one of several gating factors to the next new gTLD application round under ICANN’s new bylaws and the old Affirmation of Commitments with the US government.

It published initial recommendations earlier this year. This new set of recommendations is now open for public comment until January 8.