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Pay up or sell up, ICANN tells failing new gTLD

Kevin Murphy, January 25, 2019, Domain Registries

ICANN has responded to a request for it to reduce the $25,000 annual fee it charges gTLD registries.

The answer is no.

That wholly unsurprising reply came in a letter from registry services director Russ Weinstein to John McCabe, CEO of failing new gTLD operator Who’s Who Registry.

McCabe, in November, had asked ICANN to reduce its fees for TLDs, such as its own .whoswho, that have zero levels of abuse. ICANN fees are the “single biggest item” in the company’s budget, he said.

His request coincided with ICANN commencing compliance proceedings against the company for failure to pay these fees

Weinstein wrote, in a letter (pdf) published today:

We sympathize with the financial challenges that some new gTLD registry operators may be facing in the early periods of these new businesses. New gTLD operators face a challenging task of building consumer awareness and this can and may take significant time and effort.

But he goes on to point out that the $25,000-a-year fee was known to all applicants before they applied, and had been subject to numerous rounds of public comment before the Applicant Guidebook was finalized.

Weinstein writes:

The AGB made clear that evaluation phase was to determine whether an applicant had the requisite technical, operation and financial capabilities to operate a registry, and was not a assessment nor an endorsement of a particular business plan.

It’s pretty clear that the .whoswho business plan has failed. It’s sold no more than a handful of non-defensive domains over the four years it has been available.

Weinstein concludes his letter by pointing out that all new gTLD registries are free to terminate their contracts for any reason, and that it’s perfectly permissible under ICANN rules to sell your contract to another registry.

ICANN told Who’s Who earlier this month that it has until February 10 to pay its overdue fees or risk having its contract terminated.

New gTLD fees could be kept artificially high

Kevin Murphy, July 6, 2018, Domain Policy

More windfalls for ICANN? It’s possible that application fees for new gTLDs could be artificially propped up in order to discourage gaming.

In the newly published draft policy recommendations for the next new gTLD round, ICANN volunteers expressed support for keeping fees high “to deter speculation, warehousing of
TLDs, and mitigating against the use of TLDs for abusive or malicious purposes”.

It’s one of the ideas posed in the the Initial Report on the New gTLD Subsequent Procedures Policy Development Process, published this week.

It recommends that ICANN continues to price its application fees on a revenue-neutral basis, but with one big exception.

The report notes that there’s support for an “application fee floor” — a minimum fee threshold that would not be crossed no matter how cheap application processing actually becomes:

there might be a case where a revenue neutral approach results in a fee that is “too low,” which could result in an excessive amount of applications (e.g., making warehousing, squatting, or otherwise potentially frivolous applications much easier to submit), reduce the sense of responsibility and value in managing a distinct and unique piece of the Internet, and diminish the seriousness of the commitment to owning a TLD.

The subgroup looking at fees was “generally supportive” of the notion of a floor, the report says.

If the fee floor were used, excess funds would have to be pumped into efforts such as “universal acceptance”, the ongoing outreach project that hopes to persuade developers to ensure their software supports all TLDs.

It could also be used to support applications from the poorer regions of the world.

I wonder how much of a deterrent to warehousing an artificially high application fee would be; deep-pocketed Google and Amazon appear to have warehoused dozens of TLDs they applied for in the 2012 round.

The application fee in 2012 was $185,000 per string, priced on a “cost recovery” basis. The idea was that ICANN shouldn’t use the fees to subsidize its regular operations and vice versa.

But with roughly one third of that amount earmarked for unexpected contingencies — basically a legal defense fund — ICANN currently has close to $100 million in unspent fees sitting idle in a dedicated bank account.

The Initial Report also discusses whether application fees should be varied based on application type, as well as posing dozens of other questions for the community on the rules for the next round of new gTLDs.

Comment here.

$44 billion company is latest deadbeat gTLD registry

Indian car-making giant Tata Motors has become the latest new gTLD registry to fail to pay its ICANN fees.

According to a breach notice (pdf), $44 billion-a-year Tata hasn’t paid its $6,250 quarterly registry fee since at least November last year (though probably much earlier).

Listed on the New York Stock Exchange and elsewhere and part of the Indian conglomerate Tata Group, the company runs .tatamotors as a dot-brand gTLD.

The breach notice, dated 10 days ago, also says that the company is in breach of its contract for failing to publish an abuse contact on its nic.tatamotors web site, something it seems to have corrected.

.tatamotors had half a dozen domains under management at the last count and seems to have at least experimented with using the TLD for private purposes.

Tata becomes the second dot-brand registry to get a slap for non-payment this year.

Back in April, the bank Kuwait Finance House, with revenues of $700 million a year, was also told it was late paying its fees.

$55 billion bank not paying its $6,250 ICANN fees

Kevin Murphy, April 30, 2018, Domain Registries

Kuwait Finance House has become the latest new gTLD registry to get slapped with an ICANN breach notice for not paying its quarterly fees.

The company is a 40-year-old, Sharia-compliant Kuwaiti bank managing assets of $55.52 billion, according to Wikipedia. It has annual revenue in excess of $700 million.

But apparently it has not paid its fixed ICANN dues — $6,250 per quarter — for at least six months, according to ICANN’s breach letter (pdf).

KFH runs .kfh and the Arabic internationalized domain name equivalent .بيتك (.xn--ngbe9e0a) as closed, dot-brand domains.

Neither appears to have any live sites, but both appear to be in their launch ramp-up phase.

ICANN has been nagging the company to pay overdue fees since November, without success, according to its letter.

They’re the third and fourth new gTLD registries to get deadbeat breach notices this month, after .qpon and .fan and .fans.

Another failing new gTLD stopped paying its dues

Kevin Murphy, April 23, 2018, Domain Registries

Another new gTLD registry has been slapped with an ICANN breach notice after failing to pay its fees.

California-based dotCOOL, which runs .qpon, seems to be at least six months late in making its $6,250 quarterly payment to ICANN, according to the notice (pdf).

It’s perhaps not surprising. The TLD has been live since mid-2014 and yet has failed to top more than about 650 simultaneous domains under management, at least 100 of which were registry-owned.

Right now, its zone file contains about 470 domains.

It typically sells new domains in the single digits each month, with retail prices in the $15 to $20 range.

With that volume and the inferred registry fee, a full year’s revenue probably wouldn’t cover one quarter of ICANN fees.

The string “qpon” is a pun on “coupon”. The idea was that companies would use the TLD to push discount coupons on their customers.

But they didn’t.

The number of live sites indexed by Google is in the single figures and none of them are using .qpon for its intended purpose.

ICANN’s breach notice also demands the company start publishing a DNSSEC Practice Statement on its registry web site, but that seems like the least of its worries.

As a novel, non-dictionary string, I worry that .qpon may struggle to find a buyer.

Last week, .fan and .fans, both operated by Asiamix Digital, got similar breach notices from ICANN.

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