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Double-charging claims as registries ramp up new gTLD refund demands

Kevin Murphy, October 10, 2017, Domain Registries

Registry operators have stepped up demands for ICANN to dip into its $100 million new gTLD cash pile to temporarily lower their “burdensome” accreditation fees.

A new missive from the Registries Stakeholder Group to ICANN this week also introduces a remarkable claim that ICANN may have “double charged” new gTLD applications to the tune of potentially about $6 million.

The RySG wants ICANN to reduce the quarterly fixed fees new gTLD registries must pay by 75% from the current $6,250, for a year, at a cost to ICANN of $16.87 million.

ICANN still has roughly $96 million in leftover money from the $185,000 per-TLD application fees paid in 2012, roughly a third of which had been earmarked for unexpected expenses.

When Global Domains Division president Akram Atallah refused this request in August, he listed some of the previously unexpected items ICANN has had to pay for related to the program, one of which was “implementation of the Trademark Clearinghouse”.

But in last week’s letter (pdf), the RySG points out that each registry was already billed an additional $5,000 fee specifically to set up the TMCH.

Your letter states that registry operators knew about the fee structure from the start and implies that changes of circumstance should be irrelevant. The TMCH charge, however, was not detailed in the applicant guidebook. ICANN added it on its own after all applications were accepted and without community input. Therefore, ICANN is very much in a position to refund registry operators for this overcharge, and we request that ICANN do so. Essentially, you would be refunding the amounts we paid with our own application fees, which should have been used to set up the TMCH in the first place.

These additional fees could have easily topped $6 million, given that there are over 1,200 live new gTLDs.

Was this a case of double-charging, as the RySG says?

My gut feeling is that Atallah probably just forgot about the extra TMCH fee and misspoke in his August letter. The alternative would be a significant accounting balls-up that would need rectifying.

RySG has asked ICANN for a “detailed accounting” of its new gTLD program expenses to date. If produced, that could clear up any confusion.

Group chair Paul Diaz, who signed the letter, has also asked for a meeting with Atallah at the Abu Dhabi public meeting later this month, to discuss the issue.

The letter also accuses ICANN of costing applicants lost revenue by introducing policies such as the ban on two-letter domains, increased trademark protections, and other government-requested restrictions that were introduced after application fees had already been paid.

The tone of the letter is polite, but seems to mask an underlying resentment among registries that ICANN has not been giving them a fair chance to grow their businesses.

UPDATE: This story was updated October 12 to correct the estimate of the total amount of TMCH setup fees collected.

Will ICANN punt on .amazon again?

Kevin Murphy, September 15, 2017, Domain Policy

Amazon is piling pressure onto ICANN to finally approve its five-year-old gTLD applications for .amazon, but it seems to me the e-commerce giant will have a while to wait yet.

The company sent a letter to ICANN leadership this week calling on it to act quickly on the July ruling of an Independent Review Process panel that found ICANN had breached its own bylaws when it rejected the .amazon and and Chinese and Japanese transliterations.

Amazon’s letter said:

Such action is necessary because there is no sovereign right under international or national law to the name “Amazon,” because there are no well-founded and substantiated public policy reasons to block our Applications, because we are committed to using the TLDs in a respectful manner, and because the Board should respect the IRP accountability mechanism.

ICANN had denied the three applications based on nothing more than the consensus advice of its Governmental Advisory Committee, which had been swayed by the arguments of primarily Brazil and Peru that there were public policy reasons to keep the gTLD available for possible future use by its own peoples.

The string “Amazon”, among its many uses, is of course the name of a river and a rain forest that covers much of the South American continent.

But the IRP panel decided that the ICANN board should have at least required the GAC to explain its public policy arguments, rather than just accepting its advice as a mandate from on-high.

Global Domains Division chief Akram Atallah had testified before the panel that consensus GAC advice sets a bar “too high for the Board to say no.”

But the governmental objections “do not appear to be based on well-founded public policy concerns that justify the denial of the applications” the IRP panelists wrote.

The panel, in a 2-to-1 ruling, instructed ICANN to reopen Amazon’s applications.

Since the July ruling, ICANN’s board has not discussed how to proceed, but it seems likely that the matter will come up at its Montevideo, Uruguay retreat later this month.

No agenda for this meeting has yet been published, but there will be an unprecedented public webcast of the full formal board meeting, September 23.

The Amazon letter specifically asks the ICANN board of directors to not refer the .amazon matter back to the GAC for further advice, but I think that’s probably the most likely outcome.

I say this largely because while ICANN’s bylaws specifically allow it to reject GAC advice, it has cravenly avoided such a confrontation for most of its history.

It has on occasion even willfully misinterpreted GAC advice in order to appear that it has accepted it when it has not.

The GAC, compliantly, regularly provides pieces of advice that its leaders have acknowledged are deliberately vague and open to interpretation (for a reason best known to the politicians themselves).

It seems to me the most likely next step in the .amazon case is for the board to ask the GAC to reaffirm or reconsider its objection, giving the committee the chance to save face — and avoid a lengthy mediation process — by providing the board with something less than a consensus objection.

If ICANN were to do this, my feeling is that the GAC at large would probably be minded to stick to its guns.

But it only takes one government to voice opposition to advice for it to lose its “consensus” status, making it politically much easier for ICANN to ignore.

Hypothetically, the US government could return to its somewhat protectionist pre-2014 position of blocking consensus on .amazon, but that might risk fanning the flames of anti-US sentiment.

While the US no longer has its unique role in overseeing ICANN’s IANA function, it still acts as the jurisdictional overlord for the legal organization, which some other governments still hate.

A less confrontational approach might be to abstain and to allow friendly third-party governments to roadblock consensus, perhaps by emphasizing the importance of ICANN being seen to accountable in the post-transition world.

Anyway, this is just my gut premonition on how this could play out, based on the track records of ICANN and the GAC.

If ICANN can be relied on for anything, it’s to never make a decision on something today if it can be put off until tomorrow.

Iran rep reported to ICANN Ombudsman, again

Kevin Murphy, August 3, 2017, Domain Policy

Iran’s Governmental Advisory Committee representative has found himself reported to ICANN’s Ombudsman for alleged bad behavior for the second time in just a few months.

Outspoken GACer Kavouss Arasteh was referred to Ombudsman Herb Waye by consultant John Laprise, according to posts on mailing lists and social media.

Both men serve on an ICANN volunteer working group that is looking at matters related to the jurisdiction in which ICANN operates.

The group’s discussions have recently become extremely fractious, largely due to a series of combative emails and teleconference interventions from Arasteh.

Laprise eventually said on the list that Arasteh was being a “bad actor”, adding that “his tone, manner, and insinuations are detrimental and indeed hostile to the process.”

He later said on Facebook that he had reported the matter to the Ombudsman.

The spat centered on an August 1 teleconference in which members of the so-called WS2-Jurisdiction working group heard a briefing from ICANN lawyers on the Office of Foreign Assets Control, which oversees international trade sanctions in the US.

As well as enforcing sanctions against countries including Iran, OFAC maintains a list of people and organizations, many of them Iranian, that American companies are forbidden from doing business with.

It impacts ICANN because the organization in its normal course of business is often obliged to deal with ccTLD registries in sanctioned nations, for which it needs to apply for OFAC licenses.

Arasteh initially complained multiple times that the meeting had been rescheduled for August 1 — apparently with his initial consent — which is a national holiday in his home nation of Switzerland.

He also fought for ICANN lawyers to be asked to provide, at very short notice, a written briefing paper on OFAC, answering the group’s questions, prior to the teleconference taking place.

On neither issue did he receive support from fellow volunteers, something for which he seemed to blame group chair Greg Shatan, an intellectual property lawyer.

Arasteh’s criticisms of an increasingly weary Shatan sometimes seemed to border on conspiracy theory. All other working group members who publicly expressed an opinion said Shatan was doing a fine job herding this particular set of cats.

During the teleconference itself, Arasteh ate up the first five or six minutes of allotted time with a rambling, barely comprehensible complaint about the format of the meeting, compelling Shatan to eventually ask for his mic to be cut off.

In emails over the next 48 hours, the GAC rep continued his tirade against what he perceives as Shatan’s bias against him and called again for ICANN legal to provide a formal set of written answers to questions.

Some fellow group members believe Arasteh’s defensive and confrontational approach is merely a clash of cultures between his usual style of government diplomacy and the staid, tediously polite style of ICANN working group interactions.

Others are less charitable.

Still, the question of whether the latest WG friction has infringed any of ICANN’s “Expected Standards of Behavior” now appears to be in the hands of the Ombudsman.

Arasteh was also reported to Waye back in May, when he accused the chairs of a different ICANN working group of trying to exclude governmental voices from new gTLD policy-making by scheduling teleconferences at times he found inconvenient.

Waye subsequently reported that the complaint had been resolved between the parties.

In June, he said he was proactively monitoring a third working group mailing list after receiving allegations of harassment. That was unrelated to Iran.

Governments slammed for overreach as Amazon wins gTLD appeal

Kevin Murphy, July 19, 2017, Domain Policy

Amazon has won its appeal against the rejection of its .amazon gTLD application, in a ruling that criticizes ICANN for giving too much deference to government advice.

The Independent Review Process panel’s 2-to-1 ruling, delivered July 11 and published this week, means that .amazon and its Chinese and Japanese translations has been un-rejected and ICANN will have to consider approving it again.

The ruling (pdf) turns on the idea that ICANN’s board of directors rejected the gTLD based on nothing more than the groundless objections of a few South American governments.

Amazon’s applications were rejected three years ago when ICANN accepted the consensus advice of its Governmental Advisory Committee.

That advice, which had no attached rationale, had come largely at the behest of Brazil and Peru, two countries through which the Amazon river flows.

At issue was the word “Amazon”, which the governments protested matched the name of an important geographic region extending into several countries.

But the string was not protected by ICANN’s new gTLD program rules because it does not match the name of an administrative region of any country.

Regardless, Brazil and Peru said that to give .amazon to Amazon would prevent it being used in future by citizens of the informal South American region.

GAC consensus was reached only after the US government, for political reasons connected to the then-recent announcement of the IANA transition, decided to withdraw its objection to the advice.

Consensus, under GAC rules means simply that no one government objects to the proposed advice. It does not indicate unanimity.

But at no point in the pubic record of discussions within the GAC or ICANN board did anyone give any substantial public policy reasons for the objection, the IRP panel has now found.

Global Domains Division chief Akram Atallah testified before the panel that consensus GAC advice sets “too high for the Board to say no.”

It seems ICANN sometimes just assumes that GAC advice by default is rooted in sound public policy, even when that is not the case.

Brazil and Peru’s objections “do not appear to be based on well-founded public policy concerns that justify the denial of the applications” the panelists wrote.

The panel wrote:

We conclude that GAC consensus advice, although no reasons or rationale need be given, nonetheless must be based on a well-founded public interest concern and this public interest basis must be ascertained or ascertainable from the entirety of the record…

the Board cannot simply accept GAC consensus advice as conclusive. The GAC has not been granted a veto under ICANN’s governance documents.

So, while the GAC was under no obligation to state its reasons for objecting to .amazon, the ICANN board was obliged to state its reasons for accepting this advice beyond just “the GAC made us do it”.

As somebody who spent much of 2011 arguing that the GAC new gTLD veto was a bad idea, it’s nice to see the panel agree with me.

The GAC itself also erred by refusing to consider Amazon’s arguments in favor of its application, the IRP panel’s majority found.

Peru had publicly claimed that the string “Amazon” was protected under ICANN rules, which was not true, and Amazon did not have the opportunity to correct the record.

Amazon had also pointed out that the Brazilian oil company Ipiranga was granted its application for .ipiranga, despite its name matching the name of a Brazilian river apparently so important that it is referred to in the Brazilian national anthem.

However, the IRP panel decided that because ICANN’s board had not taken any action on .ipiranga, there was no basis for it to consider whether Amazon had been unfairly subject to different treatment.

In conclusion, this is what the panel has sent to the board:

The Panel recommends that the Board of ICANN promptly re-evaluate Amazon’s applications in light of the Panel’s declarations above. In its re-evaluation of the applications, the Board should make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications. Further, if the Board determines that the applications should not proceed, the Board should explain its reasons supporting that decision. The GAC consensus advice, standing alone, cannot supplant the Board’s independent and objective decision with a reasoned analysis.

It seems Amazon’s chances of having .amazon approved have improved. If ICANN wants to reject the applications again it is going to have to come up with some good reasons, some good reasons that possibly do not exist.

The panel also ordered ICANN to reimburse Amazon for the $163,045.51 it spent on the IRP.

US “threatens” Costa Rica over Pirate Bay domains

Kevin Murphy, June 16, 2017, Domain Policy

The US government has been threatening to “close down” Costa Rica’s .cr registry over its refusal to take down a Pirate Bay domain name, according to the registry.

Representatives of the US embassy in Costa Rica have been badgering NIC.cr to take down thepiratebay.cr since 2015, according to a letter from Pedro León Azofeifa, president of Academia Nacional de Ciencias, which runs the registry.

The letter claims:

These interactions with the United States Embassy have escalated with time and include great pressure since 2016 that is exemplified by several phone calls, emails and meetings urging our ccTLD to take down the domain, even though this would go against our domain name policies

According to the letter, a US official “has mentioned threats to close our registry, with repeated harassment regarding our practices and operation policies and even personal negative comments directed to our Executive Director”.

The letter was sent to the chair of ICANN’s Governmental Advisory Committee 10 days ago, CC’d to senior ICANN, Costa Rican and US governmental figures, and has been circulated this week in the Latin American domain name community.

The form of the alleged threats to close the registry is not clear, but it should be noted that prior to October 1 last year the US Department of Commerce, via its now-relinquished oversight of ICANN, played a key role in the administration of the DNS root zone.

The Pirate Bay is of course a popular directory of BitTorrent links largely used to disseminate pirated copies of movies and music, much of it American-made.

The site has been TLD-hopping for years, as registries around the world shut down its domains for violations of their own local rules. It has been live on thepiratebay.cr since December 2014, when its Swedish operation was shut down by authorities.

The NIC.cr letter says that its own policies follow international “best practices” and allow it to take down domains when presented with a Costa Rican court order, but that “the pressure and harassment [from the US] to take down the domain name without its proper process and local court order persists”.

The US Department of Commerce even pressured its Costa Rican counterpart to investigate NIC.cr, but that probe concluded that the registry was acting within its procedures, according to the letter.

It’s not the first attempt to get rid of the Pirate Bay this year.

Public Interest Registry in February announced a “UDRP for copyright” proposal that would allow copyright holders to have piracy disputes heard by independent arbitrators. It looked like a way to get unloved thepiratebay.org domain taken down without PIR having to take unilateral action.

That proposal was shelved after an outcry from the industry and civil rights watchdogs.

In April, one of the Pirate Bay’s founders launched a piracy-friendly domain registration service.

Just this week, the European Court of Justice ruled, after seven years of legal fights, that the Pirate Bay infringes copyright, raising the possibility of the site being blocked in more European countries.

The NIC.cr letter is dated June 6. It has not yet been published by ICANN or the GAC.