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Melbourne IT may sell off businesses as ICANN delays hit bottom line

Kevin Murphy, November 26, 2012, Domain Registrars

Melbourne IT is looking into selling some of its business units after warning the Australian markets today that 2012 profit is likely to come in below 2011 levels.

The brand protection registrar, listed on the Australian Stock Exchange, partly blamed delays to ICANN’s new gTLD program for an expected 10% dip in earnings before interest and tax.

The company said it is “in the process of pursuing possible ownership alternatives for its current portfolio of businesses”, and that overseas buyers have already been identified.

While Melbourne did not specify which units face the chop, my hunch is that it’s not talking about its domain name business.

Digital Brand Management services, which includes its registrar, is performing “strongly” despite the delays, the company said.

However, its small business, enterprise and legal content management businesses are suffering from competition and spending freezes among government clients, the company said.

Even the registrar business is facing challenges. In the first half of 2012, its total domains under management dropped 8%. The brand management side of that business is now bigger.

ICANN may have got lucky with a URS vendor

Kevin Murphy, November 25, 2012, Domain Policy

ICANN may have found a vendor willing to provide Uniform Rapid Suspension services for new gTLDs at $500 or less per case, without having to rewrite the policy to do so.

Last month, Olof Nordling, director of services relations at ICANN, gave the GNSO Council a heads-up that the URS policy may have to be tweaked if ICANN were to hit its fee targets.

But last week, following the receipt of several responses to a URS vendor Request For Information, Nordling seems to have retracted the request.

In a message to Council chair Jonathan Robinson, he wrote:

The deadline for responses to the URS RFI has passed and I’m happy to inform you that we have received several responses which we are now evaluating. Moreover, my first impression is that the situation looks quite promising, both in terms of adherence to the URS text and regarding the target fee. This also means that there is less of an urgency than I previously thought to convene a drafting team (and I’m glad to have been proven wrong in that regard!). There may still be details where such a drafting team can provide useful guidance and I will get back to you with further updates on this and other URS matters as we advance with the evaluations.

The target fee for URS has always been $300 to $500 per case, between a fifth and a third of the fee UDRP providers charge.

Following an initial, private consultation with UDRP providers WIPO and the the National Arbitration Forum, ICANN concluded that that it would miss that target unless the URS was simplified.

But some GNSO members called for a formal, open RFP, in order to figure out just how good a price vendors were willing to offer when they were faced with actual competition.

It seems to have worked.

During a session on URS at the Toronto meeting last month, incumbents WIPO and NAF were joined by a new would-be arbitration forum going by the name of Intersponsive.

Represented by IP lawyers Paul McGrady and Brad Bertoglio, the new company claimed it would be able to hit the price target due to software and process efficiencies.

NAF also said it would be able to hit targets for most URS cases, but pointed out that the poorly-described policy would create complex edge cases that would be more expensive to handle.

WIPO, for its part, said a cheaper URS would only be possible if registrants automatically lost the cases if they failed to respond to complaints.

This angered big domainers represented by the Internet Commerce Association and free speech advocates in the GNSO, who feared a simpler URS meant fewer registrant rights.

It’s not yet known which vendors are in with a shot of winning the URS contract, but if ICANN has found a reasonably priced provider, that would be pretty good news for registrants and IP owners.

Australia leads the charge as governments file 242 new gTLD warnings

Kevin Murphy, November 21, 2012, Domain Registries

Governments of the world have filed 242 warnings on new gTLD applications, more than half of which came from Australia.

Warnings were filed against 145 strings in total, and in most cases governments issued the same warnings against all competing applications in a given contention set.

Australia was responsible for 129 warnings, accounting for most of the 49 warnings received by Donuts.

There are some surprises in there.

Notably, there were no warnings on any of the strings related to sex, sexuality or porn.

Given the amount of effort the GAC put into advising against .xxx, this is a big shock. Either governments have relaxed their attitudes, or none were willing to single themselves out as the anti-porn country.

No government warned on .gay.

The largest single recipient of warnings, with 49, was Donuts, the largest portfolio applicant.

The most-warned application, with 17 warnings, was DotConnectAfrica’s .africa. The company is contesting the gTLD without government support, and African nations objected accordingly.

Nigeria also warned Delta Airlines about its proposed .delta dot-brand,

The string “delta” is a protected ISO 3166 sub-national place name, as Delta is likely to discover when the Geographic Names Panel delivers the results of its evaluation.

Australia objected to .capital on the same grounds.

Top Level Domain Holdings was hit with warnings from Italy and South Africa based on a lack of government support for its geographic applications .roma and .zulu.

Remarkably, Samoa warned the three applications for .website on the grounds that they would be “confusingly similar” to its own ccTLD, .ws, which is marketed as an abbreviation for “website”.

The US warned on all 31 of Radix Registry’s applications, saying that the Directi company inappropriately included an email from the FBI in its bids, suggested an endorsement when none exists.

Australia, among its 129 warnings, appears to have won itself a lot of friends in the intellectual property community.

It’s objected to .fail, .sucks, .gripe and .wtf on the grounds that they have “overly negative connotations” and a lack of “sufficient mechanisms to address the potential for a high level of defensive registrations.”

It also issued warnings to applicants planning gTLDs covering “regulated sectors”, including .accountant, .architect and .attorney, without sufficient safeguards to protect consumers.

Generic strings with single-registrant business models — such as Google’s .app and .blog bids — are also targeted by Australia on competition grounds.

Australia more than any other governments appears to be trying to use its warnings as a way to enter into talks with applicants, with a view to remedial action.

Whether this will be permitted — applicants are essentially banned from making big changes to their applications — is another matter entirely.

The full list of warnings can be found here.

GAC Early Warnings confirmed for today. Here’s what I expect to see

Kevin Murphy, November 20, 2012, Domain Policy

ICANN’s Governmental Advisory Committee is ready to send out its Early Warnings on new gTLD applications today as scheduled, ICANN has confirmed.

The Early Warnings, which highlight applications that individual GAC members have problems with, are expected to be sent by the GAC to applicants and published by ICANN later.

Because the warnings are expected to be issued by individual governments, rather than the GAC as a whole, we could wind up seeing hundreds, due to multiple governments objecting to the same applications.

However, some governments may have decided to be conservative for precisely the same reason.

Governments won’t be able to hide behind the cloak of “GAC Advice”, as they did when .xxx was up for approval last year; the names of the governments will be on the warnings.

That’s not to say there won’t necessarily be safety in numbers. It’s possible that some warnings will be explicitly supported by multiple governments, potentially complicating applicant responses.

But which countries will provide warnings?

I’d be surprised if the US, as arguably the most vocal GAC player, does not issue some. Likewise, the regulation-happy European Commission could be a key objector.

It’s also my understanding that Australia has a raft of concerns about various applications, and has been leading much of the back-room discussion among GAC members.

Going out on a limb slightly, I’m expecting to see the warnings from Western nations concentrating largely on regulated industries, IP protection and defensive registrations.

We’re likely to see warnings about .bank and .sucks, for examples, from these governments. To a certain extent, any non-Community applications that could be seen as representing an industry could be at risk.

On the “morality” front, indications from ICANN’s public comment period are that Saudi Arabia has a great many problems with strings that represent religious concepts, and with strings that appear to endorse behavior inconsistent with Islamic law, such as alcohol and gambling.

But last time I checked Saudi Arabia was not a member of the GAC. It remains to be seen whether similar concerns will be raised by other governments that are members.

The one Early Warning we can guarantee to emerge is against .patagonia, the application from a US clothing retailer that shares its name with a region of South America.

The Argentinian government has explicitly said it will issue a warning against this bid, and I expect it to garner significant support from other GAC members.

The GAC Early Warnings stand to cause significant headaches for applicants, many of which are gearing up for a four-day US Thanksgiving weekend.

After receiving a warning, applicants have just 21 days to decide whether to withdraw their bid — receiving an 80% refund of their $185,000 application fee — or risk a formal GAC Advice objection next year.

But that’s not even half of the problem.

The GAC has indicated that it wants to be able to, effectively, negotiate with new gTLD applicants over the details of their applications after issuing its warnings.

At the Toronto meeting last month, the GAC asked ICANN to explain:

the extent to which applicants will be able to modify their applications as a result of early warnings.

[and]

how ICANN will ensure that any commitments made by applicants, in their applications or as a result of any subsequent changes, will be overseen and enforced by ICANN.

ICANN has not yet responded to these inquiries and it does not expect to do so until Thursday.

The fact is that ICANN has for a long time said that it does not intend to allow any applicant to make any material changes to their applications after submission. This was to avoid gaming.

It has since relaxed that view somewhat, by introducing a change request mechanism that has so far processed about 30 changes, some of which (such as .dotafrica and .banque) were highly material.

Whether ICANN will extend this process to allow applicants to significantly alter their applications in order to calm the fears of governments remains to be seen.

Whatever happens this even, many new gTLD applicants are entering unknown territory.

ICANN asks: just what the hell is Whois for anyway?

Kevin Murphy, November 19, 2012, Domain Policy

It’s back to basics time at ICANN, with the launch today of a massive effort to take a fresh look at Whois.

This could be a biggie.

“We’re going to go back to the fundamentals and ask: what problems are being addressed by Whois, who’s using it and what are they using it for?” ICANN chair Steve Crocker told DI.

The ICANN board of directors earlier this month passed a resolution, published today, that calls for:

a new effort to redefine the purpose of collecting, maintaining and providing access to gTLD registration data, and consider safeguards for protecting data, as a foundation for new gTLD policy and contractual negotiations

This is bare-bones, fundamental stuff, likely to encompass pretty much every controversial issue to hit Whois over the years.

Crocker noted that the use of Whois, originally designed to help people locate the operators of large multi-user computing services, has changed over the years.

Is Whois now there to help law enforcement track down crooks? Is it there to help intellectual property owners enforce their rights? Should it help domainers verify who they’re transacting with?

Should published Whois records always be complete and accurate? Is there a right to privacy in Whois?

These are the some of the big questions that ICANN has tried and failed to grapple with over the last decade, and Crocker said that now is the time to answer them.

“My own feeling is that this must not suffer from the endless delays it has in the past, but at the same time it’s essential that we get it right rather than get it done quickly,” he said.

The new board resolution didn’t appear of thin air, however.

It’s a response to the recommendations of the Whois Policy Review Team, which earlier this year called for ICANN to make a Whois a strategic priority.

The review team itself was set up to comply with ICANN’s Affirmation of Commitments with the US Department of Commerce, one of ICANN’s core documents and part of the basis of its legitimacy.

But the AoC may presuppose certain outcomes of any root-and-branch Whois reform, calling as it does for a Whois policy that “meets the legitimate needs of law enforcement and promotes consumer trust”.

Crocker said that doesn’t necessarily rule out a big rethink about the way Whois data is accessed.

“Today, all of the information in Whois is published for the public,” he said. “Anyone can get at it, it doesn’t matter if you’re competitor or friend or law enforcement, you can get access.”

“A point of discussion could be: would it make sense to make different levels of access to information available to different people?” he added.

As an analogy, he pointed to car license plates. If you’re a cop and you see a suspicious vehicle you can trace the owner, but if you’ve just taken a fancy to the driver it’s harder to get their number.

Crocker noted that he’s not presupposing any outcomes of the review.

As well as calling for the review, the board’s latest resolution also calls for existing Whois rules, such as they are, to continue to be strictly adhered to. The resolution:

directs the CEO to continue to fully enforce existing consensus policy and contractual conditions relating to the collection, access and accuracy of gTLD registration data

This second prong of the approach is no doubt designed in part to remind contracted parties that just because Whois is open for review it doesn’t mean they can start ignoring compliance notices.

However, it’s going to be interesting to see how Whois reform plays into open discussions such as the renegotiation of the Registrar Accreditation Agreement.

The big stumbling blocks in the RAA talks right now relate directly to Whois verification, so registrars might be able to start arguing that agreeing to ICANN’s demands might preempt the review.

But Crocker doesn’t think that should happen.

“An examination of the fundamentals of Whois should not serve as as way of stalling or pulling back on the current system,” he said.

It’s not entirely clear what the next steps are for the Whois review.

There will be a board-mandated GNSO Policy Development Process somewhere down the line, but not until CEO Fadi Chehade has conducted some kind of outreach and information-gathering, it seems.

How long this will take is not known, but I get the impression the board wants to move relatively quickly. The PDP, I would guess, will take a couple of years at least.

Chehade said in his opening address during the Toronto meeting last month that long-standing disagreements over the purpose of Whois should be relatively “easy” to resolve.

Let’s see if he’s correct. I wouldn’t put money on it.