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Could the next new gTLD round last 25 years? Or 70 years?

Kevin Murphy, July 13, 2017, Domain Policy

Will the next new gTLD round see 25,000 applications? If so, how long will it take for them all to go live?

The 25,000 figure is one that I’ve heard touted a few times, most recently during public sessions at ICANN’s meeting in Johannesburg last month.

The problem is that, judging by ICANN’s previous performance, such a huge number of applications would take anywhere from 25 to 70 years to process.

It’s unclear to me where the 25,000 application estimate comes from originally, but it does not strike me as laughably implausible.

There were just shy of 1,930 applications for 1,408 unique strings in the most recent round.

There could have been so many more.

ICANN’s outreach campaign is generally considered to have been a bit lackluster, particularly in developing markets, so many potential applicants were not aware of the opportunity.

In addition, some major portfolio applicants chose to rein in their ambitions.

Larry Page, then-CEO of Google, is known to have wanted to apply for many, many more than the 101 Google wound up applying for, but was talked down by staff.

There’s talk of pent-up demand for dot-brands among those companies that missed the 2012 window, but it’s impossible to know the scale of that demand with any precision.

Despite the fact that a handful of dot-brands with ICANN registry agreements and delegations have since cancelled their contracts, there’s no reason they could not reapply for defensive purposes again in subsequent rounds.

There are also thousands of towns and cities with populations comparable to cities that applied in 2012 that could apply next time around.

And there’s a possibility that the cost of applying — set at $185,000 on a highly redundant “cost recovery” basis — may come down in the next round.

Lots of other factors will play a role in how many applications we see, but in general it doesn’t seem impossible that there could be as many as 25,000.

Assuming for a moment that there are 25,000, how long will that take to process?

In the 2012 round, ICANN said it would delegate TLDs at a rate of no more than 1,000 per year. So that’s at least 25 years for a 25,000-app round.

That rate was set somewhat arbitrarily during discussions about root zone scaling before anyone knew how many gTLDs would be applied for and estimates were around the 500 mark.

Essentially, the 1,000-per-year number was floated as a sort of straw man (or “straw person” as some ICANNers have it nowadays) so the technical folk had a basis to figure out whether the root system could withstand such an influx.

Of course, this limit will have to be revised significantly if ICANN has any hope of processing 25,000 applications in under a generation.

Discussions at the time indicated that the rate of change, not the size of the root zone, was what represented the stability threat.

In reality, the rate of delegation has been significantly slower than 1,000 per year.

It took until May 2016 for the 1,000th new gTLD to go live, 945 days after the first batch were delegated in late October 2013.

That means that during the relative “rush-hour” of new gTLD delegations, there was still only a little over one per day on average.

And that’s counting from the date of the first delegation, which was actually 18 months after the application window was closed.

If that pattern held in subsequent rounds, we would be looking at about 70 years for a batch of 25,000 to make their way through the system.

You could apply for a vanity gTLD matching your family name and leave the delegation as a gift to your great-grandchildren, long after your death.

Clearly, with 25,000 applications some significant process efficiencies — including, I fancy, much more automation — would be in order.

Currently, IANA’s process for making changes to root zone records (including delegations) is somewhat complex and has multiple manual steps. And that’s before Verisign makes the actual change to the master root zone file.

But the act of delegation is only the final stage of processing a gTLD application.

First, applications that typically run into tens of thousands of words have to undergo Initial Evaluation by several teams of knowledgeable consultants.

From Reveal Day in 2012 to the final IE being published in 2014 took a little over two years, or an average of 2.5 applications per day.

Again, we’re looking at over a quarter of a century just to conduct IE on 25,000 applications.

Then there’s contracting — ICANN’s lawyers would have to sign off on about a dozen Registry Agreements per day if it wanted to process 25,000 delegations in just five years.

Not to mention there’s also pre-delegation testing, contention resolution, auctions, change requests, objections…

There’s a limited window to file objections and there were many complaints, largely from governments, that this period was far too short to read through just 1,930 applications.

A 25,000-string round could take forever, and ICANN’s policies and processes would have to be significantly revised to handle them in a reasonable timeframe.

Then again, potential applicants might view the 2012 round as a bust and the next round could be hugely under-subscribed.

There’s no way of knowing for sure, unfortunately.

ICANN expects to lose 750 registrars in the next year

ICANN is predicting that about 750 accredited registrars will close over the next 12 months due to the over-saturation of the drop-catching market.

ICANN VP Cyrus Namazi made the estimate while explaining ICANN’s fiscal 2018 budget, which is where the projection originated, at the organization’s public meeting in South Africa last week.

He said that ICANN ended its fiscal 2017 last week with 2,989 accredited registrars, but that ICANN expects to lose about 250 per quarter starting from October until this time next year.

These almost 3,000 registrars belong to about 400 registrar families, he said.

By my estimate, roughly two thirds of the registrars are shell accreditations under the ownership of just three companies — Web.com (Namejet and SnapNames), Pheenix, and TurnCommerce (DropCatch.com).

These companies lay out millions of dollars on accreditation fees in order to game ICANN rules and get more connections to registries — mainly Verisign’s .com.

More connections gives them a greater chance of quickly registering potentially valuable domains milliseconds after they are deleted. Drop-catching, in other words.

But Namazi indicated that ICANN’s cautious “best estimate” is that there’s not enough good stuff dropping to justify the number of accreditations these three companies own.

“With the model we have, I believe at the moment the total available market for these sought-after domains that these multifamily registrars are after is not able to withstand the thousands of accreditations that are there,” he said. “Each accreditation costs quite a bit of money.”

Having a registrar accreditation costs $4,000 a year, not including ICANN’s variable and transaction fees.

“We think the market has probably gone beyond what the available market is,” he said.

He cautioned that the situation was “fluid” and that ICANN was keeping an eye on it because these accreditations fees have become material to its budget in the last few years.

If the three drop-catchers do start dumping registrars, it would reveal an extremely short shelf life for their accreditations.

Pheenix upped its registrar count by 300 and DropCatch added 500 to its already huge stable as recently as December 2016.

ICANN shuffles regional bosses, drops “hub” concept

Kevin Murphy, June 29, 2017, Domain Policy

ICANN has made a couple of changes to its senior management team and abandoned the Chehade-era concept of “hub” offices.

Rather than having three offices it calls “hubs” in different parts of the world — Los Angeles, Istanbul and Singapore — it will now have five of what it calls “regional offices”.

As well as the three former hubs, one will be in Brussels, Belgium and the other in Montevideo, Uruguay.

A few vice presidents are being shuffled around to head up each of these offices.

Senior policy VP David Olive is being replaced as managing director of the Istanbul office by Nick Tomasso, who’s also VP in charge of ICANN’s public meetings. Olive will carry on in his VP role, but back in Washington DC, from August.

Fellow policy VP and veteran GAC relations guy Olof Nordling is retiring from ICANN at the end of the July. His role as MD of the Brussels office will be filled by Jean-Jacques Sahel, VP of stakeholder engagement for Europe.

Rodrigo de la Parra, VP of stakeholder engagement for the Latin America region, will be MD of the Montevideo office. Jia-Rong Low runs the Singapore office. ICANN CEO Goran Marby of course is top dog in LA.

The difference in nomenclature — “hub” versus “regional office” — looks to me like it’s quite minor.

Former CEO Fadi Chehade had early on in his stint at ICANN professed a desire to pursue a strategy of aggressive internationalization, with hub offices having equal importance, but I don’t think the idea ever really took off to the extent he expected and he didn’t stick around long enough to see it through.

In addition, the IANA transition last year, which separated ICANN from its US government oversight, pretty much carved ICANN’s California roots into stone for the time being.

.net price increases approved

Verisign has been given the right to continue to raise the wholesale price of .net domains.

It now seems likely the price charged to registrars will top $15 by 2023.

ICANN’s board of directors at the weekend approved the renewal of the .net Registry Agreement, which gives Verisign the right increase its prices by 10% per year for the six years of the contract.

Assuming the company exercises all six options — and there’s no reason to assume it will not — the price of a .net would be $15.27 by the time the contract expires, $0.75 of which would be paid to ICANN in fees.

There was some negative public comment (pdf) about the increases, largely from domainers and those representing domainers, but the ICANN board saw nothing to persuade it to change the terms of the contract.

In notes appended to its resolution, the board stated:

the Board understands that the current price cap provisions in Verisign’s Registry Agreements, including in the .NET Registry Agreement, evolved historically to address various market factors in cooperation with constituencies beyond ICANN including the Department of Commerce. During the negotiations for the renewal, Verisign did not request to alter the pricing cap provisions, the parties did not negotiate these provisions and the provisions remain changed from the previous agreement. The historical 10% price cap was arguably included to allow the Registry Operator to increase prices to account for inflation and increased costs/investments and to take into account other market forces but were not dictated solely by ICANN.

(I assume the word “changed” in that quote should have read “unchanged”.)

Unlike contract renewals for other pre-2012 gTLDs, the .net contract does not include any of the new gTLD program’s rights protection mechanisms, such as the Uniform Rapid Suspension policy.

ICANN explained this disparity by saying these mechanisms are not consensus policies and that it has no right to impose them on legacy gTLD registry operators.

India to have SIXTEEN ccTLDs

While most countries are content to operate using a single ccTLD, India is to up its count to an unprecedented 16.

It already has eight, but ICANN’s board of directors at the weekend approved the delegation of an additional eight.

The new ccTLDs, which have yet to hit the root, are .ಭಾರತ, .ഭാരതം, .ভাৰত, .ଭାରତ, .بارت, .भारतम्, .भारोत, and .ڀارت.

If Google Translate and Wikipedia can be trusted, these words all mean “India” in, respectively, Kannada, Malayalam, Bengali, Odia, Arabic, Nepali, Hindi and Sindhi.

They were all approved under ICANN’s IDN ccTLD Fast Track program and will not operate under ICANN contract.

India already has seven internationalized domain name versions of its ccTLD in seven other scripts, along with its vanilla ASCII .in.

National Internet Exchange of India (NIXI) will be ccTLD manager for the whole lot.

India may have as many as 122 languages, according to Wikipedia, with 30 spoken by more than a million people.