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Minds + Machines dumps back-end and registrar in Nominet, Uniregistry deals

Minds + Machines is to get out of the registrar and back-end registry services markets in separate deals with Nominet and Uniregistry.

The cost-saving shake-up will lead to about 10 job losses, or about 25% to 30% of its current headcount, CEO Toby Hall told DI this morning.

Under the Nominet deal, M+M will outsource the back-end registry functions for 28 new gTLDs, currently managed in-house, to the .uk ccTLD manager.

The deal covers all the gTLDs for which M+M is the contracted party (such as .law, .cooking and .fashion), as well as the four it runs in partnership (eg .london) and the five where it currently acts as back-end for a third party registry (eg .broadway).

The company also plans to dump its “unprofitable” registrar entirely, migrating its existing customers to Uniregistry’s Uniregistrar business.

About 49,000 domains will be affected by this move, Hall said.

Uniregistry will pay M+M a commission over the lifetime of the accounts.

Focusing on the registry business was the plan from the moment Hall took over M+M, following a shareholder coup that kicked out founding CEO Antony Van Couvering in January.

Hall told DI:

It [previously] had a very ambitious plan. It wanted to be vertically integrated, but the considered view is there are people out there who are far better able to run parts of the exercise than ourselves, both on the RSP piece and likewise the registrar piece. The strategy from day one was to rapidly evolve into becoming a business-to-business marketing-led registry business and radically overhauling our cost structure at the same time.

The company is currently in a financial quiet period and will not yet disclose the amount of savings it expects to reap, Hall said. He added:

Reducing cost isn’t a strategy for growth, and as a business that will be where we will be judged. Growing our portfolio, growing our domains under management, growing our revenue within those domains. That’s what the business has to be focused on. We see within the industry that the highest value is in the [TLD] ownership part.

The job losses are expected to be largely on the technical side of the house.

The RSP outsourcing means that Nominet significantly boosts its stable of managed TLDs. While it’s in the top five back-ends in terms of DUM (due to the 11 million in .uk) its portfolio of clients there is relatively small, largely limited to a handful of dot-brands.

Nominet CEO Russell Haworth said in a statement:

This partnership takes us into the top tier of registry operators globally by volume of TLDs and compliments the brands we currently manage, such as .BBC, .Bentley and .Comcast. It also underlines our long-term strategy to provide a more diversified range of services to gTLDs and registrars.”

With the Uniregistry registrar deal, Hall said that competing with its own channel “was just not right for us”.

It might be worth noting that Uniregistry is actually a vertically integrated triple-play along the lines of M+M, also, managing its own back-end, registry and registrar businesses.

Hall said that the M+M registrar had sold mainly to domain investors with little interest in buying value-added services such as email and hosting, which is often where much of the profit lies.

Both deals are subject to ICANN approvals, and client approval in case of the back-end transition, will be phased in over many months, and are expected to be finalized by the end of the year.

UPDATE: M+M said later this morning that it is changing its official company domain to mmx.co from mindsandmachines.com.

Cruz keeps up pressure on ICANN brass

Kevin Murphy, April 6, 2016, Domain Policy

US presidential wannabe Sen. Ted Cruz has sent ICANN’s chair another nasty letter, demanding to know why he hasn’t yet responded to a laundry list of questions about former CEO Fadi Chehade’s relationship with the Chinese government.

The letter, also signed by fellow Republican senators Mike Lee and James Lankford, expresses “dismay” over the lack of response from Steve Crocker.

Cruz et al have been posing awkward questions to ICANN’s top brass since it emerged in December that Chehade had taken an unpaid position on an internet governance advisory committee run by China.

The senators say they’re worried that the US relinquishing its oversight of the IANA functions will give governments with poor freedom of expression records too much control over the internet.

A more likely explanation is that the IANA transition is an Obama initiative, and if Obama single-handedly saved a bunch of kids from a burning orphanage Cruz & Co would blame him for contributing to over-population.

That’s more or less the sentiment Chehade expressed at ICANN 55 last month, when he said:

And you know that this [Cruz] letter is not driven by anyone really worried about the transition. This is someone really worried about politics. So let’s not bring politics into the transition… Let’s resist bringing the politics of our lovely capital into this process… I think everyone knows this is political, even those in his own party… We will answer all these questions… And we will respond to the questions fully, to the Senators’ full satisfaction.

The new letter calls Chehade out for this statement, saying he “disparaged” what they call an “oversight request”.

An actual Congressional oversight hearing, focusing on the transition, a couple of weeks ago had absolutely no fireworks whatsoever.

It seems that the Republican-led committee actually responsible for internet matters, which does not include Cruz as a member, isn’t particularly upset about the IANA transition.

Nevertheless, the new Cruz letter re-poses a whole list of questions about Chehade’s involvement in China and Crocker and the ICANN board’s response to it.

The questions were originally asked March 3. ICANN had evidently said it would respond by March 18 but has not.

Cruz’s hand in the Republican primaries against front-runner Donald Trump has been strengthened in recent days, increasing the possibility that he could become US president next January.

“Cheese sandwich” comment blamed for sexual harassment complaint

Kevin Murphy, March 30, 2016, Domain Policy

ICANN’s first formal case of sexual harassment has been closed with no official finding by the Ombudsman.

Ombudsman Chris LaHatte today said he was unable to establish the facts of the alleged incident, which is said to have taken place during a coffee break at the ICANN 55 meeting in Marrkech, March 6.

LaHatte said that the complainant’s decision to publicly name the man she says harassed her had “compromised” his investigation and that the alleged actions of the man “cannot be considered serious”.

It also emerged publicly for the first time that the interaction that led to the complaint was a brief conversation about sandwiches.

LaHatte’s report on the incident says:

The allegation was that she had a relatively brief discussion with a man, which she found derogatory and which she considered was sexual harassment. The description was that he leaned towards her and took her ICANN identification tag. There was a general discussion about the food, and she said that he made the comment, “you can go make me a cheese sandwich”

But the complainant told DI a slightly different version of events that she said is more accurate:

[The man] approached me, pulled at my name tag, examined it and dropped it. A little later, he lifted my name tag and flipped it back and forth, asking me “Where are you from?”, leaned in, lecherously looked at me and then said, “do you know how to make a cheese sandwich?” I was taken aback and responded angrily with “Yes, that is why I came here, to make you cheese sandwiches.” He went on to throw another lecherous look my way and said, “Well, I love veg sandwiches.”

According to LaHatte, the man in question flatly denies that the incident even took place.

The complainant says the incident can be defined as sexual harassment under the UN Convention on the Elimination of all Forms of Discrimination Against Women, Indian law (she is Indian), and the ICANN corporate policy against sexual harassment among its staff.

Neither party is a member of ICANN staff.

LaHatte says in his report that he has not considered jurisdiction or matters of definition, given that he was unable to even establish the facts of the incident.

In this complaint, the matters alleged cannot be considered serious by any standard. If in fact the action and statement were made, it may have been a lapse of good manners and insensitive to gender. Such issues need to be taken in proportion, and best practice is not to debate this in a public forum where the issues are not yet clear…

However any chance of discussing the comments has been compromised by the decision to identify the other party before my investigation could be completed, and for the parties to have had a full opportunity to consider the alternative versions. The other party has been publically named without an opportunity to make any comment or denial of the incident. It is also part of my role as the ombudsman to ensure that standards of procedural fairness are met, and the premature publication regrettably does not meet the standards of natural justice, because the parties have a right to be heard before this occurred.

LaHatte names the complainant (who waived her right to confidentiality) but not the man (who didn’t) in his report.

The man has apparently considered legal action over his public naming.

China floats domain crackdown plans

Kevin Murphy, March 30, 2016, Domain Policy

The Chinese government is planning a crackdown on internet domains that could see mass censorship of non-Chinese names.

Draft rules floated for public comment this week are being widely reported as potentially blocking any domain that is not registered via a registry or registrar with a government license.

There are more than 50 provisions in the draft, but Article 37 is the one causing the most concern.

A translation published by Quartz yesterday has it reading like this:

Domain names engaging in network access within the borders shall have services provided by domestic domain name registration service bodies, and domestic domain name registration management bodies shall carry out operational management.

For domain names engaging in network access within the borders, but which are not managed by domestic domain name registration service bodies, Internet access service providers may not provide network access services.

At its worst, it suggests that every domain name not registered entirely through China-approved registries and registrars could be blocked from resolving in China.

You’d need a domain in .cn or a licensed gTLD, registered through a Chinese registrar, to access Chinese internet users, in other words.

But even Chinese locals who follow the issue closely are reportedly saying the regulations are vaguely worded, so it’s not clear exactly what would be blocked.

If you can read Chinese, the draft rules can be downloaded from this page. I’d be interested in hearing your take on them.

The rules also demand that domain name companies prevent domains carrying words deemed harmful from being registered.

There are additional controls on content — bans on porn, “rumor” and basically anything the Chinese government does not like — and registrant identity validation requirements.

The rules appear to be designed to replace the existing 2004 regulations that among other things force registrars and registries to obtain government licenses before the names they sell are allowed to resolve.

Those rules have led to several Western new gTLD registries, including Rightside, Famous Four Media and Minds + Machines, opening up corporate entities in China, in order to tap into the thriving market.

Local entities are of course subject to local laws — and ICANN contracts oblige them to abide by all applicable laws — which opens up the risk of Chinese regulations leaking out into the wider internet.

That almost happened with XYZ.com, which announced and then retracted (or clarified) an apparent plan to globally block domains deemed unsuitable by the Chinese censors.

It is inevitable that the proposals, which are open for public comment until April 25, will be used by US Congressional Republicans as a stick to beat ICANN and fight the imminent transition of IANA away from US government oversight.

High profile GOP politicians including presidential hopeful Ted Cruz have pointed to Chinese censorship as a risk of removing the USG from DNS root zone management.

But this isn’t really an ICANN problem as such. It’s a market forces problem.

Some new gTLD registries are seeing huge sales volume from Chinese registrants, who are trading many thousands of short, meaningless domains like baseball cards at the moment.

DI data shows that Chinese registrars accounted for 18.4 million gTLD domains in November 2015, up by 8.8 million domains in 12 months.

That number is likely to be several millions greater now, given the speculative activity of the last few months.

For registries, fully exploiting this market requires some sort of local presence, which in turn means exposing themselves to the already pretty bad Chinese censorship regime.

They’re going to have to be careful if they want to avoid China using the market to achieve the kind of back-door policy control it would never be able to obtain via ICANN.

Man in sexual harassment claim considers legal action

Kevin Murphy, March 24, 2016, Domain Policy

The man accused of sexual harassment at an ICANN meeting is considering legal action for defamation.

He’s also filed a counter-complaint with ICANN Ombudsman Chris LaHatte, after his accuser named him on a public mailing list.

That’s according to emails from LaHatte, screen-captured and posted to social media by the woman making the accusations.

LaHatte had previously told the woman that the man could not recall the alleged incident, said to have taken place during ICANN 55 in Marrakech a couple of weeks ago.

The woman says her name tag — at ICANN meetings a rectangle of plastic hanging loosely around the neck on a strap — was “pulled at” while the man made “inappropriate remarks”.

The content of the alleged remarks has not yet been disclosed.

She published her Ombudsman complaint — which names the man — to a public mailing list late last week.

In the new email, LaHatte tells her that naming the man publicly has complicated matters.

The investigation now becomes very difficult. Indeed, he has complained about the naming as being unfair and asked me to undertake a complaint investigation about your action.

The man was entitled to a “fair and impartial investigation”, he said, but “his privacy has been compromised”.

I have been waiting for a response from you about his reaction to the allegations. So he has now complained that he has been named before he had a chance for your response to be considered by me, and for any analysis and report. This is a matter of procedural fairness, and in my view he should have had the opportunity to have your reply. He is therefore considering his response which may include litigation unfortunately.

The complainant says she wants ICANN to create a sexual harassment policy for its participants — she was already talking to LaHatte about this before the alleged incident.

ICANN’s board of directors said in Marrakech it had instructed staff to look into the possibility of such a policy.