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ICANN close to becoming $200 million gift-giver

Kevin Murphy, July 27, 2020, Domain Policy

Remember how ICANN raised hundreds of millions of dollars auctioning off new gTLD contracts, with only the vaguest of ideas how to spend the cash? Well, it’s coming pretty close to figuring out where the money goes.

The GNSO Council approved a plan last Thursday that will turn ICANN into a giver of grants, with some $211 million at its initial disposal.

And the plan so far does not exclude ICANN itself for applying to use the funds.

The plan calls for the creation of a new Independent Project Applications Evaluation Panel, which would be charged with deciding whether to approve applications for this auction cash.

Each project would have to fit these criteria:

  • Benefit the development, distribution, evolution and structures/projects that support the Internet’s unique identifier systems;
  • Benefit capacity building and underserved populations, or;
  • Benefit the open and interoperable Internet

Examples given include improving language services, providing PhD scholarships, and supporting TLD registries and registrars in the developing world.

The evaluation panel would be selected “based on their grant-making expertise, ability to demonstrate independence over time, and relevant knowledge.” Diversity would also be considered.

While existing ICANN community members would not be banned from being on the panel, it’s being strongly discouraged. The plan over and over again stresses how there must be rigorous conflict-of-interest rules in place.

What’s less clear right now is what role ICANN will play in the distribution of funds.

The Cross-Community Working Group that came up with the proposal offers three possible mechanisms, but there was no strong consensus on any of them.

The one being pushed, “Mechanism A”, would see ICANN org create a new department — potentially employing as many as 20 new staff — to oversee applications and the evaluation panel.

Mechanism B would see the same department created, but it would work with an existing independent non-profit third party.

Mechanism C would see the function offloaded to a newly created “ICANN Foundation”, but ICANN’s lawyers are not keen on this idea.

The Intellectual Property Constituency was the lone dissenting voice at Thursday’s GNSO Council vote. The IPC says that support for Mechanism A actually came from a minority of CCWG participants, depending on how you count the votes.

It thinks that ICANN should divorce itself as far as possible from the administration of funds, and that not to do so creates the “unreasonable risk” of ICANN being perceived as “self-dealing”.

But as the plan stands, ICANN is free too plunder the auction funds at will anyway. ICANN’s board of directors said as long ago as 2018:

ICANN maintains legal and fiduciary responsibility over the funds, and the directors and officers have an obligation to protect the organization through the use of available resources. In such a case, while ICANN would not be required to apply for the proceeds, the directors and officers would have a fiduciary obligation to use the funds to meet the organization’s obligations.

It already took $36 million from the auction proceeds to rebuild its reserve fund, which had been diminished by ICANN swelling its ranks and failing to predict the success of the new gTLD market.

The CCWG also failed to come to a consensus on whether ICANN or its constituent parts should be banned from formally applying for funds through the program.

Because the plan is a cross-community effort, it needs to be approved by all of ICANN’s supporting organizations and advisory committees before heading to the ICANN board for final approval.

There also looks to be huge amount of decision-making and implementation work to be done before ICANN puts its hand in its pocket for anyone.

The $135 million battle for .web could be won in weeks

Afilias is to get its day in “court” to decide the fate of the .web gTLD just 10 days from now.

The registry is due to face off with ICANN before an Independent Review Process panel in a series of virtual hearings beginning August 3.

The IRP complaint was filed late 2018 as the endgame of Afilias’ attempt to have the results of the July 2016 .web auction overturned.

You’ll recall that Verisign secretly bankrolled the winning bidder, a new gTLD investment vehicle called Nu Dot Co, to the tune of $135 million, causing rival bidders to cry foul.

If that win was vacated, Afilias could take control of .web with its second-place bid.

Afilias claims that ICANN broke its own rules by refusing to thoroughly analyze whether NDC had a secret sugar daddy, something DI first reported on two weeks before the auction.

It has put forward the entirely plausible argument that Verisign splashed out what amounts to about a month’s .com revenue on .web in order to bury it and fortify its .com mindshare monopoly against what could be its most formidable competitor.

In the IRP case to date, ICANN has been acting as transparently as you’d expect when its legal team is involved.

It first redacted all the juiciest details from the Verisign-NDC “Domain Acquisition Agreement” and the presumably damaging testimony of one of its own directors, and more recently has been fighting Afilias’ demands for document discovery.

In March, the IRP panel ruled against ICANN’s protests on almost every count, ordering the org to hand over a mountain of documentation detailing its communications with Verisign and NDC and its internal deliberations around the time of the auction.

But the ace up ICANN’s sleeve may be an allegation made by Verisign that Afilias itself is the one that broke the auction’s rules.

Verisign has produced evidence that an Afilias exec contacted his NDC counterpart five days before the auction, breaking a “blackout period” rule so serious that violators could lose their applications.

While Afilias denies the allegation, the IRP panel ruled in March that Afilias must hand over copies of all communications between itself and rival bidders over the auction period.

We’re not likely to see any of this stuff until the panel issues its final declaration, of course.

In the past, IRP panels have taken as long as six or seven months after the final hearing to deliver their verdicts, but the most-recently decided case, Amazon v ICANN, was decided in just eight or nine weeks.

ICANN washes its hands of Amazon controversy

Kevin Murphy, July 22, 2020, Domain Policy

ICANN has declined to get involved in the seemingly endless spat between Amazon and the governments representing the Amazonia region of South American.

CEO Göran Marby has written to the head of the Amazon Cooperation Treaty Organization to say that if ACTO still has beef with Amazon after the recent delegation of .amazon, it needs to take it up with Amazon.

ACTO failed to stop ICANN from awarding Amazon its dot-brand gTLD after eight years of controversy, with ICANN usually acting as a mediator in attempts to resolve ACTO’s issues.

But Marby yesterday told Alexandra Moreira: “”With the application process concluded and the Registry Agreement in force, ICANN no longer can serve in a role of facilitating negotiation”.

She’d asked ICANN back in May, shortly before .amazon and its Japanese and Chinese translations hit the root, to bring Amazon back to the table for more talks aimed at getting ACTO more policy power over the gTLDs.

As it stands today, Amazon has some Public Interest Commitments that give ACTO’s eight members the right to block any domains they feel have cultural significance to the region.

Marby told Moreira (pdf) that it’s now up to ACTO to work with Amazon to figure out how that’s going to work in practice, but that ICANN’s not going to get involved.

$11 billion dot-brand blames coronavirus as it self-euthanizes

Another new gTLD you’ve never heard of and don’t care about has asked ICANN to terminate its registry contract, but it has a rather peculiar reason for doing so.

The registry is Shriram Capital, the financial services arm of a very rich Indian conglomerate, and the gTLD is .shriram.

In its termination notice, Shriram said: “Due to unprecedented Covid-19 effect on the business, we have no other option but to terminate the registry agreement with effect from 3lst March 2020.”

Weird because the letter was sent in May, and weird because Shriram Group reportedly had revenue of $11 billion in 2017. The carrying cost of a dot-brand isn’t that much.

Registries don’t actually need an excuse to terminate their contracts, so the spin from Shriram is a bit of a mystery.

Shriram had actually been using .shriram, with a handful of domains either redirecting to .com sites or actually hosting sites of their own.

It’s the 79th dot-brand to self-terminate. ICANN expects to lose 62 in the fiscal year that started three weeks ago.

ICANN still has no clue how coronavirus will affect the domain industry

Kevin Murphy, July 21, 2020, Domain Policy

ICANN is still in the dark about how the coronavirus pandemic is going to affect the domain industry’s fortunes and its own budget, judging by a blog post published overnight by CEO Göran Marby.

In the post, Marby outlined his 10 priorities (six created by himself, four by the ICANN board) for the recently commenced fiscal year, and the impact of the virus is front and center.

Notably, it appears that ICANN is thinking about creating a new department or hiring a new senior “economist” to track the domain market and forecast trends.

Bullet #6 on Marby’s list is:

Develop a plan for the potential economist function within ICANN org to follow and evaluate Domain Name System (DNS) market trends.

Background: I’ve heard the question asked, “Is the DNS market changing?” My answer is yes, probably. The questions we need to ask now are, what’s good for the end user, and what will be bad?

My read on this is that we might be looking at a new VP — an astrologer-in-chief, if you like — whose job it would be to read the tea leaves, stare into a crystal ball, rummage through pigeon guts, and predict budget-affecting market moves before they happen.

That’s a function currently occupied by the office of CFO Xavier Calvez, but his track record is spotty, having in previous years failed to predict basic stuff like junk drops in the new gTLD space.

Another of Marby’s goals, set by the board, is:

Develop and implement a plan to ensure continued financial stability in a world affected by COVID-19.

Background: While ICANN’s financial situation is sound at the moment, the impact of the unprecedented effect of the COVID-19 pandemic on the world economy is still unknown.

ICANN’s recently passed FY21 budget predicts an 8% slump in revenue due to an estimated 33% plummet in new gTLD registrations and a 2.3% drop in legacy gTLD regs, as well as a loss of 62 fee-paying dot-brand gTLDs and 380 accredited registrars.

That said, it’s also saving millions by eschewing face-to-face meetings until the whole coronavirus mess is sorted.

It’s not entirely clear how ICANN arrived at its numbers, but it seems the domain industry is looking into unknown waters right now.

It’s undeniable that the pandemic-related lockdown mandates around the world have proved a huge boon to the industry, as bricks-and-mortar businesses retreat online to try to save their livelihoods, but it’s unclear whether this boost will continue as nations emerge from quarantine and into record-setting recessions.

ICANN’s budget is dependent more than anything else on registration volumes in gTLDs, so its fiscal stability will depend on whether people continue to buy and renew domains as they lose their jobs and their companies go out of business.

It seems inevitable that companies going bust and dropping their domains is a trend we’re going to face over the coming few years, but as long as there’s enough liquidity in the domainer community that shouldn’t prove a massive issue for ICANN, which does not care who registers a domain, merely that it is registered.

Aside from budgeting concerns, the impact of coronavirus on ICANN meetings is #1 on Marby’s list of priorities.

Work with Supporting Organization and Advisory Committee leaders, community members, and the Board to define and implement a phased plan to return to face-to-face meetings. This plan will ensure the provision of safe and effective meeting formats that support the ongoing work of the community as well as allow robust remote participation options for anyone unable to attend in person. The final plan will be integrated with regional and global engagement activities.

Background: Face-to-face meetings have always been an important part of ICANN’s DNA. Despite the current pandemic-related restrictions, the Board, community, and org must ensure that we remain able to collaborate, and that we are still able to attract new participants into ICANN.

Since March, every meeting that would usually be held face to face, including the two big public meetings, has instead been held over Zoom, which has drawbacks and limitations. This October’s Hamburg meeting will also be online-only.

Marby to a great extent has his hands tied here.

As long as the virus rages out of control in ICANN’s native US, he’s going to be limited to hosting meetings in locations not only where the coronavirus has been tackled to the degree where large congregations are permitted but also where Americans are allowed to travel quarantine-free.

The next scheduled public meeting is due to take place in Cancun, Mexico in March 2021, but that country currently has locked its border to travelers from the north.

And regardless of what laws are in place next March, ICANN’s going to have to get a read on whether any community members will feel safe enough to travel — to a windowless room where everyone wears masks two meters apart for 10 hours a day — before going ahead with an expensive in-person meeting.

It seems more likely that F2F meetings will resume first on a regional level before going fully international. Travel narriers within the European Union, for example, are relatively low, so it’s not impossible to imagine small meetings going ahead with only participants from that community.

ICANN throws out “Ugly Houses” UDRP appeal

Kevin Murphy, July 20, 2020, Domain Policy

ICANN has rejected an unprecedented attempt to get a UDRP decision overturned using the Reconsideration process.

The Board Accountability Mechanisms Committee late last week summarily dismissed a Request for Reconsideration filed by a group called the Emily Rose Trust.

Emily Rose had lost a UDRP case in May concerning the domain name uglyhousesri.com, which it had been using for the last couple of years to run a home renovation-and-resale service in Rhode Island.

The complainant was a company called HomeVestors, which has been running a near-identical service called We Buy Ugly Houses (a phrase it has trademarked) for substantially longer.

The National Arbitration Forum panelist had decided that the domain was confusingly similar to the mark, and that the similarity of the services constituted bad faith use.

In filing the rather poorly-written RfR, Emily Rose argued among other things that “Ugly Houses” is a generic term not protected by the mark.

But ICANN did not consider the merits of its request, instead rejecting the RfR for being outside the scope of the process.

The BAMC said that UDRP decisions do not involved the action or inaction of the ICANN board or staff, and are therefore not subject to board Reconsideration.

While UDRP decisions are often contested in court, this RfR makes it clear that ICANN is not an avenue for appeal in individual cases.

Right to reply: new gTLD applicant hits back at my “delusional” comments

Kevin Murphy, July 14, 2020, Domain Policy

You may recall that I recently referred to Nameshop, a rejected new gTLD applicant, as “delusional” for attempting to get ICANN to grant it .internet to help fight the coronavirus pandemic.

I’ve not really pulled my punches reporting on the company’s attempts to get its rejected applied-for string, .idn, converted to .internet over the last few years. Nameshop is fighting a losing battle, I believe, and would be best served by pulling its application and getting a full refund.

Nameshop owner Sivasubramanian Muthusamy recently asked for a right to reply, and as that seemed like an easier option than getting into a pointless decade-long argument, I obliged.

Below the break, he tries to convince me and you that I’m wrong. Other than formatting, I’ve not edited it. Read it, and draw your own conclusions. Leave a comment if you wish.


By Sivasubramanian M

This brief article is primarily in response to the Domain Incite article about the Nameshop application for the .Internet Top Level Domain, titled World’s most deluded new gTLD applicant makes coronavirus pitch, and “Just give up!” ICANN tells its most stubborn new gTLD applicant, — but it is also in response to ICANN’s treatment of the Nameshop application.

Domain Incite has graciously allowed me the space here to respond, for which I am very thankful.

In reporting on the Nameshop proposal to delegate .internet in a way that can be used as a trusted communications space during the global pandemic, Domain Incite posits:

I don’t know whether Nameshop is motivated by a genuine desire to do good — as so many are during the pandemic crisis — or a sneaky strategy to shame ICANN into giving it its string change. Either way, the plan is pure delusion.

It is difficult for me to answer your question, because that would require a self-proclamation of merit, which by definition is something conferred, not claimed. However, I must seek in some way to dispel the doubts that you have expressed.

As Domain Incite has indicated in previous articles, Nameshop’s original application was for .IDN (more about that later). Although not finalized, the “IDN” moniker included a significant
element of usefulness and some sense of purpose with regard to making the Internet more accessible to all. There was always a sense of doing good. This goal was expanded and clarified in 2012 when the application was changed to .Internet and included Public Interest Commitments (that were ahead of the PIC process).

The inspiration for the original good and the idea to serve the Covid-fighting community is derived directly from my interactions with several good men and women who live purposeful
lives unseen and unknown, some of whom are involved in the Internet Governance processes.

A “sneaky strategy” would be the last thing to move them.

At this time of the COVID pandemic, some readings that came my way and my consultations encouraged the idea of a good deed to defer the business aspects of the .Internet application
and offer to utilise the TLD space with a near total focus on being of use in managing the crisis and to further use the TLD space for collaboration on renewal, with ample involvement from the ICANN Community. This is what Nameshop has offered. There is no delusion here.

Nameshop is not making a “pitch”; this is an idea to utilise the DNS for global benefit, one of the stated, yet unrealised goals of the new gTLD program.

As to Domain Incite’s characterisations of me as “most deluded” and “most stubborn”: I might be accepted to accept those descriptions if by “deluded,” you mean that I continue to believe
in the ICANN model and its propensity for doing good, and if you mean by stubborn, it is my persistence in not letting the idea of a purposeful TLD fall by the wayside.

Does my letter (pdf) reads like one that shames ICANN or instead like one that expresses a very high opinion of ICANN and deep trust in the ICANN Community? When Domain Incite and others next consider the Nameshop application, please understand that:

  • While Nameshop’s original application for .idn (disqualifiable because it is Indonesia’s country code) might be considered a mistake, consider that Google and Donuts made the same error (although it was not an existential mistake for them). This shows that the process was Byzantine even to the intellectual elites of our space – yet harmful only to
    entities the size of Nameshop.
  • While ICANN could have easily, immediately and appropriately informed me that .idn appeared on a list, ICANN took months to do so – timely response would have enabled Nameshop to correct the error at or almost at the time the application; Nameshop learnt about .idn being an alpha3 country code from others and informed ICANN, and requested to be allowed to change the string by the “Change Request” process which became an extended part of the application process.
  • After all the delays related processes of evaluation, and gaps in review processes that stymied substantive review, ICANN invited Nameshop to enter into an IRP, a review process prohibitively expensive and burdensome to be exercised by the type of applicant the new gTLD program supposedly encouraged; we have so far engaged in the cooperative engagement process. It is not our desire to engage in adversarial litigation on this matter.
  • A few other TLD applicants were permitted to change their string, after the “reveal day”. So, this issue is not black and white, it is a situation of ICANN being fair to many others but being selectively unfair concerning the string .Internet.

Where Domain Incite cites ICANN that there was, “careful review of the application,” that review was to verify if process routines were followed on paper, but with a firm resistance to
review the substance of the issue placed before ICANN. This is made clear in the various reports ICANN submitted where the reviewing parties did not perform a substantive review
either in its Board Reconsideration or even in the Ombudsman processes.

ICANN contends that it followed the due process, but following “a process” for the sake of documentation does not mean that “due process” was accorded. As observed by the Board
Governance Committee, “the reconsideration process does not allow for a full-scale review of a new gTLD application.” All of this amounts to a process severely limited by design, severely
limited in independence, and with limited notions of accountability.

Nameshop, as the applicant for the TLD .Internet, is not a large business corporation of a size typical of ICANN’s new application process. Nonetheless, Nameshop continues to contend that
it is well within ICANN’s processes to address these very process gaps to delegate .Internet; this has been an ongoing and amicable conversation.

One of the goals of the new gTLD program was to facilitate DNS usage and DNS usage for good in new areas of the globe. Delegating .Internet to Nameshop would achieve a significant milestone in ICANN’s new gTLD program. The current global health crisis amplifies ICANN’s role several fold, and in this context, Nameshop offers this proposal to present a clean TLD namespace to address multiple issues arising out of the pandemic situation, to use the space with a focus on being of help in managing the crisis, and more in causing ideas for renewal, not by Nameshop’s own strengths, but by the collective strengths and merits of the ICANN community.

First deadbeat dot-brand ripped from the root

ICANN has terminated a dot-brand gTLD contract for non-payment of fees for the first time.

The unlucky recipient of the termination notice is aigo, a privately held Chinese consumer electronics manufacturer.

ICANN first hit the company with a breach of contract notice in March 2018, noting its non-payment and a litany of other infractions.

The two parties have been in mediation and arbitration ever since, but the arbitrator found aigo was in fact in breach in late May.

ICANN issued its termination notice June 25 and IANA yanked .aigo from the DNS root servers a couple of days later.

While aigo is not the first dot-brand registry to be hit with a non-payment breach notice, it is the first to have it escalated all the way to involuntary termination.

Also recently, .intel and .metlife — run by the chipmaker and insurance company respectively — both decided to voluntarily their dot-brand registry agreements.

The total number of voluntary terminations is now 78.

World’s most deluded new gTLD applicant makes coronavirus pitch

Kevin Murphy, June 29, 2020, Domain Policy

Indian new gTLD applicant Nameshop, which still refuses to accept defeat eight years after its application for .idn was rejected, has a new coronavirus-related pitch to try to persuade ICANN to please, please, give it a gTLD.

You may recall that this company applied for .idn in 2012, overlooking the fact that IDN was banned as the reserved three-letter country code for Indonesia.

Ever since the mistake was noticed, Nameshop has been trying to convince ICANN to let it change its string to .internet, which nobody else applied for, requests that have been repeatedly rejected.

The newest Nameshop plea to ICANN (pdf) pitches .internet as a space where IGOs, NGOs and others could build or host web sites dedicated to coronavirus-related activities.

The company says it wants to:

temporarily — for the length of the pandemic crisis — operate the TLD with a request for heightened involvement of ICANN and the ICANN Community in the interest of making use of the DNS technologies, to help Government Agencies and Communities involve, increase and optimize their efforts to manage the Crisis and the ensuing recovery and renewal.

It wants to offer:

a clean new space for IGOs and NGOs to come together in their efforts to communicate, collaborate, generate solutions and expeditiously resolve the health crisis while also enabling organizations to collaborate on reconstruction efforts

The company says it would not make any money on .internet until after coronavirus is solved.

It’s also offering to set aside a quarter of its profits for good causes.

I don’t know whether Nameshop is motivated by a genuine desire to do good — as so many are during the pandemic crisis — or a sneaky strategy to shame ICANN into giving it its string change. Either way, the plan is pure delusion.

The reason ICANN has continually rejected Nameshop’s request for a string change from .idn to .internet for the last eight years is that it would set a precedent allowing any applicant to apply for any nonsense string and later change it to a desirable, uncontested string.

That hasn’t changed.

But while Nameshop has been tilting at windmills, ICANN has been earning interest on its $185,000 application fee, which I’m sure could be put to a far better use if Nameshop simply requested the full refund ICANN has offered.

Does ICANN have a race problem?

Kevin Murphy, June 29, 2020, Domain Policy

In the wake of the killing of George Floyd, pretty much every corporation and institution in the US, and many elsewhere, have felt the need to make statements or enact changes in order to show how non-racist they are, and it seems ICANN is now no exception.

The org issued a statement from CEO Göran Marby late last week in which he denounced racism and said ICANN was committed to establishing a set of “guiding principles” to govern “diversity and inclusion”.

I found the statement rather odd. Does ICANN have a racism problem that needs addressing?

I don’t think it does. At least, I’ve never even heard so much as a rumor about such behavior, never mind a confirmed case.

I’ve been scratching my head to think of any examples of ICANN being accused of racism, and the only one I can come up with is a minor controversy 10 years ago when an early draft of the new gTLD Applicant Guidebook banned “terrorism”.

Some Muslim community members complained that the word could be perceived as “racist” and it was eventually removed.

Around the same time, a handful of community members (as well as yours truly) were accused by the head of unsuccessful .africa applicant DotConnectAfrica of being part of a racist conspiracy against the company, but to the best of my recollection we never invited ICANN staff to our meetings.

But that’s basically it.

ICANN already has diversity baked into its power hierarchies. Members of the board of directors and other committees have to be geographically diverse, which will usually lead to racial diversity, for example.

A great many of its senior leaders have been (at least under some definitions) “people of color”. There doesn’t appear to be a glass ceiling.

It’s also got its Expected Standards of Behavior, a system of codified politeness used in community interactions, which explicitly forbids racial discrimination.

The broader community is global, has no ethnic majority, and is self-selecting. Anyone with the means can show up to a public meeting, dial into a remote meeting, or join a working group, regardless of race or origin.

Statistics show that whenever an ICANN meeting is held in Africa or Asia, the largest groupings of participants are African or Asian.

Of course, maybe with such diversity comes problems. There are words that are considered offensive in some parts of the world that are perfectly acceptable in others, for example, but I’ve never heard of any instances of this kind of culture clash.

But is there actual racism going on at ICANN HQ? Marby’s post says:

We will open a facilitated dialogue to support our employees, to ensure that racial bias and discrimination, or bias of any kind, have no place in our workforce. We need to be comfortable having uncomfortable conversations so that we can address the unconscious and conscious ways in which systemic racism is perpetuated. We need to listen more to Black people and people of color to learn about how these issues impact them each and every day. And we need to continue to take meaningful actions to address inequality.

That suggests that either ICANN is aware of some sort of systemic racial bias among its staff, or that it wants to hunt it down and snuff it out before it becomes a bigger issue.

Or they could just be empty words designed to pay lip service to this stuff.