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Delays to two-letter domains after governments take a second bite at the apple

Kevin Murphy, February 16, 2015, Domain Registries

New gTLD registries will have to wait a bit longer before they’re allowed to start selling two-character domain names, after ICANN’s Governmental Advisory Committee controversially issued new guidelines on their release.

The registries for hundreds of gTLDs will be affected by the delays, which could last a few months and were put in place by the ICANN board of directors at the request of the GAC at the ICANN 52 meeting in Singapore last week.

The two-character domain issue was one of the most contentious topics discussed at ICANN 52.

Exasperated registries complained to ICANN’s board that their requests to release such domains had been placed on hold by ICANN staff, apparently based on a letter from GAC chair Thomas Schneider which highlighted concerns held by a small number of governments.

The requests were frozen without a formal resolution by the board, and despite the fact that the GAC had stated more than once that it did not have consensus advice to give.

Some governments don’t want any two-letter domains that match their own ccTLDs to be released.

Italy, for example, has made it clear that it wants it.example and 1t.example blocked from registration, to avoid confusion.

Others, such as the US, have stated publicly that they have no issue with any two-character names being sold.

The process for releasing the names went live in December, following an October board resolution. It calls for a 30-day comment period on each request, with official approval coming seven to 10 days later.

But despite hundreds of requests going through the pipe, ICANN has yet to approve any. That seems to be due to Schneider’s letter, which said some governments were worried the comment process was not transparent enough.

This looked like a case of ICANN staff putting an unreasonable delay on part of registries’ businesses, based on a non-consensus GAC position that was delivered months after everyone thought it was settled law.

Registries grilled the board and senior ICANN executives about this apparent breakdown in multi-stakeholder policy-making last Tuesday, but didn’t get much in the way of an explanation.

It seems the GAC chair made the request, and ICANN implemented a freeze on a live business process, without regard to the usual formal channels for GAC advice.

However, the GAC did issue formal advice on two-letter domains on Wednesday during the Singapore meeting. ICANN’s board adopted the advice wholesale the next day.

This means that the comment period on each request — even the ones that have already completed the 30-day period — will be extended to 60 days.

The delay will be longer than a month for those already in the pipe, however, as ICANN still has to implement the board-approved changes to the process.

One of those changes is to alert governments when a new registry request has been made, a potentially complex task given that not every government is a member of the GAC.

The board’s resolution says that all comments from governments “will be fully considered”, which probably means we won’t be seeing the string “it” released in any new gTLD.

The GAC has also said it will publish a list of governments that do not intend to object to any request, and a list of governments that intend to object to every request.

.blog won in eight-figure auction by Primer Nivel

Kevin Murphy, February 16, 2015, Domain Registries

A Colombian registrar has become the unlikely owner of the coveted .blog new gTLD, beating eight other applicants to the string at auction.

Winning bidder Primer Nivel is a Panamanian company affiliated with Bogota-based CCI REG, which runs my.co.

The company was the first to reveal its plans to apply for .blog, telling DI back in April 2012 about its ambitions of the gTLD.

Rival bidders Radix, Minds + Machines, Donuts, Afilias, Merchant Law Group, BET, Google and Top Level Design all withdrew their applications over the weekend.

We’re certainly looking at an eight-figure sale here.

Kieren McCarthy, writing at The Register, reckons it went for $30 million or more, based on the fact that M+M got $3.4 million for withdrawing from .blog and .store auctions, but his back-of-the-envelope calculations are off-target for a few reasons.

Knowledgeable DI sources say the sale price was considerably lower than $30 million.

My envelope puts it at somewhere in the range of $15 million to $18 million.

I’ve always said .blog is among my favorite new gTLD strings. The market opportunity is potentially huge, with hundreds of millions of blogs live on the web today.

Primer Nivel, which to the best of my knowledge is not (unlike some other applicants) affiliated with a particular blogging platform, plans to operate .blog as an open gTLD.

The separate auction for .store, meanwhile, was won by Radix, after withdrawals from M+M, Donuts, Amazon, Google, Dot Store and Uniregistry this weekend.

Chehade declines to backtrack on domain “hogging” comments

Kevin Murphy, February 10, 2015, Domain Policy

ICANN CEO Fadi Chehade responded yesterday to anger from domain investors over recent comments in which he talked about “hogging” domain names and implied a link to cybersquatting.

But he did not, at least as far as I understood his explanation, backtrack on his original remarks.

Chehade was cheekily asked his current thoughts on domain “hoggers” by blogger David Goldstein during a press conference at the ICANN 52 meeting in Singapore yesterday.

This is the entirety of his reply:

I think the statement I made to a different media outlet about that was conflated to signify I was including in this all those who are in the domain name business. And that’s not true. There are those that do this as a business and do it very well and actually enhance the market and there are those that do it and make the business and the market less attractive and less desirable. So I think any insinuation that that statement engulfs everyone that is in this business is not true. As you know very well I’ve a very big supporter of the industry groups and was one of the people who was frankly very happy when the Domain Name Association was created and I attended their first formation meeting. This is where we stand and we continue to feel good about how this market is evolving and how these players are making this a good market that serves the public interest.

Having listened to it a few times, I wonder whether Chehade deliberately didn’t backtrack on his original remarks, or whether he doesn’t quite understand why they caused offense in the first place.

A couple of weeks back, Chehade was talking to the Huffington Post about new gTLDs during an interview at the World Economic Forum in Davos.

The interviewer asked about “concerns about a land-grab going on” among domain speculators.

It was a bit of a silly question, if you ask me. A speculative land-grab is pretty low down the list of concerns held by critics of the new gTLD program. Regardless, Chehade replied:

The reality is, the more there are names, the less people will actually be hogging names in order to charge a lot for them. Because if somebody took your name on dot X, you can go get another name on dot Y now.

I’d personally agree with that characterization of the program. It’s meant to make finding a good name at a cheap price easier. “Hogging” was probably a poor choice of words, but Chehade was talking off the cuff so I could give him a pass.

But later in the same reply, he used the term “cybersquatting” in such a way as to make it easy to infer he was conflating domain investing with cybersquatting. That’s a loaded term that is usually reserved for trademark infringement, at least when used inside the industry.

Obviously this was guaranteed to get investors’ hackles up.

First up with the hackles was Mike Berkens, who called Chehade out on The Domains, saying he “throws large domain investors under the bus and then backs up the bus and rolls over them again”.

Berkens pointed out, quite reasonably I thought, that ICANN is funded to a great extent by domain investors. He estimates that he alone pays ICANN about $15,000 a year in the fees that are collected at the point of registration and renewal.

By some estimates, which may even be conservative, about a third of new gTLD registrations to date have been made to speculators.

Berkens made the even better point that many of the people who have pumped hundreds of millions of dollars into the new gTLD program — Uniregistry’s Frank Schilling, XYZ.com’s Daniel Negari and multiple Donuts executives, for example — made their fortunes investing in second-level domains.

He concluded:

All and all some pretty ignorant statements in our opinion made by the CEO of ICANN and an insult to those domain investors that are some of the biggest buyer’s of new gTLD’s domain names who have paid ICANN a small fortune over the years allowing them to travel the world, pay millions a year in salary and other benefits.

Phil Corwin Jeremiah Johnston of the Internet Commerce Association followed up a few days ago with an open letter to Chehade which explained the outrage in slightly more formal and lawyerly way, with all the apostrophes in the right places. He wrote:

The ICA objects to your statement as it expresses a disdainful view towards the legitimate activity of domain investing, a hostile view of domain investors who are significant ICANN stakeholders who are deeply affected by its policies, a lack of awareness of the market realities of domains as an asset class, and an unwarranted promotion of new gTLD domains over those at legacy gTLDs.

Domain investors are not “hogs” and they most certainly are not deliberate trademark infringers, or “cybersquatters”. It is not clear what you intended by your reference to “cybersquatting”, though it is concerning that you used this pejorative term just after making disparaging remarks about domain investors.

With all these criticisms in mind, let’s go back and parse what Chehade said in Singapore yesterday.

First, he said his remarks had been wrongly “conflated to signify I was including in this all those who are in the domain name business”.

I’m not sure that’s what happened. I’m pretty certain Berkens and his commenters, and then Corwin Johnston, got the hump purely because Chehade dismissed domain investing as “hogging” and then implied a link between investing and trademark infringement.

Who is Chehade talking about when he draws a distinction between those who “enhance the market” and those who “make the business and the market less attractive”?

Is the line drawn between the trademark infringers and the legitimate investors, or its it drawn somewhere else?

Why did Chehade go on to express his support for the DNA, a sell-side trade group funded largely by registries and registrars? Was he drawing the line between regular second-level domainers (hogging) and those that in many cases are essentially just top-level domainers (enhancing)?

Chehade was given the opportunity to backtrack and he didn’t take it.

I’m not a domainer, but if I were I don’t think I’d be particularly satisfied about that.

Anger as governments delay two-letter domains

Kevin Murphy, February 9, 2015, Domain Registries

ICANN has heard an angry response from gTLD registries after delaying the release of two-character domains in new gTLDs, apparently at the whim of a small number of governments.

ICANN has yet to approve any of the over 350 requests for the release of two-letter domains filed by registries under a process approved by its board last October and launched in December.

The reason, according to registries, is that members of ICANN’s Governmental Advisory Committee — probably a minority — have objected and ICANN staff has “unilaterally” put a halt to the process.

Some governments — Spain, Italy and Cote d’Ivoire among them — are concerned that two-letter domains, such as es.example or it.example, may cause confusion with existing ccTLDs.

But the GAC itself was unable to find a consensus against the release of two-letter domains when it discussed the issue back in October. It merely asked for comment periods to allow individual governments to object to specific domains.

So ICANN’s board asked staff to create an “efficient procedure” to have requests swiftly approved, taking some of the stress off of the regular Registry Services Evaluation Process.

Two-letter domains have a premium dollar value for open registries, while multinational dot-brands expect to find them useful to market to the territories in which they operate.

Under the streamlined approval process, each request is subject to a 30-day comment period, and would be approved or not within seven to 10 days.

Right now, the oldest requests, which were filed in early December, are almost a month overdue for a response. The Registries Stakeholder Group told ICANN, in a letter (pdf):

We write to raise serious concern about what appears to be a recent closed-door, unilateral decision by ICANN staff, which took place over a period of weeks, to defer action on pending requests for two-character labels. This action was apparently initiated as a result of recent correspondence you received from the Chair of the Governmental Advisory Committee — but which critically does not represent formal consensus advice or even purport to represent the opinion of the GAC as a whole

It’s a case of governments strong-arming ICANN staff into changing policy, the registries claim.

GAC chair Thomas Schneider’s letter (pdf) says that an unspecified number of governments have “concerns” that the approval process was launched quite quickly and without any formal consultation with the GAC.

He goes on to make a laundry list of recommendations for making the process more amenable to governments, before requesting a “stay” on approvals until the GAC has further discussed the issue.

To date, registries representing a little over 300 strings have completed their 30-day comment periods, yet there have been only four comments from governments.

Italy and Cote d’Ivoire want ICANN to deny all requests for it.example and ci.example, because they may be confused with ccTLDs.

Spain, meanwhile, filed specific objections against the release of es.bingo, es.casino and es.abogado (lawyer), saying that these are regulated industries in Spain and should only be given to registrants who “have the required credentials”.

The RySG wants ICANN staff to immediately start approving requests that have passed through the comment process. The GAC says it will discuss the matter further at the ICANN 52 meeting currently going on in Singapore.

When RySG members raised the topic at a meeting the with ICANN board yesterday, directors avoided directly addressing the specific concerns.

Overworked ICANN community “at breaking point”, Chehade warns

Kevin Murphy, February 9, 2015, Domain Policy

The volunteers that do the bulk of the policy-development work at ICANN are are suffering from “burnout” and are at “breaking point”, CEO Fadi Chehade said during the opening ceremony of the ICANN 52 public meeting in Singapore today.

“This community — we’re hearing this from many of your leaders — is reaching a bit of burnout. And we in the staff are responsible to support you better so that we can manage the workload that you’re all feeling,” Chehade said.

A session later today will demonstrate some of the tools and processes ICANN plans to put in place to alleviate the load, he said.

Much of the work in ICANN’s supporting organizations is done on a volunteer basis.

ICANN’s tendency to spawn new working groups, roles and committees on an almost fractal basis, and the relative lack of people willing to shoulder the burden of endless teleconferences and sprawling mailing lists, has long been an issue for the community.

Not only does ICANN have to do the work of making DNS policies, it also undergoes a permanent process of self-analysis and review, which eats up time. That has been especially pronounced as ICANN prepares for its probable transition away from US government oversight.

Chehade gave an example of a key community member who showed up uncomplainingly to an important meeting despite suffering a personal tragedy just a day earlier.

“This community is a very unique community. The volunteers that make up ICANN are essentially the spirit of ICANN,” Chehade said. “This is who we are. But this is the beauty of ICANN. This is what makes us very special, and I know that our volunteers are at break-point, but let me tell you, there is no better community.”