Supreme Court allows fight for .nu to proceed

A lawsuit fighting for control of the .nu ccTLD can go ahead, the Supreme Court of Sweden has ruled.

The court confirmed last week that the Government of Niue has standing to sue, despite a lower court ruling in favor of .nu registry IIS’s claims to the contrary two years ago.

The ruling means the case will go to trial, according to Niue representative Pär Brumark.

IIS is the ccTLD registry for Sweden’s .se, but it also took over Niue’s .nu, which coincidentally means “.now” in Swedish, from its original American manager in 2013.

Niue has been fighting for .nu to be returned to its control for over two decades. The ccTLD has proven popular with Swedish speakers, and has about 250,000 current registrations, making about $5 million a year.

That’s a lot of money for a tiny island nation like Niue, which has never seen any cash from .nu sales.

Niue sued in 2018 and defied convention by publicizing its IANA redelegation request in 2021.

Niue’s case was dismissed by a lower court in 2020 after the judge ruled the government lacked ability to sue in Swedish jurisdiction. That decision was overruled (pdf) last year by a Court of Appeals.

IIS appealed to the Supreme Court, which last week declined (pdf) to hear the case, upholding the appeals court ruling. There’s no further avenue of appeal.

The case now goes back to the court of first instance for a trial. A date has not been set.

Thousands of domains hit by downtime after DNSSEC error

Sweden saw thousands of domains go down for hours on Friday, after DNSSEC errors were introduced to the .se zone file.

Local ccTLD registry IIS said in a statement that around 8,000 domains had a “technical difficulty” that started around 1530 local time and lasted around seven hours:

On the afternoon of 4/2, a problem was discovered that concerned approximately 8,000 .se domains. The problem meant that services, such as email and web, that are linked to the affected domains in some cases could not be used or reached. In total, there are approximately 1.49 million .se domains, of which approximately 8,000 were affected.

During the afternoon and evening, a thorough work was done with the troubleshooting and the error could be fixed for the affected .se domains at approximately 22.25.

The problem is believed to have been caused by incorrect DNSSEC signatures being published in the .se zone file. Any machine using a DNSSEC-validating resolver would have seen the errors and flat-out refused to resolve the domain.

This is probably the key drawback of DNSSEC — typically resolvers will treat badly signed domains as if they do not exist, rather than fail over to an unsigned, but resolving, response.

Sweden is not a DNSSEC newbie — .se was the first TLD to deploy the technology, all the way back in 2005, with services for domain holders coming a couple of years later.

Island demands return of its “naked” ccTLD

The Pacific island nation of Niue is loudly demanding that ICANN hand over control of its ccTLD, .nu, after two decades of bitter argument.

The government has taken the highly unusual move of filing a redelegation request with ICANN’s IANA unit publicly, forwarding it to other governments and the media.

The request is backed by UNR, the former Uniregistry, which is being put forward as the proposed back-end provider.

Niue claims, as it has since at least 2000, that the string was misappropriated by an American entrepreneur in the 1990s and has been used to generate tens of millions of dollars in revenue, with almost no benefit to the country.

The word “nu” is Swedish for “now”. It’s also the masculine form of “naked” in French, which enables lazy reporters to write click-baity headlines.

The Swedish meaning was first spotted by Massachusetts-based Bill Semich in 1997. Together with Niue-based Kiwi ex-pat Stafford Guest, he obtained the delegation for .nu from pre-ICANN root zone supremo Jon Postel.

They used the name Internet Users Society Niue (IUSN) and started selling .nu names to Swedes as a meaningful alternative to .se and .com.

As of today, there are about 264,000 registered .nu names, retailing for about $30 a year. Pre-2018 data is not available, but a couple of years ago, it had over 500,000 names under management.

That kind of money would be incredibly useful to Niue, which has a population of under 2,000 and few other natural resources to speak of. The country relies on hand-outs from New Zealand and, historically, dubious offshore banking schemes and the sale of postage stamps to collectors.

The government has said in the past that .nu cash would enable it to boost its internet infrastructure, thereby boosting its attractiveness as a tourist destination.

IUSN and Niue signed a memorandum of understanding in 1999, but a year later the government passed a law decreeing “.nu is a National resource for which the prime
authority is the Government of Niue”.

It’s been trying to get control of .nu ever since, but IUSN has consistently refused to recognize this law, Niue has always claimed, and has always refused to cooperate in a redelegation.

The company made headlines back in 2003 for claiming that it was rolling out free nationwide Wi-Fi in Niue, but there are serious questions about whether that ever actually happened.

Now, Niue claims:

The Wi-Fi has been continuously unstable and exceedingly limited. As of today, the ccTLD.NU administration and local presence of the IUSN in Niue consists of a motel with a PO Box and the Wi-Fi is covering a [n]egligible are[a] surrounding the motel. There is no operational management of the ccTLD.NU by the IUSN present in Niue.

I believe the motel in question is Coral Gardens, north of capital Alofi, which is or was run by Guest.

While IUSN is still the official ccTLD manager for .nu, according to IANA records, the business operations and technical back-end were transferred to Swedish ccTLD manager IIS in 2013.

IIS agreed to pay IUSN a minimum of $14.7 million over 15 years for the license to .nu, but the domain remains delegated to IUSN.

Niue, represented by its Swedish special envoy Pär Brumark (who until recently was also vice-chair of ICANN’s Governmental Advisory Committee, representing Niue) sued IIS in late 2018 in an attempt to gain control of the ccTLD.

The government argues that under Swedish control, profits from .nu can only be earmarked for the development of the Swedish internet, at the expense of Niue.

Brumark tells us the case is currently being delayed due to the coronavirus pandemic.

The problem Niue has now is pretty much the same as it always has been — IANA rules state that the losing party in a redelegation has to consent to the change of control, and IUSN really has no incentive to do so.

Niue’s best chance appears to be either the Swedish lawsuit or the possibility that it can get the GAC on board to support its request.

In-progress redelegation requests are also exempt by convention from ICANN’s transparency rules, so we’re not going to hear anything other than what Niue releases or the GAC can publicly squeeze out of ICANN leadership.

You can read the redelegation request (pdf) here.

.SE sells off $3.2 million registrar biz

Swedish ccTLD registry IIS has sold off its registrar business, .SE Direkt, to a local registrar for an undisclosed sum.
The buyer is Loopia, a web hosting company focused on the Swedish market. It will take over in a couple of weeks.
IIS said that starting February 12, lasting a few days, its customers’ domains will be transferred to Loopia. No disruption is expected.
.SE Direkt had 121,836 .se domains under management and 87,852 customers at the last count. Its 2018 revenue was expected to be around $3.2 million.
Loopia has around 225,000 customers. It does not appear to be ICANN-accredited, but you don’t need to be to sell ccTLD names.
It might actually be good news for departing .SE Direkt customers. Loopia sells .se domains for SEK 149 ($16.50), whereas .SE Direkt’s list price is SEK 270 ($29).
IIS said the sale was finalized following a review of competing bids following its October announcement that the unit was up for sale.
The .SE Direkt business has been on the decline for the best part of a decade, apparently deliberately. It was created as part of .se’s transition to a two-tier registry-registrar model in 2009.
IIS had expected to divest the business earlier, but customers did not jump ship as fast as expected.

Exclusive: Tiny island sues to take control of lucrative .nu

The tiny Pacific island of Niue has sued the Swedish ccTLD registry to gain control of its own ccTLD, .nu, DI has learned.
The lawsuit, filed this week in Stockholm, claims that the Internet Foundation In Sweden (IIS) acted illegally when it essentially took control of .nu in 2013, paying its American owner millions of dollars a year for the privilege.
Niue wants the whole ccTLD registry transferred to its control at IIS’s expense, along with all the profits IIS has made from .nu since 2013 — many millions of dollars.
It also plans to file a lawsuit in Niue, and to formally request a redelegation from IANA.
While .nu is the code assigned to Niue, it has always been marketed in northern Europe, particularly Sweden, in countries where the string means “now”.
It currently has just shy of 400,000 domains under management, according to IIS’s web site, having seen a 50,000-name slump just a couple weeks ago.
It was expected to be worth a additional roughly $5 million a year for the registry’s top line, according to IIS documents dated 2012, a time when it only had about 240,000 domains.
For comparison, Niue’s entire GDP has been estimated at a mere $10 million, according to the CIA World Factbook. The island has about 1,800 inhabitants and relies heavily on tourism and handouts from New Zealand.
According to documents detailing its 2013 takeover, IIS agreed to pay a minimum of $14.7 million over 15 years for the right to run the ccTLD, with a potential few million more in performance-related bonuses.
The Niue end of the lawsuit is being handled by Par Brumark, a Swedish national living in Denmark, who has been appointed by the Niuean government to act on its behalf on ICANN’s Governmental Advisory Committee, where he is currently a vice-chair.
Brumark told DI that IIS acted illegally when it took over .nu from previous registry, Massachusetts-based WorldNames, which had been running the ccTLD without the consent of Niue’s government since 1997.
The deal was characterized by WorldNames in 2013 as a back-end deal, with IIS taking over administrative and technical operations.
But IIS documents from 2012 reveal that it is actually more like a licensing deal, with IIS paying WorldNames the aforementioned minimum of $14.7 million over 15 years for the rights to manage, and profit from, the TLD.
The crux of the lawsuit appears to be the question of whether .nu can be considered a “Swedish national domain”.
IIS is a “foundation”, which under Swedish law has to stick to the purpose outlined in its founding charter.
That charter says, per IIS’s own translation, that the IIS “must particularly promote the development of the handling of domain names under the top-level domain .se and other national domains pertaining to Sweden.”
Brumark believes that .nu is not a national domain pertaining to Sweden, because it’s Niue’s national ccTLD.
One of his strongest pieces of evidence is that the Swedish telecoms regulator, PTS, refuses to regulate .nu because it’s not Swedish. PTS is expected to be called as a witness.
But documents show that the Stockholm County Administrative Board, which regulates Foundations, gave permission in 2012 for IIS to run “additional top-level domains”.
Via Google Translate, the Board said: “The County Administrative Board finds that the Foundation’s proposed management measures to administer, managing and running additional top-level domains is acceptable.”
Brumark thinks this opinion was only supposed to apply to geographic gTLDs such as .stockholm, and not to ccTLD strings assigned by ISO to other nations.
The Stockholm Board did not mention .nu or make a distinction between ccTLD and gTLDs in its letter to IIS, but the letter was in response to a statement from an IIS lawyer that .nu, with 70% of its registrations in Sweden, could be considered a Swedish national domain under the IIS charter.
Brumark points to public statements made by IIS CEO Danny Aerts to the effect that IIS is limited to Swedish national domains. Here, for example, he says that IIS could not run .wales.
IIS did not respond to my requests for comment by close of business in Sweden today.
Niue claims that if .nu isn’t Swedish, IIS has no rights under its founding charter to run it, and that it should be transferred to a Niuean entity, the Niue Information Technology Committee.
That’s a governmental entity created by an act of the local parliament 18 years ago, when Niue first started its campaign to get control of .nu.
The history of .nu is a controversial one, previously characterized as “colonialism” by some.
The ccTLD was claimed by Boston-based WorldNames founder Bill Semich and an American resident of the island, in 1997. That’s pre-ICANN, when the IANA database was still being managed by Jon Postel.
At the time, governments had basically no say in how their ccTLDs were delegated. It’s not even clear if Niue was aware its TLD had gone live at the time.
The official sponsor of .nu, according to the IANA record, is the IUSN Foundation, which is controlled by WorldNames.
Under ICANN/IANA policy, the consent of the incumbent sponsor is required in order for a redelegation to occur, and WorldNames has been understandably reluctant to give up its cash cow, despite Niue trying to take control for the better part of two decades.
The 2000 act of parliament declared that NITC was the only true sponsor for .nu, but even Niuean law has so far not proved persuasive.
So the lawsuit against IIS is huge twist in the tale.
If Niue were to win, IIS would presumably be obliged to hand over all of its registry and customer data to Niue’s choice of back-end provider.
Both Afilias and Danish registrar One.com have previously expressed an interest in running .nu, providing a share of the revenue to Niue, according to court documents.
Brumark said that a settlement might also be possible, but that it would be very costly to IIS.
Readers might also be interested in my 2011 article about Niue, which was once widely referred to as the “WiFi Nation”.

$3.2 million-a-year registrar up for grabs

Swedish ccTLD registry IIS is to sell off its registrar business, .SE Direkt, which is expected to bring in some $3.2 million in revenue this year.
The foundation said today that .SE Direkt has 121,836 .se domains under management and 87,852 customers, 66,819 of which are corporate.
That represents about 7% of the total .se market by domains.
IIS created the registrar in 2009 as part of its transition to a competitive two-tier sales model.
The registry explained in a note to press:

The idea was that it would work as a transition solution and that domain name holders would gradually transfer to other registrars. The number of customers has not fallen at the expected rate, but after 10 years it is on a level where IIS believes that the time is right to no longer continue with the registrar operations.

The buyer, which will have to be or become an IIS-accredited .se registrar, will get the customer base, domain database and two-year brand license, but none of the staff or other assets of the unit.
.SE Direkt sells .se names for 270 SEK ($30.27) per year.
Its revenue for 2017 was SEK 29.8 million ($3.3 million) and is expected to decline to SEK 28.3 million ($3.2 million) in 2018. The buyer would take over from the start of 2019.
There’s obviously a risk here that revenue is on a downward trajectory due to IIS’s aforementioned strategy of deliberately shedding customers.
Some effort to reverse this trend may be required by whoever takes over.
Stats on churn, usage, transfers and so on can be found in this IIS RFP (pdf).
IIS said that bids from interested parties must be submitted by October 17 and the foundation expects to select the winner by November 1.