Latest news of the domain name industry

Recent Posts

ICANN finally addresses Net 4 India meltdown, but mysteries remain

Kevin Murphy, November 18, 2020, Domain Registrars

ICANN today made an effort to publicly address the hundreds of complaints that have recently been made about Net 4 India, India’s largest registrar, which has been in insolvency proceedings for over three years and recently started losing its customers’ domains.

In a lengthy blog post, ICANN confirmed that it received roughly 300 complaints about Net4 in August and September, when India was in coronavirus lockdown and the registrar’s customer service department was unable to cope with demand.

Many customers reported on social media and elsewhere that domains were expiring and transfers to third-party registrars were not possible.

ICANN said it had received over 400 complaints since it filed its first notice of suspension against Net4, which came about after ICANN learned of the insolvency proceedings, in June 2019. It says 74% have been resolved and it’s working on the remainder.

The post sets out customers’ options when it comes to filing complaints, which is complicated by the fact that Net4 also acts as a reseller for OpenProvider, which is not in the same financial difficulty.

ICANN’s says that it is closely monitoring Net4’s compliance with its Registrar Accreditation Agreement and has regular contact with the insolvency court where the company’s case is being heard.

What’s unclear is why the company has been permitted to continue to operate as an accredited registrar, despite its insolvency proceeding being a direct violation of the RAA. ICANN filed a suspension notice in June last year, but has postponed its effective date ever since.

While ICANN says it has not ruled out terminating Net4 and transferring its domains to another registrar, the reality may be that it is unable to do so.

In today’s post, ICANN says it “postponed the start date of the Suspension Period after considering information regarding the insolvency proceedings” provided by the court-appointed resolution professional.

Last month, during the ICANN 69 public forum, the org was asked by an Indian registrant what it was doing about Net4, and compliance chief Jamie Hedlund responded:

When they initially filed for insolvency, we attempted to suspend them and prevent them from being able to register new names. But unfortunately due to the insolvency, we were not able to do that.

It seems that a resolution professional appointed by a quasi-judicial Indian court has managed to trump ICANN’s powers under its Californian-law registrar contract.

Net4’s latest registry transaction reports show that it had 90,000 gTLD domains under management at the end of July. It’s bleeding thousands of domains every month. The company claims to have 400,000 customers in total.

The insolvency proceedings were initiated in 2017 by a debt-recovery agency called Edelweiss, which had acquired $28 million of debts Net4 owed the State Bank of India.

Is India’s largest registrar about to go titsup? And where the hell is ICANN?

Kevin Murphy, September 21, 2020, Domain Registrars

India’s largest independent domain name registrar appears to be “doing an AlpNames”, with many customers complaining about domains going dark, transfer codes not being issued, and customer support being unavailable for weeks.

Net 4 India, which claims to have 400,000 customers, has been in insolvency proceeds for over two years, but it’s only in the last couple months that the complaints have started piling up by the scores from disgruntled customers.

A major complaint is that renewals are not processed even after they are paid for, that transfer authcodes never arrive, that customer support never picks up the phone or replies to emails, and (occasionally) that the Net4 web site itself is down.

As we saw with AlpNames last year and RegisterFly back in the mists of time, These are all the warning signs of a registrar in trouble.

On its web site, Net4 prominently warns customers that its call centers are operating on a skeleton staff due to India’s coronavirus lockdown measures, which may account for the lack of support.

But there are reports that customers have visited the company’s offices in person to find them closed.

There’s been radio silence from the registrar. Even its Twitter account is private.

Many local commentators are pointing to the fact that Net4 is in protracted insolvency proceedings as the true underlying issue.

There have been calls for government intervention, action by .in registry NIXI, ICANN enforcement, and even the Indian equivalent of a class action lawsuit. This local cyber law blogger is all over it.

But what is ICANN doing about it?

Net4 was taken to a quasi-judicial insolvency court in 2017 by a debt-recovery company called Edelweiss over the rupee equivalent of about $28 million of unpaid loans from the State Bank of India.

ICANN has been aware of this fact since at least April 2019, when it started calling the registrar for an explanation.

Under the standard Registrar Accreditation Agreement, being in insolvency for over 30 days is grounds for unilateral termination by ICANN.

ICANN could terminate the agreement and transfer all of Net4’s gTLD domain names to a different registrar pretty much at will — all the registrant data is in escrow. This would not protect Net4’s many thousands of .in registrants of course.

ICANN suspended Net4’s RAA in June last year, but Net4 somehow managed to talk its way out of it. ICANN later rescinded the suspension on the proviso that the registrar provide monthly updates regarding its insolvency.

Net4’s cure period has been extended three times by ICANN. The latest expired July 31 this year.

At least one ICANN staffer is on the case, however. ICANN’s head of India Samiran Gupta has recently been reaching out to customers on Twitter, offering his email address and assistance getting in contact with Net4 staff, apparently with some success.

But Net4 had 95,000 gTLD names under management at the last count (though it’s been hemorrhaging thousands per month) so this individual approach won’t go very far.

Net 4 India gets brief reprieve from ICANN suspension

India registrar Net 4 India has been given a bit of breathing space by ICANN, following its suspension last month.

ICANN suspended the registrar’s accreditation a month ago, effective June 21, after discovering the company had been in insolvency proceedings for some time.

But on June 20 ICANN updated its suspension notice to give Net4 more time to comply. It now has until September 4, the same day its insolvency case is expected to end, to provide ICANN with documentation showing it is still a going concern.

The registrar was sued by a debt collector that had acquired some Rs 1.94 billion ($28 million) of unpaid debts from an Indian bank.

ICANN’s updated suspension notice adds that Net4 is to provide monthly status updates, starting July 18, if it wants to keep its accreditation.

The upshot of all this is that the registrar can carry on selling gTLD domains and accepting inbound transfers for at least another couple months.

India’s largest registrar goes insolvent, gets suspended

India’s largest independent registrar has been found insolvent by a local court, after failing to pay back $28 million in bank loans.

Net 4 India has now also had its right to sell gTLD domains suspended by ICANN as a result.

Judging by legal papers (pdf) buried on Net4’s web site, the insolvency relates to a series of loans the company took out with the State Bank of India between 2002 and 2012.

After the company failed to pay those loans back, in 2014 the debt was acquired from SBI by Edelweiss Asset Reconstruction, which specializes in buying debt cheap then recovering it through the courts.

Edelweiss sued Net4 to get its money back a couple of years ago and, in March this year after what appears to have been a slam-dunk, won its case.

The ruling states that the outstanding debt in 2017 was almost two billion rupees — Rs 1,940,860,284, which works out to just short of $28 million at today’s rates.

Having learned about the insolvency in April, ICANN set about trying to contact Net4’s management to see if the company was coming back into compliance.

ICANN’s Registrar Accreditation Agreement says ICANN can terminate registrars’ contracts if they are in insolvency proceedings for more than 30 days.

After the company failed to show it was compliant, this week its RAA was suspended from June 21 to September 19.

During that period, Net4 will not be able to sell new domain registrations or accept incoming transfers. It will also have to display a notice on its web site to that effect.

If it has not demonstrated compliance by August 28, ICANN may start its termination process.

Net4 is the largest ICANN-accredited registrar based in India, as measured by number of registered gTLD domains (excluding Public Domain Registry, LogicBoxes, and several affiliated dummy accreditations, which are all owned by US-based Endurance International).

It had over 100,000 gTLD domains under management at the end of February — almost all in .com and other legacy gTLDs — but its DUM had been shrinking hard for many months.

At some point, Net4 appears to have been listed on both India’s National Stock Exchange and the Bombay Stock Exchange, but was delisted about a year ago.

Famous Four is DEAD! New registry promises spam crackdown

Kevin Murphy, August 7, 2018, Domain Registries

Famous Four Media’s portfolio of gTLD registries is now under the control of a new company, Global Registry Services Ltd, which has promised to abandon its failed penny-domain strategy and crack down on spam.

(August 9 update: This article contains some incorrect assumptions and speculation. Please read this follow-up piece for clarifications.)

The company, which goes by the name GRS Domains, told registrars yesterday that FFM’s 16 gTLDs are now “controlled by the same parties that control Domain Venture Partners PCC Limited, and are no longer under the management of FFM.”

DVP also owned FFM, so it’s not clear how big of a deal this restructuring is from a management point of view.

My sense is that there’s not really been a substantial change, but it’s certainly more than a simple rebranding exercise.

I’ve learned that DVP was placed into administration under the Insolvency Act back in April, with management of the TLDs handed to a PricewaterhouseCoopers administrator, more or less as I speculated in June.

The TLDs affected are: .loan, .win, .men, .bid, .stream, .review, .trade, .date, .party, .download, .science, .racing, .accountant, .faith, .webcam and .cricket.

GRS told registrars:

Moving forward there are several changes being made with regard to the overall strategy of the portfolio of gTLDs, the main one being a change to a “quality over quantity” ethos and focusing on working with our Registrar Partners to sharply reduce abuse and spam registrations.

As such, all of its current pricing promotions will end August 20 and a “much more transparent and sensible pricing strategy” will come into play.

That means a wholesale reg fee of $9.98 across the board, at least until February 2019.

GRS also plans to take a lot of its lower-priced reserved “premium” names out of the premium program altogether, and to reprice “a considerable portion” of the more expensive ones.

Finally, the company, not known to attend ICANN meetings in the past, said it plans to show up at the Barcelona meeting in October to formally relaunch itself.

Famous Four has become notorious over the last few years for its deep-discounted TLDs, which have become a haven for spammers who want to register large numbers of super-cheap, throwaway domains.

As such, its gTLDs’ volumes have been huge — many racking up hundreds of thousands of names — but their renewals poor and their reputation worse.

If GRS’ new strategy is effective, we’re almost certainly going to see the industry-wide overall number of active new gTLD domains tank over the next year or so, giving more ammunition to those who think the new gTLD program was a huge waste of effort.

It could also have an impact on ICANN’s budget — no matter how cheap FFM sold its names, it still had to pay its ICANN fees on a per-domain basis. Fewer domains equals less money in ICANN’s coffers. FFM’s registries paid over $1.6 million in ICANN fees in the organization’s fiscal 2017.

While GRS is now apparently “controlled by the same parties that control Domain Venture Partners PCC Limited”, it’s not abundantly clear to me whether that’s the same people who’ve been running FFM for the last eight years.

DVP has not immediately responded to a request for comment today.

The DVP web site has not resolved in months. The new grs.domains site doesn’t name anyone, and the NIC sites for the gTLDs in the portfolio only identify a PwC bankruptcy accountant as the primary contact.

All the companies in question are based in tax haven Gibraltar, which isn’t particularly forthcoming about identifying company directors, partners or owners.

DVP’s directors were originally Adrian Hogg, Charles Melvin, Iain Roache, Douglas Smith, Peter Young, Joseph Garcia and a company called Domain Management II (itself chaired by Roache), according to an investor presentation (pdf) DI obtained back in 2013.

I believe Melvin at least, after a legal dispute with the others, is no longer involved.

And it appears that DVP is or was in fact in administration.

I noted back in June that the 16 gTLDs were now all being administered by PwC accountant Edgar Lavarello, and wondered aloud whether this meant FFM was bankrupt.

Today I obtained (read: paid an extortionate sum for) a Gibraltar court order dated April 23 putting DVP into administration under the Insolvency Act and appointing PwC as the administrator.

The application had been made by an investor called Christina Mattin and fellow investor Braganza, a private vehicle owned by a wealthy Scandinavian family, which was (at least last year) a 10% owner.

Other named investors the court heard from were the mysterious Liechtenstein-based Rennes Foundation, something called Northern Assets Investments Limited and Dutch multimillionaire Francis Claessens.

Overall, it smells a bit to me like DVP’s principals, having seen their previous venture put out of business by disgruntled investors, have snapped up its assets and are going to try to make a second go of running the business.

As for FFM? Well, it looks rather like we won’t be hearing that name again.

UPDATE: This article was updated several hours after it was originally posted to clarify that DVP was/is “in administration”.