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These people support scrapping .org price caps

Kevin Murphy, April 29, 2019, Domain Registries

The first examples of people supporting the scrapping of price caps in .org have emerged.

ICANN’s Business Constituency and Intellectual Property Constituency have both in the last few hours filed comments on the proposed renewal of Public Interest Registry’s .org contract, which includes the controversial removal of the current 10%-a-year price caps.

The BC expresses outright support for the end of caps — the first example I’ve seen of explicit support for the move — while the IPC utterly fails to address it.

A prominent US antitrust lawyer has also weighed in to claim that approving the new provisions would not raise competition concerns.

Both the IPC and BC seem happy to accept the proposed pricing regime, given that PIR’s new contract will also include new rights protection mechanisms, such as the Uniform Rapid Suspension process.

The BC wrote in its comment to ICANN:

Given the BC’s established position that ICANN should not be a price regulator, and considering that .ORG and .INFO are adopting RPMs and other registrant provisions we favor, the BC supports broader implementation of the Base Registry Agreement, including removal of price controls

Seemingly uninterested in price caps whatsoever, the IPC wrote:

The IPC applauds Public Interest Registry and other Registry Operators that choose to implement enhanced rights protection mechanisms for third party trademark owners, and to take on enhanced responsibilities for the Registry Operator to prevent use of registrations for abusive purposes, including but not limited to violations of intellectual property rights.

From outside the ICANN community, Washington DC-based antitrust attorney David Balto, a former Federal Trade Commission official, has submitted a brief analysis in which he finds little to be concerned about from a competition perspective. He writes:

An analysis of the .org gTLD under competition would likely find that it has little market power, and thus would be unable to unreasonably raise prices. Any attempt to do so should result in users defecting to alternative gTLDs.

Users have ample protections in the form of marketplace competition and contract provisions that allow users to be notified of price increases and lock in rates for up to ten years.

These arguments stand in stark contrast to those made by many in the domainer community, such as in Andrew Allemann’s post today.

Balto says that “market power” — a legal test under US competition law — starts to kick in at about 30% market share. But .org only has about 5.5%, he wrote.

The lawyer does not identify a client affiliation in his letter.

With just a few hours left on the clock before public comments close, there have been 3,129 submitted comments, the vast majority coming from domain investors.

Some non-profit groups have also registered their objections.

Trademark posse fails to block Whois privacy policy

Kevin Murphy, March 5, 2019, Domain Policy

The ICANN community’s move to enshrine Whois privacy into formal consensus policy is moving forward, despite votes to block it by intellectual property interests.

During a special meeting yesterday, the GNSO Council voted to approve a set of recommendations that would (probably) bring ICANN’s Whois policy into compliance with the General Data Protection Regulation.

But four councilors — Paul McGrady and Flip Petillion of the Intellectual Property Constituency and Marie Pattullo and Scott McCormick of the Business Constituency — voted against the compromise deal.

Their downvotes were not enough to block it from passing, however. It has now been opened for a month of public comments before being handed to the ICANN board of directors for final approval, whereupon it will become ICANN’s newest consensus policy and binding on all contracted parties.

McGrady, an lawyer with Winston Strawn, claimed that the Expedited Policy Development Process working group that came up with the recommendations failed to reach the level of consensus that it had claimed.

“The consensus call was broken,” he said, adding that the EPDP’s final report “reflects consensus where there really wasn’t any.”

The GNSO was due to vote 10 days ago, but deferred the vote at the request of the IPC and BC. McGrady said that both groups had tried to muster up support in their communities for a “yes” vote in the meantime, but “just couldn’t get there”.

Speaking for the BC from a prepared statement, Pattullo (who works for European brand protection group AIM) told the Council:

The report is a step backwards for BC members’ interests compared to the Temp Spec, especially as the legitimate purposes for collecting and processing data are insufficiently precise, and do not include consumer protection, cybercrime, DNS abuse and IP protection.

The Temp Spec is the Temporary Specification currently governing how registries and registrars collect and publish Whois data. It was created as an emergency measure by the ICANN board and is due to expire in May, where it will very probably be replaced by something based on the EPDP recommendations.

In response to the IPC/BC votes, Michele Neylon of the Registrars Constituency and Ayden Férdeline of the Non-Commercial Stakeholders Group read statements claiming that trademark interests had been given substantial concessions during the EPDP talks.

Neylon in particular had some harsh words for the holdout constituencies, accusing them of “bad faith” and pointing out that the EPDP spent thousands of hours discussing its recommendations.

“Our members would want any number of obligations this report contains to be removed, but despite the objections we voiced our support for the final product as a sign of compromise and support for the entire multistakeholder model,” he said.

“Given the objections of certain parts of the community it’s unclear how we can ask this group to carry on with the next phase of its work at the same pace,” he said. “Given the unwillingness of others to participate and negotiate in good faith, how can we ask our reps to spend hours compromising on this work when it’s clear others will simply wait until the last minute and withdraw their consent for hard-fought compromise.”

The EPDP had a hard deadline due to the imminent expiration of the Temp Spec, but that’s not true of its “phase two” work, which will explore possible ways trademark enforcers could get access to redacted private Whois data.

Unfortunately for the IP lobby, there’s a very good chance that this work is going to proceed at a much slower pace than phase one, which wrapped up in basically six months.

During yesterday’s Council call, both Neylon and NCSG rep Tatiana Tropina said that the dedication required of volunteers in phase one — four to five hours of teleconferences a week and intensive mailing list discussions — will not be sustainable over phase two.

They simply won’t be able to round up enough people with enough time to spare, they said.

Coincidentally, neither the registrars nor the non-coms have any strong desire to see a unified access solution developed any time soon, so a more leisurely pace suits them politically too.

It will be up to the EPDP working group, and whoever turns out to be its new chair, to figure out the timetable for the phase two work.

Is ICANN over-reacting to Whois privacy law?

Kevin Murphy, March 20, 2018, Domain Policy

Is ICANN pushing the domain industry to over-comply with the European Union’s incoming General Data Protection Regulation privacy law?

Governments and plenty of intellectual property and business lobbyists think so.

After days of criticism from unhappy IP lawyers, ICANN’s public meeting in Puerto Rico last week was capped with a withering critique of the organization’s proposed plan for the industry to become GDPR compliant as pertains Whois.

The Governmental Advisory Committee, in unusually granular terms, picked apart the plan in its usual formal, end-of-meeting advice bomb, which focused on making sure law enforcement and IP owners continue to get unfettered Whois access after GDPR kicks in in May.

Key among the GAC’s recommendations (pdf) is that the post-GDPR public Whois system should continue to publish the email address of each domain registrant.

Under ICANN’s plan — now known as the “Cookbook” — that field would be obscured and replaced with a contact form or anonymized email address.

The GAC advised ICANN to “reconsider the proposal to hide the registrant email address as this may not be proportionate in view of the significant negative impact on law enforcement, cybersecurity and rights protection;”.

But its rationale for the advice is a little wacky, suggesting that email addresses under some unspecified circumstances may not contain “personal data”:

publication of the registrant’s email address should be considered in light of the important role of this data element in the pursuit of a number of legitimate purposes and the possibility for registrants to provide an email address that does not contain personal data.

That’s kinda like saying your mailing address and phone number aren’t personal data, in my view. Makes no sense.

The GAC advice will have won the committee friends in the Intellectual Property Constituency and Business Constituency, which throughout ICANN 61 had been pressuring ICANN to check whether removing email addresses from public Whois was strictly necessary.

ICANN is currently acting as a non-exclusive middleman between community members and the 20-odd Data Protection Authorities — which will be largely responsible for enforcing GDPR — in the EU.

It’s running compliance proposals it compiles from community input past the DPAs in the hope of a firm nod, or just some crumbs of guidance.

But the BC and IPC have been critical that ICANN is only submitting a single, rather Draconian proposal — one which would eschew email addresses from the public Whois — to the DPAs.

In a March 13 session, BC member Steve DelBianco pressed ICANN CEO Goran Marby and other executives and directors repeatedly on this point.

“If they [the DPAs] respond ‘Yes, that’s sufficient,’ we won’t know whether it was necessary,” DelBianco said, worried that the Cookbook guts Whois more than is required.

ICANN general counsel John Jeffrey conceded that the Cookbook given to the DPAs only contains one proposal, but said that it also outlines the “competing views” in the ICANN community on publishing email addresses and asks for guidance.

But email addresses are not the only beef the GAC/IPC/BC have with the ICANN proposal.

On Thursday, the GAC also advised that legal entities that are not “natural persons” should continue to have their full information published in the public Whois, on the grounds that GDPR only applies to people, not organizations.

That’s contrary to ICANN’s proposal, which for pragmatic reasons makes no distinction between people and companies.

There’s also the question of whether the new regime of Whois privacy should apply to all registrants, or just those based in the European Economic Area.

ICANN plans to give contracted parties the option to make it apply in blanket fashion worldwide, but some say that’s overkill.

Downtime for Whois?

While there’s bickering about which fields should be made private under the new regime, there doesn’t seem to be any serious resistance to the notion that, after May, Whois will become a two-tier system with a severely depleted public service and a firewalled, full-fat version for law enforcement and whichever other “legitimate users” can get their feet in the door.

The problem here is that while ICANN envisions an accreditation program for these legitimate users — think trademark lawyers, security researchers, etc — it has made little progress towards actually creating one.

In other words, Whois could go dark for everyone just two months from now, at least until the accreditation program is put in place.

The GAC doesn’t like that prospect.

It said in its advice that ICANN should: “Ensure continued access to the WHOIS, including non-public data, for users with a legitimate purpose, until the time when the interim WHOIS model is fully operational, on a mandatory basis for all contracted parties”.

But ICANN executives said in a session on Thursday that the org plans to ask the DPAs for a deferral of enforcement of GDPR over Whois until the domain industry has had time to come into compliance while continuing to grant access to full Whois to police and special interests.

December appears to be the favored date for this proposed implementation deadline, but ICANN is looking for feedback on its timetable by this coming Friday, March 23.

But the IPC/BC faction are not stting on their hands.

Halfway through ICANN 61 they expressed support for a draft accreditation model penned by consultant Fred Felman, formerly of brand protection registrar MarkMonitor.

The model, nicknamed “Cannoli” (pdf) for some reason, unsurprisingly would give full Whois access to anyone with enough money to afford a trademark registration, and those acting on behalf of trademark owners.

Eligible accreditees would also include security researchers and internet safety organizations with the appropriate credentials.

Once approved, accredited Whois users would have unlimited access to Whois records for defined purposes such as trademark enforcement or domain transfers. All of their queries would be logged and randomly audited, and they could lose accreditation if found to be acting outside of their legitimate purpose.

But Cannoli felt some resistance from ICANN brass, some of whom pointed out that it had been drafted by just one part of the community

“If the community — the whole community — comes up with an accreditation model we would be proud to put that before the DPAs,” Marby said during Thursday’s public forum in Puerto Rico.

It’s a somewhat ironic position, given that ICANN was just a few weeks ago prepared to hand over responsibility for creating the first stage of the accreditation program — covering law enforcement — wholesale to the GAC.

The GAC’s response to that request?

It’s not interested. Its ICANN 61 communique said the GAC “does not envision an operational role in designing and implementing the proposed accreditation programs”.

Community calls on ICANN to cut staff spending

Kevin Murphy, March 11, 2018, Domain Policy

ICANN should look internally to cut costs before swinging the scythe at the volunteer community.

That’s a key theme to emerge from many comments filed by the community last week on ICANN’s fiscal 2019 budget, which sees spending on staff increase even as revenue stagnates and cuts are made in other key areas.

ICANN said in January that it would have to cut $5 million from its budget for the year beginning July 1, 2018, largely due to a massive downwards revision in how many new gTLD domains it expects the industry to process.

At the same time, the organization said it will increase its payroll by $7.3 million, up to $76.8 million, with headcount swelling to 425 by the end of the fiscal year and staff receiving on average a 2% pay rise.

In comments filed on the budget, many community members questioned whether this growth can be justified.

Among the most diplomatic objections came from the GNSO Council, which said:

In principle, the GNSO Council believes that growth of staff numbers should only occur under explicit justification and replacements due to staff attrition should always occur with tight scrutiny; especially in times of stagnate funding levels.

The Council added that it is not convinced that the proposed budget funds the policy work it needs to do over the coming year.

The Registrars Stakeholder Group noted the increased headcount with concern and said:

Given the overall industry environment where organizations are being asked to do more with less, we are not convinced these additional positions are needed… The RrSG is not yet calling for cuts to ICANN Staff, we believe the organization should strive to maintain headcount at FY17 Actual year-end levels.

The RrSG shared the GNSO Council’s concern that policy work, ICANN’s raison d’etre, may suffer under the proposed budget.

The At-Large Advisory Committee said it “does not support the direction taken in this budget”, adding:

Specifically we see an increase in staff headcount and personnel costs while services to the community have been brutally cut. ICANN’s credibility rests upon the multistakeholder model, and cuts that jeopardize that model should not be made unless there are no alternatives and without due recognition of the impact.

Staff increases may well be justified, but we must do so we a real regard to costs and benefits, and these must be effectively communicated to the community

ALAC is concerned that the budget appears to cut funding to many projects that see ICANN reach out to, and fund participation by, non-industry potential community members.

Calling for “fiscal prudence”, the Intellectual Property Constituency said it “encourages ICANN to take a hard look at personnel costs and the use of outside professional services consultants.”

The IPC is also worried that ICANN may have underestimated the costs of its contractual compliance programs.

The Non-Commercial Stakeholders Group had some strong words:

The organisation’s headcount, and personnel costs, cannot continue to grow. We feel strongly that the proposal to grow headcount by 25 [Full-Time Employees] to 425 FTE in a year where revenue has stagnated cannot be justified.

With 73% of the overall budget now being spent on staff and professional services, there is an urgent need to see this spend decrease over time… there is a need to stop the growth in the size of the staff, and to review staff salaries, bonuses, and fringe benefits.

NCSG added that ICANN could perhaps reduce costs by relocating some positions from its high-cost Los Angeles headquarters to the “global south”, where the cost of living is more modest.

The ccNSO Strategic and Operational Planning Standing Committee was the only commentator, that I could find, to straight-up call for a freeze in staff pay rises. While also suggesting moving staff to less costly parts of the globe, it said:

The SOPC – as well as many other community stakeholders – seem to agree that ICANN staff are paid well enough, and sometimes even above market average. Considering the current DNS industry trends and forecasts, tougher action to further limit or even abolish the annual rise in compensation would send a strong positive signal to the community.

It’s been suggested that, when asked to find areas to cut, ICANN department heads prioritized retaining their own staff, which is why we’re seeing mainly cuts to community funding.

I’ve only summarized the comments filed by formal ICANN structures here. Other individuals and organizations filing comments in their own capacity expressed similar views.

I was unable to find a comment explicitly supporting increased staffing costs. Some groups, such as the Registries Stakeholder Group, did not address the issue directly.

While each commentator has their own reasons for wanting to protect the corner of the budget they tap into most often, it’s a rare moment when every segment of the community (commercial and non-commercial, domain industry and IP interests) seem to be on pretty much the same page on an issue.

Fight as ICANN “backtracks” on piracy policing

Kevin Murphy, July 1, 2016, Domain Policy

ICANN has clarified that it will not terminate new gTLD registries that have piracy web sites in their zones, potentially inflaming an ongoing fight between domain companies and intellectual property interests.

This week’s ICANN 56 policy meeting in Helsinki saw registries and the Intellectual Property Constituency clash over whether an ICANN rule means that registries breach their contract if they don’t suspend piracy domains.

Both sides have different interpretation of the rule, found in the so-called “Public Interest Commitments” or PICs that can be found in Specification 11 of every new gTLD Registry Agreement.

But ICANN chair Steve Crocker, in a letter to the IPC last night, seemed to side strongly with the registries’ interpretation.

Spec 11 states, among other things, that:

Registry Operator will include a provision in its Registry-Registrar Agreement that requires Registrars to include in their Registration Agreements a provision prohibiting Registered Name Holders from distributing malware, abusively operating botnets, phishing, piracy, trademark or copyright infringement, fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law, and providing (consistent with applicable law and any related procedures) consequences for such activities including suspension of the domain name.

A literal reading of this, and the reading favored by registries, is that all registries have to do to be in compliance is to include the piracy prohibitions in their Registry-Registrar Agreement, essentially passing off responsibility for piracy to registrars (which in turn pass of responsibility to registrants).

Registries believe that the phrase “consistent with applicable law and related procedures” means they only have to suspend a domain name when they receive a court order.

Members of the IPC, on the other hand, say this reading is ridiculous.

“We don’t know what this clause means,” Marc Trachtenberg of the IPC said during a session in Helsinki on Tuesday. “It’s got to mean something. It can’t just mean you have to put a provision into a contract, that’s pointless.”

“To put a provision into a contract that you’re not going to enforce, has no meaning,” he added. “And to have a clause that a registry operator or registrar has to comply with a court order, that’s meaningless also. Clearly a registry operator has to comply with a court order.”

Some IPC members think ICANN has “backtracked” by introducing the PICs concept then failing to enforce it.

IPC members in general believe that registries are supposed to not only require their registrars to ban piracy sites, but also to suspend piracy domains when they’re told about them.

Registries including Donuts have started doing this recently on a voluntary basis with partners such as the Motion Picture Association of America, but believe that ICANN should not be in the business of content policing.

“[Spec 11] doesn’t say what some members of the IPC think it says,” Donuts VP Jon Nevett said during the Helsinki session. “To say we’re in blatant violation of that PIC and that ICANN is not enforcing that PIC is problematic.”

The fight kicked off face-to-face in Helsinki, but it has been happening behind the scenes for several months.

The IPC got mad back in February when Crocker, responding to Governmental Advisory Committee concerns about intellectual property abuse, said the issue “appears to be outside of our mandate” (pdf).

That’s a reference to ICANN’s strengthening resolve that it is not and should not be the internet’s “content police”.

In April (pdf) and June (pdf) letters, IPC president Greg Shatan and the Coalition for Online Accountability’s Steve Metalitz called on Crocker to clarify this statement.

Last night, he did, and the clarification is unlikely to make the IPC happy.

Crocker wrote (pdf):

ICANN will bring enforcement actions against Registries that fail to include the required prohibitions and reservations in its end-user agreements and against Registrars that fail to main the required abuse point of contact…

This does not mean, however, that ICANN is required or qualified to make factual and legal determinations as to whether a Registered Name Holder or website operator is violating applicable laws and governmental regulations, and to assess what would constitute an appropriate remedy in any particular situation.

This seems pretty clear — new gTLD registries are not going to be held accountable for domains used for content piracy.

The debate may not be over however.

During Helsinki there was a smaller, semi-private (recorded but not webcast live) meeting of the some registries, IPC and GAC members, hosted by ICANN board member Bruce Tonkin, which evidently concluded that more discussion is needed to reach a common understanding of just what the hell these PICs mean.

ICANN boss warns against “content policing” calls

Kevin Murphy, October 20, 2015, Domain Policy

ICANN should resist attempts to turn the organization into a content regulator responsible for fighting piracy, counterfeiting and terrorism.

That’s according to CEO Fadi Chehade, speaking in Dublin yesterday at the opening ceremony of ICANN’s 54th public meeting.

His remarks have already solicited grumbles from members of the intellectual property community, which are eager for ICANN to take a more assertive role against registries and registrars.

Speaking to a packed auditorium, Chehade devoted a surprisingly large chunk of his opening address to the matter of content policing, which he said was firmly outside of ICANN’s remit.

He presented this diagram, breaking up the internet into three layers. ICANN plays in the central “logical” section but has no place in the top “societal” segment, he said.

ICANNs remit

“Where does ICANN’s role start and where does ICANN’s role stop?” Chehade posed. “It’s very clear Our remit starts and stops in this logical yellow layer. We do not have any responsibility in the upper layer.”

“The community has spoken, and it is important to underline that in every possible way, ICANN’s remit is not in the blue layer, it is not in the economic/societal layer,” he said. This is a technical organization.”

That basically means that ICANN has no responsibility to determine which web sites are good and which are bad. That’s best left to others such as the courts and governments.

Chehade recounted an anecdote about a meeting with a national president who demanded that ICANN shut down a list of terrorism-supporting web sites.

“We have no responsibility to render judgement about which sites are terrorists,” he said, “which sites are the good pharmacies, which sites are the bad pharmacies, which sites are comitting crimes, which sites are infringing copyrights…”

“When people ask us to render judgement on matters in the upper layer, we can’t.”

With that all said, Chehade added that ICANN should not shirk its duties as part of the ecosystem, whether through voluntary measures at registries and registrars or via contractual enforcement.

“Once determinations are made, how do we respond the these?” he said. “I hope, voluntarily.”

He gave the example of credit card companies that voluntarily stop doing business with web sites that have been reported to be involved in crime or spam.

The notion of registrars adhering to a set of voluntary principles was first floated by ICANN’s chief compliance officer, Allen Grogan, in a blog post earlier this month.

It was the one bone he threw to IP interests in a determination that otherwise came down firmly on the side of registrars.

Grogan had laid out a minimum set of actions registrars must carry out when they receive abuse reports, none of which contained a requirement to suspend or delete domain names.

The Intellectual Property Constituency appeared to greet Chehade’s speech with cautious optimism, but members are still pushing for ICANN to take a stricter approach to contract compliance.

In a session between the IPC and the ICANN board in Dublin this morning, ICANN was asked to make these hypothetical voluntary measures enforceable.

Marc Trachtenberg disagreed with Chehade’s credit card company example.

“The have an incentive to take action, which is the avoidance of future potential costs,” he said. “That similar incentive does not exist with respect to registries and registrars.”

“In order for any sort of voluntary standards to be successful or useful, there have to be incentives for the parties to actually comply with those voluntary standards,” he said.

“One possibility among many is a situation where those registries and registrars that don’t comply with the voluntary standards are potentially subject to an ICANN compliance action,” he said.

It’s pretty clear that this issue is an ongoing one.

Chehade warned in his address yesterday that calls for ICANN to increase its policing powers will only increase when and if its IANA contract is finally divorced from US government oversight.

Grogan will host a roundtable tomorrow at 10am Dublin time to discuss possible voluntary mechanisms that could be created to govern abuse.

.sucks threatens ICANN with defamation claim after “extortion” letters

Vox Populi Registry has threatened to sue ICANN for defamation and other alleged breaches of US law, over allegations of “extortion” made by two of its constituencies.

The registry’s outside law firm wrote to ICANN yesterday, saying that it has “has no interest in pursuing claims at this time” but adding:

if ICANN or any of its constituent bodies (or any directly responsible member thereof) engages in any further wrongful activity that prevents the company from fulfilling its contractual obligations and operating the .SUCKS registry as both ICANN and Vox Populi envisioned, the company will have no choice but to pursue any and all remedies available to it.

The letter follows claims by the Intellectual Property Constituency that .sucks and its $1,999 annual sunrise fees constitute a “predatory” “shakedown”, claims which ICANN has forwarded to US and Canadian trade regulators for their legal opinions.

The IPC letter was followed up by similar claims by the Business Constituency on Friday.

Vox Pop now wants these constituencies, and ICANN itself, to shut up.

“Rather than assuming cooler heads will prevail, it is time to tell ICANN to stop interfering in our ability to operate the registry,” CEO John Berard said in an email to reporters. “We are not taking legal action at this point but making it clear that we reserve the right if ICANN continues in its wrong-headed approach.”

The company denies that .sucks will encourage cybersquatting, noting that like all other gTLDs it is subject to the anti-cybersquatting UDRP and URS remedies.

it would seem that ICANN is not actually concerned about cybersquatting or any other illegal activity. Rather, ICANN appears concerned that registrations on the .SUCKS registry will be used to aggregate uncomplimentary commentary about companies and products — the very purpose for the registry that Vox Populi identified in the application it submitted to ICANN, and that ICANN approved

ICANN has disseminated defamatory statements about Vox Populi and its business practices aimed at depriving Vox Populi of the benefits of its contract with ICANN. These actions further violate the duty of good faith and fair dealing that is implied in every contract… in suggesting illegality without any basis whatsoever, your actions (and those of the ICANN IPC and ICANN BC) have given rise to defamation claims against ICANN. Vox Populi hereby demands that ICANN, including any and all of its subdivisions, cease any and all such activity immediately.

There’s bucketloads of irony here, of course.

The company says it is standing up for its future registrants’ rights to free speech, but wants its own critics gagged today.

Read the letter as a PDF here.

Congress to put .sucks on trial

Kevin Murphy, May 6, 2015, Domain Policy

The US Congress is to hold a hearing to look into the .sucks gTLD and ICANN accountability.

A hearing entitled “Stakeholder Perspectives on ICANN: The .sucks Domain and Essential Steps to Guarantee Trust and Accountability in the Internet’s Operation” has been scheduled by the House Subcommittee on Courts, Intellectual Property, and the Internet

It will take place in Washington DC next Wednesday, May 13.

The list of witnesses does not yet appear to have been published.

I would guess we’d be looking at, at the very least, somebody senior from ICANN, somebody senior from .sucks registry Vox Populi, and an intellectual property lawyer.

It was ICANN’s Intellectual Property Constituency that complained about .sucks’ sunrise policies and fees, causing ICANN to refer the matter to US and Canadian trade regulators.

The title of the House hearing suggests that the .sucks controversy will be inextricably tied to the broader issue of ICANN accountability, which is currently undergoing a significant review as ICANN seeks to split permanently from US government oversight.

That’s not great optics for ICANN; I’m sure the organization would rather not have its performance judged on what is quite an unusual edge case emerging from the new gTLD program.

ICANN reports .sucks to the FTC over “predatory” pricing

ICANN has referred .sucks registry Vox Populi to the US Federal Trade Commission over concerns from intellectual property owners that its pricing is “predatory”.

The organization has asked the FTC and the Canadian Office of Consumer Affairs to determine whether Vox Pop is breaking any laws.

It asks both agencies to “consider assessing and determining whether Vox Populi is violating any laws or regulations enforced by your respective offices”.

If it is determined that laws are being broken, ICANN said it would be able to “enforce remedies” in the .sucks registry agreement.

ICANN goes on to say that it is “evaluating other remedies” in the registry’s contract.

The shock news comes two weeks after the Intellectual Property Constituency of ICANN complained that Vox Pop’s $2,000 sunrise fee is just a “shakedown scheme”.

The IPC said March 27 it was:

formally asking ICANN to halt the rollout of the .SUCKS new gTLD operated by Vox Populi Registry Inc. (“Vox Populi”), so that the community can examine the validity of Vox Populi’s recently announced plans to: (1) to categorize TMCH-registered marks as “premium names,” (2) charge exorbitant sums to brand owners who seek to secure a registration in .SUCKS, and (3) conspire with an (alleged) third party to “subsidize” a complaint site should brand owners fail to cooperate in Vox Populi’s shakedown scheme.

The IPC is also pissed off that there’s a Sunrise Premium fee that applies to the most famous brands, regardless of when they register.

Vox Pop CEO John Berard told DI tonight that the company’s pricing and policies are “well within the rules”, meaning both ICANN’s rules and North American laws.

He asked why ICANN has referred the matter to the FTC, given that Vox Populi is a Canadian company.

He said that a senior ICANN executive had told him it was because many IPC members are US-based. He described this as “appeasement” of the IPC interests.

Greg Shatan, president of the IPC, whose letter sparked ICANN’s outreach to the FTC and OCA, said that the word “justice” is more appropriate than “appeasement”. He told DI tonight:

We’re looking forward to the FTC and OCA taking a look at Vox Populi’s behavior. And there’s lots to look at. The punitive TMCH Sunrise, where a “rights protection mechanism” intended to protect trademark owners has been turned into a scheme to extort $2,500 and up… The eternal Sunrise Premium of the far-from-spotless .SUCKS registry. The mysterious “everybody.sucks” — purportedly a third party, purportedly providing a “subsidy” to registrant — would anyone be surprised if that was a sham?

With reference to the FTC referral, Shatan also told DI tonight:

I don’t think ICANN wants to waste the FTC’s time. It’s far more rational to think that ICANN informed the FTC because Vox Populi’s activities are within the jurisdiction of the FTC. Mr. Berard’s remarks seem to indicate that he believes that Vox Populi operates beyond the reach of US laws.

With a tech contact in Bermuda and an admin contact in the Caymans, that may have been Vox Pop’s intention. Vox Pop may be operating outside US laws, but I doubt they are operating beyond their reach.

Vox Populi is incorporated in Canada, hence ICANN’s outreach to the Canadian regulator. According to its gTLD application, its only 15%+ owner is Momentous, another Canadian company.

But its IANA record lists an address in Bermuda for its technical contact and Uniregistry’s office in Grand Cayman as its administrative address.

There’s been rumors for months that Uniregistry or CEO Frank Schilling helped bankroll Vox Populi’s participation in the .sucks auction, which saw it splash out over $3 million.

ICANN is asking the US and Canadian agencies to respond to its letter with “urgency”, as .sucks is currently in sunrise and is due to go to general availability May 29.

Trademark owners and celebrities are already registering their names in the .sucks sunrise period.

ICANN confirmed in a separate letter today to IPC chair Greg Shatan that Vox Pop has paid ICANN a unique $100,000 start-up fee, and has promised to pay an extra $1 per transaction, due to now-defunct Momentous subsidiaries defaulting on “substantial payments”.

As DI reported last week, ICANN says that the fee is “not related to the nature” of .sucks, but it could give the appearance that ICANN is a beneficiary of the .sucks business model.

This article was published quite quickly after the news broke. It was updated several times on April 9, 2015. It was updated with background material. It was then updated with comments from Vox Pop. It was then updated with comments from the IPC. Later commenters had the benefit of reading earlier versions of this post before they submitted their comments.

ICM will NOT offer free .porn names to .xxx buyers

Kevin Murphy, November 10, 2014, Domain Registries

ICM Registry has reneged on its promise to “grandfather” trademark owners and other .xxx registrants in its forthcoming .sex, .porn and .adult new gTLDs.

While the changes are sure to infuriate trademark owners and .xxx registrants, the company insists that ICANN is to blame for blocking its original plans.

Originally, ICM had promised to reserve every .sex, .porn and .adult domain that matched an existing .xxx domain — if you owned or had blocked example.xxx then example.porn and so on would be reserved.

There was not to be a charge for any of these reservations.

The current versions of ICM’s new gTLD applications are unequivocal — nobody who owns a .xxx name or bought a block will be charged for the equivalent .sex, .porn or .adult names or blocks.

On names “blocked” by trademark owners during the .xxx Sunrise B period, the applications state:

All existing blocked names under the .XXX Sunrise B program… will not need to take any action to have those same names blocked in the new gTLD. All of these matching names will be automatically reserved from registration in the new TLD, free of charge.

On names registered in general availability, the applications state:

all existing .XXX names will be reserved from registration in the new gTLD and only registrants of that .XXX name will be given the opportunity to initially register that corresponding .XXX name in the new gTLD. If the .XXX registrant elects to register the name in the new gTLD, this can be done for a low annual fee. If the .XXX registrant does not elect to register the name in the new gTLD, then the new, matching, gTLD name will be reserved on [ICM’s] registry-reserved list at NO cost.

While neither application has been amended yet, neither of these statements are any longer true, ICM has confirmed.

Instead, the company’s new Domain Matching Program anticipates an extra launch phase between Sunrise and general availability. Under ICANN rules, it’s a Limited Registration Period.

During this month-long phase, anyone who owns a .xxx domain or block will be able to purchase the matching new gTLD names, unless it has already been registered in the Sunrise period.

What does this all mean…

For regular .xxx registrants?

If you own a .xxx domain, you no longer get a free permanent reservation on the matching .porn, .sex and .adult names while you make up your mind whether to buy them.

Instead, you’ll have to buy it during the 30-day DMP window.

ICM’s fee for DMP and Sunrise will be the same as for general availability, ICM CEO Stuart Lawley told DI.

Also, if there’s a trademark in the Trademark Clearinghouse that matches your second-level string, that trademark’s owner will be able to register the matching names before you get a chance.

Remember, not all TMCH users are legitimate brands. Some are domain investors gaming the system.

For premium .xxx buyers?

The changes may also concern registrants of “premium” .xxx names, many of which may have assumed they’d get the matching .porn, .sex and .adult reservations free of charge.

Porn site operators Really Useful and Barron Innovations, which have spent millions apiece on premium .xxx names such as teen.xxx and sex.xxx, have both said in ICM press releases that the grandfathering program formed an important part of their decision-making.

“We look forward to enjoying the benefits of ICM’s unique Domain Matching Program, which gives .XXX holders an opportunity to secure matching .XXX domain names in .PORN, .ADULT and .SEX,” Barron spokesperson Shay Efron said when the $3 million sale of sex.xxx was announced.

“We will be speaking individually to each premium name holder who purchased premium names after we had announced the original grandfathering plan,” Lawley told us.

It seems that the premium string will be registry-reserved, however, so there’s no chance of them being snapped up during Sunrise.

For brands?

If you’re a brand who bought a .xxx block during the Sunrise B period back in 2011, you no longer get grandfathered into a free permanent reservation in .sex, .adult and .porn.

Instead, you’ll have to buy your names as usual either during Sunrise, DMP or — if you feel like taking a risk — general availability.

The problem is: you only qualify for Sunrise if you’re registered in the TMCH, and most Sunrise B buyers are not.

Something like 70,000 names were registered during the .xxx Sunrise B period three years ago, but there are only 33,000 marks registered in the TMCH today.

The owners of more than half of the Sunrise B blocks, who may have thought their blocks would carry over to ICM’s three new gTLDs free of charge, currently do not even have the right to buy their names in Sunrise.

If you have a .xxx Sunrise B block AND are in the TMCH, you may find yourself competing with other trademark owners with matching marks during the .porn, .adult and .sex Sunrise periods.

Any Sunrise B match not registered during the Sunrise and DMP phases will be up for grabs during GA, just the same as any other domain.

Lawley reminds us that the .xxx Sunrise B predated ICM’s new gTLD applications by many months — nobody bought a block in 2011 thinking it would be enforced in all four gTLDs.

He added that ICM has “recently secured a unique offer through the TMCH that will enable trademark owners to register with the TMCH for one year, at a reduced fee.”

Why did ICM make the changes?

The changes put the registry on a collision course with the Intellectual Property Constituency of ICANN, which looks out for the interests of trademark owners and is not a fan of porn-themed TLDs.

“The IPC is going to collectively shit a brick,” one IPC member told us.

But the IPC, which has been unshakable when it comes to the strict enforcement of ICANN’s mandatory new gTLD rights protection mechanisms, may have shot itself in the foot to an extent.

According to ICM, it’s ICANN’s fault, and indirectly the IPC’s, that it’s had to abandon free grandfathering.

In a statement sent to DI, the company said:

Throughout the ICANN approval process, ICM pursued multiple pathways to try and ensure its original “grandfathering plan”. However, due to technological concerns and strong trademark protection policies that ICANN’s intellectual property community requires in all new gTLDs, ICANN flatly rejected ICM’s grandfathering plan.

The mandatory new gTLD rights protection mechanisms enforced by ICANN means that no domain names may be set aside before trademark owners have had a crack at the Sunrise period, ICM said:

Those rights protections require that TMCH-validated Sunrise Holders get the first priority for names in any new gTLD and also contain certain prohibitions on all registries from earmarking domain names for third parties.

However, ICM has still managed to set aside an unknown number of names as part of its Premium Domains Program — those names will be immune from registration during both Sunrise and the DMP.

It’s also going to reserve, free of charge, a bunch of “culturally sensitive” names — these are strings that members of the ICANN Governmental Advisory Committee asked to be reserved in .xxx.

Names related to child abuse material will also be registry-reserved at no cost to the child protection agencies that requested the blocks when .xxx launched.

Plenty of stuff is getting reserved, just not Sunrise B blocks.

ICANN’s rules against “earmarking” domains may have prevented ICM offering matching domains to regular .xxx registrants, but it’s hard to see how that would prevent a .xxx block carrying over to .porn. Blocks are not assigned to a specific registrant; they belong to the registry.

The .adult and .porn gTLDs are set to start their 30-day Sunrise periods March 1, 2015. The 30-day DMP for both will begin April 15.

The .sex gTLD was contested, so it’s running a little behind. ICM expects to launch it later in 2015.

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