No .web until 2021 after Afilias files ICANN appeal

Afilias has taken ICANN to arbitration to prevent .web being delegated to Verisign.
The company, which came second in the $135 million auction that Verisign won in 2016, filed Independent Review Process documents in late November.
The upshot of the filing is that .web, considered by many the best potential competitor for .com — Afilias describes it as “crown jewels of the New gTLD Program” — is very probably not going to hit the market for at least a couple more years.
Afilias says in in its filing that:

ICANN is enabling VeriSign to acquire the .WEB gTLD, the next closest competitor to VeriSign’s monopoly, and in so doing has eviscerated one of the central pillars of the New gTLD Program: to introduce and promote competition in the Internet namespace in order to break VeriSign’s monopoly

Its beef is that Verisign acquired the rights to .web by hiding behind a third-party proxy, Nu Dot Co, the shell corporation linked to the co-founders of .CO Internet that appears to have been set up in 2012 purely to make money by losing new gTLD auctions.
Afilias says NDC broke the rules of the new gTLD program by failing to notify ICANN that it had made an agreement with Verisign to sign over its rights to .web in advance of the auction.
The company says that NDC’s “obligation to immediately assign .WEB to VeriSign fundamentally changed the nature of NDC’s application” and that ICANN and the other .web applicants should have been told.
NDC’s application had stated that .web was going to compete with .com, and Verisign’s acquisition of the contract would make that claim false, Afilias says.
This means ICANN broke its bylaws commitment to apply its policies, “neutrally, objectively, and fairly”, Afilias claims.
Allowing Verisign to acquire its most significant potential competitor also breaks ICANN’s commitment to introduce competition to the gTLD market, the company reckons.
It will be up to a three-person panel of retired judges to decide whether these claims holds water.
The IRP filing was not unexpected. I noted that it seemed likely after a court threw out a Donuts lawsuit against ICANN which attempted to overturn the auction result for pretty much the same reasons.
The judge in that case ruled that new gTLD applicants’ covenant not to sue ICANN was valid, largely because alternatives such as IRP are available.
ICANN has a recent track record of performing poorly under IRP scrutiny, but this case is by no means a slam-dunk for Afilias.
ICANN could argue that the .web case was not unique, for starters.
The .blog contention set was won by an affiliate of WordPress maker Automattic under almost identical circumstances earlier in 2016, with Colombian-linked applicant Primer Nivel paying $19 million at private auction, secretly bankrolled by WordPress.
Nobody complained about that outcome, probably because it was a private auction so all the other .blog applicants got an even split of the winning bid.
Afilias wants the .web IRP panel to declare NDC’s bid invalid and award .web to Afilias at its final bid price.
For those champing at the bit to register .web domains, and there are some, the filing means they’ve likely got another couple years to wait.
I’ve never known an IRP to take under a year to complete, from filing to final declaration. We’re likely looking at something closer to 18 months.
Even after the declaration, we’d be looking at more months for ICANN’s board to figure out how to implement the decision, and more months still for the implementation itself.
Barring further appeals, I’d say it’s very unlikely .web will start being sold until 2021 at the very earliest, assuming the winning registry is actually motivated to bring it to market as quickly as possible.
The IRP is no skin off Verisign’s nose, of course. Its acquisition of .web was, in my opinion, more about restricting competition than expanding its revenue streams, so a delay simply plays into its hands.

Donuts backs away from .spa fight

Donuts has finally admitted defeat in its long-running fight to run the .spa gTLD, withdrawing its application and leaving rival Asia Spa and Wellness Promotion Council the victor.
ASWPC, run from Hong Kong by .asia’s Edmon Chung, has now entered into contracting with ICANN.
The company had won a Community Priority Evaluation back in 2015, with a passing score of 14 out of 16, which Donuts has been challenging ever since.
Donuts and ICANN were in a so-called Cooperative Engagement Process, a form of informal arbitration designed to stave off a more expensive Independent Review Process fight, from January 2016 until this month.
This meant ASWPC has been sitting twiddling its thumbs, unable to sign its contract or launch its TLD, for the better part of three years.
It’s not clear why Donuts decided not to go to a full-blown IRP. The company declined to comment for this article.
As a community applicant, the company had the backing of hundreds of spas worldwide.
It also had the backing of the Belgian government, which was important because spas are (little-known fact alert!) named after the tiny Belgian town of Spa.
It is believed that ASWPC promised up to 25% of its profits to Spa in order to gain this backing, but only from domains registered by Belgian, Dutch, Luxembourgish, French or German registrants.

Donuts loses to ICANN in $135 million .web auction appeal

Donuts has lost a legal appeal against ICANN in its fight to prevent Verisign running the .web gTLD.
A California court ruled yesterday that a lower court was correct when it ruled almost two years ago that Donuts had signed away its right to sue ICANN, like all gTLD applicants.
The judges ruled that the lower District Court had “properly dismissed” Donuts’ complaint, and that the covenant not to sue in the Applicant Guidebook is not “unconscionable”.
Key in their thinking was the fact that ICANN has an Independent Review Process in place that Donuts could use to continue its fight against the .web outcome.
The lawsuit was filed by Donuts subsidiary Ruby Glen in July 2016, shortly before .web was due to go to an ICANN-managed last-resort auction.
Donuts and many others believed at the time that one applicant, Nu Dot Co, was being secretly bankrolled by a player with much deeper pockets, and it wanted the auction postponed and ICANN to reveal the identity of this backer.
Donuts lost its request for a restraining order.
The auction went ahead, and NDC won with a bid of $135 million, which subsequently was confirmed to have been covertly funded by Verisign.
Donuts then quickly amended its complaint to include claims of negligence, breach of contract and other violations, as it sought $22.5 million from ICANN.
That’s roughly how much it would have received as a losing bidder had the .web contention set been settled privately and NDC still submitted a $135 million bid.
As it stands, ICANN has the $135 million.
That complaint was also rejected, with the District Court disagreeing with earlier precedent in the .africa case and saying that the covenant not to sue is enforceable.
The Appeals Court has now agreed, so unless Donuts has other legal appeals open to it, the .web fight will be settled using ICANN mechanisms.
The ruling does not mean ICANN can go ahead and delegate .web to Verisign.
The .web contention set is currently “on-hold” because Afilias, the second-place bidder in the auction, has since June been in a so-called Cooperative Engagement Process with ICANN.
CEP is a semi-formal negotiation-phase precursor to a full-blown IRP filing, which now seems much more likely to go ahead following the court’s ruling.
The appeals court ruling has not yet been published by ICANN, but it can be viewed here (pdf).
The court heard arguments from Donuts and ICANN lawyers on October 9, the same day that DI revealed that ICANN Global Domains Division president Akram Atallah had been hired by Donuts as its new CEO.
A recording of the 32-minute hearing can be viewed on YouTube here or embedded below.

Muslim world still thinks .islam isn’t kosher

The Organization of Islamic Cooperation has repeated its objection to the gTLDs .islam and .halal ever seeing the light of day.
OIC Secretary General Yousef Al-Othaimeen wrote to ICANN earlier this month to declare that its position on the two controversial applications has not changed since it initially objected to them in 2013.
The OIC comprises the foreign ministers from 57 majority-Muslim countries and these ministers recently voted unanimously to re-adopt the 2013 objection, Al-Othaimeen said (pdf).
The group “maintain the position that the new gTLDs with Islamic identity are extremely sensitive in nature as they concern the entire Muslim nature” he wrote.
He reiterated “official opposition of the OIC Member states towards the probable authorization that might allow the use of these gTLDs .islam and .halal by any entity.”
This puts ICANN between a rock an a hard place.
The applicant for both strings, Turkish outfit Asia-Green IT Systems (AGIT), won an Independent Review Process case against ICANN last November.
The IRP panel ruled that ICANN broke its own bylaws when it placed .islam and .halal into permanent limbo — an “On Hold” status pending withdrawal of the applications or OIC approval — in 2014.
ICANN’s board accepted the ruling and bounced the decision on whether to finally approve or reject the bids to its Board Accountability Mechanisms Committee, which is currently mulling over the problem.
Technically, it’s “non-consensus Governmental Advisory Committee advice”, which means the board has some wriggle room to simply accept the advice and reject the applications.
But AGIT’s lawyer disagrees, recently telling ICANN (pdf) its options are to approve the bids or facilitate dialogue towards their approval, rather like ICANN is doing with .amazon right now.

After long fight, Donuts adds .charity to its gTLD stable

Snatching victory from the jaws of defeat, Donuts has prevailed in the two-horse race for the .charity gTLD.
The company appears to have privately resolved its contention set, paying off rival bidder Famous Four Media, judging by updates to ICANN’s web site today.
The gTLD had been scheduled for an ICANN “last resort” auction in April, but that’s now off.
Famous Four has also withdrawn its application, leaving Donuts the only remaining applicant.
I believe it will be Donuts’ 239th 240th gTLD.
But for a while it looked like Famous Four had a slam-dunk on its hands.
Back in 2014, the Independent Objector of the new gTLD program had filed an Community Objection against Donuts’ application, saying it was too risky to unleash a .charity domain onto the world without registration eligibility restrictions.
The fear was (and probably still is) that fraudsters could use the domains to lend an air of credibility to their online scams.
The IO prevailed, pretty much gifting Famous Four — which had proposed restrictions — the TLD.
But Donuts embarked upon an arduous set of appeals, including an Independent Review Process case, that culminated, last December, in a ruling (pdf) that reversed the original Community Objection decision.
That cleared the way for Donuts back into the application process and, now, the private auction it seems to have won.
Due to ICANN’s adoption of Governmental Advisory Committee advice on sensitive strings, Donuts will be obliged to put some Public Interest Commitments into its .charity contract, with the aim of reducing abuse.

CPE probe: “whitewash” or “fig leaf”?

A few weeks ago, when I was reporting the conclusions of a probe into ICANN’s new gTLD program, I wrote a prediction on a piece of paper and placed it into a sealed envelope.*
I wrote: “They’re gonna call this a whitewash.”
And I was correct! Ta-dah! I’m here all week.
The lawyer for applicants for .music and .gay gTLDs has written to ICANN to complain that a purportedly independent review of the Community Evaluation Process was riddled with errors and oversights and should not be trusted.
In a letter on behalf of dotgay LLC, Arif Ali calls the report a “whitewash”. In a letter on behalf of DotMusic, he calls it a “fig leaf”.
Both companies think that the CPE probe was designed to give ICANN cover to proceed with auctions for five outstanding gTLD contention sets, rather than to get to the bottom of perceived inconsistencies in the process.
Both of Ali’s clients applied for their respective gTLDs as “community” applicants, trying to avoid auctions by using the Community Priority Evaluation process.
During their CPEs, both carried out by the Economist Intelligence Unit, neither applicant scored highly enough to win the exclusive right to .gay or .music, meaning the next stage was to auction the strings off to the highest bidder.
After repeated complaints from applicants and an Independent Review Process finding that ICANN lacked transparency and that staff may have had inappropriate influence over the EIU, ICANN hired FTI Consulting to look into the whole CPE process.
FTI’s report was finally delivered late last year, clearing ICANN on all counts of impropriety and finding that the EIU’s evaluations had been consistent across each of the applications it looked at.
The remaining gTLDs affected by this are .music, .gay, .hotel, .cpa, and .merck.
ICANN’s board of directors is due to meet to discuss next steps this weekend, but Ali says that it should “critically evaluate the [FTI] Report and not accept its wholesale conclusions”. He wrote, on behalf of DotMusic:

The report reveals that FTI’s investigation was cursory at best; its narrow mandate and evaluation methodology were designed to do little more than vindicate ICANN’s administration of the CPE process.
…
It is evident that FTI engaged in a seemingly advocacy-driven investigation to reach conclusions that would absolve ICANN of the demonstrated and demonstrable problems that afflicted the CPE process.

Among the applicants’ list of complaints: their claim that FTI did not interview affected applicants or take their submissions seriously, and the fact that ICANN was less than transparent about who was conducting the probe and what its remit was.
The same letter quotes ICANN chair Cherine Chalaby, then vice-chair, saying in a January 2017 webinar that he had observed inconsistencies in how the CPEs were carried out; inconsistencies FTI has since found did not occur.
That should be enough to provoke discussion when the board meets to discuss this and other issues in Los Angeles on Saturday.
* I didn’t actually do this of course, I just thought about it, but you get my point.

“We own your name” government tells Amazon in explosive slapdown

Amazon suffered a blistering attack from South American governments over its controversial .amazon gTLD applications this weekend.
A Peruvian official today excoriated Amazon’s latest peace offering, telling the tech giant in no uncertain terms that the word “Amazon” is not its property and demanding an apology for the company’s alleged behavior during recent legal proceedings.
“We will be giving you permission to use a certain word, not the other way around,” she said. “We are the owners of the Amazonian region.”
Speaking for almost 10 minutes during a session at the ICANN 60 meeting in Abu Dhabi this afternoon, Peru’s representative to the Governmental Advisory Committee pulled rank and scolded Amazon like a naughty schoolchild.
She claimed that Amazon had been bad-mouthing Peru by saying former GAC reps had “lied to and manipulated” the rest of the GAC in order to get support for its objection. She then demanded an apology from the company for this.
She was speaking in support of the idea that the string “Amazon” belongs to the people of the Amazonas region, which covers as many as eight South American countries, rather than the American company, despite the fact that none of those countries use the English word to describe the region.
Her remarks drew applause from parts of the audience.
Amazon had showed up at the session — described by two GAC reps later as a “lion’s den” — to offer a “strong, agreed-upon compromise that addresses the needs of the governments”.
The proposed deal would see the GAC drop its objections to .amazon in exchange for certain safeguards.
Amazon is promising to reserve geographically and culturally sensitive words at the second level in .amazon.
The domain rainforest.amazon, its associate general counsel Dana Northcott said by way of example, would be never be used by anyone.
Affected governments would get to negotiate a list of such terms before .amazon went live and there’d be an ongoing consultation process for more such terms to be protected in future.
The company has also promised not to object to — and in fact to actively support with hard resources — any future applications for .amazonas or other local-language variants by the people of the region.
But Peru was not impressed, telling the company that not only is the English version of the name of the region not its property but also that it must show more respect to governments.
“No government is going to accept any impositions from you,” she said, before appealing to fellow GAC members that the issue represents a kind of existential threat.
“The core issue here… is our survival as governments in this pseudo-multi-stakeholder space that has been invented,” she said.
“They want us to believe this is a place where we have dignity but that is increasingly obvious that this is not the case,” she said. “We don’t have it. And that is because of companies like yours… Companies that persist in not respecting the governments and the people they represent.”
The Peruvian GAC rep, listed on the GAC web site as María Milagros Castañon Seoane but addressed only as “Peru” during the session, spoke in Spanish; I’ve been quoting the live interpretation provided by ICANN.
Her remarks, in my opinion, were at least partially an attempt to strengthen her side’s negotiating hand after an Independent Review Process panel this July spanked ICANN for giving too much deference to GAC advice.
The IRP panel decided that ICANN had killed the .amazon applications — in breach of its bylaws — due to a GAC objection that appeared on the face of the public record to be based on little more than governmental whim.
The panel essentially highlighted a clash between ICANN’s bylaws commitments to fairness and transparency and the fact that its New gTLD Applicant Guidebook rules gave the GAC a veto over any application for any reason with no obligation to explain itself.
It told ICANN to reopen the applications for consideration and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications”.
That was back in July. Earlier today, the ICANN board of directors in response to the IRP passed a resolution calling for the GAC to explain itself before ICANN 61 in March next year, resolving in part:

Resolved (2017.10.29.02), the Board asks the GAC if it has: (i) any information to provide to the Board as it relates to the “merits-based public policy reasons,” regarding the GAC’s advice that the Amazon applications should not proceed; or (ii) any other new or additional information to provide to the Board regarding the GAC’s advice that the Amazon applications should not proceed.

Other governments speaking today expressed doubt about whether the IRP ruling should have any jurisdiction over such GAC advice.
“It is not for any panelist to decided what is public policy, it is for the governments to decide,” Iran’s Kavouss Arasteh said.
During a later session today the GAC, talking among itself, made little progress in deciding how to formally respond to the ICANN board’s resolution.
A session between the GAC and the ICANN board on Tuesday is expected to be the next time the issue raises its increasingly ugly head.

More delay for Amazon as ICANN punts rejected gTLD

Amazon is going to have to wait a bit longer to discover whether its 2012 application for the gTLD .amazon will remain rejected.
ICANN’s board of directors at the weekend discussed whether to revive the application in light of the recent Independent Review Process panel ruling that the bid had been kicked out for no good reason.
Instead of making a firm decision, or punting it to the Government Advisory Committee (as I had predicted), the board instead referred the matter to a subcommittee for further thought.
The newly constituted Board Accountability Mechanisms Committee, which has taken over key functions of the Board Governance Committee, has been asked to:

review and consider the Panel’s recommendation that the Board “promptly re-evaluate Amazon’s applications” and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications,” and to provide options for the Board to consider in addressing the Panel’s recommendation.

The notion of a “prompt” resolution appears to be subjective, but Amazon might not have much longer to wait for a firmer decision.
While the BAMC’s charter requires it to have meetings at least quarterly, if it follows the practice of its predecessor they will be far more frequent.
It’s possible Amazon could get an answer by the time of the public meeting in Abu Dhabi at the end of next month.
ICANN’s board did also resolve to immediately pay Amazon the $163,045.51 in fees the IRP panel said was owed.
The .amazon gTLD application, along with its Chinese and Japanese versions, was rejected by ICANN a few years ago purely on the basis of consensus GAC advice, led by the geographic name collisions concerns of Peru and Brazil.
However, the IRP panel found that the GAC advice appeared to based on not a great deal more than whim, and that the ICANN board should have at least checked whether there was a sound rationale to reject the bids before doing so.

Governments slammed for overreach as Amazon wins gTLD appeal

Amazon has won its appeal against the rejection of its .amazon gTLD application, in a ruling that criticizes ICANN for giving too much deference to government advice.
The Independent Review Process panel’s 2-to-1 ruling, delivered July 11 and published this week, means that .amazon and its Chinese and Japanese translations has been un-rejected and ICANN will have to consider approving it again.
The ruling (pdf) turns on the idea that ICANN’s board of directors rejected the gTLD based on nothing more than the groundless objections of a few South American governments.
Amazon’s applications were rejected three years ago when ICANN accepted the consensus advice of its Governmental Advisory Committee.
That advice, which had no attached rationale, had come largely at the behest of Brazil and Peru, two countries through which the Amazon river flows.
At issue was the word “Amazon”, which the governments protested matched the name of an important geographic region extending into several countries.
But the string was not protected by ICANN’s new gTLD program rules because it does not match the name of an administrative region of any country.
Regardless, Brazil and Peru said that to give .amazon to Amazon would prevent it being used in future by citizens of the informal South American region.
GAC consensus was reached only after the US government, for political reasons connected to the then-recent announcement of the IANA transition, decided to withdraw its objection to the advice.
Consensus, under GAC rules means simply that no one government objects to the proposed advice. It does not indicate unanimity.
But at no point in the pubic record of discussions within the GAC or ICANN board did anyone give any substantial public policy reasons for the objection, the IRP panel has now found.
Global Domains Division chief Akram Atallah testified before the panel that consensus GAC advice sets “too high for the Board to say no.”
It seems ICANN sometimes just assumes that GAC advice by default is rooted in sound public policy, even when that is not the case.
Brazil and Peru’s objections “do not appear to be based on well-founded public policy concerns that justify the denial of the applications” the panelists wrote.
The panel wrote:

We conclude that GAC consensus advice, although no reasons or rationale need be given, nonetheless must be based on a well-founded public interest concern and this public interest basis must be ascertained or ascertainable from the entirety of the record…
the Board cannot simply accept GAC consensus advice as conclusive. The GAC has not been granted a veto under ICANN’s governance documents.

So, while the GAC was under no obligation to state its reasons for objecting to .amazon, the ICANN board was obliged to state its reasons for accepting this advice beyond just “the GAC made us do it”.
As somebody who spent much of 2011 arguing that the GAC new gTLD veto was a bad idea, it’s nice to see the panel agree with me.
The GAC itself also erred by refusing to consider Amazon’s arguments in favor of its application, the IRP panel’s majority found.
Peru had publicly claimed that the string “Amazon” was protected under ICANN rules, which was not true, and Amazon did not have the opportunity to correct the record.
Amazon had also pointed out that the Brazilian oil company Ipiranga was granted its application for .ipiranga, despite its name matching the name of a Brazilian river apparently so important that it is referred to in the Brazilian national anthem.
However, the IRP panel decided that because ICANN’s board had not taken any action on .ipiranga, there was no basis for it to consider whether Amazon had been unfairly subject to different treatment.
In conclusion, this is what the panel has sent to the board:

The Panel recommends that the Board of ICANN promptly re-evaluate Amazon’s applications in light of the Panel’s declarations above. In its re-evaluation of the applications, the Board should make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications. Further, if the Board determines that the applications should not proceed, the Board should explain its reasons supporting that decision. The GAC consensus advice, standing alone, cannot supplant the Board’s independent and objective decision with a reasoned analysis.

It seems Amazon’s chances of having .amazon approved have improved. If ICANN wants to reject the applications again it is going to have to come up with some good reasons, some good reasons that possibly do not exist.
The panel also ordered ICANN to reimburse Amazon for the $163,045.51 it spent on the IRP.

ICANN finds no conflict of interest in .sport decision

ICANN has rejected claims that the .sport gTLD contention set was settled by an arbitrator who had undisclosed conflicts of interest with the winning applicant.
Its Board Governance Committee last week decided that Community Objection arbitrator Guido Tawil had no duty to disclose his law firm’s ties to major sports broadcasters when he effectively eliminated Famous Four Media from its fight with SportAccord.
Back in 2013, SportAccord — an applicant backed by pretty much all of the world’s major sporting organizations — won the objection when Tawil ruled that FFM’s fully commercial, open-registration bid could harms its members interests.
FFM complained with Requests for Reconsideration, Ombudsman complaints and then an Independent Review Process complaint.
It discovered, among other things, that Tawil’s law firm was helping broadcaster DirecTV negotiate with the International Olympic Committee (one of SportAccord’s backers) for Olympics broadcasting rights at the time of the Community Objection.
The IRP panel ruled in February this year that the BGC had failed to take FFM’s allegations of Tawil’s “apparent bias” into account when it processed Reconsideration requests back in 2013 and 2014.
So the BGC reopened the two Reconsideration decisions, looking at whether Tawil was required by International Bar Association guidelines to disclosed his firm’s client’s interests.
In a single decision (pdf) late last week, the BGC said that he was not required to make these disclosures.
In each of the three claims of bias, the BGC found that the connections between Tawil and the alleged conflict were too tenuous to have required disclosure under the IBA rules.
It found that the IOC and SportAccord are not “affiliates” under the IBA definition, which requires some kind of cross-ownership interests, even though the IOC is, judging by the .sport application, SportAccord’s most valued supporter.
The BGC also found that because Tawil’s firm was representing DirecTV, rather than the IOC, the relationship did not technically fall within the disclosure guidelines.
For these and other reasons, the BGC rejected FFM’s Reconsideration requests for a second time.
The decision, and the fact that FFM seems to have exhausted ICANN’s appeals mechanisms, means it is now more likely that SportAccord’s application will be allowed to continue negotiating its .sport Registry Agreement with ICANN, where it has been frozen for years.