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.africa to finally go live after judge denies injunction

Kevin Murphy, February 10, 2017, Domain Policy

A Los Angeles court has rejected a demand for a preliminary injunction preventing ICANN delegating .africa, meaning the new gTLD can go live soon.

Judge Howard Halm ruled February 3, in documents published last night, that the “covenant not to sue” signed by every new gTLD applicant is enforceable and that Africans are being harmed as long as .africa is stuck in legal limbo.

The ruling comes two and a half years after ZA Central Registry, the successful of the two .africa applicants, signed its Registry Agreement with ICANN.

Rival applicant DotConnectAfrica, rejected because it has no African government support, is suing ICANN for fraud, alleging that it failed to follow its own rules and unfairly favored ZACR from the outset.

Unfortunately, the ruling does not address the merits of these claims. It merely says that DCA is unlikely to win its suit due to the covenant it signed.

Halm based his decision on the precedent in Ruby Glen v ICANN, the Donuts lawsuit that seeks to stop ICANN awarding .web to Verisign. The judge in that case ruled last November that Donuts signed away its right to sue.

An earlier judge in the DCA v ICANN case had ruled — based at least in part on a misunderstanding of the facts — that the covenant was unenforceable, but that decision now seems to have been brushed aside.

Halm was not convinced that DCA would suffer irreparable harm if ZACR got given .africa, writing:

The .Africa gTLD can be re-delegated to DCA in the event DCA prevails in this litigation… Further, it appears that any interim harm to DCA can be remedied by monetary damages

He balanced this against the harm of NOT delegating .africa:

The public interest also weighs in favor of denying the injunction because the delay in the delegation of the .Africa gTLD is depriving the people of Africa of having their own unique gTLD.

So what now?

ICANN said in a statement: “In accordance with the terms of its Registry Agreement with ZACR for .AFRICA, ICANN will now follow its normal processes towards delegation.”

As of this morning, ZACR’s .africa bid is officially still marked as “On Hold” by ICANN, though this is likely to change shortly.

Assuming ZACR has already completed pre-delegation testing, delegation itself could be less than a week away.

If DCA’s record is anything to go by, it seems unlikely that this latest setback will be enough to get it to abandon its cause.

Its usual MO whenever it receives an adverse decision or criticism is to double down and start screaming about conspiracies.

While the injunction was denied, the lawsuit itself has not been thrown out, so there’s still plenty of time for more of that.

You can read Halm’s ruling here (pdf).

Donuts loses $22.5m .web lawsuit as judge rules gTLD applicants cannot sue

Kevin Murphy, November 30, 2016, Domain Registries

The promise not to sue ICANN that all new gTLD applicants made when they applied is legally enforceable, a California judge has ruled.

Judge Percy Anderson on Monday threw out Donuts’ lawsuit against ICANN over the controversial $135 million .web auction, saying the “covenant not to sue bars Plaintiff’s entire action”.

He wrote that he “does not find persuasive” an earlier and contrary ruling in the case of DotConnectAfrica v ICANN, a case that is still ongoing.

Donuts sued ICANN at first to prevent the .web auction going ahead.

The registry, and other .web applicants, were concerned that ultimately successful bidder Nu Dot Co was being covertly bankrolled by Verisign, which turned out to be completely correct.

Donuts argued that ICANN failed to adequately vet NDC to uncover its secret sugar daddy. It wanted $22.5 million from ICANN — roughly what it would have received if the auction had been privately managed, rather than run by ICANN.

But the judge ruled that Donuts’ covenant not to sue is enforceable. Because of that, he made no judgement on the merits of Donuts’ arguments.

Under the relevant law, Donuts had to show that the applicant contract was “unconscionable” both “procedurally” and “substantively”.

Basically, the question for the judge was: was the contract unfairly one-sided?

The judge ruled (pdf) that it was not substantively unconscionable and “only minimally procedurally unconscionable”. In other words: a bit crap, but not illegal.

He put a lot of weight on the fact that the new gTLD program was designed largely by the ICANN community and on Donuts’ business “sophistication”. He wrote:

Without the covenant not to sue, any frustrated applicant could, through the filing of a lawsuit, derail the entire system developed by ICANN to process applications for gTLDs. ICANN and frustrated applicants do not bear this potential harm equally. This alone establishes the reasonableness of the covenant not to sue.

Donuts VP Jon Nevett said in a statement yesterday that the fight over .web is not over:

Donuts disagrees with the Court’s decision that ICANN’s required covenant not to sue, while being unconscionable, was not sufficiently unconscionable to be struck down as a matter of law. It is unfortunate that the auction process for .WEB was mired in a lack of transparency and anti-competitive behavior. ICANN, in its haste to proceed to auction, performed only a slapdash investigation and deprived the applicants of the right to fairly compete for .WEB in accordance with the very procedures ICANN demanded of applicants. Donuts will continue to utilize the tools at its disposal to address this procedural failure.

It looks rather like we could be looking at an Independent Review Process filing, possibly the first to be filed under ICANN’s new post-transition rules.

Donuts and ICANN are already in the Cooperative Engagement Process — the mediation phase that usually precedes an IRP — with regards .web.

Second-placed bidder Afilias is also putting pressure on ICANN to overturn the results of the auction, resulting in a bit of a public bunfight with Verisign.

TL;DR — don’t expect to be able to buy .web domains for quite a while to come.

Judge says IANA transition suit unlikely to succeed

Kevin Murphy, October 4, 2016, Domain Policy

A Texas judge refused demands for a temporary restraining order preventing the IANA transition going ahead last weekend because the suing state attorneys general were unlikely to succeed at trial.

That was one of several reasons Judge George Hanks refused the TRO, which had been requested by the Republican AGs of Texas, Arizona, Oklahoma and Nevada.

Hanks’ order on the motion, which was published last night (pdf), said the AGs:

have not shown that there is a substantial likelihood that they will prevail on the merits of this case. Nor have they shown that there is a substantial threat that an irreparable injury will be suffered. Nor have they shown that the threated injury outweighs the threatened harm to the United States. Finally, they have not shown that granting the injunction will not disserve the public interest.

The lawsuit claims that the IANA transition, which involves the US government removing itself from its oversight roles of ICANN and DNS root zone management, represents a threat to free speech and to the stability of the .mil and .gov TLDs.

The eleventh-hour complaint was filed on Thursday, after attempts by Senator Ted Cruz and his allies to block the transition via a Congressional funding bill failed.

But Hanks ruled that the AGs claims about potential future harms amounted to no more than “speculation” and “hearsay”.

He wrote: “counsel’s statements of what ‘might’ or ‘could’ happen are insufficient to support the extraordinary relief sought in this case.”

He also pointed to one significant logical inconsistency in their argument:

Even if the Court were to find that some past harm or bad acts by the Internet Corporation for Assigned Names and Numbers (“ICANN”) impacted the interests of the States in their respective websites and alleged rights at interest, the Court notes that these past harms happened under the exact regulatory and oversight scheme that the States now seek to preserve. This, along with the lack of evidence regarding any predictable or substantially likely events, greatly undermines the States’ request for they relief they seek.

The AGs are reportedly considering their options following the ruling, and may appeal.

But another school of thought holds that the suit was largely a political gesture designed to creating talking points for the Republican party ahead of next month’s presidential election, and could be allowed to fade away.

ICANN handover in jeopardy as Texas leads lawsuit against US government

Kevin Murphy, September 29, 2016, Domain Policy

The state attorneys general of Texas, Arizona, Nevada and Oklahoma have sued the US Federal government to stop tomorrow’s planned IANA transition.

The 11th-hour suit seeks a court declaration that the transition would be unconstitutional and a temporary restraining order forcing the National Telecommunications and Information Administration to continue its oversight role.

It’s rooted in the conspiracy theories championed by the likes of Texas Senator Ted Cruz, who holds that allowing the NTIA to stop authorizing DNS root modifications is akin to handing broad internet censorship powers to Russia, China and Iran.

“Trusting authoritarian regimes to ensure the continued freedom of the internet is lunacy,” Texas Attorney General Ken Paxton said in a press release, losing about a thousand credibility points.

“The president does not have the authority to simply give away America’s pioneering role in ensuring that the internet remains a place where free expression can flourish,” he said.

The AGs reckon the remaining root zone partners, ICANN and Verisign, which are not bound by the First Amendment, could crack down on free speech.

The complaint states:

NTIA intends to delegate its approval authority over changes to the root zone file to ICANN and Verisign, and give these companies unbridled discretion to make changes to that file, with no substantive constraints on their decisions to grant or deny requests to alter the file that effectively enable or prohibit speech on the Internet.

Without the federal government approval authority, ICANN and Verisign have complete discretion to engage in this type of discrimination, and because these entities are private, citizens and States will not be able to use the democratic process

Citing the Property Clause of the U.S. Constitution, the AGs claim that the government does not have the authority to legally remove itself from oversight of the DNS root zone.

The DNS root is US property that cannot be disposed of without an act of Congress, the complaint alleges:

The Authoritative Root Zone File, the Internet Domain Name System as a whole, the exclusive right to approve changes to the root zone file, and the contracts NTIA administers in exercising control over them are property of the United States

The US Government Accountability Office told Cruz earlier this month that it was “doubtful” that it the transition requires the disposal of any US government property, in this report (pdf).

The AGs also reckon that if the US is no longer involved in root zone management, ICANN could delete .mil and .gov or transfer them to third parties.

The IANA contract between ICANN and NTIA is due to expire tomorrow night, ushering in a new era in which the global internet community becomes the back-stop preventing ICANN abusing its powers for Evil.

Cruz has been fighting against the transition for reasons best known to himself for months.

Most recently, he led an attempt to have a block on the transition included in a US federal funding bill, which wound up being passed yesterday with no such clause attached.

The four-state AG complaint can be read here (pdf).

Dot Registry backs .africa loser, batters on the ICANN lawsuit floodgates

Kevin Murphy, August 28, 2016, Domain Registries

Rejected community gTLD applicant Dot Registry has waded into the lawsuit between DotConnectAfrica and ICANN.

Filing an amicus brief on Friday in support of the unsuccessful .africa applicant, Dot Registry argues that chagrined new gTLD applicants should be allowed to sue ICANN, despite the legal releases they all signed.

The company is clearly setting the groundwork for its own lawsuit against ICANN — or at least trying to give that impression.

If the two companies are successful in their arguments, it could open the floodgates for more lawsuits by pissed-off new gTLD applicants.

Dot Registry claims applicants signed overly broad, one-sided legal waivers with the assurance that alternative dispute mechanisms would be available.

However, it argues that these mechanisms — Reconsideration, Cooperative Engagement and Independent Review — are a “sham” that make ICANN’s assurances amount to nothing more than a “bait-and-switch scheme”.

Dot Registry recently won an Independent Review Process case against ICANN that challenged the adverse Community Priority Evaluation decisions on its .inc, .llc, and .llp applications.

But while the IRP panel said ICANN should pay Dot Registry’s share of the IRP costs, the applicant came away otherwise empty-handed when panel rejected its demand to be handed the four gTLDs on a plate.

The ICANN board of directors has not yet fully decided how to handle the three applications, but forcing them to auction with competing applications seems the most likely outcome.

By formally supporting DotConnectAfrica’s claim that the legal waiver both companies signed is “unconscionable”, the company clearly reckons further legal action will soon be needed.

DotConnectAfrica is suing ICANN on different grounds. Its .africa bid did not lose a CPE; rather it failed for a lack of governmental support.

But both companies agree that the litigation release they signed is not legally enforceable.

They both say that a legal waiver cannot be enforceable in ICANN’s native California if the protected party carries out fraud.

The court seems to be siding with DotConnectAfrica on this count, having thrown out motions to dismiss the case.

Dot Registry’s contribution is to point to its own IRP case as an example of how ICANN allegedly conned it into signing the release on the assumption that IRP would be able to sort out any disputes. Its court brief (pdf) states:

although claiming to provide an alternative accountability mechanism, the Release, in practice, is just a bait-and-switch scheme, offering applicants a sham accountability procedure

Indeed, the “accountability” mechanism is nothing of the sort; and, instead of providing applicants a way to challenge actions or inactions by ICANN, it gives lip-service to legitimate grievances while rubber-stamping decisions made by ICANN and its staff.

That’s an allusion to the IRP panel’s declaration, which found no evidence that ICANN’s board of directors had conducted a thorough, transparent review of Dot Registry’s complaints.

Dot Registry is being represented by the law firm Dechert. That’s the current home of Arif Ali, who represented DotConnectAfrica in its own original IRP, though Ali is not a named lawyer in the Dot Registry brief.