GMO Registry and Radix have won Chinese government approval for their respective new gTLDs .shop and .site.
It’s the second batch of foreign new gTLDs to get the nod from China’s Ministry of Industry and Information Technology, following .vip, .club and .xyz in early December.
They’re also the first two Asian registries from outside China to get the right to flog their domains in China — GMO is Japanese and Radix is UAE-based with Indian roots.
Their new Chinese government licenses mean Chinese registrars will now be able to allow their customers to actually use .shop and .site domains to host web sites.
The registries in turn have had to agree to enforce China’s rather arbitrary and Draconian censorship policies on their Chinese customers.
The approvals were announced by MIIT December 29.
.site currently has about 570,000 domains in its zone file, making it a top-10 new gTLD by volume, while .shop, which launched much more recently, has over 100,000.
The ability for Chinese customers to develop their domains is no doubt good for the long-term health of TLDs, but it’s not necessarily a harbinger of shorter-term growth in a market where domains are often treated little more than meaningless baseball cards to be traded rather than commodities with intrinsic value.
The Chinese government has granted licenses to operate in the country to its first tranche of new gTLDs — .vip, .club and .xyz.
The agreements mean that Chinese registrars will be able to give their Chinese customers the ability to actually use their domains for web sites.
It also means the companies will be obliged to censor domains the government does not like, but only those domains registered via Chinese registrars.
The Ministry of Industry and Information Technology announced the licenses, given to the Chinese subsidiaries of Minds + Machines, .CLUB Domains and XYZ.com respectively, today.
M+M CEO Toby Hall told DI that it’s “a great moment of support for Chinese registrars”, giving them a “very clear signal about which TLDs they can focus on”.
XYZ.com said in a blog post that some of its Chinese registrars (its biggest channel) are planning on offering discounts to celebrate the approval.
It’s always been possible for Chinese people to register new gTLD domains via Chinese registrars — it’s estimated that 42% of the 27 million new gTLD domains in existence today are Chinese-owned.
However, Chinese citizens need a government license if they want to launch a web site, and the government only issues licenses for domains in approved TLDs.
In addition to .cn and China-based gTLDs, which were the first to be given the nod, Verisign was approved earlier this year for .com.
Hall said that while .vip has been popular with Chinese domainers, the MIIT license means it can start to tap the small business market there too.
Obtaining the license means that the three registries, which are all based in the US or Europe, will have to comply with Chinese regulations when it comes to Chinese customers.
That basically means the Chinese government gets to censor pretty much anything it doesn’t like, up to and including sites that “spread rumors”.
Hall said that there’s no chance of this censorship bleeding out to affect non-Chinese customers.
M+M, along with XYZ and .CLUB, are using Chinese registry gateway ZDNS to act as a proxy between their own back-ends (Nominet for .vip, Neustar for .club and CentralNic for .xyz) and Chinese registrars.
“All of our Chinese web sites go through ZDNS, so only web sites going through ZDNS would be affected,” Hall said, referring to the censorship rules.
Hall added that he was “not aware” of there being a blocklist of politically sensitive strings that Chinese customers are not allowed to register.
The break between TLD Registry and former back-end provider Afilias may be even less amicable than first thought.
I’m hearing that TLDR served Afilias with a “Notice of Material Breach” of contract earlier this year, threatening to move its two gTLDs to a rival owned by the Chinese government.
There may even be pending litigation.
Today TLDR confirmed in a statement that it’s switching the roughly 30,000 names in .在线 (.xn--3ds443g, “Chinese online”) and .中文网 (.xn--fiq228c5hs, “Chinese website”) from Afilias to Beijing Teleinfo Network Technology Co.
Tele-info is a little-known back-end provider currently servicing four pre-launch Latin-script Chinese gTLDs.
According to TLDR, the company is owned by the Chinese Academy of Telecommunication Research, which appears to be part of the Chinese government’s Ministry of Industry and Information Technology.
According to a source, back in February TLDR told Afilias that it would switch to Tele-info if Afilias was “unable or unwilling to remedy” unspecified contractual breaches by mid-May.
I don’t know what the alleged breaches were and neither company wants to talk about it.
“Afilias does not comment on pending litigation,” a spokesperson said.
“We are not commenting on contractual or litigation matters,” a TLDR spokesperson said.
TLDR said in a statement that the switch to Tele-info will help it get a Chinese government license, so Chinese registrants will be able to start using their domains. CEO Arto Isokoski said:
The completion of this milestone will hopefully pave the way for our accreditation with Chinese regulators, which ultimately allows our China-based customer’s names to resolve legally to a website hosted from within China.
It’s hard to argue with that logic — if it’s using a government back-end for its SRS, one can see how that would oil the gears of bureaucracy.
UPDATE 1753 UTC: Afilias has just provided DI with the following statement:
With respect to TLD Registry’s charges of breach of contract, Afilias categorically denies any breach of any kind whatsoever. Afilias has complied completely with our contractual obligations and responded to all requests for assistance with their various business priorities. Since we began supporting these 2 TLDs, Afilias has met every SLA and enabled the 2 TLDS to be 100% compliant with their technical and contractual obligations to ICANN. Afilias has provided 100% compliance on every SRS requirement, and maintained their DNS with 100% availability throughout the entire period of our stewardship. TLD Registry’s charges are completely without merit.
XYZ.com is trying to become one of the first non-Chinese gTLD registries to be able to sell unhindered into the Chinese market, in the face of Draconian government regulations.
The company has filed a Registry Services Evaluation Process request with ICANN — the first of its kind — that would let it use a gateway service, based in China, to comply with strict local laws on registries, registrars and registrants.
The Ministry of Industry and Information Technology regulations have been in place for a decade, but it’s only in the last year or so, in light of the new gTLD program, that China has been strictly enforcing them.
Anyone in China can buy a domain, but you need a license if you want to put up a web site, according to Gavin Brown, CTO of .xyz back-end CentralNic. Registrants also need to have their Whois information verified and validated, he said.
The problem for Chinese residents today is if they buy a domain in a TLD that is not licensed by the government, they won’t be able to obtain a license to host a web site on that domain.
The .xyz gTLD is believed to have a few hundred thousand domains registered via Chinese registrars, a substantial portion of its total.
There’s a worry that China could demand the deletion of these names and others, as it has previously in .cn, if the proper licenses have not been obtained.
Naturally, the inability to use these domains has led to a lot of pissed-off registrants. XYZ says has been receiving complaints from its registrars in the country, which in turn have been receiving complaints from their customers.
XYZ proposes to fix the problem by using a gateway service provided by ZDNS, a DNS provider based in mainland China.
Registrars in the country would maintain a separate EPP connection to ZDNS, which would act as a proxy to CentralNic’s UK-based primary EPP system.
ZDNS, which is prominently promoting its gateway service on its web site, would handle the Whois verification and also proxy the .xyz Whois lookup service, but only as it pertains to Chinese registrants and queries originating in China.
Data on non-Chinese registrants would continue to be housed with CentralNic.
ZDNS would also prevent Chinese registrants registering domains containing strings that have been banned by the government.
XYZ’s RSEP request (pdf) is currently undergoing its technical/competition review with ICANN. Assuming it passes, it would be exposed to public comment before being approved.
The RSEP states: “we are confident that the entire Internet user base of China would endorse this service and that Chinese registrars would strongly endorse this service.”
It’s the first such request to ICANN, suggesting that an awful lot of gTLDs are still not compliant with the Chinese regulations.
As of April, only 14 TLDs — all managed by China-based companies — were licensed to operate in China.
The vast majority of top-level domain registries could soon be banned from selling domains into China due to a reported crackdown under a decade-old law.
That’s according to Allegravita, a company that helps registries with their go-to-market strategies in the country.
Allegravita released a report last week claiming that Chinese registrars will be forbidden to sell domains in TLDs that are not on a government-approved list.
The crackdown could come as early as July, the report says:
Foreign registries which have not applied for Chinese market approval are advised to do so in the near term, as unapproved Top-Level Domains are likely to be taken off the market from July this year.
As of April 30, there were only only 14 TLDs on the approved list. All of them are run by Chinese registries and only five do not use Chinese script.
Not on the list: every legacy gTLD, including .com, as well as every ccTLD apart from .cn.
The Draconian move is actually the implementation of regulations introduced by China’s Ministry of Industry and Information Technology over a decade ago but not really enforced since.
As I reported in December, Donuts was facing problems launching its Chinese-script gTLDs due to this red tape.
MIIT announced in 2012 that new gTLD applicants would need licenses to sell into China.
According to Allegrevita, which until recently was working heavily with TLD Registry (“.chinesewebsite”) on its entry into the country, it’s “no longer ambiguous” that MIIT has asserted full oversight of the domain industry in China.
MIIT’s crackdown appears to be focused on the 93 Chinese registrars it has approved to do business.
Allegravita says these companies will not be allowed to sell unapproved TLD domains to Chinese registrants, but that existing registrations will be grandfathered:
by sometime in July 2015, the MIIT will not permit unapproved registries to operate or offer their domains for sale in China. The MIIT will not interfere with existing domain registrations for unapproved registries; however, new registrations will not be permitted to be sold by Chinese registrars to Chinese registrants.
Presumably, non-Chinese registrars will reap the benefits of this as Chinese would-be registrants look elsewhere to buy their domains.
China is an important market for many registries, particularly the low-cost ones.
Judging by MIIT’s web site, getting approval to sell your TLD in China involves a fairly stringent set of requirements, including having a local presence.
MIIT said in a press release last month that the “special action” is designed “to promote the healthy development of the Internet, to protect China’s Internet domain name system safe and reliable operation