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M+M registers for another 20 gTLD applications

Kevin Murphy, February 21, 2012, Domain Registries

Minds + Machines parent Top Level Domain Holdings has registered for another 20 new gTLD application slots with ICANN, bringing its total to date to 40.

The TLD Application System slots are for filing gTLD applications for itself and on behalf of M+M clients, the company said this morning.

A week ago, ICANN said that 100 registrations had been made with TAS.

TLDH is known to be involved in applications for .gay and .eco, among others. It registered its first 20 application slots during the first week of the application window, mid-January.

M+M adds $14m to new gTLDs war chest

Kevin Murphy, February 10, 2012, Domain Registries

Top Level Domain Holdings has raised £9 million ($14.2 million) with a share sale, boosting its ability to apply for new generic top-level domains.

TLDH, which is listed on the Alternative Investment Market in London, owns registry provider Minds + Machines and has interests in a number of new gTLD joint ventures.

The shares were sold to “institutional and other investors” for 8.25p each, the company said.

TLDH now has a cash pile of about $25 million, CEO Antony Van Couvering said in a press release. Chairman Peter Dengate Thrush added:

TLDH management believes that the increased capital will allow it to increase significantly the number of applications it is able to make, allowing it to develop a wider, more diversified portfolio of names in multiple languages and scripts

The current cash balance would allow it to apply for 135 gTLDs, if it blew the whole lot on application fees.

I expect its actual number of applications to be more like 30, which would leave TLDH with about $20 million in reserve for fighting contested applications and start-up costs.

It could also try to raise some more money from the markets when some of its gTLD applications start being approved, of course.

Being the only public company entirely devoted to new gTLDs may leave TLDH in an interesting tactical position a few months from now — competing applicants are going to have a relatively good insight into the strength of its hand if any of its applications go to auction.

M+M wins contract for ‘laptops and lederhosen’ gTLD

Kevin Murphy, January 20, 2012, Domain Registries

Minds + Machines has won governmental approval for its .bayern new gTLD application, according to the company.

The Bavarian state government has said it will back a bid for .bayern from Bayern Connect, which is majority-owned by M+M parent Top Level Domain Holdings, TLDH said today.

According to its press release, M+M will provide the back-end registry services, which strongly suggests that it does not plan to outsource to Neustar on this occasion.

Bayern Connect is not the only company to have announced a .bayern application, however.

Rival applicant PunktBayern, which is backed by United Domains and InterNetX among others, has been public about its plans for a couple of years too. Last year, it selected Afilias to provide its registry back-end.

If the Bavarian government is offering its exclusive support to Bayern Connect, as TLDH now says, it puts a serious question mark over the viability of the PunktBayern bid.

Under ICANN’s rules, any gTLD purporting to represent a state must secure the support or non-objection of the relevant government. Without that support, applications will be rejected.

PunktBayern does have a registered trademark on “.bayern”, however, so the tussle may not be quite over yet.

Bayern is the German name for Bavaria. The state has a population of about 12.5 million and quite a strong sense of its own identity.

It’s often referred to as the land of “laptops and lederhosen” due to a long-running government policy of friendliness to the tech industry.

ICANN to hire conflict of interest experts

Kevin Murphy, October 6, 2011, Domain Policy

ICANN is to bring in ethics experts to advise it on its conflicts of interest policy, addressing the ongoing controversy over its former chairman’s move to the domain industry.

The organization plans to “engage an external firm with expertise in advising on ethical issues”, according to the minutes of a September 15 meeting of its Board Governance Committee.

The consultants will be tasked with helping to “develop an ICANN Ethics Regime or set of Guidelines for the Board, the staff and the community.”

ICANN has been faced recently with calls to impose post-employment restrictions on board members and staff, in order to prevent a “revolving door” between it and the industry it essentially regulates.

This follows former chairman Peter Dengate Thrush’s move to new gTLD applicant Minds + Machines just a few weeks after voting to approve the new gTLD program.

Senator Ron Wyden and the Association of National Advertisers are among those making the call, and the US Department of Commerce, which oversees ICANN, appears to have heard it.

But as I reported earlier in the week, it may actually be illegal for ICANN, as a California corporation, to contractually ban employees from joining domain name companies after they quit.

However, the BGC has other ideas about how to strengthen ethics without imposing these potentially problematic employment restrictions.

It’s now talking about a ethics policy with “disclosure and abstention requirements” for directors “surrounding future interests or potential future interests”.

While the policy has yet to be written, one can imagine a scenario in which an ICANN director would be prevented from voting on a policy that would be likely to enrich them in a future job.

Cherine Chalaby, Bill Graham and Ray Plzak are the BGC members who will be leading the board discussions, which are expected to continue in Dakar later this month.

The ethics issue was first raised publicly by ICANN president Rod Beckstrom during his opening address at the Singapore meeting in June — before the new gTLD vote and before Dengate Thrush’s departure.

Would an ICANN ethics policy break the law?

Kevin Murphy, October 3, 2011, Domain Policy

Calls for a new ethics policy to prevent a “revolving door” between ICANN and the domain name industry stepped up today, with the Association of National Advertisers entering the debate.

But would such a policy be illegal in ICANN’s home state of California?

The ANA and others wrote to ICANN today, in response to a public comment period on the question of whether ICANN should revise its conflicts of interest policy.

ICANN had asked whether the policy should be changed in order to let its board of directors vote to give themselves a salary. They’re currently all unpaid except the chair.

But the responses so far have instead largely focused on the perceived need to stop directors (and to a lesser extent staff) from taking lucrative industry jobs after they quit.

That was perhaps inevitable given the recent mainstream media coverage of former ICANN chair Peter Dengate Thrush, who took a high-paying job with new gTLD applicant Minds + Machines just a few weeks after helping to push through approval of the gTLD program.

The ANA’s president, Bob Liodice, wrote:

There is, at a minimum, legitimate reason for concern that the lack of adequate conflict of interest policies have led to the development of a growing perception that Mr. Thrush (and perhaps other senior staff who recently have left ICANN) may have let future career prospects influence their official duties.

(The other senior staffer he refers to could only be Craig Schwartz, the former chief gTLD registry liaison, who quit ICANN to join a likely .bank applicant in June.

While there are good reasons that Dengate Thrush’s move looks extremely fishy to outsiders, I’ve yet to hear any compelling arguments that Schwartz, who I don’t think had any high-level policy-making power anyway, did anything wrong.)

The ANA is of course the ring-leader of the ongoing campaign to get ICANN to rethink the new gTLD program in its entirety.

Liodice’s letter goes on to outline a number of suggestions, posed as questions, as to how ICANN could improve its conflict of interest policy, such as:

should ICANN consider reasonable restrictions or a moratorium on post‐service employment of ICANN staff by, or the contracting of such staff members with, parties under contract to ICANN, or whose businesses are materially affected by any decision made by the Board during the staff member’s tenure?

In other words: should ICANN staff be banned from joining registrars and registries after they leave?

In two other letters to ICANN today, Coalition for Online Accountability, International Trademark Association and American IP Law Association (collectively) and the French government make similar calls for future employment restrictions, albeit only for ICANN directors rather than staff.

But here’s another question: if the community asked ICANN to institute a revolving-door prevention policy, could it legally do so? A bit of digging suggests it might be tough.

According to the minutes of an August 15 meeting of ICANN’s Board Governance Committee:

The BGC discussed that as a private sector organization, ICANN is limited in its ability to place restrictions on future employment, though there are many things that ICANN can do to address these concerns, such as continued strict adherence and enforcement of confidentiality provisions.

The matter was also discussed by the full board at its retreat last month, and is on the agenda for the public meeting in Dakar, Senegal, at the end of October.

While ICANN does have pseudo-regulatory power (all enforced through contract) it is at the end of the day a California corporation, which is bound by California law.

And in California, it may not be legal to unreasonably restrict employees’ future job opportunities.

I’m not a lawyer, and this may not be applicable to ICANN for any number of reasons, but consider how California law deals with so-called “non-compete clauses” in employment contracts.

The text “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void” is on the California statute books.

And in 2008, the California Supreme Court interpreted this rather strictly, ruling that “non-competition agreements are invalid under section 16600 in California even if narrowly drawn”.

So could ICANN legally prevent staff or directors from jumping into the for-profit sector when they please? Is there any point in the community even debating the subject?

At this point, any members of the California Bar reading this are welcome to throw their $0.02 into the comments section below.