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ICANN in “fact-finding” mode over potential .sucks breach

Kevin Murphy, April 13, 2015, Domain Registries

ICANN is playing its cards close to its chest when pressed on what it thinks Vox Populi may have done wrong with its .sucks launch pricing and policies.

The organization told DI in a statement that it is currently “fact-finding”, and will not speculate on what parts of the Registry Agreement may have been breached.

ICANN on Thursday reported Vox Pop to the US and Canadian trade regulators, asking them to judge whether the registry’s $2,000 sunrise fee broke any laws.

Its Intellectual Property Constituency reckons the launch, which also places thousands of trademarks on permanent, high-priced “Sunrise Premium” list amounts to nothing more than a “shakedown” of brand owners.

Vox Pop CEO John Berard told DI last week that the referral to the US Federal Trade Commission, despite that fact that the company and its owners are Canadian, amounted to “appeasement” of the IPC.

In response, ICANN told DI in a statement:

The registry is offering domain name registrations to registrants located in jurisdictions around the world. It¹s possible that a registry’s activities could violate the law in the registry’s own jurisdiction; it is also possible that a registry’s activities could violate the law in the jurisdiction of a registrar or registrant where the registry offers domain name registrations. In this case, the IPC letter was signed by an attorney based in New York City, and ICANN thought it appropriate to ask both U.S. and Canadian authorities to consider the IPC allegations.

ICANN seems to be saying on the one hand that registries are beholden to the laws of wherever their registrants are based and on the other hand that the jurisdiction of the IPC’s current president, Greg Shatan, somehow has a bearing on what laws gTLD registries are obliged to obey.

I await correction from more knowledgeable readers, but I don’t think either of those statements is accurate.

If the latter is true, then perhaps the IPC should in future elect its leaders from only the countries with the most trademark-friendly regimes.

In ICANN’s letters to the FTC and IPC, the organization said it was “evaluating other remedies”. From the context, it seems that ICANN is thinking it could initiate some kind of compliance action against .sucks regardless of the what governmental regulators say.

Asked to explain this, ICANN told DI:

We¹re currently doing some fact-finding and analysis to assess whether there has been any breach by the registry of its obligations, and, based on the results of that analysis, we will try to determine what remedies, if any, may be available. Obviously, it will depend on all the facts and circumstances. Beyond that, since we haven¹t finished that evaluation process it would be inappropriate to speculate about possible remedies.

That’s not saying much, but it leaves the door open for ICANN Compliance to do something even if the FTC and Office of Consumer Affairs deem that no laws have been broken.

One possible “breach” that has been floated relates to the differential pricing created by the Sunrise Premium list. However, my take on this is that, under the new gTLD contracts, it’s not massively different to other kinds of premium pricing program.

Differential pricing protections only apply to renewal fees. If the registrant is told at the point of sale that their renewal fees will be high, that enables registries to put different fees on different domains.

There have also been theories put forward about ICANN’s motivation for referring .sucks to regulators.

The idea that ICANN can defer to the FTC and others on legal matter is not entirely new. In cases where registries intend to merge, ICANN is allowed under its contracts to refer the deals to regulators before approving them.

But this is the first time ICANN has referred new gTLD pricing to competition authorities.

Is it a case of ICANN ass-covering?

ICANN is taking unique fees worth up to $1 million extra from Vox Populi and, as I wrote two weeks ago, the optics of this are bad for ICANN, which could look like it is profiteering from .sucks.

ICANN has explained that the extra fees related to entities that were owned by Vox Pop parent Momentous, the Canadian registrar that had many subsidiaries go out of business owing ICANN a tonne of cash.

By punting the IPC’s complaint to regulators, ICANN could deflect criticism that it is not doing enough to protect rights holders and registrants while avoiding having to make a tricky decision itself.

Regardless, the FTC referral and the fact that ICANN is charging Vox Pop special fees sends a strong message that ICANN does not trust the registry one bit.

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.

AIDS.sucks at $1.5 million and other .sucks premium weirdness

The new .sucks gTLD has some interesting pricing for its reserved premium names. Notably aids.sucks, which currently carries a $1.5 million first-year fee at one registrar.

As far as I can tell, 101domain is the only registrar that is currently publishing its prices for .sucks premium names.

I had a bit of a play around with its web site, to see if I could discover which strings the registry has flagged as premium and which appear to be blocked by the registry.

aids.sucks was the most expensive domain I found, by some margin, at $1.5 million.

The presumably puts it within the pocketbook of, say, a pharmaceuticals company, but probably not a support group.

101domain confirmed that the published price was not an error and is based on the registry’s pricing, but said it was considering lowering it.

That price, and all the other prices cited in this article, are retail prices that would include the registrar’s mark-up.

The next-highest price I could find was $450,000 for sex.sucks.

The string “sex” is usually highly priced on registries’ reserved lists. It’s a slightly different story for .sucks, however, because registry policy states that all pornography is banned. The registrant would have to find a different use.

porn.sucks does not appear to carry a premium fee.

I could not find any other physical diseases carrying premium fees, and it seems that cancer.sucks is not available to register.

However, anxiety.sucks is $4,500, depression.sucks is $12,000, and suicide.sucks is available for $16,500.

It’s worth noting at this point that .sucks is not alone in putting premium prices on domains such as these — suicide.club and aids.club both carry $5,500 fees, for example.

Sports domains baseball.sucks, football.sucks, soccer.sucks, basketball.sucks and hockey.sucks all carry $75,000 fees.

On the vices: poker.sucks is also $75,000, gambling.sucks is $42,000, beer.sucks is $27,000 and alcohol.sucks is $4,500. Other strings, such as casino.sucks, do not appear to be premiums.

This patchy premium coverage goes for entertainment too. While television.sucks ($88,500) and music.sucks ($15,000) are premiums, internet.sucks and radio.sucks are not.

In relationships, gay.sucks is listed at $27,000 (lesbian.sucks does not appear to be premium) and dating.sucks is $15,000.

I tried a few common racial slurs and found them to be unavailable. Vox Pop has a policy against cyber-bullying, which may account for that.

racism.sucks costs $52,500, however.

Religious terms blocked?

Some religious terms are considered premium, while others are not available to register.

.sucks is currently in its sunrise period, so unavailable names have presumably been blocked by the registry for some reason.

I found that christianity.sucks carries a premium price tag of $75,000, while church.sucks is $30,000 and christian.sucks is $34,500.

catholic.sucks is not available, nor are jesus.sucks, christ.sucks and moses.sucks.

But catholicism.sucks, protestant.sucks, methodist.sucks baptist.sucks, can be bought for the regular reg fee.

hindu.sucks, hinduism.sucks, buddhist.sucks and buddhism.sucks are all for sale at the usual price.

judaism.sucks and jews.sucks are available at the regular reg fee, but jew.sucks is not available.

islam.sucks, muslim.sucks and muslims.sucks are not currently available. Nor is muhammed.sucks. But mohammed.sucks and muhammad.sucks are available.

I wonder what we can fairly infer from these apparent discrepancies.

Registry defensives?

As you might expect, the name of the registry is reserved — that happens in pretty much ever gTLD.

It remains to be seen whether Vox Pop will eat its own dog food and allow third-party criticism on its site.

It turns out johnberard.sucks (Vox Populi CEO) is not available. Neither are the names of Rob Hall, CEO of Vox Pop parent Momentous, and Uniregistry CEO Frank Schilling, who is involved in the TLD is some currently undisclosed capacity.

rob.sucks, john.sucks and frank.sucks are all not available to register.

As controls, I checked out other common male first names and the full names of other major registry/registrar CEOs and found them all available.

It will be interesting to see if any of these names are ever developed into criticism web sites by their owners.

That mystery $1 million .sucks fee explained, and it’s probably not what you thought

Vox Populi has agreed to pay ICANN up to $1 million in extra fees in order to pay off the debts of affiliated deadbeat registrars, I can reveal.

The formerly mysterious fees, which comprise a $100,000 start-up payment and $1 for each of its first 900,000 .sucks transactions, were discovered by ICANN’s Intellectual Property Constituency, as I reported Friday.

I speculated that the payments may have related to ICANN padding out its legal defense fund, rather like it did with .xxx a few years ago, but it turns out that guess was dead wrong.

ICANN has told DI:

Some affiliates of Momentous, the majority owners of Vox Populi Registry, had previously defaulted on substantial payments to ICANN. Given this previous experience, ICANN negotiated special contract provisions in the Vox Populi Registry Agreement to provide additional financial assurances. Those provisions were added solely for that reason and were not related to the nature of this specific TLD.

I gather that the affiliated companies in question were shell registrars that went out of business a while ago.

Momentous company Pool.com used large numbers of empty registrar accreditations in order to drop-catch expiring domain names. Fairly standard practice in the drop-catching game.

But many of these entities were shut down, owing ICANN a whole bunch of cash in unpaid registrar fees.

ICANN has now chosen to recoup the money by extracting it from the .sucks registry, which according to its new gTLD application is majority-owned by Momentous.

The .sucks contract calls the $100,000 a “registry access fee” and the $1-a-name charge as “registry administration fee”.

For avoidance of doubt, this post is not an April Fool joke.

Why is .sucks based in Frank Schilling’s office?

Kevin Murphy, March 23, 2015, Domain Registries

The upcoming new gTLD .sucks is being run from the offices of Frank Schilling’s Uniregistry and it has a close business relationship with the registry, DI has discovered.

Vox Populi Registry, which runs .sucks and which I and many others have been assuming is completely controlled by Canadian registrar group Momentous, in fact seems to be tightly aligned with Uniregistry.

Schilling characterized it both as a “working relationship” and a “joint venture” today.

I heard through the rumor mill last year that Uniregistry may have a stake in Vox Pop.

But it wasn’t until I checked the IANA database record for .sucks today that the rumor seemed to be to an extent confirmed.

The address for Vox Populi, a Canadian company according to its ICANN contract, is listed as Uniregistry’s office in Grand Cayman in both Registry Sponsor and Administrative Contact records.

Momentous CEO Rob Hall is named as Technical Contact at a Barbados address.

“We have a joint venture agreement and are presently handling postage and handling for Vox Populi,” Schilling told DI today. “We are providing office space services to them as well.”

He characterized the deal as a “working relationship”.

I would not be at all surprised if it’s much closer than that.