Namecheap sues ICANN over .org price caps

Namecheap has sued ICANN in California, asking a court to force the Org to revisit its decision to lift price caps on .org and .info domain names five years ago.

Registrar CEO Richard Kirkendall announced the suit on Twitter this afternoon:

Today we filed suit against @ICANN. After a previous ruling via a mediation process they have taken little action towards the recommendations of that ruling and so our hand has been forced to take this action. We feel that ICANN is in direct violation of their mandate and…

— Richard Kirkendall (@NamecheapCEO) February 5, 2024

The lawsuit follows an Independent Review Process case that Namecheap partially won in December 2022, where the panel said ICANN should hire an economist to look at whether price caps are a good idea before revisiting its decision to scrap them.

The panel found that the ICANN board of directors had shirked its duties to make the decision itself and had failed to act as transparently as its bylaws mandate.

Namecheap says that over a year after that decision was delivered, ICANN has not implemented the IRP panel’s recommendations, so now it wants the Superior Court in Los Angeles to hand down an injunction forcing ICANN to do so.

Before 2019, .org was limited to 10% price increases every year, but the cap was lifted, along with caps in .info and .biz, when ICANN renewed, standardized and updated the respective registries’ Registry Agreements.

After the decision was made to scrap .org price caps, despite huge public outrage, Namecheap rounded up its lawyers almost immediately.

The caps decision led to the ulimtately unsuccessful attempt by Ethos Capital to acquire Public Interest Registry, which runs .org.

Namecheap’s new lawsuit wants the judge to issue “an order directing ICANN to comply with the recommendations of the IRP Panel”.

That means ICANN’s board would be told to consider approaching PIR and .info registry Identity Digital to talk about reintroducing price caps, to hire the economist, and to modify its procedures to avoid any future transparency missteps.

Namecheap has given away 500,000 free .me domains

A project started in 2014 has seen Namecheap give away 500,000 .me domains to university students in the Anglophone world.

The offer, started in 2014 at nc.me, is for the first year’s registration and is for students to create “online portfolios, resumes, blogs and other personal websites”.

Registrants authenticate themselves by having email addresses associated with universities, such as .edu in the US. Institutions in the UK and Australia are also supported.

Not all of the names registered over the last nine years are still registered, according to a spokesperson, but 500,000 would be a sizable chunk of .me’s total domains under management.

The registry, Domen, does not regularly publish its reg numbers but it hadn’t yet crossed the one million mark as of 2018, according to its web site.

The Namecheap spokesperson said that the registry provide the first-year regs for free under the partnership.

IRP panel tells ICANN to stop being so secretive, again

ICANN’s dismal record of adverse Independent Review Process decisions continued last week, with a panel of arbitrators telling the Org to shape up its transparency and decision-making processes.

The panel has essentially ruled that ICANN did everything it could to be a secretive as possible when it decided to remove price controls from its .org and .info registry contracts in 2019.

This violated its bylaws commitments to transparency, the IRP panel found, at the end of a legal campaign by Namecheap commenced over three years ago.

Namecheap wanted the agreements with the two registries “annulled”, but the panel did not go that far, instead merely recommending that ICANN review its decision and possibly enter talks to put the price caps back.

But the decision contains some scathing criticisms of ICANN’s practice of operating without sufficient public scrutiny.

Namecheap had argued that ICANN broke its bylaws by not only not applying its policies in a non-discriminatory manner, but also by failing to adequately consult with the community and explain its decision-making.

The registrar failed on the first count, with the IRP panel ruling that ICANN had treated registry contract renegotiations consistently over the last 10 years — basically trying to push legacy gTLDs onto the 2012-round base Registry Agreement.

But Namecheap succeeded on the second count.

The panel ruled that ICANN overused attorney-client privilege to avoid scrutiny, failed to explain why it ignored thousands of negative public comments, and let the Org make the price cap decision to avoid the transparency obligations of a board vote.

Notably, the panel unanimously found that: “ICANN appears to be overusing the attorney-client privilege to shield its internal communications and deliberations.”

As one example, senior staffers would copy in the legal team on internal communications about the price cap decision in order to trigger privilege, meaning the messages could not be disclosed in future, the decision says.

ICANN created “numerous documents” about the thinking that went in to the price cap decision, but disclosed “almost none” of them to the IRP due to its “overly aggressive” assertion of privilege, the panel says.

As another example, staffers discussed cutting back ICANN’s explanation of price caps when it opened the subject to public comment, in order to not give too much attention to what they feared was a “hot” and “sensitive” topic.

ICANN’s failure to provide an open and transparent explanation of its reasons for rejecting public comments opposing the removal of price controls was exacerbated by ICANN’s assertion of attorney-client privilege with respect to most of the documents evidencing ICANN’s deliberations…

ICANN provided a fairly detailed summary of the key concerns about removing price caps, but then failed to explain why ICANN decided to remove price caps despite those concerns. Instead, ICANN essentially repeated the explanation it gave before receiving the public comments.

The panel, which found similar criticisms in the earlier IRP of Dot Registry v ICANN, nevertheless decided against instructing ICANN to check its privilege (to coin a phrase) in future, so the Org will presumably be free to carry on being as secretive as normal in future.

Namecheap also claimed that ICANN deliberately avoided scrutiny by allowing Org to remove the price caps without a formal board of directors resolution, and the panel agreed.

The Panel finds that of the removal of price controls for .ORG, .INFO, and .BIZ was not a routine matter of “day-to-day operations,” as ICANN has asserted. The Price Cap Decision was a policy matter that required Board action.

The panel notes that prior to the renewal of .org, .info and .biz in 2019, all other legacy gTLD contracts that had been renewed — including .pro, which also removed price caps — had been subject to a board vote.

“ICANN’s action transitioning a legacy gTLD, especially one of the three original gTLDs (.ORG), pursuant to staff action without a Board resolution was unprecedented,” the panel writes.

Quite why the board never made a formal resolution on the .org contract is a bit of a mystery, even to the IRP panel, which cites lots of evidence that ICANN Org was expecting the deal to go before the board as late as May 13, 2019, a month before the anticipated board vote.

The .org contract was ultimately signed June 30, without a formal board resolution.

(Probably just a coincidence, but Ethos Capital — which went on unsuccessfully to try to acquire .org registry Public Interest Registry from ISOC later that year — was formed May 14, 2019.)

The IRP panel notes that by avoiding a formal board vote, ICANN avoided the associated transparency requirements such as a published rationale and meeting minutes.

The panel in conclusion issued a series of “recommendations” to ICANN.

It says the ICANN board should “analyze and discuss what steps to take to remedy both the specific violations found by the Panel, and to improve its overall decisionmaking process to ensure that similar violations do not occur in the future”.

The board “should consider creating and implementing a process to conduct further analysis of whether including price caps in the Registry Agreements for .ORG and .INFO is in the global public interest”

Part of that process should involve an independent expert report into whether price caps are appropriate in .info and especially .org.

If it concludes that price controls are good, ICANN should try to amend the two registry agreements to restore the caps. If it does not conduct the study, it should ask the two registries if they want to voluntarily restore them.

Finally, the panel wrote:

the Panel recommends that the Board consider revisions to ICANN’s decision-making process to reduce the risk of similar procedural violations in the future. For example, the Board could adopt guidelines for determining what decisions involve policy matters for the Board to decide, or what are the issues on which public comments should be obtained.

ICANN is on the hook to pay the panel’s fees of $841,894.76.

ICANN said in a statement that it is “is in the process of reviewing and evaluating” the decision and that the board “will consider the final declaration as soon as feasible”.

Namecheap says it won legal fight over .org price caps

Namecheap claims to have won a fight against ICANN over the lifting of contractual price caps in .org and .info back in 2019.

The two parties have been battling it out for almost three years in an Independent Review Process case over ICANN’s decision to allow the .info and .org registries to increase their prices by as much as they want.

Namecheap now claims the decision has been delivered and “the IRP panel decided that ICANN had, indeed, violated its Bylaws and Articles of Incorporation and that ICANN’s decision to remove the price caps was invalid.”

The registrar also says it failed in its attempt to have a similar ruling with regrds the .biz TLD, but it’s not clear why.

Neither party has yet published the decision in full (ICANN is likely redacting it for publication as I type), and ICANN has yet to make a statement, so we only have Namecheap’s interpretation to go on.

It seems the IRP panel disagreed with ICANN that it was within its staff’s delegated powers to renegotiate the price provisions of the contracts without input from the board of directors.

Rather, there should be a open and transparent process, involving other stakeholders, for making such changes, the panel said according to Namecheap.

What the panel does not appear to have said is that the price caps can be unilaterally restored to the contracts. Rather, it seems to suggest a combination of voluntary reinstatements, expert competition reviews, and bilateral renegotiations.

The decision also seems to say that price controls are more important in .org than .info, due to its not-for-profit nature, which flies in the face of ICANN’s long-term push to standardize its contracts to the greatest extent possible.

The row over .org pricing emerged shortly before the ultimately unsuccessful takeover attempt of Public Interest Registry by for-profit private equity firm Ethos Capital was announced. Ethos had planned to raise prices, but PIR, still a non-profit owned by the Internet Society, to date has not.

Namecheap’s IRP claims related to ICANN’s handling of that acquisition attempt were thrown out in 2021.

.info was an Afilias TLD when the IRP was filed but is now Ethos-owned Identity Digital’s biggest gTLD following consolidation.

I’ll have more on this story after the full decision is made public.

ICANN throws out prostitution complaint

ICANN has rejected a complaint from a man about a web site apparently offering prostitution services.

As I reported last month, the American had filed a Request for Reconsideration with ICANN’s board of directors after his complaints to Compliance about Namecheap were rejected.

He’s unhappy that US-based Namecheap won’t take down the domain adultsearch.com, which operates as a marketplace for sex workers, many of whom are offering services that may well be illegal in most parts of the US.

But ICANN’s Board Governance Committee rejected the complaint (pdf) for lack of standing.

While the ruling is procedural, rather than substantive, the BGC does spend quite a lot of time tying itself in knots to show that while the complainant may well believe prostitution is harmful to society in general, he failed to state how he, specifically, had been harmed.

The decision also directly references the part of the request the requester has specifically asked to be redacted (but was not).

ICANN says higher domain prices may be in the public interest

ICANN is trying to get an arbitration case covering the removal of price caps in .org, .biz and .info thrown out because it is registrants, not registrars, that are left shouldering the burden of higher prices.

The argument came in January filings, published this week, in the two-year-old Independent Review Process case being pursued by Namecheap, which is trying to get price caps reinstated on the three gTLDs.

ICANN’s lawyers are saying that the case should be thrown out because Namecheap lacks standing — IRP claimants have to show they are being harmed or are likely to be harmed by ICANN’s actions.

According to ICANN, Namecheap is not being harmed by uncapped domain prices, only its customers are, so the case should be dismissed.

Drawing heavily on an analysis commissioned by ICANN from economist Dennis Carlton, ICANN’s latest IRP submission (pdf) reads:

rational economic theory predicts that if wholesale registry prices increased, Namecheap would pass on any price increases to its customers. Namecheap is one of nearly 2,500 ICANN-accredited registrars that offer domain names to registrants, and one of hundreds of ICANN-accredited registrars that offer domain names specifically in .BIZ, .INFO, and .ORG. Namecheap thus competes against many other registrars that have exactly the same access to same registries, such as .BIZ, .INFO, and .ORG,as does Namecheap, which all pay the same wholesale price for these registry input…

Given the hundreds of registrar competitors (each facing the same registry prices from the .BIZ, .INFO, and .ORG registry operators), economic theory predicts that Namecheap and other such registrars do not have significant market power. Without market power, registrars like Namecheap do not earn supra-competitive margins and cannot absorb higher input costs. As a result, economic theory, as well as common sense, predicts that Namecheap and other competing registrars must pass on higher registry wholesale prices by raising prices to registrants, with little or no resulting harm to Namecheap.

The filing goes on the suggest that higher prices might actually be in the public interest, because ICANN lacks the expertise to set price caps at an appropriate level.

the likely harms of price regulation in these three gTLDs outweigh the likely benefits of price controls. ICANN lacks the expertise to set optimal prices. Without such expertise, the danger is that ICANN could set the wrong price — one that impairs efficient market outcomes — which would ultimately harm registrants rather than protect them…

In short, Namecheap cannot demonstrate that the public interest required ICANN to maintain price control provisions in the .BIZ, .INFO, and .ORG Registry Agreements, especially given that the majority of evidence they cite either pertains to a drastically different DNS or pertains to potential harm to registrants, not registrars.

Interestingly, in almost the same breath, the filing argues that the price of .com domains, which is capped per Verisign’s agreements with ICANN and the US government, acts as an effective deterrent to runaway price increases in other gTLDs.

With its popularity, and relatively-low, regulated price, .COM acts as a check on any registry, including .BIZ, .INFO, and .ORG, that seeks to increase prices above competitive levels.

So, regulating .com prices is good because it indirectly acts as a restraint on other registries’ prices, but regulating those other registries’ prices is bad because ICANN lacks the expertise to regulate prices.

And anyway, it’s only the registrants who get harmed if prices go up.

Got it?

.org price caps: ICANN chair denies “secret” meetings

ICANN chair Maarten Botterman has denied that the board of directors approved the removal of price caps in .org, .biz and .info in “secret” meetings in 2019.

In written testimony (pdf) recently filed as part of Namecheap’s two-year-old Independent Review Process proceeding, Botterman scoffed at the idea that ICANN secretly gave the nod to the removal of price caps in 2019:

I understand that Namecheap is claiming that the Board acted in secret when deciding to go forward with the 2019 Registry Agreements. Nothing about the Board’s conduct occurred in secret. The Board did not convene a “secret” annual, regular, or special Board meeting and did not make any “secret” formal decisions or “secret” resolutions. Instead, the Board was briefed by ICANN staff regarding contract renewals that were well within their delegated authority to negotiate and execute.

Namecheap is claiming in its IRP that ICANN broke its bylaws when it renewed the .org, .info and .biz contracts without the historical price caps that all three had in place for the better part of 20 years.

It wants those decisions annulled, potentially enabling the reinstatement of the caps.

Part of its case is that ICANN failed in its transparency obligations, with Namecheap saying that the decision to remove caps was “entirely opaque” and made with “no analysis whatsoever”.

The .info, .org and .biz contracts were renewed without the ICANN board making a formal resolution or discussing them during a session that was being recorded and minuted.

Botterman, along with declarations from with fellow director Becky Burr and VP Russ Weinstein and outside lawyers’ filings, says that the extent of the board’s involvement was two briefings that occurred at workshops in January and June 2019.

ICANN staff explained to the board why it intended to go ahead with signing the cap-free contracts, and the board “saw no reason to intervene”, Botterman wrote. Staff have delegated authority to deal with contract stuff, he said.

Now, it could be argued that these meetings were not “secret” as such — ICANN board workshops are a standard event, happening in the few days leading up to each of ICANN’s thrice-yearly public meetings.

ICANN’s chair (then Cherine Chalaby) even blogs about them, posting a rough agenda beforehand and a summary of discussions a few weeks later.

In the case of the January 2019 pre-workshop post, there’s no mention whatsoever of any contract renewals. Nor is there in the post-workshop summary.

The June 2019 post-workshop post fails to mention the fact that the board had essentially given the nod to the lifting of caps at that meeting.

The pre-workshop post makes a passing, blink-and-you’ll-miss-it reference to “Göran will update the Board on the renewal of some registry agreements”, which substantially played down what was actually going on.

At that time, ICANN was well-aware that there was huge public interest in at least the .org renewal, where over 3,300 comments had been submitted, mostly objecting to the removal of price caps.

It’s possible that the first time ICANN disclosed that the discussions had even taken place was when a spokesperson told me how the .org decision was made, in July that year.

You don’t have to be a conspiracy theorist to wonder why ICANN pretty much skimmed over the whole issue in its public disclosures, even though it was the hottest topic in town at the time.

Even now, Botterman and Burr are both invoking attorney-client privilege to limit their testimony about what happened at these two workshops.

You don’t have to think anything untoward was going on to ask whether this is all paints a picture of ICANN acting “to the maximum extent feasible in an open and transparent manner”, as its bylaws requires.

Botterman says in his declaration:

The Bylaws are clear that ICANN must “operate to the maximum extent feasible in an open and transparent manner.” But I have never understood this Bylaws provision to require that every time the Board needs to get work done, or every time the Board receives a briefing from ICANN staff on a specific topic, it must do so in public or at a annual, regular or special Board meeting. Nor would such a requirement be feasible.

Namecheap offers free services to Russian dissidents

Namecheap will offer “free anonymous domain registration and free web hosting” to anti-war protest web sites based in Russia or Belarus.

The registrar said in a statement today that the move is in response to imprisoned Russian opposition leader Alexei Navalny’s call for war protests in Russia.

The offer modifies the company’s hard-line position from earlier in the week, in which it banned Russians altogether from its services and gave registrants there a week to get out.

Namecheap’s English-language customer service is based in Ukraine, including in cities under heavy bombardment this week.

Russians interested in the free hosting offer are asked to contact customer service for details.

Namecheap boss goes nuclear on Russian customers

Namecheap has banned all Russians from its services in a comprehensive, surprising, and unprecedented expression of solidarity with Ukraine, the invaded country where most of its support staff are based.

CEO Richard Kirkendall said yesterday that Namecheap, which has over 14 million domains under management, “will no longer be providing services to users registered in Russia”, in an email to Russian customers.

Namecheap says it has over 1,000 employees in Ukraine.

It uses a company there called Zone3000 for its English-language customer support, from three locations across the country, mostly in Kharkiv, one of the cities that has been particularly affected by the Russian invasion over the last five days.

Kirkendall has given Russian customers until March 6, one week from the time of the email, to move to another registrar.

The email was posted online, and I’ve confirmed with Namecheap that it’s accurate. Kirkendall said:

Unfortunately, due to the Russian regime’s war crimes and human rights violations in Ukraine, we will no longer be providing services to users registered in Russia. While we sympathize that this war may not affect your own views or opinion on the matter, the fact is, your authoritarian government is committing human rights abuses and engaging in war crimes so this is a policy decision we have made and will stand by.

If you hold any top-level domains with us, we ask that you transfer them to another provider by March 6, 2022.

I’m told the words “any top-level domains” just means ‘any domains in any TLDs’.

Kirkendall went on to say that anyone using Russian and Belarusian ccTLDs — .ru, .xn--p1ai (.рф), .by, .xn--90ais (.бел), and .su — will no longer be able to use Namecheap’s email or hosting services.

After some negative replies, accusing Namecheap of going too far, Kirkendall wrote:

We haven’t blocked the domains, we are asking people to move. There are plenty of other choices out there when it comes to infrastructure services so this isn’t “deplatforming”. I sympathize with people that are not pro regime but ultimately even those tax dollars they may generate go to the regime. We have people on the ground in Ukraine being bombarded now non stop. I cannot with good conscience continue to support the Russian regime in any way, shape or form. People that are getting angry need to point that at the cause, their own government. If more grace time is necessary for some to move, we will provide it. Free speech is one thing but this decision is more about a government that is committing war crimes against innocent people that we want nothing to do with.

It’s by some way the strongest stance anyone in the domain industry has yet taken on the war in Ukraine.

Namecheap intends to issue a formal statement outlining its position later today.

ICANN takes the lamest swipe at Namecheap et al over blockchain domains

ICANN has come out swinging against blockchain domains and the registrars that sell them. And by “come out” I mean it’s published a blog post. And by “swinging” I mean “offered the weakest criticism imaginable”.

The post starts off well enough, observing that services marketed as “domain names” that are not automatically compatible with the global DNS are probably not a great purchase, because they don’t work like regular domains.

Using these alternatives requires something like a browser plug-in or to reconfigure your device to use a specialist DNS resolver network, the post notes, before concluding with a brief caveat emptor message.

All good stuff. ICANN has been opposed to alt-root domain efforts for at least 20 years, and the policy is even enshrined in so-called ICP-3, which nobody really talks about any more but appears to still be the law of ICANN Land.

So, which domain-alternatives is ICANN referring to here, and which registrars are selling them? The post states:

Name resolution systems outside the DNS have existed for a long time. One could mention the Sun Microsystem Network Information Service (NIS), the Digital Object Architecture (DOA), or even the Ethereum Name Service (ENS)…

With some ICANN-accredited registrars now selling NIS, DOA, or other similar domains alongside standard domain names, the potential for confusion among unsuspecting customers seems high.

You may be asking: what the heck (or, if you’re like me, fuck) are NIS and DOA domains, and which registrars are selling them?

Great questions.

NIS is an authentication protocol (a bit like LDAP) for Unix networks developed in 1985 (the same year the original DNS standard was finalized) by Sun Microsystems, a company that hasn’t existed in over a decade.

To the best of my knowledge they’ve never been marketed as an alternative to regular domain names. Nobody’s ever used them to address a publicly available web site. Nobody sells them.

DOA, also known as the Handle System, is a more recent idea, first implemented in 1994, before some of you were born. Handles are mostly numeric strings used to address digital objects such as documents. Libraries use them.

The main thing to know about Handles for the purposes of this article is that they’re specifically designed to convey no semantic information whatsoever. They’re not designed to look like domain names and they’re not used that way.

So how many registrars are selling NIS/DOA domains? I haven’t checked them all, but I’m going to go out on a pretty sturdy limb and guess the answer is “none”, which is a lot less than the “some” that ICANN asserts.

But ICANN also mentions the Ethereum Name Service, a much newer and sexier way of cybersquatting, based on the Ethereum cryptocurrency blockchain.

ENS allows people to buy .eth domain names (which do not function in the consensus DNS) for the Ethereum equivalent of about $5. As far as I can tell, you can only buy them through ens.domains, and no ICANN-accredited registrar is functionally capable of selling them.

The ICANN post also contains a brief mention of “Handshake”, and this appears to be what ICANN is actually worried about.

Handshake domains, also known as HNS, look like regular domain names and a handful of ICANN-accredited registrars are actually selling them.

Handshake is also based on blockchain technology, but unlike ENS it also allows people to create their own TLDs (which, again, do not function without special adaptations). Registrars including Namecheap, 101domain and EnCirca sell them.

It’s Namecheap’s storefront hover text, warning that HNS domains don’t work in the regular DNS, that ICANN appears to be paraphrasing in its blog post.

The registrar has a lengthy support article explaining some of the ways you can try to make a Handshake domain work, including an interactive comment thread in which a Namecheap employee suggests that DNS resolvers may choose to resolve HNS TLDs instead of conflicting TLDs that ICANN approves in future.

That’s the kind of thing that should worry ICANN, but it’s got a funny way of expressing that concern. Sun Microsystems? Digital Object Architecture? What’s the message here?

Twenty years ago, I interviewed an ICANN bigwig about New.net, one of the companies attempting to sell alt-root domains at the time. He told me bluntly the company was “breaking the internet” and “selling snake oil”, earning ICANN a snotty lawyer’s letter.

Today’s ICANN post was ostensibly authored by principal technologist Alain Durand, but I’m going to give him the benefit of the doubt and assume comms and legal took their knives to it before it was published.

While some things haven’t changed in the last two decades, others have.