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ICA worried ICANN will force URS on .net

Kevin Murphy, January 5, 2017, Domain Registries

The Internet Commerce Association has called for a “moratorium” on the Uniform Rapid Suspension policy being added to legacy gTLD contracts, months before Verisign’s .net contract is up for renewal.

In a blog post, ICA counsel Phil Corwin accused ICANN staff of making policy by the back door by compelling pre-2012 registries to adopt URS, despite a lack of ICANN community consensus policy.

In the last few years the registries for .jobs, .travel, .cat, .pro, .xxx and most recently .mobi have agreed to adopt many aspects of the 2012 Registry Agreement, which includes the URS, often in exchange for lower ICANN fees.

Corwin wrote:

the real test of [ICANN’s Global Domains Division’s] illicit strategy of incremental de facto policymaking will come later this year, when the .Net RA comes up for renewal. We have no idea whether Verisign will be seeking any substantial revisions to that RA that would provide GDD staff with substantial leverage to impose URS, nor do we know whether Verisign would be amenable to that tradeoff.

The .net RA is due to expire July 1 this year.

Verisign pays ICANN $0.75 for each .net domain registration, renewal and transfer. If that were to be reduced to the 2012 standard of $0.25, it would save Verisign at least $7.5 million a year.

The URS provides brand owners with a way to suspend trademark-infringing domains in clear-cut cases. It’s based on UDRP but is faster and cheaper and does not allow the brand owner to seize ownership of the domains.

ICA represents large domain speculators, most of which have their investments tied up in .com and .net domains. It’s complained about the addition of URS to other gTLDs but the complaints have largely fallen on deaf ears.

ICANN has said that it does not force URS on anyone, but that it takes the base new gTLD program RA as its starting point for bilateral negotiations with registries whose contracts are up for renewal.

Thick Whois coming to .com next year, price rise to follow?

Kevin Murphy, October 27, 2016, Domain Registries

Verisign could be running a “thick” Whois database for .com, .net and .jobs by mid-2017, under a new ICANN proposal.

A timetable published this week would see the final three hold-out gTLDs fully move over to the standard thick Whois model by February 2019, with the system live by next August.

Some people believe that Verisign might use the move as an excuse to increase .com prices.

Thick Whois is where the registry stores the full Whois record, containing all registrant contact data, for every domain in their TLD.

The three Verisign TLDs currently have “thin” Whois databases, which only store information about domain creation dates, the sponsoring registrar and name servers.

The model dates back to when the registry and registrar businesses of Verisign’s predecessor, Network Solutions, were broken up at the end of the last century.

But it’s been ICANN consensus policy for about three years for Verisign to eventually switch to a thick model.

Finally, ICANN has published for public comment its anticipated schedule (pdf) for this to happen.

Under the proposal, Verisign would have to start offering registrars the ability to put domains in its thick Whois by August 1 2017, both live via EPP and in bulk.

It would not become obligatory for registrars to submit thick Whois for all newly registered domains until May 1, 2018.

They’d have until February 1, 2019 to bulk-migrate all existing Whois records over to the new system.

Thick Whois in .com has been controversial for a number of reasons.

Some registrars have expressed dissatisfaction with the idea of migrating part of their customer relationship to Verisign. Others have had concerns that local data protection laws may prevent them moving data in bulk overseas.

The new proposal includes a carve-out that would let registrars request an exemption from the requirements if they can show it would conflict with local laws, which holds the potential to make a mockery out of the entire endeavor.

Some observers also believe that Verisign may use the expense of building and operating the new Whois system as an excuse to trigger talks with ICANN about increasing the price of .com from its current, frozen level.

Under its .com contract, Verisign can ICANN ask for a fee increase “due to the imposition of any new Consensus Policy”, which is exactly what the move to thick Whois is.

Whether it would choose to exercise this right is another question — .com is a staggeringly profitable cash-printing machine and this Whois is not likely to be that expensive, relatively speaking.

The proposed implementation timetable is open for public comment until December 15.

People are forgetting .com exists — ICANN survey

Kevin Murphy, September 22, 2016, Domain Policy

Have you ever heard of .com, .net and .org?

That question was posed to 3,349 domain name registrants in 24 countries by market research firm Nielsen this June and guess what — awareness of all three cornerstone gTLDs was down on a comparable 2015 survey.

Unbelievably, only 85% of respondents professed to be aware of .com’s existence, compared to 86% in 2015.

Equally unbelievably, awareness of .net and .org fell from 76% to 69% and from 70% to 65% respectively between 2015 and 2016, the survey found.

Those are just three among many hundreds of findings of the Nielsen survey, which was carried out in order to inform ICANN’s Competition, Consumer Trust & Consumer Choice Review.

The CCT is one of the reviews deemed mandatory before ICANN is able to launch the next round of new gTLD applications.

A great many of the numbers revealed by the survey are seriously open to question — some could even be empirically proven wrong.

But David Dickinson, project lead for Nielsen on the survey, told DI yesterday that the numbers themselves are less important than the trends, or lack thereof, that they might represent.

Nielsen carried out two surveys in 2015 — one of consumers and one of registrants — then repeated both surveys again a year later.

Respondents were selected from a pool of people who have at some point indicated to third-party market research companies that they are available to take surveys online, Dickinson said. They are usually compensated via some kind of redeemable loyalty points scheme.

The registrant surveys were limited to those who said they have registered a domain name. The consumer survey was limited to those who said they spend more than five hours a week online.

While the number of respondents were measured in the low thousands, the idea is that they provide a representative sample of all internet users and domain name registrants.

But there’s a lot of weirdness in the numbers.

Dickinson said that the 85% awareness number for .com could be due partly to random “mechanical errors” — people clicking the wrong buttons on their survey form — but said that lack of awareness was more common among younger respondents who were more likely to be aware of newer, less generic TLDs.

The surveys also highlighted a bizarre split in TLD awareness between consumers and registrants.

Given that registrants are a subset of consumers, and given that they are by definition more familiar with domain names, you’d expect respondents to the registrant surveys to show higher TLD awareness than those responding to the consumer surveys.

But the opposite was true.

The surveys found, for example, that 95% of consumers knew about .com, but only 85% of registrants did. For .net and .org the numbers were 88%/69% and 83%/65% respectively. None of it makes any sense.

Dickinson said that the 2015 consumer/registrant awareness numbers were “almost identical”.

“My only real conclusion here is that [in 2016] there was some systematic difference in the diligence that the registrants selected these names on these awareness questions, and that a large portion of that is just due to random variation,” he said.

“However, when we do look at those people who are registering new gTLDs, they tended to have much lower awareness of those legacy gTLDs than those people who were unaware or had not registered those new gTLDs,” he said.

“The people who said they did not recognize any of those new gTLDs at all the are very very centric on the legacy gTLDs and in particular .com,” he said.

“I think the data is overstated because of the random variation but there is a learning here when we break it down… that those legacy domains are becoming less relevant or less noticed by the younger people and the people who are registering these new gTLDs,” he said.

“I think there is a shift going on, but it’s not as big as what is stated here [in the numbers],” he said.

The surveys also looked at awareness and registration levels for new, 2012-round gTLDs, but again the numbers probably don’t accurately reflect reality.

For example, 39% of registrants claimed to have heard of .email domain names and 15% claimed to have actually registered one.

Again, these numbers don’t seem plausible. There are fewer than 60,000 .email domains in existence today. Even if there were only one million domain registrants in the world, 15% registration rate would mean at least 150,000 names should have been sold.

Dickinson said that this number could have been higher due to selection bias. The survey took about half an hour on average to fill out, so people more personally interested or invested in internet or domain name related stuff might have been more likely to stick around and complete it.

Interestingly, new gTLD awareness rates in North America were substantially lower than awareness elsewhere in the world. For example, only 25% of North Americans professed to have heard of .news, but that grew to 42% in Asia where most languages use a different script.

My sense here is that respondents — which all took the surveys in their native languages — may have just been clicking to confirm English words they recognized, rather than TLDs they had seen in the wild.

Nielsen clearly suspected that there would be an element of “false recall” among respondents because it actually included some fake TLDs among the real ones.

This led to findings such as: 26% of Africans have heard of .cairo, 17% of North Americans have heard of .toronto and 21% of South Americans have heard of .bogota.

None of those city TLDs exist.

Dickinson explained this as “assumed familiarity”.

“What very much seems to happen is that if something has an implied ‘face validity’ — it seems to make sense or seems to be readily interpretable — then those ones will get higher stated awareness than the ones that are just random letters, such as .xyz,” he said.

Indeed, while there are over six million .xyz domains out there today, with high-profile registrants including Google, only 13% of respondents claimed to be aware of it.

“The more implied familiarity or sense of familiarity there is, the more likely people are to feel like they’ve been there or seen it, so it’s definitely a false recall, but the learning from that is that the more interpretable… those things are then they have more easy acceptance by consumers than things that are not interpretable,” Dickinson said.

The surveys did not only cover awareness and registration patterns. There are literally hundreds of data points in there covering different perceptions of TLDs new and old. I’ve just focused here on the ones that made me question whether the survey was worth the time, expense and paper it was written on.

But Dickinson said that the raw numbers are not necessarily what the ICANN review teams should be looking at.

“Maybe the absolute number is not exactly dead-on, but what are the relationships between the numbers?” he said.

“I tend to look at the relationships, so for example one of the objectives of doing this survey was to see if the new gTLD program impacted the perception of the industry in any way, or trustworthiness in the industry,” he said.

“For example, we can say we’re not sure it improved — the numbers didn’t change significantly in that direction to allow us to definitively say it improved — but it certainly did not decline,” he said. “We can rule out that it declined.”

“Overall, we can say that the new gTLD program is emerging with fairly strong awareness, relative,” he said.

“We can also say with certainty that none of those new gTLDs are anywhere approaching the awareness of the legacy gTLDs, and even if there is some erosion in the legacy gTLDs it’s going to take a long time for those to reach parity, if they ever do,” he said.

The Nielsen surveys are one input to the work of the volunteer CCT Review Team, which intends to publish its preliminary report before the end of the year.

CCT-RT chair Jonathan Zuck recently published a blog post on the ICANN web site giving a progress report on recent work.

Verisign announces .net price increase

Verisign has just announced that prices for .net domains are going up again this coming February.

Announcing its second-quarter earnings, the company revealed plans to raise its registry fee from $7.46 to $8.20, effective February 1, 2017.

That’s the maximum 10% price hike it’s allowed to claim under its .net Registry Agreement with ICANN.

Raising .net prices has become a bit of an annual tradition with Verisign, one of the few gTLD registries to still have its prices regulated by ICANN.

The company had about 16.2 million .net domains under management at the last formal, published count in March. Its daily “domain base” has .net at 15.7 million names today.

Verisign has great quarter but sees China growth slowing

Kevin Murphy, April 29, 2016, Domain Registries

Verisign beat its sales expectations in the first quarter of the year, but leadership said rapid growth from Chinese registrants will now “normalize”.

The .com/.net registry last night reported net income up 21% at $107 million, on revenue that was up 9.1% to $282 million.

That’s based primarily on it selling 2.65 million net new .com/.net names during the quarter, at 7.1% increase on the Q1 2014 level baseline. It said it sold 10 million new names in the quarter, up from 8.7 million a year ago.

For comparison, Q1 2015 saw 1.51 million net adds across the two TLDs. Three months ago, the company had predicted net adds to be 1.5 to 2 million names.

It had 142.5 million names at the end of the quarter, 126.6 million of which were .com.

CEO James Bidzos told analysts: “We again saw activity coming from registrars in China that exceeded our expectations.”

However, he added: “At this point, we expect activity from registrars in China to normalize as we continue through the second quarter.”

When pressed, CFO George KIlguss elaborated (according to the SeekingAlpha earnings call transcript):

as we look at the trends, we’ve seen the demand that happened in the second half of the first quarter kind of ebb and flow. So we saw it come. It was pretty strong for a few weeks and then it came back to more than normalized path. So we don’t have a perfect crystal ball, but based on the trends that we’ve seen that we’ve been tracking, it seems to be back on the normalized path for that particular region, at least as what we’ve seen historically.

Verisign is currently negotiating for the renewal of its .com contract with ICANN, which may or may not enable it to raise its government-frozen registry prices in future.