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ICANN predicts shrinkage in new gTLD sector

Kevin Murphy, January 3, 2020, Domain Policy

ICANN will make less money from new gTLDs in its fiscal 2021 because fewer domains will be registered and renewed, according to its recently published draft budget.

The budget, released the day ICANN broke up for its Christmas holidays, shows that the organization expects to bring in $140.4 million in FY21, up a modest $300,000 on its FY20.

But it’s expecting the amount of money contributed by registries and registrars in the new gTLD sector to decline.

For FY21, it expects new gTLD registry transaction fees — the $0.25 paid to ICANN whenever a domain is registered, renewed or transferred — to be $5.1 million. That’s down from the $5.5 million currently forecast for FY20.

It expects registrar transaction fees for new gTLD domains to dip from $4.6 million to $4.3 million.

But at the same time, ICANN is predicting growth from its legacy gTLD segments, which of course are primarily driven by .com sales. All the other legacy gTLDs of note, even .org and .net, are currently on downward trajectories in terms of volumes.

For FY21, ICANN is forecasting legacy gTLD registry transaction fees to come in at $52.6 million, versus the $50.5 million it expects to see in the current FY20. In percentage terms, it’s about double the growth it’s predicting for the current FY.

Legacy gTLD registrar transaction fees are estimated to grow, however, from $31.2 million to $32.7 million.

In terms of fixed fees — the $25,000 every new gTLD registry has to pay every year regardless of transaction volume — ICANN is also predicting shrinkage.

It reckons it will lose a net seven registries in FY21, dropping from 1,170 to 1,163 by the end of June 2021. These are most likely dot-brand gTLDs that could follow the path of 69 predecessors and flunk out of the program.

ICANN also expects its base of paying registrars to go down by 100 accreditations, with no new registrar applications, causing fees to drop from $10.7 million this year to $9.6 million in FY21.

In short, it’s not a particularly rosy outlook for the gTLD industry, unless you’re Verisign.

ICANN’s financial year runs from July 1 to June 30 this year, and usually the December release of its draft budget includes some mid-year reevaluations of how it sees the current period playing out. But that’s not the case this time.

ICANN appears to be on-budget, suggesting that it’s getting better at modeling the industry the more years of historical transaction data it has access to.

The budget (pdf) is now open for public comment. I spotted a few errors, maybe you can too.

Amazon beats South America! Dot-brand contracts now signed

Kevin Murphy, December 23, 2019, Domain Policy

Amazon has prevailed in its seven-year battle to obtain the right to run .amazon as a branded top-level domain.

The company signed contracts for .amazon and the Chinese and Japanese translations on Thursday, despite years-long protests from the eight South American governments that comprise the Amazon Cooperation Treaty Organization.

This means the three gTLDs are likely to be entered into the DNS root system within a matter of weeks, after ICANN has conducted pre-delegation testing to make sure the registry’s technical systems are up to standard. The back-end is being provided by Neustar, so this is pretty much a formality.

.amazon is pretty much a done deal, in other words, and there’s pretty much nothing ACTO can do within the ICANN system to get the contract unsigned.

ACTO was of course angry about .amazon because it thinks the people of the Amazonia region have greater rights to the string than the American e-commerce giant.

It had managed to muster broad support against the gTLD applications from its Governmental Advisory Committee colleagues until the United States, represented on the GAC by the National Telecommunications Administration did a U-turn this November and withdrew its backing for the consensus.

This coincided with Amazon hiring David Redl, the most-recent former head of the NTIA, as a consultant.

The applications were originally rejected by ICANN due to a GAC objection in 2013.

But Amazon invoked ICANN’s Independent Review Process to challenge the decision and won in 2017, with the IRP panel ruling that ICANN had paid too much deference to unjustified GAC demands.

More recently, ACTO had been demanding shared control of .amazon, while Amazon had offered instead to protect cultural interests through a series of Public Interest Commitments in its registry agreements that would be enforceable by governments via the PIC Dispute Resolution Procedure.

This wasn’t enough for ACTO, and the GAC demanded that ICANN facilitate bilateral talks with Amazon to come to a mutually acceptable solution.

But these talks never really got underway, largely due to ACTO internal disputes during the political crisis in Venezuela this year, and eventually ICANN drew a line in the sand and approved the applications.

After rejecting an appeal from Colombia in September, ICANN quietly published Amazon’s proposed PICs (pdf) for public comment.

Only four comments were received during the month-long consultation.

As a personal aside, I’d been assured by ICANN several months ago that there would be a public announcement when the PICs were published, which I even promised you I would blog about.

There was no such announcement, so I feel like a bit of a gullible prick right now. It’s my own stupid fault for taking this on trust and not manually checking the .amazon application periodically for updates — I fucked up, so I apologize.

PICs commenters, including a former GAC vice-chair, also noticed this lack of transparency.

ACTO itself commented:

The proposed PIC does not attend to the Amazon Countries public policy interests and concerns. Besides not being the result of a mutually acceptable solution dully endorsed by our countries, it fails to adequately safeguard the Amazon cultural and natural heritage against the the risks of monopolization of a TLD inextricably associated with a geographic region and its populations.

Its comments were backed up, in pretty much identical language, by the Brazilian government and the Federal University of Rio de Janeiro.

Under the Amazon PICs, ACTO and its eight members each get a .amazon domain that they can use for their own web sites.

But these domains must either match the local ccTLD or “the names of indigenous peoples’ groups, and national symbols of the countries in the Amazonia region, and the specific terms OTCA, culture, heritage, forest, river, and rainforest, in English, Dutch, Portuguese, and Spanish”.

The ACTO nations also get to permanently block 1,500 domains that have the aforementioned cultural significance to the region.

The ACTO and Brazilian commenters don’t think this goes far enough.

But it’s what they’ve been given, so they’re stuck with it.

Russian company approved as gTLD escrow provider

Kevin Murphy, December 16, 2019, Domain Policy

ICANN has approved Russian internet exchange point MSK-IX as its 10th gTLD data escrow provider.

The organization said that week that Joint Stock Company “Internet Exchange “MSK-IX” has been added to its roster of companies fighting for gTLD registries escrow business.

MSK-IX is mainly in the business of operating an internet peering hub — a location where ISPs can connect their networks to backbones and to each other — in Moscow.

It becomes the fourth escrow provider in Europe, and the only one in Europe outside of the EU.

There are also five approved providers in Asia and only one — original provider Iron Mountain — in North America.

ICANN says it is not currently looking for any more providers.

gTLD registries are contractually obliged to periodically put their domain and registrant data into escrow, on the off-chance they go out of business and domains need to be transferred to a different company.

As pricey .new launches, Google reveals first set of big-name users including rapper Drake

Kevin Murphy, December 4, 2019, Domain Registries

Google Registry has opened up its .new gTLD for registration for the first time, but whether you get to buy one or not will depend on a team of Google judges.

The company opened up its “Limited Registration Period” on Monday, and it doing so revealed a bunch of early-adopter registrants including eBay, Bitly, Spotify, Github, Medium, Stripe and the Canadian musician Drake.

It’s not an open registration period. If you want a .new domain you’re going to need to present Google with a business case, showing how you intend to use your chosen domain.

These applications will be judged by Google in seven roughly month-long batches, the first of which ends January 5 and the last of which ends June 21 next year.

Competing applications for the same domain in the same batch will be decided in a beauty contest by Google itself. Needless to say, if you’re champing at the bit for a .new domain, you’ll be wanting to apply in as early a batch as possible.

If you’re lucky enough to get to register a domain, you’ll have 100 days to put it to its promised use, otherwise Google will suspend the name and keep your money.

Registry pricing has not been disclosed, but 101domain is listing .new names at $550 retail. You need the nod from Google before you get to buy the domain from a registrar.

Google says the pricing, which it acknowledges is “high”, is partly to pay for ongoing compliance monitoring. If you run a paid-for service in a .new domain, you’ll have to give Google a free account so it can check you’re sticking to your original plan.

It seems Google is going to be fairly strict about usage, which as I’ve previously reported is tied to “action generation or online creation flows”.

What this basically means is that when you type a live .new domain into your browser, you’ll be taken immediately to a page where you can create something, such as a text document, graphic design, auction listing, or blog post.

The only exception to this rule is when the web site needs a user to be logged in and redirects them to a login page instead. Most of the first tranche of registrants are currently doing this.

Google’s own .new domains include doc.new, which takes uses to a fresh sheet of blank paper at Google Docs.

The gTLD’s major anchors tenants have now been revealed at registry web site whats.new, and they include:

  • eBay: type sell.new into your browser address bar and you’ll be taken to a page where you can create a new auction/sales page.
  • Medium: story.new takes you to a blog post creation page.
  • Spotify: create a new music playlist at playlist.new
  • Webex: open up a web conference at webex.new or letsmeet.new.
  • Bitly: create a shortened link at link.new.
  • OVO Sound: this is a record label in the Warner Music stable, founded by Drake. It currently appears to be being used to plug two of OVO’s artists, which I think is a horrible waste of a nice domain. There’s no “content creation” that I can see, and I reckon it could be a prime candidate for deletion unless “listen to this crappy Drake song” counts as “action generation”.

There are a few more anchor tenants publicized at whats.new, but you get the idea.

.new will enter general availability next July.

Three more dot-brands fizzle out. Total now 69, dudes

Kevin Murphy, December 4, 2019, Domain Registries

Three more dot-brand registries have opted to kill off their own gTLDs, bringing the total to date to 69.

The three self-terminating gTLDs, which all informed ICANN of their intentions in October and November, are: .工行 (.xn--estv75g), .nadex and .vistaprint.

The .vistaprint termination is perhaps of note, given that online printing company Vistaprint was one of the bidders in the 2016 auction of .web, due to its application for .webs being ruled confusingly similar.

It wound up paying just a dollar for that gTLD, due to the complexity of the .web contention set, but even that appears to have been a defensive move.

Since then, Vistaprint has also terminated its .vista contract, and my records show that it has been “in contracting” with ICANN for .webs since August 2016. Clearly, it’s in no rush to ever actually use the thing.

Also noteworthy, .工行 becomes only the second internationalized domain name gTLD to self-terminate, after Walmart called it quits on its pre-delegation contract for .一号店.

.工行 was owned by the state-owned Industrial and Commercial Bank of China (ICBC), which by many measures is the largest bank in the world. It had revenue of over $105 billion last year, so whatever factors drove its decision to dump its dot-brand, cost was not one of them.

Finally, Nadex, an online stock-trading platform, evidently couldn’t find a use for .nadex, so it’s jumped ship too.

Hundreds of dot-brands remain, collectively managing thousands of domains and web sites.

Governments kill off another gTLD bid

Kevin Murphy, November 26, 2019, Domain Registries

Another proposed new gTLD has been killed off by governmental intervention.

A Thailand-based company call Better Living Management Company applied for .thai back in 2012, but quickly ran into opposition from the Thai government, which thought the string too culturally sensitive.

The ICANN Governmental Advisory Committee did not object to Thailand’s objection, and issued consensus advice asking ICANN to reject the application, which it did in November 2013.

BLM filed an Independent Review Process complaint in April 2014, alleging irregularities within the GAC, but the appeal was quickly shelved.

Now, five years later, the company has finally withdrawn it application, meaning it gets most of its application fee back as a refund.

Part of the reason the application failed is likely the fact that the Thai ccTLD registry, Thai Network Information Center Foundation, already runs the internationalized domain name ccTLD .ไทย, which means “.thai” in Thai.

Other applications to be killed off by GAC advice include .islam, .halal, .gcc and one of the .africa bids.

XYZ buys dormant gTLD from “pyramid scheme” operator

Kevin Murphy, November 19, 2019, Domain Registries

XYZ.com has bought another unused dot-brand to add to its portfolio.

It’s taken over the contract for .quest from original registry Quest ION Ltd, a subsidiary of a Hong Kong-based multi-level marketing company called QNet, according to ICANN records.

The gTLD will become the 13th that XYZ has a stake in, and the second dormant dot-brand that it’s acquired, after .monster.

.quest has been delegated for a few years, but its owner had no live domains beyond the mandatory NIC site.

I have to say I was unfamiliar with the company until today, but QNet’s Wikipedia page makes it sound sufficiently dodgy that I’m surprised nobody raised questions about its suitability to be a registry during the ICANN application process.

Its multi-level marketing business model has been described as a “pyramid scheme” or “Ponzi scheme” by various governments and has seen QNet hit by serious legal challenges in many countries on at least four continents.

Loads of its executives, including at least one listed on the gTLD application, have been arrested over the years.

But I guess that’s water under the bridge now, because XYZ has taken control of .quest.

There’s no word yet on a launch date.

Rival dot-brand bidders in settlement talks, seek auction delay

Kevin Murphy, November 13, 2019, Domain Registries

Two companies called Merck have managed to delay an ICANN auction for the .merck dot-brand top-level domain.

The two companies applied for .merck in 2012 and have spent the last almost eight years conducting a battle for the string using various ICANN conflict and appeals mechanisms.

Earlier this year, ICANN placed the two applications into a “last resort” auction, the proceeds of which would flow into ICANN’s own coffers.

Scheduled for July, it would have been the first time competing brands had fought for the same gTLD at ICANN auction.

But the two Mercks sought and received multiple extensions to the auction date, telling ICANN that they were in private settlement talks, until ICANN seemingly got bored and denied their last extension request.

The auction was set to go ahead in late October, but the two applicants managed to get another delay anyway by filing a Request for Reconsideration with ICANN, asking that the refusal to extend be overturned.

While the request is likely to be rejected, the mere fact of its filing means both applications continue to be in “On Hold” status while the request is processed, buying the companies at least a month of extra time to come to their own less-expensive resolution.

The two companies are US-based Merck Registry Holdings, Inc. and its former parent, Germany-based Merck KGaA. The German company is over 350 years old and split from its American subsidiary when it was seized by the US government during World War I. They’re both in the chemicals business.

America has Amazon’s back in gTLD fight at ICANN 66

Kevin Murphy, November 3, 2019, Domain Policy

The United States looks set to stand in the way of government attempts to further delay Amazon’s application for .amazon.

The US Governmental Advisory Committee representative, Vernita Harris, said today that the US “does not support further GAC advice on the .amazon issue” and that ICANN is well within its rights to move forward with Amazon’s controversial gTLD applications.

She spoke after a lengthy intervention from Brazilian rep Ambassador Achilles Zaluar Neto, who said South American nations view the contested string as their “birthright” and said ICANN is allowing Amazon “to run roughshod over the concerns and the cultural heritage of eight nations and tens of millions of people”.

It was the opening exchange in would could prove to be a fractious war of words at ICANN 66 in Montreal, which formally opens tomorrow.

The .amazon applications have been controversial because the eight countries in the Amazon Cooperation Treaty Organization believe their unwritten cultural rights to the word outweigh Amazon’s trademark rights.

Forced to the negotiating table by ICANN last year, the two sides each posed their own sets of ideas about how the gTLD could be managed in such a way as to protect culturally sensitive terms at the second-level, and taking ACTO’s views into account.

But an ICANN-imposed deadline for talks to conclude in April was missed, largely as a result of the ongoing Venezuela crisis, which caused friction between the ACTO governments.

But today, Brazil said that ACTO is ready and willing to get back to the negotiating table asked that ICANN reopen these talks with an impartial mediator at the helm.

As things stand, Amazon is poised to get .amazon approved with a bunch of Public Interest Commitments in its registry contract that were written by Amazon without ACTO’s input.

Neto said that he believed a “win-win” deal could be found, which “would provide a positive impetus for internet governance instead of discrediting it”. He threatened to raise the issue at the Internet Governance Forum next month.

ICANN’s failure to reopen talks “would set a bad precedent and reflect badly on the current state of internet governance, including its ability to establish a balance between private interests and public policy concerns”, he said

But the US rallied to Amazon’s defense. Harris said:

The United States does not support further GAC advice on the .amazon issue. Any further questions from the GAC to the Board on this matter we believe is unwarranted… We are unaware of any international consensus that recognizes inherent governmental rights and geographic names. Discussions regarding protections of geographic names is the responsibility of other forums and therefore should be discussed and those relevant and appropriate forums. Contrary to statements made by others, it is the position of the United States that the Board’s various decisions authorizing ICANN to move forward with processing the.application are consistent with all relevant GAC advice. The United States therefore does not support further intervention that effectively works to prevent or delay the delegation of .amazon and we believe we are not supportive and we do not believe that it’s required.

This is a bit of a reversal from the US position in 2013.

Back then, the GAC wanted to issue consensus advice that ICANN should reject .amazon, but the US, protecting one of its largest companies, stood in the way of full consensus until, in the wake of the Snowden revelations, the US decided instead to abstain, apparently to appease an increasingly angry Brazil.

It was that decision that opened the door to the six more years of legal wrangling and delay that .amazon has been subject to.

With the US statement today, it seems that the GAC will be unlikely to be able to issue strong, full-consensus advice that will delay .amazon further, when it drafts its Montreal communique later in the week.

The only other GAC member speaking today to support the US position was Israel, whose rep said “since it is an ongoing issue for seven years, we don’t believe that there is a need for further delay”.

Several government reps — from China, Switzerland, Portugal, Belgium and the European Commission — spoke in favor of Brazil’s view that ICANN should allow ACTO and Amazon back to the negotiating table.

The GAC is almost certain to say something about .amazon in its communique, due to drop Wednesday, but the ICANN board of directors does not currently have an Amazon-related item on its Montreal agenda.

UPDATE: The originally published version of this story incorrectly identified the US GAC representative as Ashley Heineman, who is listed on the GAC’s web site as the US representative. In fact, the speaker was Vernita Harris, acting associate administrator at the US National Telecommunications and Information Administration. Had I been watching the meeting, rather that just listening to it, this would have been readily apparent to me. My apologies to Ms Heineman and Ms Harris for the error.

New (kinda) geo-TLD rules laid out at ICANN 66

Kevin Murphy, November 2, 2019, Domain Policy

The proposed rules for companies thinking about applying for a geographic gTLD in the next application round have been sketched out.

They’re the same as the old rules.

At ICANN 66 in Montreal today, a GNSO Policy Development Process working group team discussed its recently submitted final report (pdf) into geographic strings at the top level.

While the group, which comprised over 160 members, has been working for over two years on potential changes to the rules laid out in the 2012 Applicant Guidebook, it has basically concluded by consensus that no changes are needed.

What it has decided is that the GNSO policy on new gTLDs that was agreed upon in 2007 should be updated to come into line with the current AGB.

It appears to be a case of the GNSO setting a policy, the ICANN staff and board implementing rules inconsistent with that policy, then, seven years later, the GNSO changing its policy to comply with that top-down mandate.

It’s not really how bottom-up ICANN is supposed to work.

But at least nobody’s going to have to learn a whole new set of rules when the next application round opens.

The 2012 AGB bans two-letter gTLDs, for example, to avoid confusion with ccTLDs. It also places strong restrictions on the UN-recognized names of countries, territories, capital cities and regions.

It also gave the Governmental Advisory Committee sweeping powers to object to any gTLD it didn’t like the look of.

What it didn’t do was restrict geographic names such as “Amazon”, which is an undeniably famous geographic feature but which does not appear on any of the International Standards Organization lists that the AGB defers to.

Amazon the retailer has been fighting for its .amazon gTLDs for seven years, and it appears that the new GNSO recommendations will do nothing to provide clarity for edge-case applicants such as this in future rounds.

The group that came up with report — known as Work Track 5 of the New gTLD Subsequent Procedures PDP Working Group — evidently had members that want to reduce geographic-string protections and those who wanted to increase them.

Members ultimately reached “consensus” — indicating that most but not all members agreed with the outcome — to stick with the status quo.

Nevertheless, the Montreal session this afternoon concluded with a great deal of back-slapping and expressions that Work Track 5 had allowed all voices, even those whose requests were ultimately declined, to be heard equally and fairly.

The final report has been submitted to the full WG for adoption, after which it will go to the full GNSO for approval, before heading to public comment and the ICANN board of directors as part of the PDP’s full final report.