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.amazon domain isn’t a slam dunk after all

Kevin Murphy, January 9, 2019, Domain Policy

Amazon’s application for the .amazon dot-brand may not be as secure as it was thought, following an ICANN decision over the Christmas period.

Directors threw out a South American government demand for it to un-approve the .amazon bid, but clarified that ICANN has not yet made a “final decision” to allow the gTLD to go live.

The Board Accountability Mechanisms Committee formally rejected (pdf) a Request for Reconsideration filed by the Amazon Cooperation Treaty Organization, which is made up of the governments of the eight countries near that big foresty, rivery, basiny thing, on December 21.

ACTO had asked the board to overturn its October resolution that took .amazon off its longstanding “Will Not Proceed” (ie, rejected) status and put it back on the path to delegation.

Secretary general Jacqueline Mendoza last month blasted ICANN for multiple “untrue, misleading, unfortunate and biased statements”, in connection with ACTO’s purported acquiescence to the .amazon bid.

Refusing ACTO’s request, the BAMC stated that ACTO had misinterpreted the resolution, and that ICANN did not intend to delegate .amazon until Amazon the company and ACTO had sat down to talk about how they can amicably share the name.

The October resolution “could have been clearer”, the BAMC said, adding:

the Resolution was passed with the intention that further discussions among the parties take place before the Board takes a final decision on the potential delegation of .AMAZON and related top-level domains. The language of the Resolution itself does not approve delegation of .AMAZON or support any particular solution. Rather, the Resolution simply “directs the President and CEO, or his designee(s), to remove the ‘Will Not Proceed’ status and resume processing of the .AMAZON applications.”

There are pages and pages of this kind of clarification. The committee clearly wants to help to smooth over relations between ICANN and the governments.

On the face of it, there’s a slight whiff of ret-conny spin about the BAMC recommendations.

There’s some ambiguity in the public record about what the ICANN board actually voted for in October.

Shortly before the ICANN board voted to resume processing .amazon, CEO Goran Marby stated, in front of an audience at ICANN 63 in Barcelona, both that a decision to delegate was being made and that ACTO was still at the table:

what we in practice has done is, through facilitation process, constructed a shared delegation of .AMAZON where the company has or will provide commitments to the ACTO countries how the .AMAZON will be used in the future. And the decision today is to delegate it, forward it to me to finalize those discussions between the company and those countries.

And I’m also formally saying yes to the invitation to go to Brazil from the ACTO countries to their — finish off the last round of discussions.

While the new clarifications seem to suggest that ACTO still has some power to keep .amazon out of the root, the BAMC decision also suggests that the full board could go ahead and approve .amazon at the ICANN 64 meeting in Japan this March, with or without governmental cooperation, saying:

the BAMC recommends that the Board reiterates that the Resolution was taken with the clear intention to grant the President and CEO the authority to progress the facilitation process between the ACTO member states and the Amazon corporation with the goal of helping the involved parties reach a mutually agreed solution, but in the event they are unable to do so the Board will make a decision on the next steps at ICANN 64 regarding the potential delegation of .AMAZON and related top-level domains. The BAMC encourages a high level of communication between the President and CEO and the relevant stakeholders, including the representatives of the Amazonian countries and the Amazon corporation, between now and ICANN 64.

If you’ve not been following the story, ACTO has concerns about .amazon due to its similarity to the name of the rain-forest region.

Amazon the company has promised to encode cultural safeguards in its ICANN contract and offered to donate a bunch of free stuff to the countries to sweeten the deal

The current Amazon offer has not been published.

The BAMC recommendation will now be considered by the full ICANN board, which is usually just a formality.

ICANN budget predicts small new gTLD recovery and slowing legacy growth

Kevin Murphy, December 18, 2018, Domain Services

The new gTLD market will improve very slightly over the next year or so, according to ICANN’s latest budget predictions.

The organization is now forecasting that it will see $5.2 million of funding from new gTLD registry transaction fees in the fiscal year ending June 30, 2019, up from the $5.1 million it predicted when it past the FY19 budget in May.

That’s based on expected transactions being 24 million, compared to the previous estimate of 23.9 million.

It’s the first time ICANN has revised its new gTLD transaction revenue estimates upwards in a couple years.

ICANN is also now estimating that FY20 transaction fees from new gTLDs will come in at $5.5 million.

That’s still a few hundred grand less than it was predicting for FY17, back in 2016.

Transaction fees, typically $0.25, are paid by registries with over 50,000 names whenever a domain is created, renewed, or transferred.

The FY19 forecast for new gTLD registrar transaction fees has not been changed from the $4.3 million predicted back in May, but ICANN expects it to increase to $4.6 million in FY20.

ICANN’s budget forecasts are based on activity it’s seeing and conversations with the industry.

It’s previously had to revise new gTLD revenue predictions down in May 2018 and January 2018. 

ICANN is also predicting a bounceback in the number of accredited registrars, an increase of 15 per quarter in FY20 to end the year at 2,564. That would see accreditation fees increase from an estimated $9.9 million to $10.7 million.

The budget is also less than optimistic when it comes to legacy, pre-2012 gTLDs, which includes the likes of .com and .net.

ICANN is now predicting FY19 legacy transaction fees of $49.8 million. That’s compared to its May estimate of $48.6 million.

For FY20, it expects that to go up to $50.5 million, reflecting growth of 2.1%, lower than the 2.6% it predicted last year.

Overall, ICANN expects its funding for FY19 to be $137.1 million, $600,000 less than it was predicting in May.

For FY20, it expects funding to increase to $140.1 million. That’s still lower than the $143 million ICANN had in mind for FY18, before its belt-tightening initiatives kicked off a year ago.

The budget documents are published here for public comment until February 8.

ICANN will also hold a public webinar today at 1700 UTC to discuss the plans. Details of the Adobe Connect room can be found here.

DNS inventor says .luxe first innovation in a decade

Kevin Murphy, December 10, 2018, Domain Registries

DNS inventor Paul Mockapetris has endorsed MMX’s foray into the blockchain as “the first genuine piece of DNS related innovation that I have seen in the last decade”.

The quote came in an MMX press release this morning, which provided an update on the launch of .luxe as the first gTLD that publishes information to the Ethereum blockchain as well as the DNS.

As I attempted to describe a few months ago, .luxe is being sold as an alternative way to address blockchain assets such as cryptocurrency wallets, which currently use nonsense, immemorable 40-character hashes.

MMX has built an API that allows registrars to automatically associate .luxe domains with Ethereum addresses.

The registry said today it now has 11 registrars signed up to use this API, along with 60 more selling vanilla .luxe domains.

In addition to its launch distribution partner, the wallet provider imToken, MMX said it has also signed up Bitxbank, BeeNews, BEPAL, Hillstone Partners, Math Wallet, MTC Mesh Network, Qufen, Fbee, and ChainDD, which all appear to be Asian blockchain software companies.

It expects to announce support for two non-Ethereum blockchains in the first half of next year.

Judging by zone files, .luxe names have not exactly been flying off the shelves since launch.

It had around 2,600 names in its zone file yesterday, having entered general availability about a month ago.

Despite this, CEO Toby Hall said in this morning’s press release that MMX’s initial investment in .luxe (I assume he’s referring to the R&D investment rather than the cost of applying for the gTLD) has already been recouped.

New gTLDs continue growth trend, but can it last?

Kevin Murphy, December 10, 2018, Domain Registries

New gTLDs continued to bounce back following a year-long slump in registration volumes, according to Verisign data.

The company’s latest Domain Name Industry Brief, covering the third quarter, shows new gTLDs growing from 21.8 million names to 23.4 million names, a 1.6 million name increase.

New gTLDs also saw a 1.6 million-name sequential increase in the second quarter, which reversed five quarters of declines.

The sector has yet to surpass its peak of 25.6 million, which it reached in the fourth quarter of 2016.

It think it will take some time to get there, and that we’ll may well see a decline in next couple quarters.

The mid-point of the third quarter marked the end of deep discounting across the former Famous Four Media (now GRS Domains) portfolio (.men, .science, .loan, etc), but the expected downward pressure on volumes wasn’t greatly felt by the end of the period.

With GRS’s portfolio generally on the decline so far in Q4, we might expect it to have a tempering effect on gains elsewhere when the next DNIB is published.

Verisign’s data showed also that ccTLDs shrunk for the first time in a couple years, down by half a million names to 149.3 million. Both .uk and .de suffered six-figure losses.

Its own .net was flat at 14.1 million, showing no signs of recovery after several quarters of shrinkage, while .com increased by two million names to finish September with 137.6 under management.

No .web until 2021 after Afilias files ICANN appeal

Kevin Murphy, December 6, 2018, Domain Registries

Afilias has taken ICANN to arbitration to prevent .web being delegated to Verisign.

The company, which came second in the $135 million auction that Verisign won in 2016, filed Independent Review Process documents in late November.

The upshot of the filing is that .web, considered by many the best potential competitor for .com — Afilias describes it as “crown jewels of the New gTLD Program” — is very probably not going to hit the market for at least a couple more years.

Afilias says in in its filing that:

ICANN is enabling VeriSign to acquire the .WEB gTLD, the next closest competitor to VeriSign’s monopoly, and in so doing has eviscerated one of the central pillars of the New gTLD Program: to introduce and promote competition in the Internet namespace in order to break VeriSign’s monopoly

Its beef is that Verisign acquired the rights to .web by hiding behind a third-party proxy, Nu Dot Co, the shell corporation linked to the co-founders of .CO Internet that appears to have been set up in 2012 purely to make money by losing new gTLD auctions.

Afilias says NDC broke the rules of the new gTLD program by failing to notify ICANN that it had made an agreement with Verisign to sign over its rights to .web in advance of the auction.

The company says that NDC’s “obligation to immediately assign .WEB to VeriSign fundamentally changed the nature of NDC’s application” and that ICANN and the other .web applicants should have been told.

NDC’s application had stated that .web was going to compete with .com, and Verisign’s acquisition of the contract would make that claim false, Afilias says.

This means ICANN broke its bylaws commitment to apply its policies, “neutrally, objectively, and fairly”, Afilias claims.

Allowing Verisign to acquire its most significant potential competitor also breaks ICANN’s commitment to introduce competition to the gTLD market, the company reckons.

It will be up to a three-person panel of retired judges to decide whether these claims holds water.

The IRP filing was not unexpected. I noted that it seemed likely after a court threw out a Donuts lawsuit against ICANN which attempted to overturn the auction result for pretty much the same reasons.

The judge in that case ruled that new gTLD applicants’ covenant not to sue ICANN was valid, largely because alternatives such as IRP are available.

ICANN has a recent track record of performing poorly under IRP scrutiny, but this case is by no means a slam-dunk for Afilias.

ICANN could argue that the .web case was not unique, for starters.

The .blog contention set was won by an affiliate of WordPress maker Automattic under almost identical circumstances earlier in 2016, with Colombian-linked applicant Primer Nivel paying $19 million at private auction, secretly bankrolled by WordPress.

Nobody complained about that outcome, probably because it was a private auction so all the other .blog applicants got an even split of the winning bid.

Afilias wants the .web IRP panel to declare NDC’s bid invalid and award .web to Afilias at its final bid price.

For those champing at the bit to register .web domains, and there are some, the filing means they’ve likely got another couple years to wait.

I’ve never known an IRP to take under a year to complete, from filing to final declaration. We’re likely looking at something closer to 18 months.

Even after the declaration, we’d be looking at more months for ICANN’s board to figure out how to implement the decision, and more months still for the implementation itself.

Barring further appeals, I’d say it’s very unlikely .web will start being sold until 2021 at the very earliest, assuming the winning registry is actually motivated to bring it to market as quickly as possible.

The IRP is no skin off Verisign’s nose, of course. Its acquisition of .web was, in my opinion, more about restricting competition than expanding its revenue streams, so a delay simply plays into its hands.