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Double-charging claims as registries ramp up new gTLD refund demands

Kevin Murphy, October 10, 2017, Domain Registries

Registry operators have stepped up demands for ICANN to dip into its $100 million new gTLD cash pile to temporarily lower their “burdensome” accreditation fees.

A new missive from the Registries Stakeholder Group to ICANN this week also introduces a remarkable claim that ICANN may have “double charged” new gTLD applications to the tune of potentially about $6 million.

The RySG wants ICANN to reduce the quarterly fixed fees new gTLD registries must pay by 75% from the current $6,250, for a year, at a cost to ICANN of $16.87 million.

ICANN still has roughly $96 million in leftover money from the $185,000 per-TLD application fees paid in 2012, roughly a third of which had been earmarked for unexpected expenses.

When Global Domains Division president Akram Atallah refused this request in August, he listed some of the previously unexpected items ICANN has had to pay for related to the program, one of which was “implementation of the Trademark Clearinghouse”.

But in last week’s letter (pdf), the RySG points out that each registry was already billed an additional $5,000 fee specifically to set up the TMCH.

Your letter states that registry operators knew about the fee structure from the start and implies that changes of circumstance should be irrelevant. The TMCH charge, however, was not detailed in the applicant guidebook. ICANN added it on its own after all applications were accepted and without community input. Therefore, ICANN is very much in a position to refund registry operators for this overcharge, and we request that ICANN do so. Essentially, you would be refunding the amounts we paid with our own application fees, which should have been used to set up the TMCH in the first place.

These additional fees could have easily topped $6 million, given that there are over 1,200 live new gTLDs.

Was this a case of double-charging, as the RySG says?

My gut feeling is that Atallah probably just forgot about the extra TMCH fee and misspoke in his August letter. The alternative would be a significant accounting balls-up that would need rectifying.

RySG has asked ICANN for a “detailed accounting” of its new gTLD program expenses to date. If produced, that could clear up any confusion.

Group chair Paul Diaz, who signed the letter, has also asked for a meeting with Atallah at the Abu Dhabi public meeting later this month, to discuss the issue.

The letter also accuses ICANN of costing applicants lost revenue by introducing policies such as the ban on two-letter domains, increased trademark protections, and other government-requested restrictions that were introduced after application fees had already been paid.

The tone of the letter is polite, but seems to mask an underlying resentment among registries that ICANN has not been giving them a fair chance to grow their businesses.

UPDATE: This story was updated October 12 to correct the estimate of the total amount of TMCH setup fees collected.

New gTLDs still a crappy choice for email — study

Kevin Murphy, September 28, 2017, Domain Tech

New gTLDs may not be the best choice of domain for a primary email address, judging by new research.

Over 20% of the most-popular web sites do not fully understand email addresses containing long TLDs, and Arabic email addresses are supported by fewer than one in 10 sites, a study by the Universal Acceptance Steering Group has found.

Twitter, IBM and the Financial Times are among those sites highlighted as having only partial support for today’s wide variety of possible email addresses.

Only 7% of the sites tested were able to support all types of email address.

The study, carried out by Donuts and ICANN staff, looked at 749 websites (in the top 1,000 or so as ranked by Alexa) that have forms for filling in email addresses.

On each site, seven different email addresses were input, to see whether the site would accept them as valid.

The emails used different combinations of ASCII and Unicode before the dot and mixes of internationalized domain name and ASCII at the second and top levels.

These were the results (click to enlarge or download the PDF of the report here):

IDN emails

The problem with these numbers, it seems to me, is the lack of a control. There’s no real baseline to judge the numbers against.

There’s no mention in the paper about testing addresses that use .com or decades-old ccTLDs, which would have highlighted web sites that with broken scripts that reject all emails.

But if we assume, as the paper appears to, that all the tested web sites were 100% compliant for .com domains, the scores for new gTLDs are not great.

There are currently over 800 TLDs over four characters in length, but according to the UASG research 22% of web sites will not recognize them.

There are 150 IDN TLDs, but a maximum of 30% of sites will accept them in email addresses.

When it comes to right-to-left scripts, such as Arabic, the vast majority of sites are totally hopeless.

UASG dug into the code of the tested sites when it could and found that most of them use client-side code — JavaScript processing a regular expression — to verify addresses.

A regular expression is complex bit of code that can look something like this: /^.+@(?:[^.]+\.)+(?:[^.]{2,})$

It’s not every coder’s cup of tea, but it can get the job done with minimal client-side resource overheads. Most coders, the UASG concludes, copy regex they found on a forum and maybe tweak it a bit.

This should not be shocking news to anyone. I’ve known about it since 2009 or earlier when I first started ripping code from StackOverflow.

However, the UASG seems to be have been working on the assumption that more sites are using off-the-shelf software libraries, which would have allowed the problem to be fixed in a more centralized fashion.

It concludes in its paper that much greater “awareness raising” needs to happen before universal acceptance comes closer to reality.

Millions spent as three more new gTLDs auctioned

Kevin Murphy, September 26, 2017, Domain Registries

Two or three new gTLDs have been sold in a private auction that may well have seen over $20 million spent.

The not-yet-delegated strings .inc, .llc and (I think) .llp hit the block at some point this month.

They are the first new gTLDs to be auctioned since Verisign paid $135 million for .web a little over a year ago.

At this point, nobody wants to talk about which applicant(s) won which of the newly sold strings, but it seems that the proceeds ran into many millions.

MMX, which applied for .inc and .llc, said this morning that it has benefited from a $2.4 million windfall by losing both auctions.

The auctions evidently took place in September, but CEO Toby Hall declined to comment any further, citing non-disclosure agreements.

There were nine remaining applicants for .inc and eight for .llc.

I don’t think it’s possible to work out which sold for how much using just MMX’s disclosure.

But private auctions typically see the winning bid divided equally between the losers.

I believe .llp was probably sold off by auction at the same time.

The reason for this is that .llc, .inc and .llp were contention sets all being held up by one applicant’s dispute with ICANN.

Dot Registry LLC had applied for all three as “community” gTLDs, which meant it had to go through the Community Evaluation Process.

While it failed the CPE on all three counts, the company subsequently filed an Independent Review Process complaint against ICANN, which it won last August.

You may recall that this was the IRP that found disturbing levels of ICANN meddling in the drafting of the CPE panel’s findings.

Ever since then, ICANN has been conducting an internal review, assisted by outside experts, into how the CPE process worked (or didn’t).

Lawyers for Dot Registry and other affected applications (for .music and .gay) have been haranguing ICANN all year to get a move on and resolve the issue.

And yet, just as the end appeared to be in sight, Dot Registry seems to have decided to give up (or, possibly, cash out) and allow the strings to go to auction.

CEO Shaul Jolles declined to comment on the auctions today.

All I can currently tell you is that at least two of the Dot Registry holdout strings have been sold and that MMX did not win either of them.

The applicants for .inc were: Uniregistry, Dot Registry, Afilias, GMO, GTLD Limited, MMX, Nu Dot Co (now a known Verisign front), Donuts and Google.

The applicants for .llc were: MMX, Dot Registry, Nu Dot Co, Donuts, Afilias, Top Level Design, myLLC and Google.

MMX revenue slips despite domain growth

Kevin Murphy, September 26, 2017, Domain Registries

MMX today posted a smaller loss for the first half of the year, despite managing to grow domains under management and hit some important financial milestones.

The new gTLD registry formerly known as Mind + Machines, which announced a few months ago that it’s looking to be acquired, reported an H1 loss of $526,000 compared to a loss of $1.9 million a year earlier.

Revenue and billings were both down due to the lack of any big launches in the period; H1 2016 had benefited from the strong launch of .vip in China.

Revenue, which is recognized over the duration of the domain registrations, was $5.3 million compared to $7.4 million in 2016. Billings, a measure of cash sales, were $5.6 million compared to $8.1 million.

Despite these dips, MMX is happy enough that the “quality” of its revenue is getting better.

The company said that revenue from domain renewals more than doubled to $2.4 million and represented 45% of revenue. A year ago, it was 15%.

As another measure of the health of its business, it also said that its renewal billings was greater than its operating expenditure for the first time, after cost-cutting.

Domains under management went into seven figures for the first time, to 1.1 million. That was up from 821,000 at the start of the year.

It processed 318,000 new registrations in the six months, compared to 452,000 a year earlier (when .vip’s launch provided a boost).

More delay for Amazon as ICANN punts rejected gTLD

Kevin Murphy, September 26, 2017, Domain Policy

Amazon is going to have to wait a bit longer to discover whether its 2012 application for the gTLD .amazon will remain rejected.

ICANN’s board of directors at the weekend discussed whether to revive the application in light of the recent Independent Review Process panel ruling that the bid had been kicked out for no good reason.

Instead of making a firm decision, or punting it to the Government Advisory Committee (as I had predicted), the board instead referred the matter to a subcommittee for further thought.

The newly constituted Board Accountability Mechanisms Committee, which has taken over key functions of the Board Governance Committee, has been asked to:

review and consider the Panel’s recommendation that the Board “promptly re-evaluate Amazon’s applications” and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications,” and to provide options for the Board to consider in addressing the Panel’s recommendation.

The notion of a “prompt” resolution appears to be subjective, but Amazon might not have much longer to wait for a firmer decision.

While the BAMC’s charter requires it to have meetings at least quarterly, if it follows the practice of its predecessor they will be far more frequent.

It’s possible Amazon could get an answer by the time of the public meeting in Abu Dhabi at the end of next month.

ICANN’s board did also resolve to immediately pay Amazon the $163,045.51 in fees the IRP panel said was owed.

The .amazon gTLD application, along with its Chinese and Japanese versions, was rejected by ICANN a few years ago purely on the basis of consensus GAC advice, led by the geographic name collisions concerns of Peru and Brazil.

However, the IRP panel found that the GAC advice appeared to based on not a great deal more than whim, and that the ICANN board should have at least checked whether there was a sound rationale to reject the bids before doing so.