Operation September Thrust leads to another million-domain Radix gTLD

Radix has become the first new gTLD portfolio registry to hit over one million domains in more than one TLD.
It said today that .site has crossed the seven-digit threshold, joining .online, which hit a million names in 2018.
It’s huge recent growth for .site, which had around 561,000 domains under management at the end of September.
Radix CEO Sandeep Ramchandani told DI today that the rapid uptick comes as a result of a marketing program internally code-named “September Thrust”.
This involved promotional pricing — Ramchandani said the cheapest a .site could have been obtained would be about $0.99 — and joint-marketing efforts with multiple registrars.
This mostly involved plugs on registrar home pages, email shots, and promotion in the “check availability” part of registrar storefronts, he said.
The latest transaction reports filed with ICANN show .site grew by about 120,000 DUM in October, with West.cn, NameCheap and Network Solutions (Web.com) the biggest beneficiaries.
NetSol’s .site DUM actually grew by about 10x in the month.
The $1 retail pricing was apparently available at some registrars prior to September, and continues to exist on storefronts today.

Pay up or sell up, ICANN tells failing new gTLD

ICANN has responded to a request for it to reduce the $25,000 annual fee it charges gTLD registries.
The answer is no.
That wholly unsurprising reply came in a letter from registry services director Russ Weinstein to John McCabe, CEO of failing new gTLD operator Who’s Who Registry.
McCabe, in November, had asked ICANN to reduce its fees for TLDs, such as its own .whoswho, that have zero levels of abuse. ICANN fees are the “single biggest item” in the company’s budget, he said.
His request coincided with ICANN commencing compliance proceedings against the company for failure to pay these fees
Weinstein wrote, in a letter (pdf) published today:

We sympathize with the financial challenges that some new gTLD registry operators may be facing in the early periods of these new businesses. New gTLD operators face a challenging task of building consumer awareness and this can and may take significant time and effort.

But he goes on to point out that the $25,000-a-year fee was known to all applicants before they applied, and had been subject to numerous rounds of public comment before the Applicant Guidebook was finalized.
Weinstein writes:

The AGB made clear that evaluation phase was to determine whether an applicant had the requisite technical, operation and financial capabilities to operate a registry, and was not a assessment nor an endorsement of a particular business plan.

It’s pretty clear that the .whoswho business plan has failed. It’s sold no more than a handful of non-defensive domains over the four years it has been available.
Weinstein concludes his letter by pointing out that all new gTLD registries are free to terminate their contracts for any reason, and that it’s perfectly permissible under ICANN rules to sell your contract to another registry.
ICANN told Who’s Who earlier this month that it has until February 10 to pay its overdue fees or risk having its contract terminated.

ICANN puts deadline on .amazon talks

ICANN’s board of directors has voted to put a March deadline on talks over the future of the .amazon gTLD.
Late last week, the board formally resolved to “make a decision” on .amazon at ICANN 64, which runs in Kobe, Japan from March 9 to March 14.
It would only do so if Amazon the e-commerce giant and the eight governments of the Amazon Cooperation Treaty Organization fail to come to a “mutually agreed solution” on their differences before then.
CEO Goran Marby is instructed to facilitate these talks.
Here are the relevant resolved clauses from the resolution:

Resolved (2019.01.16.03), the Board hereby reiterates that Resolution 2018.10.25.18 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 at ICANN 64 on the next steps regarding the potential delegation of .AMAZON and related top-level domains.
Resolved (2019.01.16.04), the Board 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, and directs the President and CEO to provide the Board with updates on the facilitation process in anticipation of revisiting the status of the .AMAZON applications at its meeting at ICANN64.

The vote came following ACTO’s demand that ICANN reverse its decision to take .amazon, and Chinese and Japanese translations, off their “Will Not Proceed” status, which heavily implied they will ultimately end up in the root.
ACTO, which claims its members have a greater right to the string due to its geographical and cultural significance, says it has not yet agreed to Amazon’s peace offering, which includes safeguards, financial support for future gTLD applications, and free Kindles.
The ICANN board has now formally rejected the demand — so .amazon is still officially on the path to delegation — but has published mountains of clarification explaining that ACTO misinterpreted what the status change implied.
The board now says that the status change was necessary in order for ICANN to negotiate the inclusion of Public Interest Commitments — PICs, which would give ACTO the right to challenge Amazon if it breaches any of its cultural safeguards — in the .amazon contracts.
With ACTO’s Request for Reconsideration now dealt with, the ball moves into ACTO’s court.
Will ACTO come back to the negotiating table, or will it retain the hard line it has been adopting for the last few months? We’ll find out before long.

Another failing gTLD not paying its “onerous” dues

ICANN has sent out its first public contract breach notice of the year, and it’s going to another new gTLD registry that’s allegedly not paying its fees.
The dishonor goes to Who’s Who Registry, manager of the spectacularly failing gTLD .whoswho.
According to ICANN, the registry hasn’t paid its registry fees for several months and hasn’t been responding to private compliance outreach.
The company has a month to pay up or risk suspension or termination.
CEO John McCabe actually wrote to ICANN (pdf) the day after one of its requests for payment in November, complaining that its fees were too “onerous” and should be reduced for registries that are “good actors” with no abuse.
ICANN’s annual $25,000 fee is “the single largest item in .whoswho’s budget”, McCabe wrote, “the weight of which suppresses development of the gTLD”.
Whether ICANN fees are to blame is debatable, but all the data shows that .whoswho, which has been in general availability for almost four years, has failed hard.
It had 100 domains under management at the last count, once you ignore all the domains owned by the registry itself. This probably explains the lack of abuse.
Well over half of these names were registered through brand-protection registrars. ICANN statistics show 44 names were registered during its sunrise period.
A Google search suggests that only four people are currently using .whoswho for its intended purpose and one of those is McCabe himself.
The original intent of .whoswho was to mimic the once-popular Who’s Who? books, which contain brief biographies of notable public figures.
The gTLD was originally restricted to registrants who had actually appeared in one of these books, but the registry scrapped that rule and slashed prices from $70 to $20 a year in 2016 after poor uptake.
I’d venture the opinion that, in a world of LinkedIn and Wikipedia, Who’s Who? is an idea that might have had its day.

.CLUB announces three years of price increases

.CLUB Domains is to increase its wholesale registry fees by $1.90 over the next three years.
The company announced that the increases for .club names will come on July 1 this year, next year, and in 2021.
The current price is $8.05 per domain per year. This will go up to $8.95, then $9.45, then $9.95.
They’re the first price changes .CLUB has implemented, other than discounts, since its launch in 2014.
The gTLD had almost 1.5 million names under management at the last public count, and has about 1.16 million names in its zone file today.
It saw a growth surge in the second half of 2018 due to aggressive discounting in China — with AliBaba selling new names for as little as $0.44 — which led to a corresponding increase in abuse.
.CLUB is a rare example of a private TLD operator that is fairly open about its financials.

How new gTLD auctions could kill gaming for good

Ever heard of a Vickrey auction? Me neither, but there’s a good possibility that it could become the way most new gTLD fights get resolved in future.
It’s one of several methods being proposed to help eliminate gaming in the next new gTLD application round that have received some support in a recently closed round of public comments.
ICANN’s New gTLD Subsequent Procedures working group (SubPro) is the volunteer effort currently writing the high-level rules governing future new gTLD applications.
Two months ago, it published a preliminary report exploring possible ways that contention sets could be resolved.
The current system, from the 2012 round, actively encourages applicants to privately resolve their sets. Usually, this entails a private auction in which the winning bid is shared evenly between the losing applicants.
This has been happening for the last five years, and a lot of money has been made.
Losing auctions can be a big money-spinner. Publicly traded portfolio registry MMX, for example, has so far made a profit of over $50 million losing private auctions, judging by its annual reports. It spent $13.5 million on application fees in 2012.
MMX is actually in the registry business, of course. But there’s a concern that its numbers will encourage gaming in future.
Companies could submit applications for scores of gTLDs they have no intention of actually operating, banking on making many multiples of their investment by losing private auctions.
Pointing no fingers, it’s very probably already happened. But what to do about it?
Who’s this Vickrey chap?
One suggestion that seems to be getting some love from diverse sections of the community is a variation of the “Vickrey auction”.
Named after the Canadian Nobel Prize-winning economist William Vickrey, it’s also called a “second price sealed bid auction”.
Basically, each applicant would secretly submit the maximum price they’d be willing to pay for the contested gTLD, and the applicant with the highest bid would pay the amount of the second-highest bid.
This method has, I believe, been used more than once in private contention resolution during the 2012 round.
But under the system suggested by SubPro, each applicant would make their single, sealed, high bid at time of application, before they know who else is gunning for the same string.
That way, contention sets could be mostly eliminated right at the start of the process, leading to time and cost efficiencies.
There’d be no need for every application in a contention set to go through full evaluation. Only the high bidder would be evaluated. If it failed evaluation, the second-highest bidder would go into evaluation, etc, until a successful applicant was found.
For losing applicants, a possible benefit of this is that they’d get much more of their application fees refunded, because they’d be skipping much of the process.
Neither would they have to bear the ambient running costs of sitting on their hands for potentially years while the ICANN process plays itself out.
It could also substantially speed up the next round. If the round has five, 10, 20 or more times as many applications as the 1,930 received in 2012, resolving contention sets at the very outset could cut literally years off processing times.
The SubPro concept also envisages that the winning bid (which is to say, the second-highest bid) would go directly into ICANN’s coffers, eliminating the incentive to game the system by losing auctions.
I must admit, there’s a lot to love about it. But it has drawbacks, and critics.
Why Vickrey may suck
SubPro itself notes that the Vickrey model it outlines would have to take into account other aspects of the new gTLD program, such as community applications, applicants seeking financial support from ICANN, and objections.
It also highlights concerns that bids submitted at the time of application constitute private business-plan information that applicants may not necessarily want ICANN staff seeing (with the revolving door, this info could quite easily end up at a competitor).
Companies and constituencies responding to the recent public comment period also have concerns.
There’s hesitance among some potential applicants about being asked to submit blind bids. There are clearly cases where an applicant would be prepared to pay more to keep a gTLD out of the hands of a competitor.
One could imagine, for example, that Coca-Cola would be ready to spend a lot more money on .cola if it knew Pepsi was also bidding, and possibly less if it were only up against Wolf Cola.
The Intellectual Property Constituency raised this concern. It said that it was open to the idea of Vickrey auctions, but that it preferred that bids should be submitted after all the applications in the contention set have been revealed, rather than at time of application:

Although there is a potential downside to this in that the parties have not put a “value” on the string in advance, the reality is that many factors come into play in assessing that “value”, certainly for a brand owner applicant and possibly for all applicants, including who the other parties are and how they have indicated they intend to use the TLD.

The Brand Registry Group and Neustar were both also against the Vickrey model outlined by SubPro, but neither explained their thinking.
The Business Constituency, which is often of a mind with the IPC, in this case differed. The BC said it agreed that bids should be submitted alongside applications, only to be unsealed in the event that there is contention. The BC said:

This Vickrey auction would also resolve contention sets very early in the application evaluation process. That saves contending applicants from spending years and significant sums during the contention resolution process, which was very difficult for small applicants.

It’s hard to gauge where current registries, which are of course also likely applicants, stand on Vickrey. The Registries Stakeholder Group is a pretty diverse bunch nowadays and it submitted a set of comments that, unhelpfully, flatly contradict each other.
“Some” RySG members believe that the current evaluation and contention process should stay in place, though they’re open to a Vickrey-style auction replacing the current ascending-clock model at the last-resort stage after all evaluations are complete.
“Other” RySG members, contrarily, wholeheartedly support the idea that bids should be submitted at the time of application and the auction processed, Vickrey-style, before evaluation.
“An application process which requires a thorough evaluation of an applicant who will not later be operating the gTLD is not an efficient process,” these “other” RySG members wrote. They added:

if contention sets are resolved after the evaluation process and not at the beginning of it, like the Vickery model suggestion, it would enable applicants who applied for multiple strings to increase the size of their future bids each time they lost an auction. Each TLD needs to be treated on its own merits with no contingencies allowed for applicants with numerous applications.

It’s not at all clear which registries fall into the “some” category and which into “other”, nor is it clear the respective size of each group.
Given the lack of substantive objections to pre-evaluation Vickrey auctions from the “some” camp, I rather suspect they’re the registries hoping to make money from private settlements in the next round.
Other ideas
Other anti-gaming ideas put forward by SubPro, which did not attract a lot of support, included:

• A lottery. Contention sets would be settled by pulling an applicant’s name out of a hat.
• An RFP process. This would mean comparative, merit-based evaluation, which has never been a popular idea in ICANN circles.
• Graduated fees. Basically, applicants would pay more in application fees for each subsequent application they filed. This would disadvantage portfolio applicants, but could give smaller applicants a better shot at getting the string they want.

All of the comments filed on SubPro’s work has been fed back into the working group, where discussions about the next new gTLD round will soon enter their fourth year…

.amazon domain isn’t a slam dunk after all

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

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

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?

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.