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Verisign’s silly .xyz lawsuit thrown out

Kevin Murphy, October 28, 2015, Domain Registries

Verisign has had its false advertising lawsuit against the .xyz gTLD registry thrown out of court. this week won a summary judgement, ahead of a trial that was due to start next Monday.

“By granting XYZ a victory on summary judgement, the court found that XYZ won the case as a matter of law because there were no triable issues for a jury,” the company said in a statement.

The judge’s ruling does not go into details about the court’s rationale. XYZ’s motion to dismiss has also not been published.

So it’s difficult to know for sure exactly why the case has been thrown out.

Verisign sued in December, claiming XYZ and CEO Daniel Negari had lied in advertising and media interviews by saying there are no good .com domain names left.

Many of its claims centered on this video:

XYZ said its ads were merely hyperbolic “puffery” rather than lies.

Verisign also claimed that XYZ had massively inflated its purported registration numbers by making a shady $3 million reciprocal domains-for-advertising deal with Network Solutions.

XYZ general counsel Grant Carpenter said in a statement: “These tactics appear to be part of a coordinated anti-competitive scheme by Verisign to stunt competition and maintain its competitive advantage in the industry.”

While Verisign has lost the case, it could be seen to have succeeded in some respects.

XYZ had to pay legal fees in “the seven-figure range”, as well as disclose hundreds of internal company documents — including emails between Negari and me — during the discovery phase.

Through discovery, Verisign has obtained unprecedented insight into how its newest large competitor conducts its business.

While I’ve always thought the lawsuit was silly, I’m now a little disappointed that more details about the XYZ-NetSol deal are now unlikely to emerge in court.

Should brands get a new gTLD round to themselves? Twitter thinks so

Kevin Murphy, October 20, 2015, Domain Policy

Twitter wants to get its hands on some new gTLDs but doesn’t want to wait.

Having missed the first round of new gTLD applications back in 2012, the company is now keen on getting .twitter and other strings both branded and generic.

“We’re interest in round two,” Twitter trademark counsel Stephen Coates said as ICANN’s business constituencies met the board of directors today.

“We have several interesting opportunities to develop around that space,” he said. “We are interested in both brands and generics.”

The problem for Twitter, and every other would-be gTLD applicant, is that ICANN isn’t even talking in broad terms about when the next round will be.

The absolute minimum that must happen is that ICANN must complete a review of round one, focusing on “Competition, Consumer Trust and Consumer Choice”. This CCT review is mandated by ICANN’s Affirmation of Commitments with the US government.

Almost three years after the first round opened, the volunteer team that will carry out the CCT review has not even been assembled yet.

There are a number of other factors that may or may not wind up on the critical path — such as reviews of rights protection mechanisms and security and stability at the DNS root.

Coates said he would like a “bifurcated” review process leading to two separate second application rounds.

“I would advocate for bifurcating the review process, which I think is very important, especially around RPMs,” he said. “But also bifurcating the round process, treating dot-brands differently than generic names.”

I think this outcome is unlikely.

Application rules that give preference to one type of application over another invite exploitation. It happened in the 2003 sponsored TLD round and it’s happening with “community” and “Specification 13” applications in the current round too.

Afilias gives its gTLDs a kick up the bum with U-turn 101domain buy

Kevin Murphy, October 16, 2015, Domain Registries

Afilias, once one of the fiercest opponents of registries owning registrars, has acquired 101domain to gain its first significant foothold in the registrar market.

Wolfgang Reile, president and CEO of 101domain, said he would be quitting the company and that COO/CFO Anthony Beltran will be leading the new Afilias unit in future.

The acquisition, which closed September 2, was for an undisclosed amount, but I’d say it was easily a seven-figure deal.

When Afilias rival CentralNic acquired last year, it paid $7.5 million.

California-based 101domain is currently about a quarter of the size that was when it was bought, based on gTLD domains under management, with a little over 120,000 names on its books as of June this year, according to registry reports.

But the company is well known as a go-to registrar if you want a broad choice of TLDs — it says it currently supports over 900. Its ccTLD sales may make the company much bigger.

Getting its stable of registry offerings to market is one of the reasons Afilias was drawn to 101domain.

Afilias’ own portfolio of TLDs contain some semi-restricted strings — such as .vote, which has a no-domaining policy — that would not be automatically attractive to many registrars.

Afilias told DI:

This acquisition furthers our post-vertical integration strategy of establishing a capability that enables us to both service our registry customers and ensure an outlet for TLDs of our own that may not be easy to find at a traditional registrar. 101domain is expected to continue to operate as it does today.

Afilias actually already had a registrar division — Emerald Registrar, which does business from — but had fewer than 1,500 domains under management at the last count.

Its registry business has over 20 million domains.

If you have a long memory, you may recall that Afilias was once dead-set against the concept of vertical integration — registries and registrars under the same ownership — which in the post-2012 new gTLD world has become industry standard.

The ICANN working group that was tasked with reforming ownership rule was held in stalemate by Afilias and Go Daddy back in 2010, before ICANN finally broke the deadlock.

New gTLD portfolio registries including Uniregistry, Google, Minds + Machines and Rightside have registrar businesses already. Famous Four seems to be closely aligned with Alpnames, and Donuts is tight with Rightside.

Odd-couple coalition wants URS deleted from legacy gTLD contracts

Kevin Murphy, October 14, 2015, Domain Registries

Commercial and non-commercial interests within ICANN have formed a rare alliance in order to oppose the Uniform Rapid Suspension policy in three new legacy gTLD contracts.

The groups want ICANN to delete URS from the .travel, .cat and .pro Registry Agreements, which were all renewed for 10-year terms last week.

The Business Constituency and the Non-Commercial Stakeholders Group put their names to a Request for Reconsideration filed with ICANN yesterday.

The Internet Commerce Association, a member of the BC, filed a separate RfR asking for the same thing yesterday too.

These groups believe that ICANN contracting staff are trying to create consensus policy by the back door, from the top down, by imposing URS on gTLDs that were delegated before the 2012 application round.

URS was created specifically for the new gTLD program and therefore should not apply to legacy gTLDs, they say. The BC/NCSG request states:

Our joint concern… is that a unilateral decision by ICANN contractual staff within the [Global Domains Division] to take the new gTLD registry agreement as the starting point for renewal RAs for legacy gTLDs has the effect of transforming the PDDRP [Post Delegation Dispute Resolution Process] and the URS into de facto Consensus Policies without following the procedures laid out in ICANN’s Bylaws for their creation. To be clear, we take no objection to a registry voluntarily agreeing to adopt RPMs in their contractual negotiations with ICANN.

The ICA has the same objections. It’s primarily concerned that the new contracts set a precedent that will ultimately force URS into the .com space, when Verisign’s contract comes up for renewal.

Both RfRs ask ICANN to delete the URS requirements from the just-signed .pro, .travel and .cat registry agreements.

The requesters suspect that rather than including URS as “the result of even-handed ‘bilateral negotiations'”, it was “staff insistence that the registries accept it to achieve timely registry agreement renewal.”

They want the ICANN board to demand to see the emails that were exchanged during negotiations in order to determine whether the registries were strong-armed into signing up for URS.

The BC/NCSG request is here. The ICA request is here.

XYZ to put global block on domains banned in China

Kevin Murphy, October 12, 2015, Domain Registries plans to slap a global ban on domain names censored by the Chinese government.

Chinese words meaning things such as “human rights” and “democracy” are believed to be on the block list, which an industry source says could contain as many as 40,000 words, names and phrases.

(UPDATE: Gavin Brown, CTO of XYZ back-end CentralNic, tweeted that the list is nowhere near 40,000 names long.)

The registry seems to be planning to allow the Chinese government to censor its new gTLDs, which include .xyz, .college, .rent, .protection and .security, in every country of the world.

And it might not be the last non-Chinese registry to implement such a ban.

The surprising revelation came in a fresh Registry Services Evaluation Process request (pdf), filed with ICANN on Friday.

The RSEP asks ICANN to approve the use of a gateway service on the Chinese mainland, which the company says it needs in order to comply with Chinese law.

As previously reported, Chinese citizens are allowed to register domains in non-Chinese registries, but they may not activate them unless the registry complies with the law.

That law requires the registry to be located on the Chinese mainland. XYZ plans to comply by hiring local player ZDNS to proxy its EPP systems and mirror its Whois.

But the Chinese government also bans certain strings — which I gather are mostly but not exclusively in Chinese script — from being registered in domain names.

Rather than block them at the ZDNS proxy, where only Chinese users would be affected, XYZ has decided to ban them internationally.

Registrants in North America or Europe, for example, will not be able to register domains that are banned in China. XYZ said in its RSEP:

XYZ will reserve names prohibited for registration by the Chinese government at the registry level internationally, so the Gateway itself will not need to be used to block the registration of of any names. Therefore, a registrant in China will be able to register the same domain names as anyone else in the world.

It seems that XYZ plans to keep its banned domain list updated as China adds more strings to its own list, which I gather it does regularly.

Customers outside of China who have already registered banned domains will not be affected, XYZ says.

If China subsequently bans more strings, international customers who already own matching domains will also not be affected, it says.

CEO Daniel Negari told DI: “To be clear, we will not be taking action against names registered outside of China based on Chinese government requests.”

But Chinese registrants do face the prospect losing their domains, if China subsequently bans the words and XYZ receives a complaint from Chinese authorities.

“We treat requests from the Chinese government just like we treat requests from the US government or any other government,” Negari said.

“When we receive a valid government or court order to take action against a name and the government has jurisdiction over the registration, we will take action the registration,” he said.

Up to a third of the .xyz zone — about three hundred thousand names — is believed to be owned by Chinese registrants who are currently unable to actually use their names.

The company clearly has compelling business reasons to comply with Chinese law.

But is giving the Chinese government the ongoing right to ban tens of thousands of domain names internationally a step too far?

ICANN allows anyone to file public comments on RSEP requests. I expect we’ll see a few this time.