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Government anger over two-letter domains

Kevin Murphy, March 16, 2017, Domain Policy

ICANN’s Governmental Advisory Committee has clashed with its board of directors over the lack of protections for two-letter domain names that match country codes.

The board has now formally been urged to reconsider its policy to allow registries to sell these names, after angry comments and threats from some GAC members.

Governments from Brazil, Iran, China and the European Union are among at least 10 angered that the names are either not adequately protected or only available for exorbitant prices,

The debate got very heated at ICANN 58 here in Copenhagen on Wednesday morning, during a public session between the GAC and the board, with Iran’s outspoken GAC rep, Kavous Arasteh, almost yelling at Chris Disspain, the board’s point man on the topic.

Arasteh even threatened to take his concerns, if not addressed, to the International Telecommunications Union when it convenes for a plenipotentiary next year.

“Your position is not acceptable. Rejected categorically,” he said.

“The multistakeholder process was not easily accepted by many countries. Still people have difficulty with that,” he said. “We have a plenipotentiary coming in 2018, and we will raise the issue if the matter is not resolved… It is not always commercial, government also has some powers, and we exercise our powers.”

Invoking the ITU is a way to turn a relatively trivial disagreement into an existential threat to ICANN, a typical negotiating tactic of governments that don’t get what they want from ICANN.

The relatively trivial disagreement in this case is ICANN’s decision to allow gTLD registries to release all previously reserved two-letter strings.

In November, ICANN approved a policy that released all two-letter strings on the proviso that registrants have to assert that they will not pass themselves off as affiliated with the countries concerned.

Registries also were given a duty to investigate — but not necessarily act upon — governmental complaints about confusion.

ICANN thinks that this policy is perfectly compliant with the GAC’s latest official advice, supplied following the Helsinki meeting last June, which asked ICANN to:

urge the relevant Registry or the Registrar to engage with the relevant GAC members when a risk is identified in order to come to an agreement on how to manage it or to have a third-party assessment of the situation if the name is already registered.

Disspain patiently pointed out during Wednesday’s session that governments have no legal rights to their ccTLD strings at the second level, and that most of the complaining governments don’t even protect two-letter strings in their own ccTLDs.

But some GAC reps disagreed.

China stated (via the official interpreter): “We believe the board doesn’t have the right or the mandate to decide whether GAC members have the right over two-character domain names.”

While no government spoke in favor of the ICANN policy on Wednesday, the complaining governments do appear to be in a minority of the GAC.

Despite this, they seem to have been effective in swaying fellow committee members to issue some stern new advice. The Copenhagen communique, published last night (pdf), reads:

a. The GAC advises the ICANN Board to:

I. Take into account the serious concerns expressed by some GAC Members as contained in previous GAC Advice

II. Engage with concerned governments by the next ICANN meeting to resolve those concerns.

III. Immediately explore measures to find a satisfactory solution of the matter to meet the concerns of these countries before being further aggravated.

IV. Provide clarification of the decision-making process and of the rationale for the November 2016 resolution, particularly in regard to consideration of the GAC advice, timing and level of support for this resolution.

ICANN is being compelled to retroactively revisit a policy that was issued in compliance with previous GAC advice, it seems.

The next ICANN meeting is being held in Johannesburg in June, so the clock is ticking.

Two-letter domains are valuable properties even in new gTLDs. With each expected to sell for thousands, two-letter names are likely to be a multimillion dollar windfall for even moderately sized portfolio registries.

Schilling expects GoDaddy to return after dumping Uniregistry gTLDs

Kevin Murphy, March 14, 2017, Domain Registries

Uniregistry CEO Frank Schilling has expressed his “surprise” that GoDaddy has decided to stop selling his company’s gTLDs, but said he expects the registrar to return in future.

GoDaddy’s decision to stop new registrations and inbound transfers for Uniregistry’s portfolio of gTLDs came after the registry revealed price increases for 16 strings that ranged from nominal to over 3,000%.

The registrar told Domain Name Wire yesterday that Uniregistry’s move presented “an extremely poor customer experience” and “does not reflect well on the domain name industry”.

Registrars are of course the customer-facing end of the domain name industry, and the burden of explaining renewal price increases of 5x falls on their shoulders.

But Schilling seems to expect the ban to be temporary.

“We are extremely surprised by GoDaddy’s reaction but are pleased that our extensions are available at many other registrars who support our approach. We remain ready to support GoDaddy when they decide on a path which works for their customers,” he told DI today.

“We expect them to return,” he added.

It’s a plausible prediction. GoDaddy’s statement to DNW said Uniregistry had been cut off “until we can assess the impact on our current and potential customers”, which suggests it’s not necessarily permanent.

GoDaddy is Uniregistry’s first or second-largest registrar in most of the affected gTLDs.

But because the gTLDs in question have so few domains in them, the number of GoDaddy-sponsored domains is typically under 1,000 per gTLD.

Even in the much larger zones of .click and .link (which are receiving small price increases and will still wholesale for under $10), GoDaddy’s exposure is just a few thousand domains and it’s nowhere near the market leader.

I wonder how much of GoDaddy’s decision to drop Uniregistry has to do with the reaction from domain investors.

Ever since DI broke the news of the price increases a week ago, there’s been a stream of angry domainer blog and forum posts, condemning Schilling and Uniregistry for the decision and using the move as a stick to batter the whole new gTLD program.

For registrars, it doesn’t necessarily strike me a terrible deal.

While they will have to deal with customer fallout, over the longer term higher wholesale prices means bigger margins.

Registrars are already adding about a hundred bucks to the $300 cost of a .game domain, and the price increase from $10 to $300 of the Spanish equivalent, .juegos, likely means similar margins there too.

Schilling: big price increases needed to keep new gTLDs alive

Uniregistry is to massively increase the price of some of its under-performing new gTLDs in an effort to keep them afloat.

Sixteen TLDs from the company’s portfolio of 27 will see price increases of up to 3,000% starting September 8, CEO Frank Schilling confirmed to DI today.

“We need more revenue from these strings, especially the low volume ones, without question,” he said. “We can’t push on a string and stoke demand overnight. So in order for that string to survive as a standalone it has to be profitable.”

While domainers have taken to new gTLDs in greater numbers than Schilling anticipated, demand among worldwide consumers has been slower than expected, Schilling said.

“If you have a space with only 5,000 registrations, you need to have a higher price point to justify its existence, just because running a TLD isn’t free,” he said.

The alternative to repricing would be to sell the TLD in question to a competitor, which in turn would then be forced to reprice anyway, he said.

The TLDs seeing the biggest price hikes are .hosting and .juegos (Spanish for “games”) which are going up from about $20 retail and about $10 retail respectively to about $300 apiece.

Schilling said he believed that true web hosts could afford the new pricing. The .juegos increase is modeled on what Uniregistry has been doing with .game, which currently retails for closer to $400.

At the budget, sub-$10 end of the portfolio, .click and .link are to see fees rise by a buck or two per year.

Names in .audio, .blackfriday, .diet, .flowers, hiphop .guitars and .property, currently priced in the $10 to $25 range, will all start retailing for about $100 per year.

The other affected TLDs are .christmas, .help, .sexy and .tattoo, which will all see big increases but stay in the sub-$100 range.

The TLDs seeing the biggest price increases are among the ones with the fewest registrations — .juegos has about 1,000 names in its zone, while .hosting has fewer than 6,000. Most of the 16 TLDs have fewer than 10,000 names in their zones.

Uniregistry is no stranger to highly-priced domains. It runs .cars, .car and .auto, where it sells every domain at $2,888 a year retail (with no reserved premiums) but has fewer than 500 names in each zone.

Schilling said that in some ways he prefers this model to the more standard model of low-price base fees with high-price premiums.

The higher prices will likely lead in the short term to lower registration numbers (as speculators flee) but will give Uniregistry more cash to invest in marketing.

“That metering effect of high prices, we like that, in terms of trying to grow the namespace, and it gives us money we can use to try to market the strings to prosperity,” Schilling said.

“At a higher price point, the marketing can scale, but we just can’t do it on base registrations of ten bucks or twenty bucks,” he said.

He added that the higher base fee gives Uniregistry more flexibility to provide periodic discounts.

ICANN rules make it much easier to have a high base fee and keep it regularly discounted than to periodically increase fees, which requires six months notice.

“Between renewals promotions and pricing promotions, a lot of the effects of the price increases will be moot,” Schilling said.

Because the new prices don’t kick in until September, registrants are able to lock in pricing at current levels by renewing for up to 10 years.

While the price increases and Schilling’s relatively gloomy commentary will certainly fuel opponents of new gTLDs, whom are legion, Schilling is still bullish on the market, which he continues to characterize as a marathon rather than a sprint.

“Within ten years, will it be bigger? Absolutely. It’ll be quintuple what it is today,” he said. “But we need to get to 10 years, and to keep the lights on between here and there we need higher prices, without question.”

Donuts took down 11 domains for Hollywood last year

Kevin Murphy, February 28, 2017, Domain Policy

Donuts caused 11 domain names in its new gTLD portfolio to be taken down in the first 12 months of its deal with the US movie industry.

The company disclosed yesterday that the Motion Picture Association of America requested the suspension of 12 domains under their bilateral “Trusted Notifier” agreement, which came into effect last February.

The news follows the decisions by Public Interest Registry and the Domain Name Association not to pursue a “Copyright ADRP” process that would have made such Trusted Notifier systems unnecessary.

Of the 12 alleged piracy domains, seven were suspended by the sponsoring registrar, one was addressed by the hosting provider, and Donuts terminated three at the registry level.

For the remaining domain, “questions arose about the nexus between the site’s operators and the content that warranted further investigation”, Donuts said.

“In the end, after consultation with the registrar and the registrant, we elected against further action,” it said.

Trusted Notifier is supposed to address only clear-cut cases of copyright infringement, where domains are being using solely to commit mass piracy. Donuts said:

Of the eleven on which action was taken, each represented a clear violation of law—the key tenet of a referral. In some cases, sites simply were mirrors of other sites that were subject to US legal action. All were clearly and solely dedicated to pervasive illegal streaming of television and movie content. In a reflection of the further damage these types of sites can impart on Internet users, malware was detected on one of the sites.

Donuts also dismissed claims that Trusted Notifier mechanisms represent a slippery slope that will ultimately grant censorship powers to Big Content.

The company said “a mere handful of names have been impacted, and only those that clearly were devoted to illegal activity. And to Donuts’ knowledge, in no case did the registrant contest the suspension or seek reinstatement of the domain.”

It is of course impossible to verify these statements, because Donuts does not publish the names of the domains affected by the program.

Trusted Notifier, which is also in place at competing portfolio registry Radix, was this week criticized in an academic paper from professor Annemarie Bridy of the University of Idaho College of Law and Stanford University.

The paper, “Notice and Takedown in the Domain Name System: ICANN’s Ambivalent Drift into Online Content Regulation”, she argues that while Trusted Notifier may not by an ICANN policy, the organization has nevertheless “abetted the development and implementation of a potentially large-scale program of privately ordered online content regulation”.

India’s biggest bank switches to dot-brand

Kevin Murphy, February 22, 2017, Domain Registries

State Bank of India has announced plans to migrate all of its web sites to its new dot-brand gTLD.

The company has been responsible for .sbi since it was delegated by ICANN last April, but bank.sbi is its first live domain name.

Currently, while bank.sbi is live and resolving, the old domain sbi.co.in appears to still be its primary address.

However, SBI said “all of the bank’s internet presence… shall soon be migrated to the .sbi gTLD”.

There will be a period of crossover while customers get used to the change, it said in a press release.

The bank said: “a gTLD site like .sbi conveys an assurance to the customer that the site is authorised, genuine and is not an inappropriate or phishing site”.

The move is perhaps significant given that SBI is state-owned, and one might expect some level of nationalism when it comes to domain choice.

But SBI, India’s largest bank with $490 billion in assets under management, is not the first bank to say it plans to use its dot-brand as its primary TLD.

BNP Paribas, the world’s biggest non-Chinese bank, uses .bnpparibas for almost everything, particularly in its native France. It has three domains in the Alexa top 100,000 most-visited web sites.

Others with dot-brands in use include Barclays and Citi.