Latest news of the domain name industry

Recent Posts

Next new gTLD round unlikely before 2022

Kevin Murphy, March 13, 2018, Domain Policy

ICANN is unlikely to accept any more new gTLD applications until a full decade has passed since the last round was open.

That’s the conclusion of some ICANN community members working on rules for the next round.

Speaking at ICANN 61 in Puerto Rico this weekend, Jeff Neuman, co-chair of the New gTLD Subsequent Procedures Working group, presented a “best case” timetable for the next round.

The timetable would see the next new gTLD application window opening in the first quarter of 2021, nine years after the 2012 round.

But Neuman acknowledged that the timeline would require all parts of the ICANN community — working groups, GNSO Council, board of directors, staff — to work at their most efficient.

With that in mind, 2021 seems optimistic.

“Even if we hit the 2021 date, that’s still a decade after the launch of the last round, which is crazy,” Neuman said.

Slide

The timetable assumes the GNSO wraps up its policy development a year from now, with the ICANN board approving the policy mid-2019.

It then gives the ICANN staff about six months to publish an updated Applicant Guidebook, and assumes whatever is produced is approved within about six months, after the first pass of public comments.

It’s worth noting that the 2012 round’s AGB hit its first draft in 2008 and went through half a dozen revisions over three years before it was finalized, though one imagines there would be less wheel-reinventing required next time around.

After the board gives the AGB the final nod, the timeline assumes ICANN staff about six months to “operationalize” the program.

But one unidentified ICANN staffer, who said she was “the person that will be ultimately responsible for the implementation” of whatever the GNSO comes up with, said during this weekend’s session that she doubted this was realistic.

She said ICANN the organization would need “at least 12 months” between the ICANN board approving the AGB and the application window opening. That would push the window to late 2021.

The Subsequent Procedures policy work is of course not the only gating factor to the next round.

There’s also a potential bottleneck in work being carried out to review rights protection mechanisms, where fears of filibustering have emerged in an already fractious working group.

All things considered, I wouldn’t place any bets on an application window opening as early as 2021.

Donuts scraps 200 companies, consolidates under Binky Moon

Kevin Murphy, March 11, 2018, Domain Registries

Donuts has consolidated all of its original portfolio of new gTLD contracts under a single LLC, scrapping almost 200 shell companies in the process.

At least 196 contracts, each of which were originally allocated to a unique LLC, have been assigned now to Binky Moon LLC.

This seems to have happened back in late November, but ICANN only added the transfers to its published list of reassignments last week.

When Donuts applied for over 300 gTLDs back in 2012, each application belonged to a different shell company. Apparently randomly generated names — such as New Sky LLC, Sand Shadow LLC and Bitter Fields LLC — were chosen for each.

This was for “tax and other purposes” that made sense when Donuts was a new company, I’m told.

Now, with Donuts by one measure the fastest-growing tech company in the world, it made more sense to “retire” the old LLCs and realize the “operational efficiencies” of consolidation, a spokesperson said.

Not all of Donuts’ contracts belong to Binky Moon. When the company acquired 2003-round .travel last month it assigned the Registry Agreement to Dog Beach LLC.

Is ICANN still over-estimating revenue from “stagnating” gTLD industry?

Kevin Murphy, March 11, 2018, Domain Policy

ICANN may have slashed millions from its revenue estimate for next year, but it has not slashed deeply enough, according to registrars and others.

Industry growth is flat, and below even ICANN’s “worst case” expectations for the fiscal year starting July 1, registrars told the organization in comments filed on its FY19 budget last week.

The Registrars Stakeholder Group said that “the FY 2019 budget fails to recognize that overall industry growth is flat.”

ICANN’s budget foresees FY19 revenue of $138 million, up $3.5 million on the projected result for FY18.

“These revenue projections presume growth in the domain market that is not aligned with industry expectations,” the RrSG said, pointing to sources such as Verisign’s Domain Name Industry Brief, which calculated 1% industry growth last year.

ICANN’s predictions are based on previous performance and fail to take into account historical “one-time events”, such as the Chinese domain speculation boom of a couple years ago, that probably won’t be repeated, RrSG said.

RrSG also expects the number of accredited registrars to decrease due to industry consolidation and drop-catching registrars reducing their stables of shell accreditations.

(I’ll note here that Web.com has added half a dozen drop-catchers to its portfolio in just the last few weeks, but this goes against the grain of recent trends and may be an aberration.)

RrSG said ICANN’s budget should account for reduced or flat accreditation fee revenue (which as far as I can tell it already does).

The comment, which can be read in full here, concludes:

Taken together, these concerns represent a disconnect between ICANN funding projections, and the revenue expectations of Registrars (and presumably, gTLD Registries) from which these funds are derived. In our view, ICANN’s assessment of budgetary “risks” are too optimistic , and actual performance for FY19 will be significant lower.

For what it’s worth, the Registries Stakeholder Group had this to say about ICANN’s revenue estimates:

Reliable forecasts, characterised by their scrutiny and realism, are fundamental to put together a realistic budget and to avoid unpleasant surprises, such as the shortage ICANN is experiencing in the current fiscal year. The RySG advises ICANN to continue to conduct checks on its forecasts and to re-evaluate the methodology used to predict its income in order to prevent another funding shortfall such as that which the organization experienced in FY18.

Amazon’s .amazon gTLD may not be dead just yet

Kevin Murphy, March 11, 2018, Domain Policy

South American governments are discussing whether to reverse their collective objection to Amazon’s .amazon gTLD bid.

A meeting of the Governmental Advisory Committee at ICANN 61 in Puerto Rico yesterday heard that an analysis of Amazon’s proposal to protect sensitive names if it gets .amazon will be passed to governments for approval no later than mid-April.

Brazil’s GAC rep said that a working group of the Amazon Cooperation Treaty Organization is currently carrying out this analysis.

Amazon has offered the eight ACTO countries commitments including the protection of such as “rainforest.amazon” and actively supporting any future government-endorsed bids for .amazonas.

Its offer was apparently sweetened in some unspecified way recently, judging by Brazil’s comments.

ACTO countries, largely Brazil and Peru, currently object to .amazon on the grounds that it’s a clash with the English version of the name for the massive South American rain forest, river and basin region, known locally as Amazonas.

There’s no way to read the tea leaves on which way the governments will lean on Amazon’s latest proposal, and Peru’s GAC rep warned against reading too much into the fact that it’s being considered by the ACTO countries.

“I would like to stress the fact that we are not negotiating right now,” she told the GAC meeting. “We are simply analyzing a proposal… The word ‘progress’ by no means should be interpreted as favorable opinion towards the proposal, or a negative opinion. We are simply analyzing the proposal.”

ICANN’s board of directors has formally asked the GAC to give it more information about its original objection to .amazon, which basically killed off the application a few years ago, by the end of ICANN 61.

Currently, the GAC seems to be planning to say it has nothing to offer, though it may possibly highlight the existence of the ACTO talks, in its formal advice later this week.

ICANN mulls $68 million raid on auction war chest

Kevin Murphy, March 9, 2018, Domain Policy

ICANN wants to put away another $68 million for a rainy day and it’s considering raiding its new gTLD auction war chest in order to do so.

It’s also thinking about dipping into the pool of cash still left over from new gTLD application fees in order to bolster is “reserve fund” from its current level of $70 million to its target of $138 million.

But, as a relief to registrants, it appears to have ruled out steep fee increases, which had been floated as an option.

The reserve fund is basically a safety net that ICANN could use to keep the lights on in the event that revenue should suddenly plummet dramatically and unexpectedly.

If, for example, Verisign returned to its old antagonistic ways and refused to pay its .com fees for some reason, ICANN would lose about a third of its annual revenue but would be able to tap its reserve until the legal fisticuffs were resolved.

ICANN said in a discussion document (pdf) this week that it took $36 million from the reserve since 2014 in order to complete the IANA transition. Over the same period, its annual budget has swelled from about $85 million to $138 million and contributions back into the reserve have been minimal.

That’s left it with a meager $70 million squirreled away, $68 million shy of its longstanding target level of one year’s budget.

ICANN is now saying that it wants to replenish the fund in less than five years.

About $15 million of its target would come from cost-cutting its operations budget over the period.

It also wants to take at least $36 million from the new gTLD auction proceeds fund, which currently stands at $104 million (with another $132 million incoming should Verisign successfully obtain .web over the objections of rival bidders).

The remaining $17 million could come from “leftover” new gTLD application fees — that fund is currently about $80 million — or from more cost-cutting or more auction proceeds, or from a combination of the three.

A fourth option — increasing the per-transaction fees registrants are charged via their registries and registrars — appears to have been ruled out.

My back-of-the-envelope maths suggests that an annual per-transaction increase of about $0.07 would have been needed to raise $68 million over five years.

The proposal is open for public comment until April 25.