Latest news of the domain name industry

Recent Posts

.club financing option sees early traction with $150k sales

Kevin Murphy, February 6, 2017, Domain Registries

.CLUB Domains said it has seen some early successes with its new 0% financing option, selling $150,000 worth of premium .club domains in its first week.

The registry announced that it sold 39 premiums for a total of $149,480, and that 37 of those names were sold using the financing option.

This option allows registrants to spread the cost of their domains over five years — 60 monthly payments — for names priced over $1,000.

The scheme was announced at the NamesCon conference in conjunction with a new brokers program, which gives brokers the ability to pass on 10% discounts to their clients and earn 15% commissions.

Seventeen of the 39 names were sold via brokers.

The results of the the first seven days of these programs compare favorably to other periods. In the fourth quarter of 2016, .CLUB said premium sales were $112,000.

For the whole of 2016, the registry sold $941,000 of reserved premium names, making a total of $4.3 million since .club launched May 2014.

ICANN loses another IRP — .sport gTLD fight reopens as panel finds “apparent bias”

Kevin Murphy, February 2, 2017, Domain Registries

The future of the .sport gTLD was cast into turmoil this week after an independent panel ruled that there was “apparent bias” in the decision that awarded the string to a group linked to the Olympics.

The new Independent Review Panel ruling found that ICANN broke its own bylaws by refusing to allow Famous Four Media to appeal a 2013 decision that essentially awarded .sport to rival bidder SportAccord.

FFM claims the expert panelist tasked with deciding SportAccord’s Community Objection had undisclosed conflicts of interest that made him much more likely to rule in favor of SportAccord, which is backed by the International Olympic Committee, than FFM, which is a purely commercial operator.

And the IRP panel did not disagree, ruling this week that ICANN should have taken FFM’s claims into account before rejecting its requests for an appeal in 2014.

The ruling means that ICANN may be forced to throw out the Community Objection decision from 2013 and order it to be re-tried with a new expert, potentially allowing FFM back into the .sport contest.

As usual with IRP cases, the ruling is a complex and very dry read, involving multiple layers of objections, appeals, panels and experts.

FFM and SportAccord were the only two applicants for .sport in the 2012 application round.

SportAccord, which has the backing of dozens of sporting organizations in addition to the IOC, claims to represent pretty much all organized sport and wants to run .sport with restrictions on who can register.

FFM, conversely, wants to keep it open to everyone with a passing interest in sport.

In an attempt to kick FFM out of the contest without a potentially expensive auction, SportAccord filed, and then won, a Community Objection in 2013.

To win, it had to prove that the interests of the sport community would be harmed if FFM got to run it. The objection expert panelist, Guido Tawil, came down on SportAccord’s side.

FFM naturally enough disagreed with his conclusion, and vowed to fight to overturn it.

The registry later discovered that Tawil had undisclosed ties to the IOC, which it said should have disqualified him from acting as an independent expert.

First, Tawil attended a conference of the International Bar Association in Rio de Janeiro in 2011 called “Olympic‐Size Investments: Business Opportunities and Legal Framework”, where he co‐chaired a panel entitled “The quest for optimising the dispute resolution process in major sport‐hosting events”.

Second, the law firm he works for, Argentina-based M & M Bomchil, counts DirecTV among its key clients and at the time of the Community Objection DirecTV was negotiating with the IOC for Latin America broadcasting rights for the Sochi 2014 and Rio 2016 Olympics, rights it subsequently obtained.

Third, a partner in Tawil’s law firm is president of Torneos y Competencias, a sports broadcaster with ties to DirecTV.

FFM has claimed: “Guido Tawil’s own legal practice and business is built around a company for whom IOC broadcasting rights are a core aspect of its business.”

While FFM filed two Requests for Reconsideration with ICANN in late 2013 and early 2014, raising the possibility of conflicts of interest and demanding ICANN have Tawil’s ruling thrown out, both were rejected by ICANN’s Board Governance Committee.

It also took its claims to the ICANN Ombudsman, who drafted (but did not finalize) a finding that agreed with FFM that the Community Objection should be retried with a new expert.

The subsequent IRP filing challenged the two RfR decisions and, two years later, the IRP panel has now ruled:

the IRP Panel is of the view that in order to have upheld the integrity of the system, in accordance with its Core Values, the ICANN Board was required properly to consider whether allegations of apparent bias in fact gave rise to a basis for reconsideration of an Expert Determination. It failed to do so and, consequently, is in breach of its governing documents.

The panel also said that ICANN should have taken the Ombudsman’s draft report into account.

It declared:

that the action of the ICANN Board in failing substantively to consider the evidence of apparent bias of the Expert arising after the Expert Determination had been rendered was inconsistent with the Articles, Bylaws and/or the Applicant Guidebook.

The panel has ordered ICANN to pay FFM’s share of the $152,673 IRP costs.

ICANN’s board will now have to consider the IRP decision, and it seems very possible that a new Community Objection review might be ordered.

On the face of it, it looks like a big win for FFM.

That does not mean that SportAccord will not prevail in its objection for a second time, even with a different presiding expert, however.

One fact in its favor is that it now has three years’ worth of evidence of how Famous Four conducts its business — selling domains at super-cheap prices, some say at the expense of the cleanliness of its namespaces — with which to attempt to show the likelihood of harm.

What seems certain is that the .sport gTLD is not going to see the light of day any time soon.

Read the ruling as a PDF here.

Rightside sells eNom to Tucows for $83.5m

Kevin Murphy, January 23, 2017, Domain Registrars

Tucows is to become “the second largest registrar in the world” by acquiring eNom from Rightside, paying $83.5 million.

The deal will give Tucows another 14.5 million domains under management and 28,000 resellers, giving it a total of 29 million DUM and 40,000 resellers.

That DUM number, which appears to include ccTLDs, makes Tucows the undisputed volume leader in the reseller world and the second-largest registrar overall.

GoDaddy, the DUM leader, had about 55 million domains just in gTLDs at the last count.

Tucows CEO Elliot Noss told analysts that the deal, along with the April 2016 acquisition of Melbourne IT’s reseller business, were “individual opportunistic transactions”.

He said that Tucows will take its time integrating the two companies, but expects to realize cost savings (presumably read: job losses as duplicate administrative positions are eliminated) over 24 months.

The reseller APIs will not change, and Tucows will not migrate names over to its own existing ICANN accreditations. This could help with reseller retention.

For Rightside, the company said the spin-off will allow it to focus on vertical integration between its gTLD registry business and its consumer-facing registrar, Name.com.

Rightside had come in for a certain amount of high-profile investor criticism for its dogged focus on new gTLDs at the expense of its eNom and Name.com businesses.

Activist investor J Carlo Cannell, supported by fellow investor and Uniregistry CEO Frank Schilling, a year ago accused Rightside of putting too much emphasis on “garbage” new gTLDs instead of its more profitable registrar businesses.

Since then, Rightside has rebuffed separate offers for some or all of its gTLDs by rivals Donuts and XYZ.com.

Last June, it also announced plans to modernize eNom, which Cannell and others had accused of looking stale compared to its competitors.

The biggest dot-brand in the world has 50,000 domains, but are they legit?

Kevin Murphy, January 19, 2017, Domain Registries

The biggest dot-brand gTLD active today has about 50,000 domains under management, but the vast majority of them may not be compliant with ICANN rules.

Real Estate Domains LLC runs .realtor in partnership with the National Association of Realtors, a US-based real estate agent membership organization.

RED/NAR has an ICANN policy exemption that means it does not have to open .realtor to competition between registrars, but it does not appear to be sticking to the promises it made when it asked for that exemption.

RED has told DI that it believes it is fully compliant with its contractual obligations.

The .realtor gTLD is highly unusual, possibly even unique, in the market.

It is, by most comparisons, a thriving new gTLD. It has tens of thousands of domain names and thousands of active web sites.

It’s the 59th-biggest 2012-round gTLD, according to zone file counts. It has more names than .blog, .webcam and .ninja.

It currently has about 48,000 names in its zone file, a bit less than half of its November 2015 peak of 110,000. It’s been offering a free first-year name to NAR members since launch, which may account for the first-year peak and second-year trough.

It’s arguably a “dot-brand”, but its domains are primarily used by fee-paying third parties, which is not the case for the over 500 other dot-brands out there today.

The string “realtor” is in fact an trademark, fiercely guarded by the NAR and apparently at genuine risk of genericide.

To call yourself a realtor, you have to pay NAR local and national membership fees that can run into hundreds of dollars a year.

To register a .realtor domain, you have to be an NAR member. So, even though the price of a .realtor domain is only around $40 at Name Share (the only approved .realtor registrar), the cost of eligibility is much higher.

I think that the way the NAR is selling its names to third-party realtors is very possibly a breach of ICANN rules, but explaining why I think that will get a bit complicated.

To begin with, whether a gTLD is a “dot-brand” depends to a great extent on your definition of the term.

I usually take “dot-brand” to mean any new gTLD that has Specification 13 — which allows registries to ignore ICANN policies such as the otherwise mandatory Sunrise period — in its Registry Agreement.

There are 463 gTLDs that have Spec 13 so far. They’re being used to a greater or lesser extent by the respective registries to promote their own brands.

Some have set up a bunch of domains with redirects to specific URLs on their .com or ccTLD site. Others have built a modest number of custom sites to promote various products, services, offers or marketing campaigns.

A small number have been using their domains to help business partners. Spanish car maker Seat points scores of .seat domains to cookie-cutter sites promoting local car dealerships, but I’ve seen no evidence these dealers have any control over these domains.

Almost all of the time, the only entity actually using the domain is the registry — that is, the brand owner — itself.

There’s also another definition of dot-brand — any gTLD that does not have Spec 13, but does have an exemption to Specification 9 of the standard ICANN Registry Agreement.

Spec 9, also called the “Code of Conduct”, is the part of the RA that requires registries to give equal, non-discriminatory access to all ICANN-accredited registrars.

It’s there to stop registries favoring registrars they have close relationships with and therefore to keep the market competitive.

Every Spec 13 dot-brand has a Spec 9 exemption, but not every TLD with a Spec 9 exemption has signed Spec 13.

There are 66 gTLDs that have the Spec 9 exemption but do not have Spec 13 in their contracts. Almost all of these have fewer than 100 domains in their zone file today.

The Spec 9 exemption was created to avoid the stupid and undesirable situation where a big-name company has to open access to its dot-brand back-end registry to multiple registrars, even though it is the only registrant permitted to register names there.

The Code of Conduct is there to protect registrants. When there is only one registrant, there’s no need for protection. With multiple registrants, competition needs to be enforced.

To get the Spec 9 exemption, dot-brands have to send a letter to ICANN promising three things:

  1. All domain name registrations in the TLD are registered to, and maintained by, Registry Operator for the exclusive use of Registry Operator or its Affiliates (as defined in the Registry Agreement);
  2. Registry Operator does not sell, distribute or transfer control or use of any registrations in the TLD to any third party that is not an Affiliate of Registry Operator; and
  3. Application of the Code of Conduct to the TLD is not necessary to protect the public interest

Those bullets are copied from the March 2014 .realtor letter (pdf), but they’re all basically the same.

The first bullet says that domains have to be registered to the registry operator. In the case of .realtor, that’s RED/NAR.

And in fact, as far as I can tell, every .realtor domain has the RED/NAR listed in the “Registrant” field of its Whois record. The registry owns the lot.

But that bullet also says that .realtor domains have to be “maintained by” and “for the exclusive use of” the registry operator (in this case, the NAR) and its “Affiliates”.

The second bullet says that the registry cannot give “control or use” of any .realtor domain to a third party that is not an “Affiliate” of the registry.

The term “Affiliate” is important here. The Spec 9 exemption states that it is defined by the RA, and the RA defines it like this:

For the purposes of this Agreement: (i) “Affiliate” means a person or entity that, directly or indirectly, through one or more intermediaries, or in combination with one or more other persons or entities, controls, is controlled by, or is under common control with, the person or entity specified, and (ii) “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of securities, as trustee or executor, by serving as an employee or a member of a board of directors or equivalent governing body, by contract, by credit arrangement or otherwise.

My reading of this is that an Affiliate is an entity that is controlled, in a corporate sense, by the registry. The definition came about as a way to stop domain companies trying to avoid policy obligations by hiding behind shell companies.

However, in my opinion, the vast majority of .realtor domains today are in fact being controlled and used by third parties that are not registry Affiliates by the RA definition.

The first giveaway is Whois. While RED/NAR is listed as the “Registrant” of pretty much all .realtor domains, in most cases the “Administrative” contact is listed as the person or company who caused the name to be registered. Third-party realtors, in other words.

Realtor screenSecond, the registry’s web site states plainly that NAR member realtors can “get” and “use” .realtor domains and goes on to specify that they can use the names to build a web site, set up an email address, and even redirect the domain to an existing site.

Doing a Google search for .realtor sites, you’ll find that realtors are in fact using .realtor domains for these permitted purposes.

This seems to be a case of thousands of non-registry parties paying for “control” and “use” of domains that are supposed to be restricted to the registry’s control and use.

It seems to be true that they don’t “own” the domains that they “use”, but they nevertheless do “use” them in much the same way as I expect a significant majority of non-domainer registrants in other TLDs “use” their domains.

NAR/RED is of course fully aware of its RA obligations, and has written its own terms to accommodate them.

On a .realtor registry web site, its registration agreement, or “License Agreement”, states:

You represent, warrant and agree that you are a REALTOR®, an NAR member, the Canadian Real Estate Association (“CREA”), a member of CREA, an NAR or CREA member Board or Association, an NAR affiliate, an NAR licensee, or otherwise in a contractual relationship with NAR relating to use of NAR’s REALTOR® mark and that, in such capacity, you are deemed an “Affiliate” of RED as such is defined in the Registry Agreement, including as specifically set forth in the Code of Conduct Exemption.

The NAR is basically asking its members to affirm, via the small print of their registration agreement (that the majority won’t read) and the .realtor RA (which I’m sure none of them will read), that the NAR has some kind of corporate control over them.

That’s clearly not the case, in my understanding. The NAR’s members are generally fully independent sole traders or limited companies.

Realtors causing .realtor domains to be registered on their behalf are no more “Affiliates” of RED or the NAR than I would be an Affiliate of Facebook if, perchance, there’s a similar clause in the Facebook terms of service.

While I’ve been asking industry experts about this for the last couple of weeks, it was suggested to me that the fact that .realtor registrants have a “contract” with the registry (to license the Realtor trademark) is enough to satisfy the “Affiliate” definition.

I don’t buy it. Every registrant in every TLD signs a contract whenever they register a domain name. If a contract were sufficient for a Spec 9 opt-out, every gTLD would have the opt-out.

At this point you may be wondering what the harm of this business model is. I wondered the same thing myself.

The main harm, as far as I can see it, is that it sets a precedent for other gTLDs to avoid contractual obligations.

The other is that .realtor registrants (for want of a better term) are locked into the one approved registrar, Name Share, forever. If Name Share were to raise its prices, they would not have the option to move to another registrar.

Name Share, part of the EnCirca registrar family, specializes in niche TLDs and currently charges a not-unreasonable $39.95 per year for a .realtor domain.

There’s also the fact that gTLDs themed around real estate are thin on the ground right now.

RED/NAR also controls the new gTLD .realestate, but it has yet to launch for unknown reasons.

.realtor went from delegation to general availability in less than three months back in mid-2014 — a fast launch — but .realestate was delegated in April 2016 and hasn’t even set out its launch plan yet.

It’s a fully generic, non-brand gTLD but it hasn’t told ICANN when its sunrise, trademark claims or GA dates are yet. It hasn’t even launched its nic.realestate web site yet, which is a contractual obligation also in the RA.

I don’t know why RED/NAR has not started to launch .realestate yet. When I asked RED’s top brass I did not get a reply.

But I do know that a real estate agent in North America today who wants to get a domain in a semantically valuable TLD has one fewer option due to the absence of .realestate from the market.

Another option, buying a .realty domain from Top Level Spectrum, is not possible either because, 18 months after delegation, it also has not launched.

Then there’s .homes, a restricted gTLD operated by Dominion Enterprises, but that has virtually no registrar support and fewer than 100 names in its zone eight months after general availability started.

The only real option right now (other than using an unrelated TLD) is to buy a .realtor domain, but they’d have to pay hundreds of dollars to NAR for membership and then would not have a choice of registrars through which to register.

I put all of my questions about the business model and the Spec 9 exemption to RED last week.

“We believe we are in full compliance with the Spec 9 exemption as granted by ICANN based on our request and posted publicly here,” CEO Matthew Embrescia said in an email (link in original).

Brian Johnson, general counsel for RED, said in a separate email:

our position is that RED is in full compliance as such relates to Spec 9 for .REALTOR. In fact, we think .REALTOR is a very successful example of a TLD with a legitimate business model which incorporates a Spec 9 exemption.

I also pushed Johnson and Embrescia for specific explanations of why I might be wrong in my interpretation of the Spec 9 exemption and how RED is applying it, but I did not get any replies.

A senior ICANN staffer, while declining to comment on the specifics of any TLD or any compliance investigation, told me that my understanding of the Spec 9 exemption is correct.

I gather that all Spec 9-exempt registries are obliged to submit an annual report about their exemption compliance, and that the 2016 report is due tomorrow.

However, I believe .realtor’s business model is well over one year old already, so it’s debateble whether ICANN has been paying attention.

.radio set for November launch, weird tiered pricing

Kevin Murphy, January 19, 2017, Domain Registries

The European Broadcasting Union plans to operate the forthcoming .radio gTLD in such a way as to discourage domain investors.

It yesterday set out its launch timetable, registration restrictions, and expects registrars to charge companies between €200 and €250 per domain per year ($213 to $266).

Interestingly, it’s also proposing to charge different, lower prices for individuals, though that pricing tier has not been disclosed.

I’m not sure I can think of another company that wants to charge different prices depending on the class of registrant and it seems like would be tough to enforce.

If I’m the domain manager at a radio company, can’t I just register the domain in my own name, rather than my employer’s, in order to secure the lower price?

Other registries, notably .sucks, have come under fire in the past for charging trademark owners higher fees. Isn’t basing pricing tiers on the legal status of the registrant pretty much the same thing?

That perception could be reinforced by the angle the EBU is taking in its marketing.

“We are proposing that the radio community may like to consider securing the integrity of their web presence by requesting appropriate .radio domains for defensive reasons initially,” .radio TLD Manager Alain Artero said in a blog post.

“The TLD will be focused on content and matters specific to radio and we want to prevent speculators and cybersquatting in this TLD,” he added.

The EBU is not planning to take the TLD to general availability until November, which is a long launch runway by any measure.

Before then, for two months starting May 3, there’ll be a qualified launch program in which radio stations (as opposed to “internet” radio stations) will be able to claim priority registration for their brand.

Sunrise will begin in August.

The EBU secured rights to .radio as a “Community” gTLD, meaning it has to enforce registration restrictions, after a 2014 Community Priority Evaluation ruling allowed it to win its contention set without an auction.

The eligibility criteria are somewhat broad, including: “Radio broadcasting stations. Unions of Broadcasters. Internet radios. Radio Amateurs. Radio professionals (journalists, radio hosts, DJs…) [and] Radio-related companies selling radio goods and services”.