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Is Verisign .web applicant’s secret sugar daddy?

The fiercely contested .web gTLD is being forced into a last-resort auction and some people seem to think a major registry player is behind it.

Two .web applicants — Radix (pdf) and Schlund (pdf) — this week wrote to ICANN to demand that the .web auction, currently planned for July 27, be postponed.

They said the sale should be delayed to give applicants time “to investigate whether there has been a change of leadership and/or control” at rival applicant Nu Dot Co LLC.

Nu Dot Co is a new gTLD investment vehicle headed up by Juan Diego Calle, who launched and ran .CO Internet until it was sold to Neustar a couple of years ago.

I gather that some applicants believe that Nu Dot Co’s .web application is now being bankrolled by a larger company with deeper pockets.

The two names I’ve heard bandied around, talking to industry sources this week, are Verisign and Neustar.

Nobody I’ve talked to has a shred of direct evidence either company is involved and Calle declined to comment.

So is this paranoia or not?

There are a few reasons these suspicions may have come about.

First, the recent revelation that successful .blog applicant Primer Nivel, a no-name Panama entity with a Colombian connection, was actually secretly being bankrolled by WordPress, has opened eyes to the possibility of proxy bidders.

It was only after the .blog contention set was irreversibly settled that the .blog contract changed hands and the truth become known.

Some applicants may have pushed the price up beyond the $19 million winning bid — making the rewards of losing the private auction that much higher — had they known they were bidding against a richer, more motivated opponent.

Second, sources say the .web contention set had been heading to a private auction — in which all losing applicants get a share of the winning bid — but Nu Dot Co decided to back out at the last minute.

Under ICANN rules, if competing applicants are not able to privately resolve their contention set, an ICANN last-resort auction must ensue.

Third, this effective vetoing of the private auction does not appear to fit in with Nu Dot Co’s strategy to date.

It applied for 13 gTLDs in total. Nine of those have already gone to auctions that Nu Dot Co ultimately lost (usually reaping the rewards of losing).

The other four are either still awaiting auction or, in the case of .corp, have been essentially rejected for technical reasons.

It usually only makes sense to go to an ICANN last-resort auction — where the proceeds all go to ICANN — if you plan on winning or if you want to make sure your competitors do not get a financial windfall from a private auction.

Nu Dot Co isn’t actually an operational registry, so it doesn’t strictly have competitors.

That suggests to some that its backer is an operational registry with a disdain for new gTLD rivals. Verisign, in other words.

Others think Neustar, given the fact that its non-domains business is on the verge of imploding and its previous acquisition of .CO Internet from Calle.

I have no evidence either company is involved. I’m just explaining the thought process here.

According to its application, two entities own more than 15% of Nu Dot Co. Both — Domain Marketing Holdings, LLC and NUCO LP, LLC — are Delaware shell corporations set up via an agent in March 2012, shortly before the new gTLD application filing deadline.

Many in the industry are expecting .web to go for more than the $41.5 million GMO paid for .shop. Others talk down the price, saying “web” lacks the cultural impact it once had.

But it seems we will all find out later this month.

Responding to the letters from Schlund and Radix, ICANN yesterday said that it had no plans to postpone the July 27 last-resort auction.

All seven applicants had to submit a postponement form by June 12 if they wanted a delay, ICANN informed them in a letter (pdf), and they missed that deadline.

They now have until July 20 to either resolve the contention privately or put down their deposits, ICANN said.

The applicants for .web, aside from Nu Dot Co, are Google, Donuts, Radix, Schlund, Web.com and Afilias.

Due to a string confusion ruling, .webs applicant Vistaprint will also be in the auction.

Buy it or lose it? Governments could get first dibs on two-letter domains

Governments and ccTLD registries would get new rights to own two-letter domains in new gTLDs under a proposed ICANN policy.

These highly-prized domains, many of which are likely worth thousands or tens of thousands of dollars, would be subject to a mini sunrise period, under the proposal.

The so-called Exclusive Availability Pre-registration Period would be limited to those companies or government entities in charge of matching ccTLDs.

The measures are outlined in “Proposed Measures for Letter/Letter Two-Character ASCII Labels to Avoid Confusion with Corresponding Country Codes” (pdf), published by ICANN late last week.

The surprisingly succinct document outlines three things new gTLD registries must do if they want to start selling two-letter domains matching ccTLDs, which are currently restricted.

The key measure is:

Registry Operator must implement a 30-day period in which registration of letter/letter two-character ASCII labels that are country codes, as specified in the ISO 3166-1 alpha-2 standard, will be made exclusively available to the applicable country-code manager or government.

In other words, if you’re a government or company listed as the ccTLD manager here, you get 30 days of exclusive opportunity to buy the LL.example matching your ccTLD.

Until now, governments have been able to block the release of LL new gTLD domains matching their ccTLDs.

The new proposal, introduced in an attempt to settle a long-running debate about the most appropriate way to enable the release of two-character strings, appears to add a “buy it or lose it” component to existing policy.

Under the base New gTLD Registry Agreement, all two-character domains were initially reserved.

Then, in late 2014, ICANN said registries could release all letter-number, number-letter and number-number combinations.

Many registries have already released such names, some selling for thousands at auction. When Rightside released its LN/NL/NN names, some carried price tags as high as $50,000.

Letter-letter domains could also be released following a formal registry request to ICANN, but were subject to a 60-day period during which governments could object.

Almost 1,000 new gTLDs have submitted such requests, and almost all have been “partially approved”.

That means some governments objected to the release of ccTLD-matching domains. Over 16,000 unique domain names have been objected to and therefore blocked over the last year or so.

The new proposal would add an extra process under which these blocked domains could be released, with ccTLD concerns getting first rights.

Interestingly, it appears to bring ccTLD managers into the mix, rather than restricting the names simply to governments.

The Governmental Advisory Committee has been the main driving force behind demands for restrictions on LL domains, but the proposed policy appears to also extend rights to private entities.

Remember, many ccTLDs are operated independently by private companies, without local government oversight.

For example, .uk is managed by Nominet, a non-governmental entity. The UK government has blocked many uk.example domains from being registered. The new policy appears to allow either Nominet or the government to register these names.

The one-page proposal is light on some details. It does not say, for example, what happens when the government and the ccTLD manager both want the name.

In keeping with ICANN’s habit of staying out of pricing, it does not specify price caps either.

It does, however, oblige registries to ban registrants from pretending to be affiliated with the relevant government when they are not.

Governments also get to complain, and registries have to investigate, if the relevant domains are causing “confusion”, though registries do not appear to be under a strict obligation to delete or suspend domains.

The policy is open for public comment until August here.

Chinese gTLD cranks up renewal prices from $18 to $100

Chinese new gTLD registry Beijing RITT-Net has said it intends to more than quintuple its registration and renewal prices.

From January 1, 2017, prices for .手机 will go up from $18 a year to $100 a year, the company said in a notice to ICANN late last month.

.手机 (.xn--kput3i) is a Chinese internationalized domain name meaning “.cell” or “.cellphone”.

The registry told ICANN:

it is our sincere hope to adjust the initial registration and renewal fees from 18 dollars to 100 dollars with the aim to keep up with the status quo of China’s domain name market and to provide registrants with better services. We wish the new price will be effective from Jan 1st, 2017.

I believe this is the biggest renewal price hike for a new gTLD registry to date.

Around 25,000 existing registrations appear to be affected, but very few registrars will have to deal with the ramifications.

According to registry reports, over 99% of its registrations were made via Beijing Innovative Linkage Technology, which does business at dns.com.cn.

GoDaddy gets its dot-brand

GoDaddy has become a new gTLD registry with the delegation yesterday of .godaddy.

It’s a dot-brand, so domain name registrations will not be made available to the general public.

In one of the shortest mission statements found in new gTLD applications, the company describes .godaddy like this:

The mission or purpose of the .GODADDY gTLD is strictly for branding protection and internal use. The gTLD .GODADDY will give visitors to any .GODADDY site the assurance that they are truly dealing with Go Daddy and not an imposter or cybersquatter.

GoDaddy has not yet gone live with its nic.godaddy site.

It’s not the first domain name firm to get its own dot-brand. Notably, Neustar and Verisign own .neustar and .verisign.

It’s not the only registrar with a dot-brand, either. France’s OVH got there first with .ovh.

GoDaddy originally applied for two other gTLDs — .home and .casa — but withdrew their applications almost immediately after a shift of company strategy.

Rightside refuses Donuts’ “opportunistic” $70m gTLD offer

Rightside has rebuffed Donuts’ semi-hostile takeover attempt for its portfolio of gTLD registry contracts.

The question now is: will Donuts up the offer from the $70 million already on the table?

In a pre-markets statement today, Rightside said the offer “undervalued” the assets.

CEO Taryn Naidu is quoted as saying:

After thoughtful evaluation, Rightside’s Board has determined that Donuts’ proposal significantly undervalues Rightside’s Registry assets. We believe Donuts’ proposal is an opportunistic attempt to acquire Rightside’s valuable portfolio of domain extensions with an undervalued price and in a manner that would not be in the best interests of Rightside shareholders.

The company reckons its gTLDs will be bringing in $50 million to $75 million in revenue a year in the next three two five years, which would represent substantial growth over current levels.

It made $2.6 million from the registry business in the first quarter this year.

Donuts’ offer could be considered “opportunistic” given that there’s some shareholder dissatisfaction with Rightside’s success rate with new gTLDs today.

Activist investor J Carlo Cannell and Uniregistry CEO Frank Schilling, both of whom own small but significant chunks of Rightside, have called on the company to get rid of some of its under-performers.

By announcing the offer publicly — apparently after months of private offers — Donuts might have been trying to capitalize on this unrest.

But pissed-off investors don’t necessarily want these gTLDs sold off cheap.

Rightside has 40 new gTLDs. A $70 million offer equals $1.75 million per gTLD. That’s fair way below the average sale price for gTLDs at ICANN auction, which is $7 million (or $3 million if you take the median).

Will Donuts now increase its offer, or back away?