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Amazon wins! ICANN on verge of approving .amazon despite government outrage

Amazon has one foot over the finish line in its seemingly endless battle for the .amazon gTLD.

ICANN last week nudged its application along to probably its final hurdle and gave the strongest indication yet that the controversial dot-brand will soon be delegated in the root.

Amazon has essentially won, beating off objections from the eight South American nations of the Amazon Cooperation Treaty Organization.

In a May 15 resolution, published late Friday, the ICANN board of directors resolved that there is “no public policy reason for why the .AMAZON applications should not be allowed to proceed”.

It now plans to approve the application for .amazon, along with the Chinese and Japanese translations, after Amazon’s “Public Interest Commitments” — enforceable voluntary commitments that would be incorporated into its registry contract — have been subject to 30-day public comment period.

These PICs would require Amazon to give each of the eight nations, and ACTO itself, one domain name under .amazon that they could use to provide non-commercial information about the region whose name the company shares.

Amazon would also have to block up to 1,500 culturally sensitive terms in each of the TLDs, so that nobody could use them.

There’d be a steering committee comprising Amazon and the ACTO members, which would get to decide which domains are blocked. Amazon would have the ultimate veto, but ACTO states could appeal by filing PIC Dispute Resolution Procedure complaint with ICANN.

The text of Amazon’s proposed PICs can be found in an April 17 letter to ICANN (pdf).

As far as I can tell, the public comment period has not yet been opened. If it has, it’s so well-hidden on the ICANN web site that even my voodoo powers have been ineffective in unearthing it.

It seems likely that it will attract comment from ACTO and its members, along with others with an interest in protecting the Amazon region.

Whether their comments will be enough to make ICANN change its mind about eventually delegating .amazon seems highly unlikely.

Amazon, in my view, has basically won at this point.

The victory comes over seven years after the original application was filed.

Amazon fought off a Community Objection from the Independent Objector in 2013, but its applications were rejected by ICANN after receiving consensus advice from the Governmental Advisory Committee.

The GAC reached consensus against Amazon only after the United States, which had been protecting what is one of its largest technology companies’ interests, caved to pressure from the rest of the committee.

But Amazon filed an Independent Review Process complaint, which in July 2017 came back in the company’s favor. The IRP panel ruled that the GAC’s advice had been flimsy and baseless, and that ICANN should un-reject the .amazon applications.

Since then, it’s been a fight between Amazon and ACTO, with ICANN trapped in the middle.

As far as ICANN is concerned, the GAC had only advised it to “facilitate” a resolution between the two parties. It does not appear to believe it was under an obligation to assure that both parties were happy with the outcome.

ACTO had wanted much stronger protections from Amazon including majority control of the policy steering committee and, hilariously, a button on every single .amazon web page linking to an ACTO site promoting the Amazon region.

The company rejected those requests, and instead put its own unilateral proposal to ICANN.

Following ICANN’s approval, it’s now very possible that Amazon could start using .amazon this year.

However, given the usual speed at which the company launches its delegated gTLDs, some time in the 2030s is just as likely.

Defunct Famous Four ordered to hand $1.5 million back to investors

Former domain registry manager Famous Four Media has been ordered to return money to investors that was being used as insurance against its portfolio of gTLDs going out of business.

In an April 18 ruling (pdf) from Gibraltar’s Supreme Court, FFM and its CEO Iain Roache are told that original investors Domain Venture Partners are the true owners what looks to be about $1.5 million being used to back letters of credit in ICANN’s name.

It’s a very complicated ruling, reflecting the complex structure of the FFM/DVP relationship. It wants for clarity in some areas, and is probably best suited to interpretation by a forensic accountant.

Nevertheless, I’ll give it a shot.

Basically, back in 2011 businessman Iain Roache recruited a bunch of international investors to join him in funding applications for 60 new gTLDs. The investment vehicle was and is called Domain Venture Partners.

Each application had an associated “bid vehicle”, essentially a Gibraltar-based shell company with names along the lines of Dot Science Ltd or Dot Accountant Ltd.

Those of the vehicles that were successful in their applications continue to be the official registry sponsors for 16 active gTLDs. They’re all owned by DVP.

Famous Four was a separate company, owned 80:20 by Roache and business partner Geir Rasmussen, hired by DVP to manage the business of actually selling domains.

For many years, myself and pretty much everybody else covering the domain name industry referred to FFM as if it was the owner of the TLDs, more or less interchangeably with DVP.

In fact, FFM was just a DVP contractor and behind the scenes DVP was growing increasingly unhappy with how the domains were being managed, DVP investor Robert Maroney told DI last August.

For about a year now, FFM has been in liquidation. DVP kicked it out of the registry management business and replaced it with a new company that it controls called GRS Domains, managed by a PricewaterhouseCoopers accountant called Edgar Lavarello.

Thirteen of the DVP bid vehicles sued Famous Four to claim ownership of, among other things, the money backing the so-called “Continuing Operations Instruments” that ICANN demanded from each new gTLD applicant.

The COI, usually a letter of credit from a big bank, were used to give ICANN the confidence that new gTLD domain registrants would not be affected by dodgy registries going out of business and their domains immediately going dark. The money would fund ongoing technical operations for a few years, giving registrants time to find a new home for their web sites.

In this case, Famous Four’s liquidator refused to agree that the money backing the COIs was rightfully DVP’s.

What seems to have happened is that in mid-2016 the DVP letters of credit were hastily switched from Credit Suisse to Barclays, after Credit Suisse closed down its Gibraltar branch.

There was a period in which both sets of LoCs were active, in order to remain compliant with ICANN’s rule that there must be an active COI at all times.

The original Credit Suisse LoCs had been funded by DVP, but the Barclays LoCs were funded by FFM, or quite possibly Roache himself, to the tune of about $1.5 million.

FFM was then repaid by the return of the money backing the Credit Suisse LoCs, when those LoCs were closed, according to Chief Justice Anthony Dudley’s ruling.

After the switch of banks, the LoCs were no longer in the names of the DVP bid vehicles; they belonged to FFM. The money DVP put up to originally secure the COIs was now in FFM’s control.

Dudley now seems to have ruled that FFM now owes DVP this money back, and that the liquidator, Grant Jones of Simmons Gainsford, was wrong to withhold it.

In fact, the judge has some quite stern words for Jones, saying that he was “wholly inappropriate” when he temporarily turned over his responsibilities as liquidator to Roache and his law firm. Dudley wrote:

It may be that it arises as a consequence of the Liquidator having limited funds with which to engage in litigation. But whatever the reason, the position adopted by the liquidator of FFM in these proceedings has been unusual and certainly capable of being construed as running counter to the fundamental principle of objectivity required of a Liquidator, now codified in the Insolvency Practitioner Regulations 2014. Rather than formulate his own view (or as urged by me at a preliminary hearing seek his own independent legal advice) by letter dated 1 March 2019 GJ sought to abrogate his responsibility and authorised IR and JSF to act on behalf of FFM

That aside, the main piece of evidence that appears to have caused Dudley to side with DVP was a set of emails from Famous Four chief legal officer Oliver Smith to DVP investors that were sent at the time the LoCs were switching banks.

Smith confirmed in one of these emails that FFM was basically just acting as a conduit for DVPs bid vehicles, which by that point were operational registries.

The judge noted that the Smith email that confirmed this was submitted in evidence by Lavarello and Maroney only after Roache had submitted the rest of the thread, excluding this email, in his own evidence.

Dudley ruled that the DVP companies should get what they asked for, namely the funds associated with the LoCs. It’s not entirely clear from his ruling how much this is, but by my reading it’s around the $1.5 million mark.

The liquidation, which is ongoing, is to the best of my knowledge unrelated to the still unexplained demise of AlpNames, the registrar and close FFM partner also owned by Roache and Rasmussen.

Finally, a disclaimer.

Because I’ve already had one spurious legal threat related to my ongoing coverage of Famous Four’s demise, and don’t really need the arseache of any more, I’m going to state unequivocally for the record that I’m not alleging any wrongdoing by anyone.

If I’ve got anything wrong, as always I will gladly issue a correction. Just ask, and show your working. No need to sic the lawyers on me.

You can read the judge’s decision (pdf) and decide for yourself what’s been going on.

ICANN to host first-ever high-stakes dot-brand auction

Kevin Murphy, May 7, 2019, Domain Sales

Two companies that own trademark rights to the same brand are to fight it out at an ICANN auction for the first time.

Germany-based Merck Group will fight it out for .merck with American rival Merck & Co at an auction scheduled to take place July 17.

Because it’s an ICANN “last-resort” auction, the value of the winning bid will be disclosed and all the money will flow to ICANN.

It will be the first ICANN gTLD auction for three years, when a Verisign proxy agreed to pay $135 million for .web.

The two Mercks could still avoid the ICANN auction by resolving their contention set privately.

The German Merck is a chemicals company founded in 1668 (not a typo) and the US Merck was founded as its subsidiary in the late 19th century.

That division was seized by the US government during World War I and subsequently became independent.

The German company uses merckgroup.com as its primary domain today. The US firm, which with 2018 revenue of over $42 billion is by far the larger company, uses merck.com.

Both companies applied for .merck as “community” applicants and went through the Community Priority Evaluation process.

Neither company scored enough points to avoid an auction, but the German company had the edge in terms of points scored.

Both applications then found themselves frozen while ICANN reviewed whether its CPE process was fair. That’s the same process that tied up the likes of .gay and .music for so many years.

While the July auction will be the first all-brand ICANN auction, at least one trademark owner has had to go to auction before.

Vistaprint, which owns a trademark on the term “webs” was forced to participate in the .web auction after a String Confusion Objection loss, but due to the technicalities of the process only had to pay $1 for .webs.

Dead dot-brands hit 50

Two more dot-brands are on their way out, bringing the total to fall on their swords to date to a nice round 50.

Both of the new departures appear to be brands belonging to the Saudi telecommunications company Etihad Etisalat, which does business as Mobily and has annual revenue approaching $1.8 billion.

The gTLDs in question are .mobily and موبايلي., the Arabic version of the brand, which sits in the root as .xn--mgbb9fbpob.

As is usual in cases of dot-brand self-termination, neither TLD had actually been put to any use beyond the obligatory nic. site.

Despite Mobily being based in Saudi Arabia, the registry is actually a Bahrain company, Greentech Consulting, apparently being run by a US-based new gTLD consultancy called WiseDots.

I’ve never heard of this outfit or its point man before today and its social media activity seems to have dried up shortly after the new gTLD application window closed in 2012.

The registry was hit by a breach of contract notice in December 2016 after it apparently forgot to pay its ICANN fees for a while, but it managed to resolve the issue without further action.

These five TLDs contain 80% of all child abuse images

Online child abuse watchdog the Internet Watch Foundation has released its 2018 annual report, and it fingers the five TLDs that host four in five cases of child sexual abuse images and videos.

The TLDs in question are Verisign’s .com and .net, Neustar’s repurposed Colombian ccTLD .co, Russia’s .ru and Tonga’s .to.

IWF found the illegal content in 3,899 unique domains, up 3% from 2017’s 3,791 domains, in 151 different TLDs.

Despite the apparent concentration of illegal web pages in just five TLDs, it appears that this is largely due to the prevalence of image-hosting and file-sharing “cyberlocker” sites in these TLDs.

These are sites abused by the purveyors of this content, rather than being specifically dedicated to abuse.

It would be tricky for a registry to take action against such sites, as they have substantial non-abusive uses. It would be like taking down twitter.com whenever somebody tweets something illegal.

In terms of domains being registered specifically for the purpose of distributing child abuse material, the new gTLDs created since 2012 come off looking much worse.

IWF said that last year it found this material on 1,638 domains across 62 new gTLDs. That’s 42% of the total number of domains used to host such content, compared to new gTLDs’ single-figures overall market share.

The number of URLs (as opposed to domains) taken down in new gTLD web sites was up 17% to 5,847.

IWF has a service that alerts registries when child abuse material is found in their TLDs.

Its 2018 report can be found here (pdf).