Latest news of the domain name industry

Recent Posts

Last chance to win newdomains.org tickets

Kevin Murphy, August 11, 2011, Domain Services

Congratulations to Jim Davies, you’ve just won a free conference pass for newdomains.org worth $1,000 for entering the latest DomainIncite competition.

Random.org’s random number sequence generator selected the winning order of tweets qualifying for the draw, and Twitter handle @PerthPom came top of the list.

That’s a second Australia-based winner, by the looks of things, after Michael’s win on Monday. I hope you guys can both afford the airfare.

Competition Day Three

I have two final tickets to give away.

To reiterate, they’re Full Conference passes for the newdomains.org conference in Munich, Germany, on September 26 and 27. Flights, hotels and Oktoberfest not included. Details here.

If you want a pass, just leave a comment here before 2359 UTC Sunday August 14, saying why you think you should get one. Make something up.

I’ll use Random.org again to pick the two lucky winners and announce the names on Monday.

All winners will be contacted by somebody from the conference organizer, United-Domains, next week.

UPDATE: Proving just how random Random.org is, the winning order it selected was 1, 2, 3, 4, 5. The winners are TAG and Daniel. I’ll be in touch.

Beckstrom strikes back at ANA threat

Kevin Murphy, August 10, 2011, Domain Policy

ICANN president Rod Beckstrom has come out swinging against the latest attack on its new top-levels domains program, promising to “vigorously defend” it.

In his response to a harshly critical missive from the Association of National Advertisers, Beckstrom calls ANA’s claims “either incorrect or problematic in several respects”.

I think “firmly worded” would be an appropriate way to characterize his letter (pdf).

In it, he notes that the new gTLD program has been on the cards since 1998, and has been developed over several years using input from the entire ICANN community, including ANA itself.

He further states that some of the complaints outlined by ANA president Bob Liodice show a lack of research.

As I noted in my interview with Liodice yesterday, ANA seems to think cybersquatting at the top-level will be enabled unless companies defensively apply for their “.brand” gTLDs.

Beckstrom said that these statements “demonstrate a lack of understanding of Program details”.

The letter suggests that companies have no choice but to apply for their own gTLDs. Operating a gTLD means assuming a number of significant responsibilities; this is clearly not for everyone. Indeed, it is hoped that those without an interest in making a contribution to expanded choice or innovation in the DNS will not apply. One clear directive of the consensus policy advice on which the program is built is that TLDs should not infringe the existing legal rights of others. The objection process and other safeguards eliminate the need for “defensive” gTLD applications, because where an infringement of legal rights can be established using these processes, an application will not be approved.

The response goes on to outline some of the mandatory second-level trademark protection mechanisms that have been included in the program’s Applicant Guidebook.

ICANN is arguably on shakier ground here – making use of these mechanisms is still going to cost brand owners time and money, which is the basis of ANA’s objections.

The question now is whether Beckstrom’s responses will be enough to get ANA to call off the dogs.

He has offered to talk to ANA to “to discuss how the ANA might participate more actively in the policy development activities and other ICANN processes going forward”.

That’s specifically not an offer to get into negotiations with ANA about the contents of the Guidebook or to delay the launch of the program.

That was never going to happen, particularly not in response to a thirteenth-hour complaint from an organization that hasn’t commented on the program for the last two years.

Liodice said yesterday that unless ICANN agrees to suspend the program, ANA plans to lobby the US Congress, its Department of Commerce, and may sue.

Reaction from the domain name industry to Beckstrom’s letter has so far been predictably positive.

ANA chief calls for new gTLDs to be suspended

Kevin Murphy, August 9, 2011, Domain Policy

The president of the Association of National Advertisers said the organization may sue ICANN unless it suspends its new top-level domains program.

Speaking to DomainIncite, ANA’s Bob Liodice said that American industry is “horrified” by the program, which he believes will cost his members a “quite humongous sum of money”.

Liodice wrote to ICANN president Rod Beckstrom a week ago, demanding the program be abandoned and dropping major hints that a lawsuit would be the alternative.

ANA’s board of directors, comprised of representatives of 36 of the largest companies in the US, is “unanimous” in its opposition to the program, he told me.

“We’ve had many conversations with our members, brand owners in the US, and nobody supports this to our knowledge,” Liodice said. “If American industry is not supporting the recommendation to do this, then who is? What is the benefit if brands owners are saying they’re horrified?”

ANA’s members simply do not understand why the program has been introduced, Liodice indicated.

“What’s the problem, what is ICANN trying to solve?” he said.

I put it to him that increasing competition in the registry space is in many ways ICANN’s raison d’etre, built into its founding principles.

“Just because this is something that was supposed to be done back in the Clinton days doesn’t mean it has to be done today,” he said. “The world has changed.”

“I think this is more for the benefit of ICANN than for the benefit of the [advertising] industry,” he said. “ICANN will secure substantial revenue for these changes and put incredible burdens on the industry to no benefit for the industry.”

ICANN, which is obviously a non-profit, says it has priced the program on a cost-recovery basis.

Not convinced by .brands

I asked Liodice if any of ANA’s members had expressed interest in “.brand” gTLDs, and put it to him that enjoy.coke or iwantmy.mtv might be innovative ways to advertise.

“That is not an issue right now,” he said. “The brand for the most part is in the URL anyway, what benefit does it get from moving to right of the dot?”

“The industry is in a period of stability and is very satisfied with status quo,” he added.

Liodice was not aware of the .brand announcements from Canon and Hitachi, but expressed skepticism about their reasons for applying.

“Are those companies saying this is important to me and will further my business interests?” he asked.

Canon USA does appear to be a member of ANA, although it does not have a seat on its board. Hitachi is not a member.

ANA’s plan

Last week’s letter gave Beckstrom an August 22 deadline to respond. The first thing ANA intends to do is wait for his reply, Liodice said.

Anything other than an undertaking to suspend the program for talks is likely to see an escalation.

“We first have to ensure this program is suspended,” Liodice said. “We’re trying to halt the introduction at this point in time and suspend it until we can have these conversations.”

ANA also hopes to speak to the US Department of Commerce, which has an oversight relationship with ICANN, as well as to members of Congress.

“We are lobbying members of Congress to make sure they’re aware of the detrimental characteristics of this, particularly at a time when the world is in great disorder with the financial crisis,” Liodice said.

There’s also the possibility of court action.

While stopping short of saying ANA will definitely sue, Liodice did say that the organization’s lawyers are looking into possible causes of action.

“If the reply is not consistent [with ANA’s requests] we will explore that possibility,” he said.

ANA would be represented by the law firm Reed Smith, which has already published its own statement of support for Liodice’s letter on its web site.

It’s good to talk

My feeling is that some of ANA’s concerns are already dealt with by the program’s Applicant Guidebook, and that a conversation explaining this could help reduce tensions.

Liodice, for example, appears convinced that top-level cybersquatting will be possible – that .coke could be registered by somebody other than Coca-Cola.

My view is that such an obvious transgression would be easily (and relatively cheaply) dealt with using the Legal Rights Objection mechanism already in the Guidebook.

That’s assuming, of course, that the $185,000 application fee failed to be a deterrent, and that a registry back-end provider dumb enough to put its name to the bid could be found.

But even if ANA can be convinced that the risk of TLD-squatting is negligible, its concerns about the potential for problems at the second level will be harder to address.

Let’s face it, while estimates of the increased cost of trademark enforcement vary wildly, nobody has disputed that there will be a cost.

One ANA member has estimated that the per-brand cost to companies would be $2 million over 10 years, Liodice said.

ANA does not appear to have spent much time getting involved in the development of the new gTLD program lately — the most recent submission I could find dates from 2009 — but Liodice said its counsel Reed Smith has been representing it in the ICANN process.

Your second chance to win a $1,000 conference pass

Kevin Murphy, August 8, 2011, Domain Services

Congratulations to “Michael”, you’ve just won a free conference pass for newdomains.org worth $1,000 just for leaving a comment on DomainIncite.

Random.org’s random number sequence generator selected the winning order of comments earlier today, and Michael came top of the list.

His winning answer to the question of “What new gTLD(s) do you think will be successful, and why?” was:

If success is defined by the value it offers the Internet community and not by the number of registrations then I think that a cause based TLD like .Eco or .HIV will be the most successful as they will revolutionize the way we interest with charities online and show our support, ushering in a new era.

I’ve hooked the winner up with conference organizer United-Domains.

And now on to…

Competition Day Two

To be in with a chance at winning the second Full Conference pass to newdomains.org, simply:

1) Follow me on Twitter (if you’re not already doing so).

2) Send a tweet mentioning @domainincite and including the hashtag #conferencecompo

Tweets must be sent by 2359 UTC, Tuesday August 9. I’ll announce the randomly-selected winner here on Wednesday.

Again, the prize does not include transportation or accommodation, but it does include a certain amount of food and drink, along with access to all the panels and exhibits.

The show runs September 26-27 in Munich, Germany.

These Full Conference passes are currently selling for €699 ($1,000) each, so if you’re currently wondering whether or not to attend, a free ticket may help make your mind up.

Advertisers threaten to sue over new gTLDs

Kevin Murphy, August 4, 2011, Domain Policy

The Association of National Advertisers is threatening legal action unless ICANN “abandons” its recently approved new generic top-level domains program.

Its CEO, Robert Liodice, has written to his ICANN counterpart Rod Beckstrom outlining its litany of concerns about new gTLDs.

ANA’s strongly worded arguments will be familiar territory for anyone who has been following development of the program for the last few years.

It’s worried about cybersquatting, typosquatting, phishing, as well as the cost of defensive registrations and post-launch trademark enforcement.

The organization represents 400 companies that collectively spend $250 billion every year on their brands, according to the letter.

It also claims that ICANN shirked its duties by failing to adequately consider the economic impact of the program, and that it failed to develop it in a transparent, bottom-up manner.

Liodice wrote (pdf), with my emphasis:

ICANN must not ignore the legitimate concerns of brand owners and the debilitating effect on consumer protection and healthy markets its unsupervised actions will cause. Should ICANN refuse to reconsider and adopt a program that takes into account the ANA’s concerns expressed in this letter, ICANN and the Program present the ANA and its members no choice but to do whatever is necessary to prevent implementation of the Program and raise the issues in appropriate forums that can consider the wisdom, propriety and legality of the program.

The letter ends with a bunch of legal blah about ANA’s rights and remedies, a pretty obvious indication that it’s considering its legal position.

ICANN should “abandon” the program until ANA’s concerns have been addressed, Liodice wrote.

That’s not going to happen, of course.

There’s no way ICANN can put a halt to the program without basically admitting ANA’s analysis of it has merit.

If ANA wants to stop new gTLDs from going ahead, it’s going to need to do more than send a letter.

The letter is CC’d to the US Department of Commerce and several Congressmen, which suggests that we may see another Congressional hearing into the program before too long.

But will we see a lawsuit as well?

ICANN, at least, has anticipated the likelihood of having to defend itself in court for some time.

About 30% of the the $185,000 application fee – $30 million in a 500-application round – is allocated to various “risks”, of which a legal defense fund is one component.

I’d be surprised if ICANN’s legal team hasn’t war-gamed potential claims and defenses every time the Applicant Guidebook has been updated.

The next five months are going to be very interesting times.

Tucows expands into 200 TLDs with $2.5m deal

Kevin Murphy, August 2, 2011, Domain Registrars

Tucows has acquired EPAG Domainservices, a Bonn, Germany-based domain name registrar, for $2.5 million.

The deal is notable for the size of EPAG’s top-level domain catalog – it offers registrations in 200 TLDs compared to Tucows’ current 33.

Tucows hopes to offer all 200 to its 12,000-strong reseller channel before the end of the year, according to a press release.

CEO Elliot Noss said: “We expect that the deep expertise in registry integration we gain from EPAG will add invaluable bench-strength to our team as we prepare for ICANN’s roll-out of new TLDs.”

EPAG was previously owned by QSC, one of Germany’s largest ISPs.

The registrar has a portfolio of 400,000 customer domains under management, which Tucows is getting its hands on for an average of $6.25 per domain.

Tucows’ OpenSRS channel currently accounts for about 11 million domains, making it the third-largest registrar after Go Daddy and eNom.

More than half of EPAG’s registrations appear to be in ccTLDs. Webhosting.info puts its share of the ICANN gTLD market at 160,623 domains.

VeriSign boss leaves domain industry

Kevin Murphy, August 1, 2011, Domain Registries

Former VeriSign chief executive Mark McLaughlin, who resigned last week, is leaving the domain name industry entirely, signing up as the new CEO of Palo Alto Networks, a firewall vendor.

The privately held company is being tipped for an imminent IPO, which could mean a big stock payday for McLaughlin if executed successfully.

The Wall Street Journal quotes McLaughlin today as saying “the upside is on the equity side”.

Coming ahead of the launch ICANN’s top-level domains program, you could have been forgiven for thinking that McLaughlin may have been headhunted by a new gTLD player.

That would have been a heck of an endorsement of the commercial opportunity of new gTLDs, for the head of .com and .net to throw in with the newcomers.

But clearly McLaughlin has realized there’s more money in firewalls.

Smart man.

At VeriSign, founder Jim Bedzos has taken over as CEO while a permanent replacement for the 10-year VeriSign veteran is sought.

VeriSign CEO quits. But where’s he going?

VeriSign’s CEO and president Mark McLaughlin has quit the company for a CEO position at an undisclosed private company.

The news of his departure, after two years at VeriSign’s helm, came during the company’s second quarter earnings call yesterday.

McLaughlin’s been at VeriSign for over a decade. In his time as CEO, he oversaw a massive restructuring at the company.

VeriSign is now dramatically smaller – 1,000 people compared to 5,000 when he took over – following the sale of assets such as the security business, which Symantec bought.

His resignation is effective on Monday, but he’s told the company he’ll stick around until late August. Founder and chairman Jim Bedzos will become interim CEO while a replacement is found.

But where’s McLaughlin going?

The timing, less that six months before ICANN’s new top-level domains program kicks off, is certainly curious. It would be an unbelievable coup for a new gTLD firm to hire the former boss of .com.

A lot of people are switching companies at the moment, positioning themselves the best to exploit the new gTLD opportunity. (Anybody need a writer? I’m told my prices are very reasonable).

But he could be going anywhere, of course.

On VeriSign’s earnings call yesterday, McLaughlin said he wanted to join a private company and take it public, which made me think he may be leaving the domain business entirely.

McLaughlin is an advisor to Altos Ventures, a venture capital firm with a bunch of startups to its name.

There are not a great many companies in the domain industry – that we know about, at least – that immediately jump out as near-term IPO candidates.

McLaughlin plans to announce his new employer next week.

Final gTLD Applicant Guidebook expected this week

Kevin Murphy, July 25, 2011, Domain Policy

It’s been over a month since ICANN approved its new top-level domains program, but we still don’t have a final-final version of the Applicant Guidebook.

The resolution approving the program ICANN passed in Singapore called for a number of amendments to be made to the 352-page tome.

The current draft was published May 30, and so far ICANN has not said when the next version – likely to be the version used in the first round of applications – will be released.

I inquired, and now word has come from on high that ICANN’s new gTLD team hopes to have the English version of the new Guidebook published by the end of July – this coming weekend.

The Singapore resolution called for changes to the government Early Warning and Advice processes, added protection for Olympic and Red Cross trademarks, and a modification of the Uniform Rapid Suspension cybersquatting policy.

One has to wonder if the changes outlined in the resolution are the only changes that we’ll see – a month seems like a long time to make just a few fairly minor edits.

The resolution said the board “authorizes staff to make further updates and changes to the Applicant Guidebook as necessary and appropriate”.

The first round of new gTLD applications is set to open January 12.

ICANN fights government gTLD power grab

Kevin Murphy, July 22, 2011, Domain Policy

ICANN has opposed a US move to grant governments veto power over controversial new top-level domain applications.

Cutting to the very heart of Obama administration internet governance policy, ICANN has told the National Telecommunications and Information Administration that its recent proposals would “undermine the very principle of the multi-stakeholder model”.

The stern words came in ICANN’s response to the NTIA’s publication of revisions to the IANA contract, the contract that allows ICANN to retain its powers over the domain name system root.

The NTIA’s Further Notice Of Inquiry contained proposed amendments to the contract, including this:

For delegation requests for new generic TLDS (gTLDs), the Contractor [ICANN] shall include documentation to demonstrate how the proposed string has received consensus support from relevant stakeholders and is supported by the global public interest.

This was widely interpreted as a US attempt to avoid a repeat of the .xxx scandal, when ICANN approved the porn gTLD despite the unease voiced by its Governmental Advisory Committee.

As I noted in June, it sounds a lot like code for “if the GAC objects, you must reject”, which runs the risk of granting veto powers to the GAC’s already opaque consensus-making process.

In his response to the FNOI (pdf), ICANN chief Rod Beckstrom says that the NTIA’s proposal would “replace” the “intensive multi-stakeholder deliberation” that created the newly approved Applicant Guidebook.

He also pointed out the logical inconsistency of asking IANA to remain policy-neutral in one part of the proposed contract, and asking it to make serious policy decisions in another:

The IANA functions contract should not be used to rewrite the policy and implementation process adopted through the bottom-up decision-making process. Not only would this undermine the very principle of the multi-stakeholder model, it would be inconsistent with the objective of more clearly distinguishing policy development from operational implementation by the IANA functions operator.

NTIA head Larry Strickling has been pounding the “multistakeholderism” drum loudly of late, most recently in a speech in Washington and in an interview with Kieren McCarthy of .nxt.

In the .nxt interview, Strickling was quite clear that he believes ICANN should give extra authority to governments when it comes to approving controversial strings.

The NTIA concern – shared by other government entities including the European Commission – is that controversial strings could lead to national blocking and potentially internet fragmentation.

While Strickling declined to comment on the specific provisions of the IANA contract, he did tell .nxt:

If the GAC as a consensus view can’t support a string then my view is that the ICANN Board should not approve the string as to do so in effect legitimizes or sanctions that governments should be blocking at the root zone level. And I think that is bad for the Internet.

Where you’re dealing with sensitive strings, where you’ve engaged the sovereignty of nations, I think it is appropriate to tip the hat a little bit more to governments and listen to what they say. On technical issues it wouldn’t be appropriate but on this particular one, you’ve got to listen a little bit more to governments.

He also indicated that the US would not necessarily stand up for its principles if confronted by substantial objections to a string from other governments:

So we would be influenced – I can’t say it would be dispositive – if a large number of countries have a problem with a particular string, even if it was one that might not be objectionable to the United States government.

And that is out of interest of protecting the Internet’s root from widespread blocking at the top-level by lots of governments.

Does this mean that the US could agree to a consensus GAC objection to a .gay gTLD? A .porn? A .freespeech? It certainly sounds like it.