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Companies that both support and oppose new gTLDs

Kevin Murphy, December 8, 2011, Domain Policy

NetChoice, which has spent the last few years publicly expressing a skeptical view of ICANN’s new top-level domains program, has today come out explicitly in its support.

“While not perfect, ICANN’s plan to expand the domain space is a critical step forward for the Internet,” NetChoice executive director Steve DelBianco said in a press release.

“Managed properly, the new gTLD program should increase competition, expand user choice, and make the Internet far more useful to hundreds of millions of users worldwide who read and write in alphabets other than Latin,” he said.

This puts a number of companies in the interesting situation of simultaneously opposing and supporting the new gTLDs program, at least if you track which associations they belong to.

Take eBay, for example.

eBay is a member of NetChoice, but it’s also a member of the anti-expansion Association of National Advertisers, according to the organizations’ respective web sites.

It’s also a member of the Interactive Advertising Bureau, which opposes new gTLDs and is a founder member of the Coalition for Responsible Internet Domain Oversight, which was founded by the ANA and also opposes new gTLDs.

Yahoo, Expedia and Facebook are all members of the IAB, which opposes the expansion, and NetChoice, which doesn’t.

The Screen Actors Guild, which has openly opposed new gTLDs, is also inexplicably listed as a member of the Electronic Retailing Association, which in turn is a member of NetChoice.

News Corp is a member of NetChoice, which supports new gTLDs, while many of its Fox-branded subsidiaries are members of the IAB, which is a member of CRIDO, which opposes new gTLDs.

Intel is a member of the ANA, which opposes the program. It’s also a member of the Association of Competitive Technology, which is in turn a member of NetChoice, which supports it.

Very confusing, isn’t it?

Almost makes you think that, regardless of which side you’re on, hiding behind a coalition just makes your point of view seem less valid.

Notes from the Senate new gTLDs hearing

Kevin Murphy, December 8, 2011, Domain Policy

The US Senate’s Commerce Committee held a hearing into ICANN’s new generic top-level domain program today, following pressure from the Association of National Advertisers.

It must have been a busy day on Capitol Hill. Not only was the hearing delayed by 45 minutes, but when it did begin only four or five Senators showed up to speak.

Committee chair Sen. Jay Rockefeller put his head through the door just long enough to deliver a prepared statement, leaving Sen. Amy Klobuchar to lead the rest of the hearing.

It was a relatively subdued and hurried affair that heard for the most part some extremely well-worn arguments about the potential benefits and risks of new gTLDs.

Nevertheless, the hearing did generate a few headline moments. These are my first impressions.

Rockefeller in pro-gTLD shocker

Given that the hearing was called at the behest of ICANN’s critics, it was slightly surprising that the Committee’s chairman gave a generally pro-expansion statement.

Sen. Rockefeller said he was generally in favor of new gTLDs, believing them to be pro-competition and pro-innovation, but suggested that the roll-out should be slower and more cautious.

“I think we’ll have to get used to .hotel, I think we’ll have to get used to .auto,” he said.

“If ICANN is determined to move forward, it should do so slowly and cautiously,” he said. “The potential for fraud, consumer confusion, and cybersquatting is massive and argues for a phased in implementation. Scaling back the initial round of new top level domains introduced in 2013 may be a prudent approach.”

ICANN expects about 1,000 applications

Senior vice president Kurt Pritz gave the latest ICANN guesstimate about how many new gTLD applications it expects to receive in the first round.

That number is 500 to 1,000, maybe a little more but “not thousands”, he said, noting that the estimate was completely based on hearsay.

New ICANN conflict of interest rules

ICANN’s board of directors evidently voted to restrict their post-ICANN employment opportunities at the board meeting earlier today, if Pritz’s testimony is an accurate guide.

He said that directors will not be able to work for any new gTLD operator that they have voted to approve for 12 months after they leave ICANN.

Cheaper application fees for worthy applicants

Again scooping the publication of today’s ICANN board meeting resolutions, Pritz revealed that application fees are going to be reduced from $185,000 to $47,000 for needy applicants.

This suggests heavily that ICANN figured out a way to accommodate the recommendations of the Joint Applicant Support working group, which proposed a number of measures aimed at reducing the financial burden for applicants in developing nations.

There was no word from Pritz about which organizations or nations will be eligible for the reduction, however.

The ANA compares senators to Disney characters

At one point, the ANA’s Dan Jaffe wheeled out a slide bearing a picture of Donald Duck and Mickey Mouse, to illustrate the problem of inaccurate Whois information.

He was addressing Sen. Maria Cantwell and Sen. Kelly Ayotte, both of whom asked questions about fraud and both of whom use Whois privacy services on their official campaign web sites.

I found this immensely amusing.

Dyson speaks for the little guy (if he has a trademark)

Former ICANN chair Esther Dyson said in her opening testimony that she was the only person at the hearing there to represent public opinion, rather than that of big business.

She then went on to complain, with a straight face, about all the trademark enforcement headaches big business will have to deal with in a world of hundreds of new gTLDs.

She’s particularly miffed, as a director of a company called Meetup, that ICM Registry has reserved meetup.xxx as a premium domain name.

Meetup will probably sue whoever buys the name for trademark infringement, she indicated.

Way to stick it to The Man, Esther!

Wither IDNs?

Non-Latin-script gTLDs were not discussed in any depth during the hearing, meriting only one or two mentions.

That’s unusual, given that IDN gTLDs are the one benefit of the ICANN program that not even intellectual property interests have dared to argue against.

Next steps

The ANA and the YMCA want somebody to put a stop to the new gTLD program, or to at least delay it.

Dyson suggested that for the US to unilaterally intervene might be a bad idea, politically.

When asked whether the Department of Commerce would be able to stay ICANN’s hand, Commerce representative Fiona Alexander ducked the question.

With a handful of exceptions, nobody on the Senate committee seemed to care enough about the subject to show up and ask questions.

I think this probably counts as a win for the pro-expansion camp.

There is however another hearing, this time before the House Energy and Commerce Committee, next week. If recent history is any guide, we’re likely to be in for more of the same.

London issues .london RFP through Olympic bid system

Kevin Murphy, December 8, 2011, Domain Registries

London & Partners, the official promotional agency for London, has released a request for proposals for a registry to apply for and run .london as a new top-level domain.

Bidders will have to sign up for CompeteFor, an online procurement tool designed primarily for the London 2012 Olympics, in order to submit their proposals.

UK-based registries Nominet and CentralNic have already said they plan to respond to the RFP, but L&P says that it is open to companies anywhere, not only in the UK and EU.

The RFP is open until January 5 at noon GMT.

Was .xxx’s launch disappointing?

Kevin Murphy, December 8, 2011, Domain Registries

The weekend box office numbers are in, and .xxx didn’t put as many bums on seats as might have been expected.

ICM Registry sold 55,367 new .xxx domain names in its first 24 hours of general availability, giving it a total of almost 159,351 registrations, according to the company.

That’s pretty good going for a TLD which, despite the spin in ICM’s recent TV commercials, is intended for a limited customer base, and which is selling for $80 to $100 a year.

Given its $60 registry fee, ICM will have taken over $3.3 million in revenue yesterday, over $550,000 of which will be given to its sponsoring organization, IFFOR.

However, the 159,351 total includes non-resolving domains, ICM has confirmed.

Due to the unique trademark protection mechanisms put in place for non-porn companies, it’s possible to pay for a .xxx domain that will only ever resolve to a standard registry placeholder.

ICM has previously said that it took almost 80,000 sunrise applications, and that the landrush phase put its total “comfortably over 100,000″.

It did not, however, break out the mix of Sunrise A (resolving) and Sunrise B (non-resolving) domains.

That’s an important distinction, both for ICM’s ongoing revenue and for gauging demand for .xxx among registrants.

Each Sunrise B domain gave ICM a $161 windfall but, unlike every other TLD launched to date, has the sale had no recurring revenue component.

I think it’s possible that 50,000 to 60,000 sunrise domains were non-resolvers, which would give .xxx a total of roughly 100,000 active domains under management after one day of GA.

(My assumptions are that all 80,000 sunrise applications were unique and approved, and that roughly two thirds were for Sunrise B non-resolving domains).

Assuming all the active domains are renewed, it’s a $6 million a year business (or $5 million, if you exclude the mandatory IFFOR donation) for ICM already.

The .xxx zone is already bigger than .travel, .pro, .jobs, .aero, .coop, .museum and .cat. It will likely be bigger than .name, .tel and .asia by the end of the month.

So why suggest that it’s a disappointing result?

Pre-reservations

First, for a few years ICM was accepting no-cost .xxx “pre-reservations” through its web site, while its gTLD application was in ICANN limbo.

It racked up over 900,000 such reservations for roughly 650,000 unique .xxx domain names before shutting the offer down in July this year.

One might expect that most people interested enough in .xxx to pre-register a domain months or years in advance might also be interested in grabbing that domain during landrush, sunrise or at the moment of GA. That apparently didn’t happen.

.CO

Let’s also compare .xxx to the launch of .co by .CO Internet last year.

While .CO did not have anything like the long-term media exposure as .xxx, it did of course have the advantage of offering a completely generic string priced at a third of .xxx.

Within its first 24 hours of general availability, .CO said that it had 233,000 domains under management, about 39,000 of which were landrush or sunrise registrations.

Even at the cheaper registry fee (about $20 a year) .CO still made more money in day one than ICM (although ICM wins hands-down in terms of premium domain sales).

.CO, incidentally, also only had 10 accredited registrars at launch (not counting resellers) compared to ICM’s over 70.

Go Daddy

Go Daddy is responsible for roughly half of all new .com registrations, with similar numbers in other TLDs including .co, but it does not appear to be promoting .xxx very heavily.

For the last few days, its homepage has contained only one small below-the-fold reference to .xxx domains. Its TLD drop-down menu has .xxx in tenth place, between .biz and .ca.

Conversely, ICM has been promoting Go Daddy (and DomainMonster) more heavily in its own marketing – notably on gavin.xxx, the site “owned” by its TV commercial character.

Expectations

So is .xxx on track to meet expectations at this early stage?

ICM CEO Stuart Lawley has previously predicted 300,000 to 500,000 registrations in the first few months, and that’s still an achievable goal given its day-one performance.

.CO Internet, for example, more than doubled its 233,000 first-day take within two months of going into general availability.

The new Russian ccTLD .рф registered 200,000 domains in its first six hours when it launched in November 2010, and hit 800,000 by April this year.

While .xxx clearly hasn’t yet smashed estimates in the same way as its sunrise did, I think early indications are that it’s looking pretty healthy.

Dyson confirmed for new gTLDs Senate hearing

Kevin Murphy, December 6, 2011, Domain Policy

The US Senate Committee on Commerce, Science and Transportation has published the witness list for this Thursday’s hearing into ICANN’s new gTLD program.

Esther Dyson, the founding chair of ICANN’s board of directors and now a fierce critic of the organization, may turn out to cause the most fireworks.

While Dyson was pro-expansion a decade ago, voting in favor of .info, .biz and others, she recently came out against the program in a widely syndicated op-ed and at a CADNA conference.

Kurt Pritz, ICANN’s senior vice president of stakeholder relations and regular new gTLDs go-to guy, will return to Capitol Hill to defend the program.

(We’re likely to see some criticism of CEO Rod Beckstrom as a result of his absence, as we did following the House of Representatives hearing earlier this year, I imagine.)

Fiona Alexander of the National Telecommunications and Information Administration, ICANN’s governmental overseer, has also been named as a witness.

Predictably, the Association of National Advertisers has a seat on the panel in the form of Dan Jaffe, its vice president of government relations.

The ANA and its newly formed Coalition for Responsible Internet Domain Oversight is believed to have brought about the hearing due to its anti-ICANN lobbying activities.

The witness with the wildcard credentials is Angela Williams, general counsel of the Young Men’s Christian Association of the United States of America.

The YMCA does not appear to have spent a great deal of time contributing to ICANN or the new gTLDs program.

It is however a member of ICANN’s new Not-for-Profit Organizations Constituency (NPOC), which is viewed by some (largely other non-commercial stakeholders) as a shill for intellectual property interests.