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Registrars want six-month stay on new Whois policy

Registrars representing the majority of the gTLD industry want ICANN to withhold the ban hammer for six months on its new temporary Whois policy.

As I reported earlier today, ICANN has formally approved an unprecedented Temporary Policy that seeks to bring the Whois provisions of its contracts into compliance with the EU’s General Data Protection Regulation.

It comes into effect next Friday, May 25, but it contains a fair few items that will likely take longer for registrars to implement.

While ICANN’s top lawyer has indicated that ICANN Compliance will act as reasonably as possible about enforcing the new policy, registrars want a moratorium of at least six months.

In a letter (pdf) dated May 16 (before the policy was voted through, but while its contents were broadly known), Registrar Stakeholder Group chair Graeme Bunton wrote:

Any temporary specification adopted now that significantly deviates from previously held expectations and models will be far too late for us to accommodate for a May 25, 2018 implementation date.

For this reason, we ask that any temporary specification include a formal ICANN compliance moratorium, not shorter than six (6) months, providing us an opportunity to conform, to the extent possible, our GDPR implementation with the GDPR-compliant aspects of any ICANN temporary specification

He added that some registrars may need even more time, so they should have the right ask for an extension if necessary.

The letter is signed by Endurance, GoDaddy, Tucows, Blacknight, 1&1, United Domains, NetEarth One and Cloudflare, which together account for most gTLD domains.

Is ICANN still over-estimating revenue from “stagnating” gTLD industry?

Kevin Murphy, March 11, 2018, Domain Policy

ICANN may have slashed millions from its revenue estimate for next year, but it has not slashed deeply enough, according to registrars and others.

Industry growth is flat, and below even ICANN’s “worst case” expectations for the fiscal year starting July 1, registrars told the organization in comments filed on its FY19 budget last week.

The Registrars Stakeholder Group said that “the FY 2019 budget fails to recognize that overall industry growth is flat.”

ICANN’s budget foresees FY19 revenue of $138 million, up $3.5 million on the projected result for FY18.

“These revenue projections presume growth in the domain market that is not aligned with industry expectations,” the RrSG said, pointing to sources such as Verisign’s Domain Name Industry Brief, which calculated 1% industry growth last year.

ICANN’s predictions are based on previous performance and fail to take into account historical “one-time events”, such as the Chinese domain speculation boom of a couple years ago, that probably won’t be repeated, RrSG said.

RrSG also expects the number of accredited registrars to decrease due to industry consolidation and drop-catching registrars reducing their stables of shell accreditations.

(I’ll note here that Web.com has added half a dozen drop-catchers to its portfolio in just the last few weeks, but this goes against the grain of recent trends and may be an aberration.)

RrSG said ICANN’s budget should account for reduced or flat accreditation fee revenue (which as far as I can tell it already does).

The comment, which can be read in full here, concludes:

Taken together, these concerns represent a disconnect between ICANN funding projections, and the revenue expectations of Registrars (and presumably, gTLD Registries) from which these funds are derived. In our view, ICANN’s assessment of budgetary “risks” are too optimistic , and actual performance for FY19 will be significant lower.

For what it’s worth, the Registries Stakeholder Group had this to say about ICANN’s revenue estimates:

Reliable forecasts, characterised by their scrutiny and realism, are fundamental to put together a realistic budget and to avoid unpleasant surprises, such as the shortage ICANN is experiencing in the current fiscal year. The RySG advises ICANN to continue to conduct checks on its forecasts and to re-evaluate the methodology used to predict its income in order to prevent another funding shortfall such as that which the organization experienced in FY18.

Community calls on ICANN to cut staff spending

Kevin Murphy, March 11, 2018, Domain Policy

ICANN should look internally to cut costs before swinging the scythe at the volunteer community.

That’s a key theme to emerge from many comments filed by the community last week on ICANN’s fiscal 2019 budget, which sees spending on staff increase even as revenue stagnates and cuts are made in other key areas.

ICANN said in January that it would have to cut $5 million from its budget for the year beginning July 1, 2018, largely due to a massive downwards revision in how many new gTLD domains it expects the industry to process.

At the same time, the organization said it will increase its payroll by $7.3 million, up to $76.8 million, with headcount swelling to 425 by the end of the fiscal year and staff receiving on average a 2% pay rise.

In comments filed on the budget, many community members questioned whether this growth can be justified.

Among the most diplomatic objections came from the GNSO Council, which said:

In principle, the GNSO Council believes that growth of staff numbers should only occur under explicit justification and replacements due to staff attrition should always occur with tight scrutiny; especially in times of stagnate funding levels.

The Council added that it is not convinced that the proposed budget funds the policy work it needs to do over the coming year.

The Registrars Stakeholder Group noted the increased headcount with concern and said:

Given the overall industry environment where organizations are being asked to do more with less, we are not convinced these additional positions are needed… The RrSG is not yet calling for cuts to ICANN Staff, we believe the organization should strive to maintain headcount at FY17 Actual year-end levels.

The RrSG shared the GNSO Council’s concern that policy work, ICANN’s raison d’etre, may suffer under the proposed budget.

The At-Large Advisory Committee said it “does not support the direction taken in this budget”, adding:

Specifically we see an increase in staff headcount and personnel costs while services to the community have been brutally cut. ICANN’s credibility rests upon the multistakeholder model, and cuts that jeopardize that model should not be made unless there are no alternatives and without due recognition of the impact.

Staff increases may well be justified, but we must do so we a real regard to costs and benefits, and these must be effectively communicated to the community

ALAC is concerned that the budget appears to cut funding to many projects that see ICANN reach out to, and fund participation by, non-industry potential community members.

Calling for “fiscal prudence”, the Intellectual Property Constituency said it “encourages ICANN to take a hard look at personnel costs and the use of outside professional services consultants.”

The IPC is also worried that ICANN may have underestimated the costs of its contractual compliance programs.

The Non-Commercial Stakeholders Group had some strong words:

The organisation’s headcount, and personnel costs, cannot continue to grow. We feel strongly that the proposal to grow headcount by 25 [Full-Time Employees] to 425 FTE in a year where revenue has stagnated cannot be justified.

With 73% of the overall budget now being spent on staff and professional services, there is an urgent need to see this spend decrease over time… there is a need to stop the growth in the size of the staff, and to review staff salaries, bonuses, and fringe benefits.

NCSG added that ICANN could perhaps reduce costs by relocating some positions from its high-cost Los Angeles headquarters to the “global south”, where the cost of living is more modest.

The ccNSO Strategic and Operational Planning Standing Committee was the only commentator, that I could find, to straight-up call for a freeze in staff pay rises. While also suggesting moving staff to less costly parts of the globe, it said:

The SOPC – as well as many other community stakeholders – seem to agree that ICANN staff are paid well enough, and sometimes even above market average. Considering the current DNS industry trends and forecasts, tougher action to further limit or even abolish the annual rise in compensation would send a strong positive signal to the community.

It’s been suggested that, when asked to find areas to cut, ICANN department heads prioritized retaining their own staff, which is why we’re seeing mainly cuts to community funding.

I’ve only summarized the comments filed by formal ICANN structures here. Other individuals and organizations filing comments in their own capacity expressed similar views.

I was unable to find a comment explicitly supporting increased staffing costs. Some groups, such as the Registries Stakeholder Group, did not address the issue directly.

While each commentator has their own reasons for wanting to protect the corner of the budget they tap into most often, it’s a rare moment when every segment of the community (commercial and non-commercial, domain industry and IP interests) seem to be on pretty much the same page on an issue.

Amsterdam refuses to publish Whois records as GDPR row escalates

Kevin Murphy, October 23, 2017, Domain Policy

Two Dutch geo-gTLDs are refusing to provide public access to Whois records in what could be a sign of things to come for the whole industry under new European privacy law.

Both .amsterdam and .frl appear to be automatically applying privacy to registrant data and say they will only provide full Whois access to vetted individuals such as law enforcement officials.

ICANN has evidently slapped a breach notice on both registries, which are now complaining that the Whois provisions in their Registry Agreements are “null and void” under Dutch and European Union law.

FRLregistry and dotAmsterdam, based in the Netherlands, are the registries concerned. They’re basically under the same management and affiliated with the local registrar Mijndomein.

dotAmsterdam operates under the authority of the city government. .frl is an abbreviation of Friesland, a Dutch province.

Both companies’ official registry sites, which are virtually identical, do not offer links to Whois search. Instead, they offer a statement about their Whois privacy policy.

That policy states that Dutch and EU law “forbids that names, addresses, telephone numbers or e-mail addresses of Dutch private persons can be accessed and used freely over the internet by any person or organization”.

It goes on to state that any “private person” that registers a domain will have their private contact information replaced with a “privacy protected” message in Whois.

Legal entities such as companies do not count as “private persons”.

Under the standard ICANN Registry Agreement, all new gTLDs are obliged to provide public Whois access under section 2.5. According to correspondence from the lawyer for both .frl and .amsterdam, published by ICANN, the two registries have been told they are in breach.

It seems the breach notices have not yet escalated to the point at which ICANN publishes them on its web site. At least, they have not been published yet for some reason.

But the registries have lawyered up already, regardless.

A letter from Jetse Sprey of Versteeg Wigman Sprey to ICANN says that the registries are free to ignore section 2.5 of their RAs because it’s not compliant with the Dutch Data Protection Act and, perhaps more significantly, the EU General Data Protection Regulation.

The GDPR is perhaps the most pressing issue for ICANN at the moment.

It’s an EU law due to come into effect in May next year. It has the potential to completely rewrite the rules of Whois access for the entire industry, sidestepping the almost two decades of largely fruitless ICANN community discussions on the topic.

It covers any company that processes private data on EU citizens; breaching it can incur fines of up to €20 million or 4% of revenue, whichever is higher.

One of its key controversies is the idea that citizens should have the right to “consent” to their personal data being processed and that this consent cannot be “bundled” with access to the product or service on offer.

According to Sprey, because the Registry Agreement does not give registrants a way to register a domain without giving their consent to their Whois details being published, it violates the GDPR. Therefore, his clients are allowed to ignore that part of the RA.

These two gTLDs are the first I’m aware of to openly challenge ICANN so directly, but GDPR is a fiercely hot topic in the industry right now.

During a recent webinar, ICANN CEO Goran Marby expressed frustration that GDPR seems to have come about — under the watch of previous CEOs — without any input from the ICANN community, consideration in the EU legislative process of how it would affect Whois, or even any discussion within ICANN’s own Governmental Advisory Committee.

“We are seeing an increasing potential risk that the incoming GDPR regulation will mean a limited WHOIS system,” he said October 4. “We appreciate that for registers and registers, this regulation would impact how you will do your business going forward.”

ICANN has engaged EU legal experts and has reached out to data commissioners in the 28 EU member states for guidance, but Marby pointed out that full clarity on how GDPR affects the domain industry could be years away.

It seems possible there would have to be test cases, which could take five years or more, in affected EU states, he suggested.

ICANN is also engaging with the community in its attempt to figure out what to do about GDPR. One project has seen it attempt to gather Whois use cases from interested parties. Long-running community working groups are also looking at the issue.

But the domain industry has accused ICANN the organization of not doing enough fast enough.

Paul Diaz and Graeme Bunton, chairs of the Registries Stakeholder Group and Registrars Stakeholder Group respectively, have recently escalated the complaints over ICANN’s perceived inaction.

They told Marby in a letter that they need to have a solution in place in the next 60 days in order to give them time to implement it before the May 2018 GDPR deadline.

Complaining that ICANN is moving too slowly, the October 13 letter states:

The simple fact is that the requirements under GDPR and the requirements in our contracts with ICANN to collect, retain, display, and transfer personal data stand in conflict with each other.

GDPR presents a clear and present contractual compliance problem that must be resolved, regardless of whether new policy should be developed or existing policy adjusted. We simply cannot afford to wait any longer to start tackling this problem head-on.

For registries and registrars, the lack of clarity and the risk of breach notices are not the only problem. Many registrars make a bunch of cash out of privacy services; that may no longer be as viable a business if privacy for individuals is baked into the rules.

Other interests, such as the Intellectual Property Constituency (in favor of its own members’ continued access to Whois) and non-commercial users (in favor of a fundamental right to privacy) are also complaining that their voices are not being heard clearly enough.

The GDPR issue is likely to be one of the liveliest sources of discussion at ICANN 60, the public meeting that kicks off in Abu Dhabi this weekend.

UPDATE: This post was updated October 25 to add a sentence clarifying that companies are not “private persons”.

Pilot program for Whois killer launches

Kevin Murphy, September 7, 2017, Domain Tech

ICANN is to oversee a set of pilot programs for RDAP, the protocol expected to eventually replace Whois.

Registration Data Access Protocol, an IETF standard since 2015, fills the same function as Whois, but it is more structured and enables access control rules.

ICANN said this week that it has launched the pilot in response to a request last month from the Registries Stakeholder Group and Registrars Stakeholder Group. It said on its web site:

The goal of this pilot program is to develop a baseline profile (or profiles) to guide implementation, establish an implementation target date, and develop a plan for the implementation of a production RDAP service.

Participation will be voluntary by registries and registrars. It appears that ICANN is merely coordinating the program, which will see registrars and registrars offer their own individual pilots.

So far, no registries or registrars have notified ICANN of their own pilots, but the program is just a few days old.

It is expected that the pilots will allow registrars and registries to experiment with different types of profiles (how the data is presented) and extensions before ICANN settles on a standard, contractually enforced format.

Under RDAP, ICANN/IANA acts as a “bootstrapping” service, maintaining a list of RDAP servers and making it easier to discover which entity is authoritative for which domain name.

RDAP is basically Whois, but it’s based on HTTP/S and JSON, making it easier to for software to parse and easier to compare records between TLDs and registrars.

It also allows non-Latin scripts to be more easily used, allowing internationalized registration data.

Perhaps most controversially, it is also expected to allow differentiated access control.

This means in future, depending on what policies the ICANN community puts in place, millions of current Whois users could find themselves with access to fewer data elements than they do today.

The ICANN pilot will run until July 31, 2018.

.sucks “gag order” dropped, approved

Kevin Murphy, April 19, 2016, Domain Registries

Vox Populi, the .sucks registry, has had controversial changes to its registrar contract approved after it softened language some had compared to a “gag order”.

ICANN approved changes to the .suck Registry-Registrar Agreement last week, after receiving no further complaints from registrar stakeholders.

Registrars had been upset by a proposed change that they said would prevent brand-protection registrars from publicly criticizing .sucks:

The purpose of this Agreement is to permit and promote the registration of domain names in the Vox Populi TLDs and to allow Registrar to offer the registration of the Vox Populi TLDs in partnership with Vox Populi. Neither party shall take action to frustrate or impair the purpose of this Agreement.

But Vox has now “clarified” the language to remove the requirement that registrars “promote” .sucks names. The new RRA will say “offer” instead.

Registrars had also complained that the new RRA would have allowed Vox to unilaterally impose new contractual terms with only 15 days notice.

Vox has amended that proposal too, to clarify that changes would come into effect 15 days after ICANN has given its approval.

Vox CEO John Berard told ICANN in a March 18 letter:

VoxPop’s intent was never to alter any material aspect of the Registry Registrar Agreement. Our intent was to clarify legal obligations that already exist in the Agreement, and conform the timeframes for any future amendments with those specified in our ICANN registry contract.

Anger as ICANN splashes out $160,000 on travel

Kevin Murphy, March 15, 2016, Domain Policy

Should representatives of Facebook, Orange, Thomson Reuters, BT and the movie industry have thousands of ICANN dollars spent on their travel to policy meetings?

Angry registrars are saying “no”, after it emerged that ICANN last month spent $80,000 flying 38 community members to LA for a three-day intersessional meeting of the Non-Contracted Parties House.

It spent roughly the same on the 2015 meeting, newly released data shows.

ICANN paid for fewer than 10 registries and registrars — possibly as few as two — to attend the equivalent Global Domains Division Summit last year, a few registrars told DI.

The numbers were released after a Documentary Information Disclosure Policy request by the Registrars Stakeholder Group a month ago, and published on Friday (pdf).

It appears from the DIDP release that every one of the 38 people who showed up in person was reimbursed for their expenses to the tune of, on average, $2,051 each.

The price tag covers flights, hotels, visa costs and a cash per diem allowance that worked out to an average of $265 per person.

ICANN also recorded travel expenses for another two people who ultimately couldn’t make it to the event.

The NCPH is made up of both commercial and non-commercial participants. Many are academics or work for non-profits.

However, representatives of huge corporations such as Facebook and BT also work in the NCPH and let ICANN pick up their expenses for the February meeting.

Lawyers from influential IP-focused trade groups such as the Motion Picture Association of America and International Trademark Association were also happy for ICANN to pay.

One oddity on the list is the CEO of .sucks registry Vox Populi, who is still inexplicably a member of the Business Constituency.

MarkMonitor, a corporate registrar and Thomson Reuters subsidiary that attends the Intellectual Property Constituency, also appears.

Despite $80,000 being a relatively piddling amount in terms of ICANN’s overall budget, members of the Contracted Parties House — registries and registrars — are not happy about this state of affairs as a matter of principle.

ICANN’s budget is, after all, primarily funded by the ICANN fees registries and registrars — ultimately registrants — must pay.

“CPH pays the bills and the non-CPH travels on our dime,” one registrar told DI today.

One RrSG member said only two registrars were reimbursed for their GDD Summit travel last year. Another put the number at five. Another said it was fewer than 10.

In any event, it seems to be far fewer than those in the NCPH letting ICANN pick up the tab.

It’s not entirely clear why the discrepancy exists — it might be just because fewer contracted parties apply for a free ride, rather than evidence of a defect in ICANN expenses policy.

The NCPH intersessional series was designed to give stakeholders “the opportunity, outside of the pressures and schedule strains of an ICANN Public Meeting to discuss longer-range substantial community issues and to collaborate with Senior ICANN Staff on strategic and operational issues that impact the community”, according to ICANN.

Registrars object to “unreasonable” .bank demands

Registrars are upset with fTLD Registry Services for trying to impose new rules on selling .bank domains that they say are “unreasonable”.

The Registrar Stakeholder Group formally relayed its concerns about a proposed revision of the .bank Registry-Registrar Agreement to ICANN at the weekend.

A key sticking point is fTLD’s demand that each registrar selling .bank domains have a dedicated .bank-branded web page.

Some registrars are not happy about this, saying it will “require extensive changes to the normal operation of the registrar.”

“Registrars should not be required to establish or maintain a “branded webpage” for any extension in order to offer said extension to its clients,” they told ICANN.

i gather that registrars without a full retail presence, such as corporate registrars that sell mainly offline, have a problem with this.

There’s also a slippery slope argument — if every gTLD required a branded web page, registrars would have hundreds of new storefronts to develop and maintain.

fTLD also wants registrars to more closely align their sales practices with its own, by submitting all registration requests from a single client in a single day via a bulk registration form, rather than live, or pay an extra $125 per-name fee.

This is to cut down on duplicate verification work at the registry, but registrars say it would put a “severe operational strain” on them.

There’s also a worry about a proposed change that would make registrars police the .bank namespace.

The new RRA says: “Registrar shall not enable, contribute to or willing aid any third party in violating Registry Operator’s standards, policies, procedures, or practices, and shall notify Registry Operator immediately upon becoming aware of any such violation.”

But registrars say this “will create a high liability risk for registrars” due to the possibility of accidentally overlooking abuse reports they receive.

The registrars’ complaints have been submitted to ICANN, which will have to decide whether fTLD is allowed to impose its new RRA or not.

The RrSG’s submission is not unanimously backed, however. One niche-specializing registrar, EnCirca, expressed strong support for the changes.

In a letter also sent to ICANN, it said that none of the proposed changes are “burdensome”, writing:

EnCirca fully supports the .BANK Registry’s efforts to ensure potential registrants are fully informed by Registrars of their obligations and limitations for .BANK.  This helps avoid confusion and mis‐use by registrants, which can cause a loss of trust in the Registry’s stated mission and commitments to the banking community.

fTLD says the proposed changes would bring the .bank RRA in line with the RRA for .insurance, which it also operates.

The .insurance contract has already been signed by several registrars, it told ICANN.

.sucks sends in the lawyers in “gag order” fight

Kevin Murphy, January 23, 2016, Domain Registries

Vox Populi is taking ICANN to mediation over a row about what some of its registrars call a “gag order” against them.

Its lawyers have sent ICANN a letter demanding mediation and claiming ICANN has breached the .sucks Registry Agreement.

I believe it’s the first time a new gTLD registry has done such a thing.

The clash concerns changes that Vox Populi proposed for its Registry-Registrar Agreement late last year.

Some registrars believe that the changes unfairly give the registry the unilateral right to amend the RRA in future, and that they prevent registrars opposed to .sucks in principle from criticizing the gTLD in public.

I understand that a draft letter that characterizes the latter change as a “gag order” has picked up quite a bit of support among registrars.

ICANN has referred the amended draft of the .sucks RRA to its Registrars Stakeholder Group for comment.

But Vox Pop now claims that it’s too late, that the new RRA has already come into force, and that this is merely the latest example of “a pattern on ICANN’s part to attempt to frustrate the purpose and intent of its contract with Vox Populi, and to prevent Vox Populi from operating reasonably”.

The registry claims that the changes are just intended to provide “clarity”.

Some legal commentators have said there’s nothing unusual or controversial about the “gag” clauses.

But the conflict between Vox and ICANN all basically boils down to a matter of timing.

Under the standard Registry Agreement for new gTLDs, registries such as Vox Pop are allowed to submit proposed RRA changes to ICANN whenever they like.

ICANN then has 15 calendar days to determine whether those changes are “immaterial, potentially material or material in nature.”

Changes are deemed to be “immaterial” by default, if ICANN does not rule otherwise within those 15 days.

If they’re deemed “material” or “potentially material”, a process called the RRA Amendment Procedure (pdf) kicks in.

That process gives the registrars an extra 21 days to review and potentially object to the changes, while ICANN conducts its own internal review.

In this case, there seems to be little doubt that ICANN missed the 15-day deadline imposed by the RA, but probably did so because of some clever timing by Vox.

Vox Pop submitted its changes on Friday, December 18. That meant 15 calendar days expired Monday, January 3.

However, ICANN was essentially closed for business for the Christmas and New Year holidays between December 24 and January 3, meaning there were only three business days — December 21 to 23 — in which its lawyers and staff could scrutinize Vox’s request.

Vox Pop’s timing could just be coincidental.

But if it had wanted to reduce the contractual 15 calendar days to as few business days as possible, then December 18 would be the absolute best day of the year to submit its changes.

As it transpired, January 3 came and went with no response from ICANN, so as far as Vox is concerned the new RRA with its controversial changes came into effect January 6.

However, on January 8, ICANN submitted the red-lined RRA to the RrSG, invoking the RRA Amendment Procedure and telling registrars they have until January 29 to provide feedback.

Vox Pop’s lawyer, demanding mediation, says the company was told January 9, six days after ICANN’s 15-day window was up, that its changes were “deemed material”.

Mediation is basically the least-suey dispute resolution process a registry can invoke under the RA.

The two parties now have a maximum of 90 days — until April 20 — to work out their differences more or less amicably via a mediator. If they fail to do so, they proceed to a slightly more-suey binding arbitration process.

In my opinion, ICANN finds itself in this position due to a combination of a) Vox Pop trying to sneak what it suspected could be controversial changes past its staff over Christmas, and b) ICANN staff, in the holiday spirit or off work entirely, dropping the ball by failing to react quickly enough.

While I believe this is the first time a 2012-round gTLD registry has gone to dispute resolution with ICANN, Vox did threaten to sue last year when ICANN referred its controversially “predatory” launch plans to US and Canadian trade regulators.

That ultimately came to nothing. The US Federal Trade Commission waffled and its Canadian counterpart just basically shrugged.