ICANN scores win in single-letter .com lawsuit

A Los Angeles court has handed ICANN a victory in a lawsuit filed against it by a domainer who thinks he has the rights to register all the remaining single-character .com domains.

Bryan Tallman of VerandaGlobal.com sued ICANN back in August, claiming the Org was breaking the law by refusing to allow him to register domains such as 1.com and A.com.

He already owns the matching domains in Verisign’s Chinese, Japanese and Hebrew .com IDNs, such as A.קום (A.xn--9dbq2a) and 1.コム (1.xn--tckwe), and says previous Verisign statements mean this gives him the right to the equivalents in vanilla .com.

These domains would very likely be worth tens of millions of dollars apiece. Verisign has held almost all single-character domain names in registry-reserved status since the 1990s. A few, notably Elon Musk’s x.com, pre-date the reservation.

Tallman claimed unfair competition, breach of contract, negligence and fraud and sought a declaratory judgement stating that ICANN be forced to transfer to him all of the 10 digits and all 23 of the remaining unregistered letters in .com, along with some matching .net names.

Pretty outlandish stuff, based on some pretty flimsy arguments.

ICANN filed a demurrer last year, objecting to the suit and asking the Superior Court of California in LA to throw it out, and the judge mostly agreed. In a February ruling (pdf), published recently by ICANN, he threw out all seven of Tallman’s claims.

Tallman was given permission to re-state and re-file five of the claims within 30 days, but his demand for a declaratory judgement was ruled out completely as being irreparably broken.

One-letter .lu domains could be bought for peanuts

Luxembourg’s ccTLD registry is auctioning off 2,825 one and two-character .lu domain names, and so far bids are looking very affordable.

The names have been reserved for two decades, but Restena began releasing them to trademark owners in August, and yesterday the landrush phase began.

The company has set up a special website for the auction.

After the first day of bidding, only one domain, j.lu, has attracted a bid in four figures (€2,000).

All 36 letters and numbers have at least one bid. Another 15 internationalized domains — single letters with diacritics or accents — have not yet attracted bids.

The domain with the most action so far is hu.lu — I wonder why — with a €500 top bid.

It’s still early days, and obviously most auction activity happens towards the end.

The plan is for the auctions to run for a minimum of 12 more days, but they could be extended into December.

On December 15, anything not already registered will be released for registration on a first-come, first-served basis.

Verisign gets approval to sell O.com for $7.85

ICANN is to grant Verisign the right to sell a single-character .com domain name for the first time in over 25 years.
The organization’s board of directors is due to vote next Thursday to approve a complex proposal that would see Verisign auction off o.com, with almost all of the proceeds going to good causes.
“Approval of Amendment to Implement the Registry Service Request from Verisign to Authorize the Release for Registration of the Single-Character, Second-Level Domain, O.COM” is on the consent agenda for the board’s meeting at the conclusion of ICANN 64, which begins Saturday in Kobe, Japan.
Consent agenda placement means that there will likely be no further discussion — and no public discussion — before the board votes to approve the deal.
Verisign plans to auction the domain to the highest bidder, and then charge premium renewal fees that would essentially double the purchase price over a period of 25 years.
But the registry, already under scrutiny over its money-printing .com machine, would be banned from profiting from the sale.
Instead, Verisign would only receive its base registry fee — currently $7.85 per year — with the rest being held by an independent third party that would distribute the funds to worthy non-profit causes.
ICANN had referred the Verisign proposal, first put forward in December 2016, to the US government, and the Department of Justice gave it the nod in December 2017.
There was also a public comment period last May.
The request almost certainly came about due to Overstock.com’s incessant lobbying. The retailer has been obsessed with obtaining o.com for well over a decade, but was hamstrung by the legacy policy, enshrined in the .com registry agreement, that forbids the sale of single-character domains.
Whoever else wants to buy o.com, they’ll be bidding against Overstock, which has a trademark.
It’s quite possible nobody else will bid.
When Overstock briefly rebranded as O.co several years ago — it paid $350,000 for that domain — it said it saw 61% of its traffic going to o.com instead.
All single-character .com names that had not already been registered were reserved by IANA for technical reasons in 1993, well before ICANN took over DNS policy.
Today, only q.com, z.com and x.com are registered. Billionaire Elon Musk, who used x.com to launch PayPal, reacquired that domain for an undisclosed sum in 2017. GMO Internet bought z.com for $6.8 million in 2014.
With the sale of o.com now a near certainty, it is perhaps only a matter of time before more single-character .com names are also released.
No gTLD approved after 2012 has a restriction on single-character domains.
As a matter of disclosure: several years ago I briefly provided some consulting/writing services to a third party in support of the Verisign and Overstock positions on the release of single-character domain names, but I have no current financial interest in the matter.

Have your say on single-character .com domains

ICANN wants your opinion on its plan to allow Verisign to auction off o.com, with a potential impact on the future release of other single-character .com domain names.
The organization has published a proposed amendment to the .com registry contract and opened it for public comment.
The changes would enable Verisign to sell o.com, while keeping all other currently unallocated single-character names on its reserved list.
The company would not be able to benefit financially from the auction beyond its standard $7.85 reg fee — all funds would be held by an independent third-party entity and distributed to undisclosed non-profit causes.
The arrangement would also see the buyer pay a premium renewal fee of 5% of the initial outlay, doubling the purchase price over the course of 25 years.
They would not be able to resell the domain without selling the registrant company itself.
It’s a pretty convoluted system being proposed, given that there may well end up only being one bidder.
Overstock.com, the online retailer, has been pressuring ICANN and Verisign to release o.com for well over a decade, and the proposed auction seems to be a way to finally shut it up.
The company has a US trademark on O.com, so any other bidder for the name would probably be buying themselves a lawsuit.
The proposed auction system does not address trademark issues — there’s no sunrise period of trademark claims period.
One party already known to be upset about lack of rights protection is First Place Internet, a search engine company that has a US trademark on the number 1.
It told ICANN (pdf) back in January that the o.com deal would “set a dangerous precedent” for future single-character name releases.
The ICANN public comment period, which comes after ICANN received the all-clear from US competition regulators, closes June 20.
As a matter of disclosure, several years ago I briefly acted as a consultant to a third party in support of the Verisign and Overstock positions, but I have no current interest in the situation one way or the other.

Verisign wants to auction off O.com for charity

The internet could soon gets just its fourth active single-character .com domain name, after Verisign revealed plans to auction off o.com for charity.
The company has asked ICANN to allow it to release just one of the 23 remaining one-letter .com domains, which are currently reserved under the terms of the .com registry agreement.
It’s basically a proof of concept that would lead to this contractual restriction being lifted entirely.
O.com has been picked as the guinea pig, because of “long-standing interest” in the domain, according to Verisign.
Overstock.com, the $1.8 billion-a-year US retailer, is known to have huge interest in the name.
The company acquired o.co from .CO Internet for $350,000 during the ccTLD’s 2010 relaunch, then embarked upon a disastrous rebranding campaign that ended when the company estimated it was losing 61% of its type-in traffic to o.com.
Overstock has obsessed over its unobtainable prize for over a decade and would almost certainly be involved in any auction for the domain.
In fact, I wouldn’t be surprised to discover that Overstock pressured Verisign into requesting the release of o.com.
Despite the seven or eight figures that a single-letter .com domain could fetch, Verisign’s cut of the auction proceeds would be just $7.85, its base registry fee.
Regardless, it has a payment schedule in mind that would see the winning bidder continue to pay premium renewal fees for 25 years, eventually doubling the sale price.
The winner would pay their winning bid immediately and get a five-year registration, but then would have to pay 5% of that bid to renew the domain for years six through 25.
In other words, if the winning bid was $1 million, the annual renewal fee after the first five years would be $50,000 and the total amount paid would eventually be $2 million.
All of this money, apart from the auction provider’s cut, would go to a trust that would distribute the funds to internet-focused non-profit organizations, such as those promoting security or open protocols.
There’s also a clause that would seem to discourage domain investors from bidding. The only way to transfer the domain would be if the buyer was acquired entirely, though this could be presumably circumvented with the use of a shell company.
It’s an elaborate auction plan, befitting of the fact that one-character .com domains are super rare.
Only x.com, q.com and z.com are currently registered and it’s Verisign policy to reserve them in the unlikely event they should ever expire.
Billionaire entrepreneur Elon Musk this July reacquired x.com, the domain he used to launch PayPal in the 1990s, back from PayPal for an undisclosed sum.
Z.com was acquired by GMO Internet for $6.8 million in 2014.
Single-character domains are typically not reserved in the ICANN contracts of other gTLDs, whether pre- or post-2012, though it’s standard practice for the registry to reserve them for auction anyway.
Verisign’s reservations in .com and .net are a legacy of IANA policy, pre-ICANN and have been generally considered technically unnecessary for some years.
Still, there’s been a reluctance to simply hand Verisign, already a money-printing machine through accident of history, another windfall of potentially hundreds of millions of dollars by allowing it to sell off the names for profit. Hence the elaborate plan with the O.com trust fund.
The proposal to release O.com requires a contractual amendment, so Verisign has filed a Registry Services Evaluation Process request (pdf) with ICANN that is now open for public comment.
As a matter of disclosure: several years ago I briefly provided some consulting/writing services to a third party in support of the Verisign and Overstock positions on the release of single-character domain names, but I have no current financial interest in the matter.