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Double-charging claims as registries ramp up new gTLD refund demands

Kevin Murphy, October 10, 2017, Domain Registries

Registry operators have stepped up demands for ICANN to dip into its $100 million new gTLD cash pile to temporarily lower their “burdensome” accreditation fees.

A new missive from the Registries Stakeholder Group to ICANN this week also introduces a remarkable claim that ICANN may have “double charged” new gTLD applications to the tune of potentially about $6 million.

The RySG wants ICANN to reduce the quarterly fixed fees new gTLD registries must pay by 75% from the current $6,250, for a year, at a cost to ICANN of $16.87 million.

ICANN still has roughly $96 million in leftover money from the $185,000 per-TLD application fees paid in 2012, roughly a third of which had been earmarked for unexpected expenses.

When Global Domains Division president Akram Atallah refused this request in August, he listed some of the previously unexpected items ICANN has had to pay for related to the program, one of which was “implementation of the Trademark Clearinghouse”.

But in last week’s letter (pdf), the RySG points out that each registry was already billed an additional $5,000 fee specifically to set up the TMCH.

Your letter states that registry operators knew about the fee structure from the start and implies that changes of circumstance should be irrelevant. The TMCH charge, however, was not detailed in the applicant guidebook. ICANN added it on its own after all applications were accepted and without community input. Therefore, ICANN is very much in a position to refund registry operators for this overcharge, and we request that ICANN do so. Essentially, you would be refunding the amounts we paid with our own application fees, which should have been used to set up the TMCH in the first place.

These additional fees could have easily topped $6 million, given that there are over 1,200 live new gTLDs.

Was this a case of double-charging, as the RySG says?

My gut feeling is that Atallah probably just forgot about the extra TMCH fee and misspoke in his August letter. The alternative would be a significant accounting balls-up that would need rectifying.

RySG has asked ICANN for a “detailed accounting” of its new gTLD program expenses to date. If produced, that could clear up any confusion.

Group chair Paul Diaz, who signed the letter, has also asked for a meeting with Atallah at the Abu Dhabi public meeting later this month, to discuss the issue.

The letter also accuses ICANN of costing applicants lost revenue by introducing policies such as the ban on two-letter domains, increased trademark protections, and other government-requested restrictions that were introduced after application fees had already been paid.

The tone of the letter is polite, but seems to mask an underlying resentment among registries that ICANN has not been giving them a fair chance to grow their businesses.

UPDATE: This story was updated October 12 to correct the estimate of the total amount of TMCH setup fees collected.

NCC sells Open Registry at huge discount

Kevin Murphy, January 6, 2017, Domain Registries

NCC Group has followed through on its promise to divest parts of its domain business, selling the Open Registry collection of companies at a huge discount to the original purchase price.

KeyDrive and a mysterious entity called Terrain.com SA have together acquired the companies for €3.75 million ($3.97 million).

That’s compared to the minimum of £7.9 million ($12 million) NCC originally paid just two years ago.

NCC said in a statement that the sold companies are:

  • Open Registry SA, a registry back-end provider with a handful of new gTLD clients.
  • ClearingHouse for Intellectual Property SA, aka CHIP, which provides software and billing support for the Trademark Clearinghouse.
  • Nexperteam CVBA, a tiny registrar.
  • Sensirius CVBA, the original Open Registry company, a new gTLD consultancy.

Missing from that list is Artemis, the new gTLD registry for .trust, which NCC separately acquired from Deutsche Post for an undisclosed sum in February 2014.

NCC is also keeping hold of its data escrow business, which is widely used by gTLD registries to comply with ICANN rules.

It’s not clear how the sold companies are being divided up between the two buyers.

KeyDrive is the Luxembourg-based holding company for the registrars Key-Systems and Moniker and other domain firms.

Terrain.com appears to belong to EuroDNS chair Xavier Buck, who was chair of Open Registry until NCC bought it, but the domain itself doesn’t seem to resolve right now.

NCC said that €2 million will be paid up front and €1.75 million will be deferred for 18 months.

ICANN says “no impact” from TMCH downtime

The 10-hour outage in the Trademark Clearinghouse’s key database had no impact on domain registrations, ICANN says.

We reported earlier this week that the TMCH’s Trademark Database had been offline for much of last Friday, for reasons unknown.

We’d heard concerns from some users that the downtime may have allowed registrants to register domain names matching trademarks without triggering Trademark Claims notices.

But that worry may have been unfounded. ICANN told DI:

The issue occurred when two nodes spontaneously restarted. The cause of this restart is still under investigation. Although both nodes came back up, several services such as the network interface, TSA Service IP and the SSH daemon did not. All TMDB Services except the CNIS service were unavailable during the outage. From a domain registration point of view there should have been no impact.

CNIS is the Claim Notice Information Service, which provides registrars with Trademark Claims notice data.

Concern over mystery TMCH outage

Kevin Murphy, May 20, 2015, Domain Tech

The Trademark Clearinghouse is investigating the causes and impact of an outage that is believed to have hit its primary database for 10 hours last Friday.

Some in the intellectual property community are concerned that the downtime may have allowed people to register domain names without receiving Trademark Claims notices.

The downtime was confirmed as unscheduled by the TMCH on a mailing list, but requests for more information sent its way today were deflected to ICANN.

An ICANN spokesperson said that the outage is being analyzed right now, which will take a couple of days.

The problem affected the IBM-administered Trademark Database, which registrars query to determine whether they need to serve up a Claims notice when a customer tries to register a domain that matches a trademark.

I gather that registries are supposed to reject registration attempts if they cannot get a definitive answer from the TMDB, but some are concerned that that may not have been the case during the downtime.

Over 145,000 Claims notices have been sent to trademark owners since the TMCH came online over a year ago.

(UPDATE: This story was edited May 21 to clarify that it is the TMCH conducting the investigation, rather than ICANN.)

.porn now the biggest new gTLD sunrise

Kevin Murphy, March 10, 2015, Domain Registries

.porn and .adult have taken the crown of the most-subscribed new gTLD sunrise periods to date.

The two ICM Registry spaces opened up for registrations from users of the Trademark Clearinghouse on March 2.

A little over a week later, the company tells DI that both gTLDs have individually exceeded the previous sunrise record holder.

My understanding is that .london was the new gTLD with the most sunrise registrations, selling just over 800 names to TMCH customers during its combined sunrise/landrush, which ended last July.

ICM revealed in a webinar last week that it expected its new gTLDs to have to biggest sunrise numbers to date.

“Both .porn and .adult will have exceeded that [.london] number comfortably,” ICM president Stuart Lawley confirmed to DI today.

.adult is “almost neck and neck” with .porn, Lawley said.

The numbers are still pretty small compared to ICM’s 2003-round gTLD, .xxx, which had over 80,000 sunrise applications in October 2011.

They’re also pretty small compared to the TMCH’s overall number of registrations, which at the last public disclosure was a little under 35,000.

But ICM has another couple opportunities for trademark owners to defensively register that may work out cheaper.

First, from April 6 to April 30 companies that bought non-resolving “blocked” names in the .xxx Sunrise B will be able to block the same strings in .porn and .adult.

ICM says registrars are offering discounts for five-year blocks.

Then, from May 6 to May 31 the Domain Matching program starts. That’s open to any .xxx registrant, defensive or otherwise, but not to those with .xxx Sunrise B blocks.