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New gTLD registries get $6 million refund

ICANN has offered new gTLD registries refunds totaling over $6 million after allegedly double-charging them for access to the Trademark Clearinghouse.

At the weekend, its board of directors resolved:

to provide a refund of $5,000, as soon as practicable, to the contracted registries or registry operators (including those that have terminated their contracts or whose TLD delegation has been revoked) that have paid to ICANN the one-time RPM access fee

The five grand fee was levied on each new gTLD as a way of funding the TMCH, which handles trademark validation for sunrise periods and other rights protection mechanisms.

But registries pointed out last October that this kind of thing was precisely what their original $185,000 applications fees were meant to cover.

The Registries Stakeholder Group said back then:

All other systems and programs related to the New gTLD Program were funded from application fees. The TMCH should have been no different and there was no reason to “double-charge” registries for this one piece of the program.

Eight months later, ICANN seems to have reluctantly agreed.

It appears that the refunds — which given over 1,200 TLDs would come to over $6 million in total — will be paid from the roughly $80 million in leftover application fees, rather than ICANN’s tightening operational budget.

While $5,000 isn’t life-changing money, it adds up to a substantial chunk of change for large portfolio registries such as Donuts, which stands to receive roughly $1.5 million.

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.)