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Chehade declines to backtrack on domain “hogging” comments

Kevin Murphy, February 10, 2015, Domain Policy

ICANN CEO Fadi Chehade responded yesterday to anger from domain investors over recent comments in which he talked about “hogging” domain names and implied a link to cybersquatting.

But he did not, at least as far as I understood his explanation, backtrack on his original remarks.

Chehade was cheekily asked his current thoughts on domain “hoggers” by blogger David Goldstein during a press conference at the ICANN 52 meeting in Singapore yesterday.

This is the entirety of his reply:

I think the statement I made to a different media outlet about that was conflated to signify I was including in this all those who are in the domain name business. And that’s not true. There are those that do this as a business and do it very well and actually enhance the market and there are those that do it and make the business and the market less attractive and less desirable. So I think any insinuation that that statement engulfs everyone that is in this business is not true. As you know very well I’ve a very big supporter of the industry groups and was one of the people who was frankly very happy when the Domain Name Association was created and I attended their first formation meeting. This is where we stand and we continue to feel good about how this market is evolving and how these players are making this a good market that serves the public interest.

Having listened to it a few times, I wonder whether Chehade deliberately didn’t backtrack on his original remarks, or whether he doesn’t quite understand why they caused offense in the first place.

A couple of weeks back, Chehade was talking to the Huffington Post about new gTLDs during an interview at the World Economic Forum in Davos.

The interviewer asked about “concerns about a land-grab going on” among domain speculators.

It was a bit of a silly question, if you ask me. A speculative land-grab is pretty low down the list of concerns held by critics of the new gTLD program. Regardless, Chehade replied:

The reality is, the more there are names, the less people will actually be hogging names in order to charge a lot for them. Because if somebody took your name on dot X, you can go get another name on dot Y now.

I’d personally agree with that characterization of the program. It’s meant to make finding a good name at a cheap price easier. “Hogging” was probably a poor choice of words, but Chehade was talking off the cuff so I could give him a pass.

But later in the same reply, he used the term “cybersquatting” in such a way as to make it easy to infer he was conflating domain investing with cybersquatting. That’s a loaded term that is usually reserved for trademark infringement, at least when used inside the industry.

Obviously this was guaranteed to get investors’ hackles up.

First up with the hackles was Mike Berkens, who called Chehade out on The Domains, saying he “throws large domain investors under the bus and then backs up the bus and rolls over them again”.

Berkens pointed out, quite reasonably I thought, that ICANN is funded to a great extent by domain investors. He estimates that he alone pays ICANN about $15,000 a year in the fees that are collected at the point of registration and renewal.

By some estimates, which may even be conservative, about a third of new gTLD registrations to date have been made to speculators.

Berkens made the even better point that many of the people who have pumped hundreds of millions of dollars into the new gTLD program — Uniregistry’s Frank Schilling, XYZ.com’s Daniel Negari and multiple Donuts executives, for example — made their fortunes investing in second-level domains.

He concluded:

All and all some pretty ignorant statements in our opinion made by the CEO of ICANN and an insult to those domain investors that are some of the biggest buyer’s of new gTLD’s domain names who have paid ICANN a small fortune over the years allowing them to travel the world, pay millions a year in salary and other benefits.

Phil Corwin Jeremiah Johnston of the Internet Commerce Association followed up a few days ago with an open letter to Chehade which explained the outrage in slightly more formal and lawyerly way, with all the apostrophes in the right places. He wrote:

The ICA objects to your statement as it expresses a disdainful view towards the legitimate activity of domain investing, a hostile view of domain investors who are significant ICANN stakeholders who are deeply affected by its policies, a lack of awareness of the market realities of domains as an asset class, and an unwarranted promotion of new gTLD domains over those at legacy gTLDs.

Domain investors are not “hogs” and they most certainly are not deliberate trademark infringers, or “cybersquatters”. It is not clear what you intended by your reference to “cybersquatting”, though it is concerning that you used this pejorative term just after making disparaging remarks about domain investors.

With all these criticisms in mind, let’s go back and parse what Chehade said in Singapore yesterday.

First, he said his remarks had been wrongly “conflated to signify I was including in this all those who are in the domain name business”.

I’m not sure that’s what happened. I’m pretty certain Berkens and his commenters, and then Corwin Johnston, got the hump purely because Chehade dismissed domain investing as “hogging” and then implied a link between investing and trademark infringement.

Who is Chehade talking about when he draws a distinction between those who “enhance the market” and those who “make the business and the market less attractive”?

Is the line drawn between the trademark infringers and the legitimate investors, or its it drawn somewhere else?

Why did Chehade go on to express his support for the DNA, a sell-side trade group funded largely by registries and registrars? Was he drawing the line between regular second-level domainers (hogging) and those that in many cases are essentially just top-level domainers (enhancing)?

Chehade was given the opportunity to backtrack and he didn’t take it.

I’m not a domainer, but if I were I don’t think I’d be particularly satisfied about that.

.top says Facebook shakedown was just a typo

Kevin Murphy, January 16, 2015, Domain Registries

Jiangsu Bangning Science & Technology, the .top registry, is blaming a typo for a Facebook executive’s claim that it wanted $30,000 or more for facebook.top.

Information provided to the ICANN GNSO Council by Facebook domain manager Susan Kawaguchi yesterday showed that .top wanted RMB 180,000 (currently $29,000) for a trademarked name that previously had been blocked due to ICANN’s name collisions policy.

But Mason Zhang, manager of the registry’s overseas channel division, told DI today that the price is actually RMB 18,000 ($2,900):

We were shocked when seeing that our register price for TMCH protected names like Facebook during Exclusive Registration Period is changed from “eighteen thousand” into what is written, the “one hundred and eighty thousand”.

I think that might be a type mistake from our side, and we checked and we are certain that the price is CNY EIGHTEEN THOUSAND.

The 18,000-yuan sunrise fee is published on the registry’s official web site, as I noted yesterday.

The registry email sent to Facebook is reproduced in this PDF.

I wondered yesterday whether a breakdown in communication may to be blame. Perhaps I was correct.

While $3,000 is still rather high for a defensive registration, it doesn’t stink of extortion quite as badly as $30,000.

Still, it’s moderately good news for Facebook and any other company worried they were going to have to shell out record-breaking prices to defensively register their brands.

“Cyberflight” rules coming to UDRP next July

Kevin Murphy, November 18, 2014, Domain Policy

It will soon be much harder for cybersquatters to take flight to another registrar when they’re hit with a UDRP complaint.

From July 31 next year, all ICANN-accredited registrars will be contractually obliged to lock domain names that are subject to a UDRP and trademark owners will no longer have to tip off the registrant they’re targeting.

Many major registrars lock domain names under UDRP review already, but there’s no uniformity across the industry, either in terms of what a lock entails or when it is implemented. Under the amended UDRP policy, a “lock” is now defined as:

a set of measures that a registrar applies to a domain name, which prevents at a minimum any modification to the registrant and registrar information by the Respondent, but does not affect the resolution of the domain name or the renewal of the domain name.

Registrars will have two business days from the time they’re notified about the UDRP to put the lock in place.

Before the lock is active, the registrants themselves will not be aware they’ve been targeted by a complaint — registrars are banned from telling them and complainants no longer have to send them a copy of the complaint.

If the complaint is dismissed or withdrawn, registrars have one business day to remove the lock.

Because these change reduce the 20-day response window, registrants will be able to request an additional four calendar days (to account for weekends, I assume) to file their responses and the request will be automatically granted by the UDRP provider.

The new policy was brought in to stop “cyberflight”, a relatively rare tactic whereby cybersquatters transfer their domains to a new registrar to avoid losing their domains.

The policy was approved by the Generic Names Supporting Organization in August last year and approved by the ICANN board a month later. Since then, ICANN staff has been working on implementation.

The time from the first GNSO preliminary issue report (May 27, 2011) to full implementation of the policy (July 31, 2015) will be 1,526 days.

You can read a redlined version of the UDRP rules here (pdf).

Momentous pays over $3 million for .sucks

Kevin Murphy, November 3, 2014, Domain Registries

Momentous Corp, whose .sucks application has been branded “predatory”, has won the three-way contention set for the new gTLD, according to sources with knowledge of the auction.

The company paid over $3 million for the string, one source said.

Momentous affiliate Vox Populi Registry beat Donuts and Top Level Spectrum, the other applicants, at a private auction I gather was managed by Applicant Auction.

It’s likely to be a controversial win.

Vox Populi has said it plans to charge $25,000 per year for a single Sunrise registration, leading some (myself included) to believe its business model is to exploit the fears of brand owners.

(UPDATE: The company has changed its mind about pricing. It says it won’t charge $25,000 after all.)

In March, US Senator Jay Rockefeller branded the plan nothing more than a “predatory shakedown scheme” with “no socially redeeming value”.

But the company’s CEO, John Berard, told DI last year that .sucks will be an “innovative part of customer service, retention and loyalty”.

Vox Populi is positioning .sucks as a customer feedback tool that companies can budget alongside other pricey items such as retaining a PR agency, for example.

The registry plans to have strict rules against cyber-bullying. The proposed $300-a-year general availability price tag is likely to keep it out of the hands of most schoolyard bullies.

There will also be a “zero tolerance” policy toward parked domains and pornography, according to its web site.

That’s unlikely to calm the concerns of trademark owners, however.

.sucks is a gTLD that many advisers have been characterizing as a “must-have” for companies worried about their online image, rather like .xxx was a few years ago.

Vox Populi started accepting Sunrise pre-registrations for $2,500 on its web site last December, but that offer does not appear to be still available.

France slams ICANN after GAC rejects special treatment for .wine

Kevin Murphy, June 26, 2014, Domain Policy

France says that “ICANN is no longer the appropriate forum to discuss Internet governance” after it failed to win support from other governments for special protections in .wine and .vin gTLDs.

The government came to ICANN 50 in London this week apparently determined to secure a Governmental Advisory Committee consensus that .wine should have protection for geographic indicators.

GIs are protected geographic terms such as “Champagne”, “Parma” and “Cheddar” that link a product to the region in which it is traditionally produced. France has a lot of wine-related GIs.

But the GAC — as I think everyone, including France, expected — failed to come to an agreement.

The GAC’s London communique (pdf) reads:

There was further discussion on the issue of .wine/.vin, but no agreement was reached because of the sensitive nature of the matter.

The matter of .wine and .vin was raised at the High Level Governmental Meeting, where some members expressed concerns in terms of ICANN’s accountability and public policy. These concerns are not shared by all members.

In the absence of a consensus GAC objection, the most likely outcome is ICANN pushing the competing .vin/.wine applicants along the contention resolution process to auction.

France has won a lot of media coverage this week, throwing out allegations such as the idea that ICANN is “opaque”, and questioning ICANN’s ability to do its job properly.

Quizzed about France’s statements at a press conference on Monday, ICANN CEO Fadi Chehade pointed out that studies have show ICANN is extremely transparent and wondered aloud whether France’s position is the one where you “scream that everything’s broken when you don’t get what you want”.

Today’s French statement is a little, but not much, more relaxed. Translated, it partially reads:

Current procedures at ICANN highlight its inability to take into account the legitimate concerns of States and to ensure common resource management in the direction of respect for cultural diversity and balance of interests in economic sectors that its decisions affect.

Accordingly, it will propose to its European partners and all other stakeholders to reflect on the future of Internet governance based on transparency, accountability, and equal stakeholders. Commission also believes that ICANN is no longer the appropriate forum to discuss Internet governance.

The government did, however, reiterate its support for the notion of multi-stakeholder internet governance.

French wine producers were less diplomatic. We received a statement from ANEV, the Association Nationale des Elus de la Vigne et du vin, this afternoon that called upon the French government and European Union to block all domain names that use GIs in violation of local law.

Personally, I don’t think that’s going to happen.

During an ICANN session on Monday, the French GAC rep used the .wine controversy to call for the creation of a “General Assembly” at ICANN.

I’m working from the transcript, which has been translated by ICANN into English, and some media reports, but it seems that France is thinking along the lines of an ITU-style, voting-based rather than consensus-based, approach to generating GAC advice. I may be wrong.

During Monday’s press conference, Chehade did not oppose France’s suggestions, though he was careful to point out that it would have to be approved by the whole ICANN community first (implicitly a tall order).

A vote-based GAC could well favor European Union countries, given the make-up of the GAC right now.

On the .wine issue, it’s mainly a few Anglophone nations such as the US, Canada and Australia that oppose extra GI protections.

These nations point out that the GI issue is not settled international law and is best dealt with in venues such as the World Trade Organization and the World Intellectual Property Organization.

France actually says the same thing.

But while France says that ICANN’s refusal to act on .wine jeopardizes GI talks in other fora, its opponents claim that if ICANN were to act it would jeopardize the same talks.

Chehade said during the Monday press conference that France had not yet run out of ways to challenge ICANN’s position on this, so the story probably isn’t over yet.