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.web auction to go ahead after ICANN denies Donuts/Radix appeal

The new gTLD .web seems set to go to auction next week after ICANN rejected an 11th-hour delay attempt by two applicants.

ICANN’s Board Governance Committee said yesterday that there is no evidence that applicant Nu Dot Co has been taken over by a deep-pocketed third party.

The BGC therefore rejected Donuts’ and Radix’s joint attempt to have the July 27 “last resort” auction delayed.

Donuts and Radix had argued in a Request for Reconsideration earlier this week that Nu Dot Co has changed its board of directors since first applying for .web, which would oblige it to change the application.

Its failure to do so meant they auction should be delayed, they said.

They based their beliefs on an email from NDC director Jose Ignacio Rasco, in which he said one originally listed director was no longer involved with the application but that “several others” were.

There’s speculation in the contention set that a legacy gTLD operator such as Verisign or Neustar might now be in control of NDC.

But the BGC said ICANN had already “diligently” investigated these claims:

in response to the Requesters’ allegations, ICANN did diligently investigate the claims regarding potential changes to Nu Dot’s leadership and/or ownership. Indeed, on several occasions, ICANN staff communicated with the primary contact for Nu Dot both through emails and a phone conversation to determine whether there had been any changes to the Nu Dot organization that would require an application change request. On each occasion, Nu Dot confirmed that no such changes had occurred, and ICANN is entitled to rely upon those representations.

ICANN staff had asked Rasco via email and then telephone whether there had been any changes to NDC’s leadership or control, and he said there had not.

He is quoted by he BGC as saying:

[n]either the ownership nor the control of Nu Dotco, LLC has changed since we filed our application. The Managers designated pursuant to the company’s LLC operating agreement (the LLC equivalent of a corporate Board) have not changed. And there have been no changes to the membership of the LLC either.

The RfR has therefore been thrown out.

Unless further legal action is taken, the auction is still scheduled for July 27. The deadline for all eight applicants (seven for .web and one for .webs) to post deposits with ICANN passed on Wednesday.

As it’s a last resort auction, all funds raised will go into an ICANN pot, the purpose of which has yet to be determined. The winning bid will also be publicly disclosed.

Had the contention set been settled privately, all losing applicants would have made millions of dollars of profit from their applications and the price would have remained a secret.

NDC is the only applicant refusing to go to private auction.

The applicants for .web are NDC, Radix, Donuts, Schlund, Afilias, Google and Web.com. Vistaprint’s bid for .webs is also in the auction.

The RfR decision can he read here (pdf).

Is Verisign .web applicant’s secret sugar daddy?

The fiercely contested .web gTLD is being forced into a last-resort auction and some people seem to think a major registry player is behind it.

Two .web applicants — Radix (pdf) and Schlund (pdf) — this week wrote to ICANN to demand that the .web auction, currently planned for July 27, be postponed.

They said the sale should be delayed to give applicants time “to investigate whether there has been a change of leadership and/or control” at rival applicant Nu Dot Co LLC.

Nu Dot Co is a new gTLD investment vehicle headed up by Juan Diego Calle, who launched and ran .CO Internet until it was sold to Neustar a couple of years ago.

I gather that some applicants believe that Nu Dot Co’s .web application is now being bankrolled by a larger company with deeper pockets.

The two names I’ve heard bandied around, talking to industry sources this week, are Verisign and Neustar.

Nobody I’ve talked to has a shred of direct evidence either company is involved and Calle declined to comment.

So is this paranoia or not?

There are a few reasons these suspicions may have come about.

First, the recent revelation that successful .blog applicant Primer Nivel, a no-name Panama entity with a Colombian connection, was actually secretly being bankrolled by WordPress, has opened eyes to the possibility of proxy bidders.

It was only after the .blog contention set was irreversibly settled that the .blog contract changed hands and the truth become known.

Some applicants may have pushed the price up beyond the $19 million winning bid — making the rewards of losing the private auction that much higher — had they known they were bidding against a richer, more motivated opponent.

Second, sources say the .web contention set had been heading to a private auction — in which all losing applicants get a share of the winning bid — but Nu Dot Co decided to back out at the last minute.

Under ICANN rules, if competing applicants are not able to privately resolve their contention set, an ICANN last-resort auction must ensue.

Third, this effective vetoing of the private auction does not appear to fit in with Nu Dot Co’s strategy to date.

It applied for 13 gTLDs in total. Nine of those have already gone to auctions that Nu Dot Co ultimately lost (usually reaping the rewards of losing).

The other four are either still awaiting auction or, in the case of .corp, have been essentially rejected for technical reasons.

It usually only makes sense to go to an ICANN last-resort auction — where the proceeds all go to ICANN — if you plan on winning or if you want to make sure your competitors do not get a financial windfall from a private auction.

Nu Dot Co isn’t actually an operational registry, so it doesn’t strictly have competitors.

That suggests to some that its backer is an operational registry with a disdain for new gTLD rivals. Verisign, in other words.

Others think Neustar, given the fact that its non-domains business is on the verge of imploding and its previous acquisition of .CO Internet from Calle.

I have no evidence either company is involved. I’m just explaining the thought process here.

According to its application, two entities own more than 15% of Nu Dot Co. Both — Domain Marketing Holdings, LLC and NUCO LP, LLC — are Delaware shell corporations set up via an agent in March 2012, shortly before the new gTLD application filing deadline.

Many in the industry are expecting .web to go for more than the $41.5 million GMO paid for .shop. Others talk down the price, saying “web” lacks the cultural impact it once had.

But it seems we will all find out later this month.

Responding to the letters from Schlund and Radix, ICANN yesterday said that it had no plans to postpone the July 27 last-resort auction.

All seven applicants had to submit a postponement form by June 12 if they wanted a delay, ICANN informed them in a letter (pdf), and they missed that deadline.

They now have until July 20 to either resolve the contention privately or put down their deposits, ICANN said.

The applicants for .web, aside from Nu Dot Co, are Google, Donuts, Radix, Schlund, Web.com and Afilias.

Due to a string confusion ruling, .webs applicant Vistaprint will also be in the auction.

Verisign to get .com for six more years, but prices to stay frozen

ICANN and Verisign have agreed to extend their .com registry contract for another six years, but there are no big changes in store for .com owners.

Verisign will now get to run the gTLD until November 30, 2024.

The contract was not due to expire until 2018, but the two parties have agreed to renew it now in order to synchronize it with Verisign’s new contract to run the root zone.

Separately, ICANN and Verisign have signed a Root Zone Maintainer Agreement, which gives Verisign the responsibility to make updates to the DNS root zone when told to do so by ICANN’s IANA department.

That’s part of the IANA transition process, which will (assuming it isn’t scuppered by US Republicans) see the US government’s role in root zone maintenance disappear later this year.

Cunningly, Verisign’s operation of the root zone is technically intermingled with its .com infrastructure, using many of the same security and redundancy features, which makes the two difficult to untangle.

There are no other substantial changes to the .com agreement.

Verisign has not agreed to take on any of the rules that applies to new gTLDs, for example.

It also means wholesale .com prices will be frozen at $7.85 for the foreseeable future.

The deal only gives Verisign the right to raise prices if it can come up with a plausible security/stability reason, which for one of the most profitable tech companies in the world seems highly unlikely.

Pricing is also regulated by Verisign’s side deal (pdf) with the US Department of Commerce, which requires government approval for any price increases until such time as .com no longer has dominant “market power”.

The .com extension is now open for public comment.

Predictably, it’s already attracted a couple of comments saying that the contract should instead be put out to tender, so a rival registry can run the show for cheaper.

That’s never, ever, ever, ever going to happen.

Verisign loses .art contract to CentralNic

CentralNic has been awarded the back-end contract for the forthcoming .art gTLD, usurping Verisign from the role.

UK Creative Ideas, which bought .art at a private auction for an undisclosed sum a year ago, appointed the company its “exclusive registry service provider”, CentralNic said.

UKCI’s original .art application named Verisign as its back-end, and this is not the first time CentralNic has sneaked away a Verisign client.

When XYZ.com acquired .theatre, and .security and .protection from Symantec, it moved them from Verisign to its .xyz provider CentralNic.

That earned XYZ and CentralNic a contract interference lawsuit, which XYZ settled in May.

Clearly litigation has not managed to chill competition in this instance.

.art is set to launch in stages over the next 12 months, CentralNic said.

UKCI estimated in its ICANN application that it would get between 25,000 and 80,000 registrations in its first year.

That may prove to be optimistic, at least at the high end.

UKCI’s vision for .art is for a restricted gTLD, which don’t tend to do huge volumes. I believe the largest restricted new gTLD is .nyc, with about 75,000 names in its zone.

All .art registrants will have to show some kind of connection to the art world, according to UKCI’s application.

This includes artists, owners and keepers of works of art, commercial art organisations (such as galleries and auction and trading houses), not-for-profit organisations (such as museums, foundations, and professional associations), supporting businesses (such as insurance, appraisal, transport) and customers and members of the general public interested in art.

Goodness knows how this will be implemented in practice, given that basically everyone is an artist to some extent.

UKCI is based in the Isle of Man, the UK dependency presumably selected for tax reasons rather than any connection to the art world, and is backed by Russian venture capitalists.

Verisign says new gTLDs put millions at risk

Kevin Murphy, May 26, 2016, Domain Tech

Verisign has revived its old name collisions security scare story, publishing this week a weighty research paper claiming millions are at risk of man-in-the-middle attacks.

It’s actually a study into how a well-known type of attack, first documented in the 1990s, might become easier due to the expansion of the DNS at the top level.

According to the paper there might be as many as 238,000 instances per day of query traffic intended for private networks leaking to the public DNS, where attackers could potentially exploit it to all manner of genuinely nasty things.

But Verisign has seen no evidence of the vulnerability being used by bad guys yet and it might not be as scary as it first appears.

You can read the paper here (pdf), but I’ll attempt to summarize.

The problem concerns a virtually ubiquitous protocol called WPAD, for Web Proxy Auto-Discovery.

It’s used by mostly by Windows clients to automatically download a web proxy configuration file that tells their browser how to connect to the web.

Organizations host these files on their local networks. The WPAD protocol tries to find the file using DHCP first, but fails over to DNS.

So, your browser might look for a wpad.dat file on wpad.example.com, depending on what domain your computer belongs to, using DNS.

The vulnerability arises because companies often use previously undelegated TLDs — such as .prod or .global — on their internal networks. Their PCs could belong to domains ending in .corp, even though .corp isn’t real TLD in the DNS root.

When these devices are roaming outside of their local network, they will still attempt to use the DNS to find their WPAD file. And if the TLD their company uses internally has actually been delegated by ICANN, their WPAD requests “leak” to registry or registrant.

A malicious attacker could register a domain name in a TLD that matches the domain the target company uses internally, allowing him to intercept and respond to the WPAD request and setting himself up as the roaming laptop’s web proxy.

That would basically allow the attacker to do pretty much whatever he wanted to the victim’s browsing experience.

Verisign says it saw 20 million WPAD leaks hit its two root servers every single day when it collected its data, and estimates that 6.6 million users are affected.

The paper says that of the 738 new gTLDs it looked at, 65.7% of them saw some degree of WPAD query leakage.

The ones with the most leaks, in order, were .global, .ads, .group, .network, .dev, .office, .prod, .hsbc, .win, .world, .one, .sap and .site.

It’s potentially quite scary, but there are some mitigating factors.

First, the problem is not limited to new gTLDs.

Yesterday I talked to Matt Larson, ICANN’s new vice president of research (who held the same post at Verisign’s until a few years ago).

He said ICANN has seen the same problem with .int, which was delegated in 1988. ICANN runs one of .int’s authoritative name servers.

“We did a really quick look at 24 hours of traffic and saw a million and a half queries for domain names of the form wpad.something.int, and that’s just one name server out of several in a 24-hour period,” he said.

“This is not a new problem, and it’s not a problem that’s specific to new gTLDs,” he said.

According to Verisign’s paper, only 2.3% of the WPAD query leaks hitting its root servers were related to new gTLDs. That’s about 238,000 queries every day.

With such a small percentage, you might wonder why new gTLDs are being highlighted as a problem.

I think it’s because organizations typically won’t own the new gTLD domain name that matches their internal domain, something that would eliminate the risk of an attacker exploiting a leak.

Verisign’s report also has limited visibility into the actual degree of risk organizations are experiencing today.

Its research methodology by necessity was limited to observing leaked WPAD queries hitting its two root servers before the new gTLDs in question were delegated.

The company only collected relevant NXDOMAIN traffic to its two root servers — DNS queries with answers typically get resolved closer to the user in the DNS hierarchy — so it has no visibility to whether the same level of leaks happen post-delegation.

Well aware of the name collisions problem, largely due to Verisign’s 11th-hour epiphany on the subject, ICANN forces all new gTLD registries to wildcard their zones for 90 days after they go live.

All collision names are pointed to 127.0.53.53, a reserved IP address picked in order to catch the attention of network administrators (DNS uses TCP/IP port 53).

Potentially, at-risk organizations could have fixed their collision problems shortly after the colliding gTLD was delegated, reducing the global impact of the vulnerability.

There’s no good data showing how many networks were reconfigured due to name collisions in the new gTLD program, but some anecdotal evidence of admins telling Google to go fuck itself when .prod got delegated.

A December 2015 report from JAS Advisors, which came up with the 127.0.53.53 idea, said the effects of name collisions have been rather limited.

ICANN’s Larson echoed the advice put out by security watchdog US-CERT this week, which among other things urges admins to use proper domain names that they actually control on their internal networks.