Is the .co rebid biased toward Afilias? Yeah, kinda

The Colombian government has come under fire for opening up the .co registry contract for rebid in a way that seems predetermined to pick Afilias as the winner, displacing its fierce rival Neustar.
As I blogged in November, Colombia thinks it might be able to secure a better registry deal, so it plans to shortly open .co up to competitive proposals.
A company called .CO Internet, acquired by Neustar for $109 million in 2014, has been running the ccTLD for the last decade. There are currently around 2.3 million .co domains under management, according to Colombia.
With the renewal deadline looming, the government’s technology ministry, MinTIC, published an eyebrow-raising request for proposals last month.
What’s surprising about the RFP is that some of the four main technical performance criteria listed are so stringent that probably only two companies in the industry qualify — Verisign and Afilias, and so far Verisign has not been involved in the RFP process.
The companies that have been engaging with the government to date are Afilias, Neustar/.CO, Nominet, CentralNic and Donuts.
First, MinTIC wants a registry that’s had at least two million domains under management across its portfolio continuously for two years. All five registries qualify there.
Second, it wants a registry that’s been involved in the migration of a TLD of at least one million names, either as the gaining or losing back-end.
That immediately narrows the pack to just two of the five aforementioned registries — Neustar and Afilias.
Verisign would also qualify, if it’s in the bidding, but I suspect it’s not. Taking over .co would look like a “buy it to kill it” strategy, which would be horrible optics for the Colombian government.
There have only ever been three migrations over one million names, to my knowledge: the Verisign->Afilias .org transition of 2003, the Neustar->Afilias .au move of 2018, and last year’s Afilias->Neustar .in handover.
CentralNic, Nominet and Donuts have all moved numerous TLDs between back-ends, but with much smaller per-TLD domain volumes.
Third — and here’s the kicker — the successful .co bidder will have to show that it processes on average 25 million registry transactions — defined as “billable EPP (write) transactions, as well as all EPP search (read) transactions” — per day. (All of the RFP quotes in this post have been machine-translated from Spanish by Google and run by a few generous Spanish speakers for verification.)
The RFP is not entirely clear on what exact data points it’s looking at here, but my take is that qualifying transactions include, at an absolute minimum, attempts to create a domain, renew a domain, transfer a domain and check whether a domain is registered.
The vast majority of such transactions are in the check and create functions, and I believe a great deal of that activity relates to drop-catching, where registries are flooded with add requests for just-deleted domains.
Whichever way you split it, 25 million a day is a ludicrously high number. Literally only .com, which sees 2.3 billion checks and 1.5 billion adds per month, sees that kind of action.
According to Neustar, which actually runs .co, it only sees 6.4 million transactions per day on average. The requirement to handle 25 million a day is “exaggerated, unjustified and discriminatory” against Neustar, Neustar told MinTIC.
But the RFP allows for the bidding registries to spread their 25-million-a-day quota across all of the TLDs they manage, and this MAY sneak Afilias over the line.
I say MAY in big letters because I don’t believe the numbers that Afilias (and probably other registries too) reports to ICANN every month are reliable.
If you add up the reported, qualifying EPP transactions for September in Afilias’ top four legacy gTLDs — .org, .info, .mobi and .pro — you get to over 25 million per day.
But those same records show that, for example, .mobi, .pro and .info had exactly the same number of EPP availability checks that month — 215,988,497 each.
This is clearly bad data.
I reported on this issue last May, when ICANN’s Security and Stability Advisory Committee informed ICANN that major registries were providing “not reliable” or possibly “fabricated” data about port 43 Whois queries.
Afilias, which was one of the apparent offenders, told me at the time that it was addressing the issue with ICANN, but it does not yet appear to have fully fixed its reporting to enable TLD-by-TLD breakdowns of its registry activity.
It is of course quite possible, even very likely, that Afilias has on average more than 25 million qualifying EPP transactions per day, but how’s it going to prove that to the Colombian government when the numbers it reports under contract to ICANN are clearly unreliable?
It’s a little harder to determine whether Neustar would qualify under the 25-million transaction rule, because some of its largest zones are ccTLDs — .co, .in and .us — that do not publicly report this kind of data. Its comments to the RFP suggest it would not.
Numbers aside, I’ll note that there’s very probably an inherent bias towards legacy gTLD operators like Afilias and against relative newcomers such as CentralNic if you’re counting EPP transactions. As I noted above, a lot of these transactions are coming from drop-catch activity, which is more prevalent on larger, older TLDs where there are more dropping domains that are more likely to have existing backlinks and traffic.
The fourth technical requirement in the Colombian RFP that looks a bit fishy is the requirement that the new registry must have channel relationships with at least 10 of the largest 25 registrars, as listed by a web site called domainstate.com.
I can’t say I’ve looked at domainstate.com very often, if at all, but a quick look at its numbers for September strongly suggests to me that it does not count post-2012 new gTLD registrations in its registrar league table. One registrar with almost four million domains under management doesn’t even show up on the list. This arguably could give an advantage to a registry that plays strongly in legacy gTLDs.
That said, it’s probably an academic point — I don’t think any of the bidders for the .co contract would have difficulty showing that they have 10 of the top 25 registrars on board, whichever way you calculate that league table.
Cumulatively, these four technical hurdles have led some to suggest that Afilias has somehow steered MinTIC towards creating an RFP only it could win.
Apart from what I’ve discussed here, I’ve no evidence that is the case, and Afilias has not yet responded to my request for comment today.
Luckily for the bidding registries, the Columbian RFP has not yet been finalized. Comments submitted by the bidders and others are apparently going to be taken on board, so the barriers to entry for respondents could be lowered before bids are finally accepted.
MinTIC posted an update last night that extends the period that the RFP could run, and the transition period should Neustar lose the contract. A handover, should one happen at all, could now happen as late as February next year.

Verisign pays ICANN $20 million and gets to raise .com prices again

Verisign is to get the right to raise the price of .com domains by 7% per year, under a new contract with ICANN.
The deal, announced this hour, will also see Verisign pay ICANN $20 million over five years, starting in 2021, “to support ICANN’s initiatives to preserve and enhance the security, stability and resiliency of the DNS”.
According to ICANN, the pricing changes mean that the maximum price of a .com domain could go as high as $10.26 by October 2026.
Verisign getting the right to once more increase its fees — which is likely to be worth close to a billion dollars to the company’s top line over the life of the contract — was not unexpected.
Pricing has been stuck at $7.85 for years, due to a price freeze imposed by the Obama-era US National Telecommunications and Information Administration, but this policy was reversed by the Trump administration in late 2018.
The amendment to the .com registry agreement announced today essentially takes on the terms of the Trump appeasement, so Verisign gets to up .com prices by 7% in the last four years of the six-year duration of the contract.
ICANN said:

ICANN org is not a price regulator and will defer to the expertise of relevant competition authorities. As such, ICANN has long-deferred to the [US Department of Commerce] and the United States Department of Justice (DOJ) for the regulation of pricing for .COM registry services.

But ICANN will also financially benefit from the deal over and above what it receives from Verisign under the current .com contract.
First, the two parties have said they will sign a binding letter of intent (pdf) committing Verisign to give ICANN $4 million a year, starting one year from now, to help fund ICANN’s activities:

conducting, facilitating or supporting activities that preserve and enhance the security, stability and resiliency of the DNS, which may include, without limitation, active measures to promote and/or facilitate DNSSEC deployment, Security Threat mitigation, name collision mitigation, root server system governance and research into the operation of the DNS

That’s basically describing one of ICANN’s core missions, which is already funded to a great extent by .com fees, so quite why it’s being spun out into a separate agreement is a little bit of a mystery to me at this early stage.
Don’t be surprised if you hear the words “bung” or “quid pro quo” being slung around in the coming hours and days by ICANN critics.
The second financial benefit to ICANN comes from additional payments Verisign will have to make when it sells its ConsoliDate service.
This is the service that allows .com registrants, via their registrars, to synchronize the renewal dates of all of the domains in their portfolio, so they only have to worry about renewals on a single day of the year. It’s basically a partial-year renewal.
Under the amended .com contract, ICANN will get a piece of that action too. Verisign has agreed to pay ICANN a pro-rated fee, based on the $0.25 per-domain annual renewal fee, for the number of days any given registration is extended using ConsoliDate.
I’m afraid to say I don’t know how much money this could add to ICANN’s coffers, but another amendment to the contract means that Verisign will start to report ConsoliDate usage in its published monthly transaction reports, so we should get a pretty good idea of the $$$$ value in the second half of the year.
The amended contract — still in draft form (pdf) and open for public comment — also brings on a slew of new obligations for Verisign that bring .com more into line with other gTLDs.
There’s no Uniform Rapid Suspension policy, so domain investors and cybersquatters can breath a sigh of relief there.
But Verisign has also agreed to a new Registry-Registrar Agreement that contains substantial new provisions aimed at combating abuse, fraud and intellectual property infringement — including trademark infringement.
It has also agreed to a series of Public Interest Commitments, along the same lines as all the 2012-round new gTLDs, covering the same kinds of dodgy activities. The texts of the RRA addition and PICs are virtually identical, requiring:

a provision prohibiting the Registered Name Holder from distributing malware, abusively operating botnets, phishing, pharming, piracy, trademark or copyright infringement, fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law and providing (consistent with applicable law and any related procedures) consequences for such activities, including suspension of the registration of the Registered Name;

There are also many changes related to how Verisign handles data escrow, Whois/RDAP and zone file access. It looks rather like users of ICANN’s Centralized Zone Data Service, including yours truly, will soon have access to the humongous .com zone file on a daily basis. Yum.
The proposed amendments to the .com contract are now open for public comment here. You have until February 14. Off you go.

Non-coms want .org’s future carved in stone

ICANN’s non-commercial stakeholders have “demanded” changes to Public Interest Registry’s .org contract, to protect registrants for the next couple of decades.
The NCSG sent a letter to ICANN chair Maarten Botterman this week which stopped short of demanding, as others have, that ICANN reverse its decision to unfetter PIR from the 10%-a-year cap on prices increases it has previously been subject to.
Instead, it asks ICANN to strengthen the already existing notification obligations PIR has when it increases prices.
Today, if PIR wants to up its fee it has to give its registrars six months notice, and registrants are allowed to lock in the current pricing by renewing for up to 10 years.
NCSG wants to ensure registrants get the same kind of advance notification, either from PIR or its registrars, and for the lock-in period doubled to 20 years.
The group is concerned that, now that PIR seems set to become a for-profit venture following its $1.135 billion acquisition by Ethos Capital, there’s a risk the registry may attempt to exploit the registrants of its over 10 million .org domains.
I think it unlikely that ICANN, should it pay any attention at all to the letter, will agree to the 20-year renewal ask, given that the contract only runs for 10 years and that gTLD registries are forbidden from selling domains for periods of longer than a decade.
It would require adjustments with other parts of the contract, such as transaction reporting requirements, and would probably need some industry-wide tinkering with the EPP registry protocols too.
In some respects, the stance on pricing could be seen as a softening of NCSG’s previous position.
In April, it said that price caps should remain, but that they should be increased from the 10% a year level. If that view remains, the letter does not restate it.
The NCSG also wants the oft-criticized Uniform Rapid Suspension policy removed from the .org contract, on the basis that it was only ever supposed to be applied to gTLDs applied for in the 2012 round and not legacy gTLDs.
URS has been incorporated in all but one of the legacy gTLD contracts that have been renewed since 2012.
Finally, NCSG asks that ICANN essentially write the US First Amendment into the .org agreement, writing that it wants:

A strong commitment that the administration of the ORG domain will remain content-neutral; that is, the registry will not suspend or take away domains based on their publication of political, cultural, social, ethnic, religious, and personal content, even untrue, offensive, indecent, or unethical material, like that protected under the U.S. First Amendment.

The fear that a .org in commercial hands will be more susceptible to censorship pressures is something that the Electronic Frontier Foundation has also recently raised.
The basis for the NCSG’s demands are rooted in the original redelegation of .org from Verisign to PIR in early 2003, which came after a competitive bidding process that saw PIR beat 10 rival applicants, partly on the basis of its commitment to non-profit registrants.
You may recall I did a deep-dive into .org’s history last week that covered what was said by whom during that process.
NCSG writes:

The ORG situation is unique because of its origins in a competitive RFP that was specifically earmarked for noncommercial registrants. How ICANN handles this case, however, will have enormous precedential consequences for the stability of the DNS and ICANN’s own reputation and status. Changes in ownership are likely to be increasingly common going forward. Domain name users want stability and predictability in their basic infrastructure, which means that the obligations, service commitments and pricing cannot be adjusted dramatically as ownership changes.

NCSG’s letter has not yet been published by ICANN, but the Internet Governance Project’s Milton Mueller has copied its text in a blog post here.

Are ISOC’s claims about .org’s history bogus?

The Internet Society has started to fight back against those trying to put a stop to its $1.13 billion sale of Public Interest Registry to Ethos Capital.
Among the tactics being deployed appears to be an attempt to play down the notion that .org has always been considered as a home for non-profits run by a non-profit.
Apparently, it’s perfectly fine for .org to transition back into commercial hands, because not-for-profit ISOC was never intended as its forever home and the TLD was never intended for non-profits anyway.
Is that bullshit?
Yes and no. Mostly yes. It turns out you get a different answer depending on when you look in .org’s storied history.
ISOC, it seems, is starting in 1994, in an internet standard written by Jon Postel (who was ICANN before there was an ICANN).
A statement published by ISOC last week tries to characterize .org as a home for the “miscellaneous”, quoting from RFC 1591

I also want to address some other misconceptions about .ORG. Although .ORG has often been thought of as a “home of non-profits”, the domain was not actually defined that way. In 1994, RFC 1591 described it this way: “ORG – This domain is intended as the miscellaneous TLD for organizations that didn’t fit anywhere else. Some non-government organizations may fit here.”

It’s an accurate quote.
.org is described in other RFCs in a similar way. The earliest reference is 1984’s RFC 920 which says .org means “Organization, any other domains meeting the second level requirements.”
RFC 1032 says:

“ORG” exists as a parent to subdomains that do not clearly fall within the other top-level domains. This may include technical-support groups, professional societies, or similar organizations.

I can’t find any mention of non-profits in any of the relevant DNS RFCs.
ISOC goes on to note that .org was managed by a for-profit entity — Network Solutions, then Verisign — from 1993 until PIR took over in 2003.
Again, that’s true, but while it might have been managed by a commercial entity, NetSol was pretty clear about who .org was for.
When it went public in 1997, the company told would-be investors in its S-1 registration statement:

The most common TLDs include .com, used primarily by commercial entities, .org for nonprofit organizations, .net for network service providers, .edu for universities and .gov for United States governmental entities

That’s pretty unambiguous: the .org registry in 1997 said that .org was for non-profits.
In 2001, when ICANN inked a deal with Verisign to spin off .org into a new registry, there was no ambiguity whatsoever.
In announcing the deal, ICANN said that it would “return the .org registry to its original purpose” and .org would return to “to its originally intended function as a registry operated by and for non-profit organizations” (my emphasis).
The price ICANN paid for extracting .org from Verisign’s clutches was the very first “presumptive renewal” clause being inserted into the .com contract, which has seen Verisign reap billions with no risk of ever losing its golden goose.
The prize was so potentially lucrative that Verisign even agreed to give a $5 million endowment — no questions asked — to the successor registry, for use relaunching or promoting .org.
The only catch was that the new registry had to be a non-profit. Commercial registries — Verisign competitors such as Neustar — wouldn’t get the money.
ICANN and its community spent the remainder of 2001 and most of 2002 devising an RFP, accepting proposals from 11 would-be .org registries, and picking a winner.
The multistakeholder Domain Names Supporting Organization — roughly equivalent to today’s GNSO — was tasked with coming up with a set of principles governing who should get to run .org and how.
It came up with a report in January 2002 that stated, as its first bullet point:

The initial delegation of the .org TLD should be to a non-profit organization that is noncommercial in orientation and the initial board of which includes substantial representation of noncommercial .org registrants.

It went on to say that applicants “should be recognized non-profit entities” and to suggest a few measures to attract such entities to the bidding process.
These recommendations, which secured consensus support of the DNSO’s diverse stakeholders and a unanimous vote of the Names Council (the 2002 equivalent of the GNSO Council), nevertheless never made it into ICANN’s final RFP.
At some point during this process, ICANN decided that it would be unfair to exclude for-profit bidders, so there was no non-profit requirement in the final RFP.
As far as I can tell from the public record and my increasingly unreliable memory, it was Vint Cerf — father of the internet, creator of ISOC, then-chair of ICANN, and one of the few people currently cool with PIR being sold into commercial hands — that opened it up to for-profit bidders.
The decision was made at ICANN’s board meeting in Accra, Ghana, at ICANN 12. Back then, the board did its thinking aloud, in front of an audience, so we have a transcript.
The transcript shows that Cerf recommended that ICANN remain neutral on whether the successor registry was non-profit or for-profit. He put forward the idea that a commercial registry could quite easily create a non-profit entity in order to bid anyway, so it would be a kinda pointless restriction. The board agreed.
So in 2002, 11 entities, some of them commercial, submitted proposals to take over .org.
In ISOC’s bid, it stated that it would use the $5 million Verisign endowment “primarily to expanding outreach to non-commercial organizations on behalf of .ORG”.
ISOC/PIR took Verisign’s millions, as a non-profit, in order to pitch .org at other non-profits, in other words.
The evaluation process to pick Verisign’s successor was conducted by consultancy Gartner, a team of “academic CIOs” and ICANN’s Noncommercial Domain Name Holders’ Constituency (roughly equivalent to today’s Non-Commercial Stakeholders Group).
The NCDNHC was under strict instructions from ICANN management to not give consideration to whether the applicants were commercial or non-commercial, but its report (pdf) did “take notice of longstanding relationships between the bidders (whether for-profit or non-profit) and the noncommercial community available in the public record”.
It ranked the PIR bid as third of the 11 applicants, on the basis that .org money would go to support ISOC and the IETF, which NCDNHC considered “good works”.
ICANN’s preliminary and final evaluation reports were both opened for public comment, and comment from the applicants themselves, and on both occasions ISOC sought to play up its not-for-profit status. In August 2002, it said:

Overall, we believe ISOC’s experience as a not-for-profit, Internet-focused organization, combined with Afilias’ expertise as a stable and proven back end provider, enables us to fully meet all the criteria set forth by the ICANN Board.

In October 2002, it said:

We believe strongly that the voice of the non-commercial community is critical to the long-term success of .ORG. ISOC’s global membership and heritage and PIR’s non-profit status will ensure the registry remains sensitive to non-commercial concerns. Should the ICANN Board select ISOC’s proposal, PIR will execute extensive plans to ensure that this voice is heard.

ISOC’s application was of course ultimately determined to be the best of the bunch, and in October 2002 ICANN decided to award it the contract.
Then there was the small matter of the IANA redelegation. IANA is the arm of ICANN that deals with changes to the root zone. Whenever a TLD changes hands, IANA issues a report explaining how the redelegation came about.
In the case of .org, IANA echoed the previous feelings about .org’s “intended” purpose, stating:

the Internet Society is a long-established organization that is particularly knowledgeable about the needs of the organizations for which the .org top-level domain was intended. By establishing PIR as a subsidiary to serve as the successor operator of .org, the Internet Society has created a structure that can operate the .org TLD in a manner that will be sensitive to the needs of its intended users

So, does history tell us that .org is meant to be a TLD by and for non-profits?
Mostly, yes, I think it does.

Verisign likely to get its billion-dollar .com pricing windfall

Verisign and ICANN appear to be on the verge of signing a new .com registry contract that could prove extremely lucrative for the legacy gTLD company.
Speaking to analysts following the announcement of Verisign’s third-quarter results late last week, CEO Jim Bidzos said talks with ICANN, which have their first anniversary this week, are “nearly complete”.
The new contract will take on the terms of the Cooperative Agreement between Verisign and the US Department of Commerce, which was amended a year ago to scrap an Obama-era price freeze.
Under the future contract, Verisign is expected to be able to raise its .com fee from its current $7.85 by 7% in four of the six years of the deal. As I wrote at the time, this could be worth close to a billion dollars.
This, for a company that already enjoys profit margins so generous that I regularly receive phone calls from perplexed analysts asking me to help explain how they get away with it.
Bidzos said on Thursday night:

let me remind you that under the 2016 amendment to our .com registry agreement with ICANN, which extended the term of the agreement, we and ICANN also agree to negotiate in good faith to do two things; first, we agree to reflect changes to the Cooperative Agreement in the com agreement, including pricing terms. Second, we agree to amend the com agreement to include terms to preserve and enhance the security and stability of the com registry or the internet.
We believe these discussions with ICANN are nearly complete. While it will be inappropriate at this time to provide more details, I can say that we were satisfied with the results so far. As noted, this is an ICANN process and we expect that before long ICANN will be publishing for public comment the documents we have been discussing.

The Cooperative Agreement also allows Verisign to launch a registrar business, just as long as that registrar does not sell .com domains.
Potentially, Verisign could get the right to launch a customer-facing registrar focused on selling .net, .org and newer gTLDs and ccTLDs.
Given we already pretty much know what the new pricing regime is going to be, the big mystery right now is why it’s taken ICANN and Verisign so long to renegotiate the contract.
One analyst asked Bidzos on Thursday whether ICANN has talked its way into getting a bigger slice of the registry fee, currently set at $0.25 per annual domain transaction.
That’s in-line with what almost all the other gTLD registries pay, and I can’t see ICANN demanding more without attracting a tonne of criticism. Verisign is already by some margin its biggest funding source.
Could ICANN have demanded that Verisign adopt the Uniform Rapid Suspension anti-cybersquatting policy, which would be guaranteed to enrage domain investors?
Whatever else is to be added to the contract, it appears to be related to that amorphous term “security and stability”, which could mean basically anything.
When ICANN and Verisign agreed to talk about new terms “to preserve and enhance the security and stability of the Internet or the TLD”, what on Earth where they talking about?
It looks like we won’t have to wait too much longer to find out.

After .org price outrage, ICANN says it has NOT scrapped public comments

ICANN this evening said that it will continue to open up gTLD registry contract amendments for public comment periods, despite posting information yesterday suggesting that it would stop doing so.
The organization recently formalized what it calls “internal guidelines” on when public comment periods are required, and provided a summary in a blog post yesterday.
It was very easy to infer from the wording of the post that ICANN, in the wake of the controversy over the renegotiation of Public Interest Registry’s .org contract, had decided to no longer ask for public comments on future legacy gTLD contract amendments.
I inferred as much, as did another domain news blogger and a few other interested parties I pinged today.
I asked ICANN if that was a correct inference and Cyrus Namazi, head of ICANN’s Global Domains Division, replied:

No, that is not correct. All Registry contract amendments will continue to be posted for public comment same as before.

He went on to say that contract changes that come about as a result of Registry Service Evaluation Process requests or stuff like change of ownership will continue to not be subject to full public comment periods (though RSEP does have its own, less-publicized comment system).
The ICANN blog post lists several scenarios in which ICANN is required to open a public comment period. On the list is this:

ICANN org base agreements with registry operators and registrars.

The word “base” raised at least eight eyebrows of people who read the post, including my two.
The “base” agreements ICANN has with registries and registrars are the 2013 Registrar Accreditation Agreement and the 2012/2017 Registry Agreement.
The RAA applies to all accredited registrars and the base RA applies to all new gTLD registries that applied in the 2012 round.
Registries that applied for, or were already running, gTLDs prior to 2012 all have bespoke contracts that have been gradually brought more — but not necessarily fully — into line with the 2012/17 RA in renewal renegotiations over the last several years.
In all cases, the renegotiated legacy contracts have been subject to public comment, but in no cases have the comments had any meaningful impact on their ultimate approval by ICANN.
The most recent such renewal was Public Interest Registry’s .org contract.
Among the changes were the introduction of the Uniform Rapid Suspension anti-cybersquatting policy, and the removal of price caps that had limited PIR to a 10% increase per year.
The comment period on this contract attracted over 3,200 comments, almost all of which objected to the price regulation changes or the URS.
But the contract was signed regardless, unaffected by the comments, which caused one registrar, NameCheap, to describe the process as a “sham”.
With this apparently specific reference to “base” agreements coming so soon thereafter, it’s easy to see how we could have assumed ICANN had decided to cut off public comment on these contentious issues altogether, but that appears to not be the case.
What this seems to mean is that when .com next comes up for renewal, it will be open for comment.

These two ccTLDs drove two thirds of all domain growth in Q2

The number of registered domain names in the world increased by 2.9 million in the second quarter, driven by .com and two ccTLDs.
That’s according to the latest Verisign Domain Name Industry Brief, which was published (pdf) overnight, and other data.
The quarter ended with 354.7 million domains. Verisign’s own .com was up 1.5 million over Q1 at 142.5 million names.
ccTLDs across the board grew by 1.9 million names sequentially to 158.7 million. Year-over-year, the increase was 10.5 million domains.
The sequential ccTLD increase can be attributed almost entirely to two TLDs: .tw and .uk. These two ccTLDs appear to account for two thirds of the overall net new domains appearing in Q2.
Taiwan grew by about 600,000 in the quarter, presumably due to an ongoing, unusual pricing-related growth spurt among Chinese domainers that I reported in June.
The UK saw an increase of roughly 1.3 million domains, ending the quarter at 13.3 million.
That’s down to the deadline for registering second-level .uk matches for third-level .co.uk domains, which passed June 25.
Nominet data shows that 2LDs increased by about 1.2 million in the period, even as 3LDs dipped. The difference between this and the Verisign data appears to be rounding.
Factoring out the .uk and .tw anomalies, we have basically flat ccTLD growth, judging by the DNIB data.
Meanwhile, the new gTLD number was 23 million. That’s flat after rounding, but Verisign said that the space was actually up by about 100,000 names.
Growth as a whole was tempered by what I call the “other” category. That comprises the pre-2012 gTLDs such as .net, .org, .info and .biz. That was down by about a half a million names.
.net continued its gradual new gTLD-related decline, down 200,000 names sequentially at 13.6 million, while .org was down by 100,000 names.
The overall growth numbers are subject to the usual DNIB-related disclaimers: Verisign (and most everyone else) doesn’t have good data for some TLDs, including large zones such as .tk and .cn.

This latest Chinese bubble could deflate ccTLD growth

With many ccTLD operators recently reporting stagnant growth or shrinkage, one registry has performed stunningly well over the last year. Sadly, it bears the hallmarks of another speculative bubble originating in China.
Verisign’s latest Domain Name Industry Brief reported that ccTLDs, excluding the never-shrinking anomaly that is .tk, increased by 1.4 million domains in the first quarter of the year.
But it turns out about 1.2 million of those net new domains came from just one TLD: Taiwan’s .tw, operated by TWNIC.
Looking at the annual growth numbers, the DNIB reports that ccTLDs globally grew by 7.8 million names between the ends of March 2018 and March 2019.
But it also turns out that quite a lot of that — over five million names — also came from .tw.
Since August 2018, .tw has netted 5.8 million new registrations, ending May with 6.5 million names.
It’s come from basically nowhere to become the fifth-largest ccTLD by volume, or fourth if you exclude .tk, per the DNIB.
History tells us that when TLDs experience such huge, unprecedented growth spurts, it’s usually due to lowering prices or liberalizing registration policies.
In this case, it’s a bit of both. But mostly pricing.
TWNIC has made it much easier to get approved to sell .tw names if you’re already an ICANN-accredited registrar.
But it’s primarily a steep price cut that TWNIC briefly introduced last August that is behind huge uptick in sales.
Registry CEO Kenny Huang confirmed to DI that the pricing promo is behind the growth.
For about a month, registrants could obtain a one-year Latin or Chinese IDN .tw name for NTD 50 (about $1.50), a whopping 95% discount on its usual annual fee (about $30).
As a result, TWNIC added four million names in August and September, according to registry stats. The vast majority were Latin-script names.
According to China domain market experts Allegravita, and confirmed by Archive.org, one Taiwanese registrar was offering free .tw domains for a day whenever a Chinese Taipei athlete won a gold medal during the Asian Games, which ran over August and September. They wound up winning 17 golds.
Huang said that the majority of the regs came from mainland Chinese registrants.
History shows that big growth spurts like this inevitably lead to big declines a year or two later, in the “junk drop”. It’s not unusual for a registry to lose 90%+ of its free or cheap domains after the promotional first year is over.
Huang confirmed that he’s expecting .tw registrations to drop in the fourth quarter.
It seems likely that later this year we’re very likely going to see the impact of the .tw junk drop on ccTLD volumes overall, which are already perilously close to flat.
Speculative bubbles from China have in recent years contributed to wobbly performance from the new gTLD sector and even to .com itself.

New gTLDs slip again in Q1

The number of domains registered in new gTLDs slipped again in the first quarter, but it was not as bad as it could have been.
Verisign’s latest Domain Name Industry Brief, out today, reports that new gTLD domains dropped by 800,000 sequentially to end March at a round 23.0 million.
It could have been worse.
New gTLD regs in Q1 were actually up compared to the same period last year, by 2.8 million.
That’s despite the fact that GRS Domains, the old Famous Four portfolio, has lost about three million domains since last August.
Verisign’s own .com was up sequentially by two million domains and at 141 million, up by 7.1 million compared to Q1 2018. But .net’s decline continued. It was down from 14 million in December to 13.8 million in March.
Here’s a chart (click to enlarge) that may help visualize the respective growth of new gTLDs and .com over the last three years. The Y axes are in the millions of domains.

New gTLDs have shrunk sequentially in six of the last 12 quarters, while .com has grown in all but two.
The ccTLD world, despite the woes reported by many European registries, was the strongest growth segment. It was up by 2.5 million sequentially and 10 million compared to a year ago to finish the period with 156.8 million.
But once you factor out .tk, the free TLD that does not delete expired or abusive names, ccTLDs were up by 1.4 million sequentially and 7.8 million on last year.

Major registries posting “fabricated” Whois data

One or more of the major gTLD registries are publishing Whois query data that may be “fabricated”, according to some of ICANN’s top security minds.
The Security and Stability Advisory Committee recently wrote to ICANN’s top brass to complain about inconsistent and possibly outright bogus reporting of Whois port 43 query volumes.
SSAC said (pdf):

it appears that the WHOIS query statistics provided to ICANN by registry operators as part of their monthly reporting obligations are generally not reliable. Some operators are using different methods to count queries, some are interpreting the registry contract differently, and some may be reporting numbers that are fabricated or otherwise not reflective of reality. Reliable reporting is essential to the ICANN community, especially to inform policy-making.

SSAC says that the inconsistency of the data makes it very difficult to make informed decisions about the future of Whois access and to determine the impact of GPDR.
While the letter does not name names, I’ve replicated some of SSAC’s research and I think I’m in a position to point fingers.
In my opinion, Google, Verisign, Afilias and Donuts appear to be the causes of the greatest concern for SSAC, but several others exhibit behavior SSAC is not happy about.
I reached out to these four registries on Wednesday and have published their responses, if I received any, below.
SSAC’s concerns relate to the monthly data dumps that gTLD registries new and old are contractually obliged to provide ICANN, which publishes the data three months later.
Some of these stats concern billable transactions such as registrations and renewals. Others are used to measure uptime obligations. Others are largely of academic interest.
One such stat is “Whois port 43 queries”, defined in gTLD contracts as “number of WHOIS (port-43) queries responded during the reporting period”.
According to SSAC, and confirmed by my look at the data, there appears to be a wide divergence in how registries and back-end registry services providers calculate this number.
The most obvious example of bogosity is that some registries are reporting identical numbers for each of their TLDs. SSAC chair Rod Rasmussen told DI:

The largest issue we saw at various registries was the reporting of the exact or near exact same number of queries for many or all of their supported TLDs, regardless of how many registered domain names are in those zones. That result is a statistical improbability so vanishingly small that it seems clear that they were reporting some sort of aggregate number for all their TLDs, either as a whole or divided amongst them.

While Rasmussen would not name the registries concerned, my research shows that the main culprit here appears to be Google.
In its December data dumps, it reported exactly 68,031,882 port 43 queries for each of its 45 gTLDs.
If these numbers are to be believed, .app with its 385,000 domains received precisely the same amount of port 43 interest as .gbiz, which has no registrations.
As SSAC points out, this is simply not plausible.
A Google spokesperson has not yet responded to DI’s request for comment.
Similarly, Afilias appears to have reported identical data for a subset of its dot-brand clients’ gTLDs, 16 of which purportedly had exactly 1,071,939 port 43 lookups in December.
Afilias has many more TLDs that did not report identical data.
An Afilias spokesperson told DI: “Afilias has submitted data to ICANN that addresses the anomaly and the update should be posted shortly.”
SSAC’s second beef is that one particular operator may have reported numbers that “were altered or synthesized”. SSAC said in its letter:

In a given month, the number of reported WHOIS queries for each of the operator’s TLDs is different. While some of the TLDs are much larger than others, the WHOIS query totals for them are close to each other. Further statistical analysis on the number of WHOIS queries per TLD revealed that an abnormal distribution. For one month of data for one of the registries, the WHOIS query counts per TLD differed from the mean by about +/- 1%, nearly linearly. This appeared to be highly unusual, especially with TLDs that have different usage patterns and domain counts. There is a chance that the numbers were altered or synthesized.

I think SSAC could be either referring here to Donuts or Verisign
Looking again at December’s data, all but one of Donuts’ gTLDs reported port 43 queries between 99.3% and 100.7% of the mean average of 458,658,327 queries.
Is it plausible that .gripe, with 1,200 registrations, is getting almost as much Whois traffic as .live, with 343,000? Seems unlikely.
Donuts has yet to provide DI with its comments on the SSAC letter. I’ll update this post and tweet the link if I receive any new information.
All of the gTLDs Verisign manages on behalf of dot-brand clients, and some of its own non-.com gTLDs, exhibit the same pattern as Donuts in terms of all queries falling within +/- 1% of the mean, which is around 431 million per month.
So, as I put to Verisign, .realtor (~40k regs) purportedly has roughly the same number of port 43 queries as .comsec (which hasn’t launched).
Verisign explained this by saying that almost all of the port 43 queries it reports come from its own systems. A spokesperson told DI:

The .realtor and .comsec query responses are almost all responses to our own monitoring tools. After explaining to SSAC how Verisign continuously monitors its systems and services (which may be active in tens or even hundreds of locations at any given time) we are confident that the accuracy of the data Verisign reports is not in question. The reporting requirement calls for all query responses to be counted and does not draw a distinction between responses to monitoring and non-monitoring queries. If ICANN would prefer that all registries distinguish between the two, then it is up to ICANN to discuss that with registry operators.

It appears from the reported numbers that Verisign polls its own Whois servers more than 160 times per second. Donuts’ numbers are even larger.
I would guess, based on the huge volumes of queries being reported by other registries, that this is common (but not universal) practice.
SSAC said that it approves of the practice of monitoring port 43 responses, but it does not think that registries should aggregate their own internal queries with those that come from real Whois consumers when reporting traffic to ICANN.
Either way, it thinks that all registries should calculate their totals in the same way, to make apples-to-apples comparisons possible.
Afilias’ spokesperson said: “Afilias agrees that everyone should report the data the same way.”
As far as ICANN goes, its standard registry contract is open to interpretation. It doesn’t really say why registries are expected to collect and supply this data, merely that they are obliged to do so.
The contracts do not specify whether registries are supposed to report these numbers to show off the load their servers are bearing, or to quantify demand for Whois services.
SSAC thinks it should be the latter.
You may be thinking that the fact that it’s taken a decade or more for anyone to notice that the data is basically useless means that it’s probably not all that important.
But SSAC thinks the poor data quality interferes with research on important policy and practical issues.
It’s rendered SSAC’s attempt to figure out whether GDPR and ICANN’s Temp Spec have had an effect on Whois queries pretty much futile, for example.
The meaningful research in question also includes work leading to the replacement of Whois with RDAP, the Registration Data Access Protocol.
Finally, there’s the looming possibility that ICANN may before long start acting as a clearinghouse for access to unredacted Whois records. If it has no idea how often Whois is actually used, that’s going to make planning its infrastructure very difficult, which in turn could lead to downtime.
Rasmussen told DI: “Our impression is that all involved want to get the numbers right, but there are inconsistent approaches to reporting between registry operators that lead to data that cannot be utilized for meaningful research.”