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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).

Donuts joins fight to delay .web gTLD auction with emergency appeal

Donuts and Radix have filed an “emergency” appeal with ICANN in an attempt to get the forthcoming auction for the .web gTLD delayed.

The companies, both of which have applied for .web, say they have evidence that one of their rival bidders recently changed ownership without telling ICANN, in breach of application rules.

They filed a Request for Reconsideration (pdf) with ICANN (pdf) on Sunday, demanding the delay and an investigation into whether Nu Dot Co LLC is under new control.

The move follows speculation, which we reported last week, that Nu Dot Co is now being controlled by a major legacy gTLD registry player such as Verisign.

The evidence for the the change of ownership comes to light for the first time in the RfR. It’s an email from Nu Dot Co director Jose Ignacio Rasco to Donuts dated June 7. It reads:

Nicolai is at NSR full time and no longer involved with our TLD applications. I’m still running our program and Juan sits on the board with me and several others.

“Nicolai” is Nicolai Bezsonoff, who is listed as an NDC director in its .web application. NSR is presumably Neustar, where Bezsonoff went to work when it acquired .CO Internet.

“Juan” is Juan Calle, the third NDC director, CEO, and former CEO of .CO Internet.

Donuts and Radix believe that Bezsonoff’s departure and the apparent appointment of the unnamed “several others” as NDC directors gave NDC the obligation, under Applicant Guidebook rules, to inform ICANN of the changes.

The Guidebook states:

If at any time during the evaluation process information previously submitted by an applicant becomes untrue or inaccurate, the applicant must promptly notify ICANN via submission of the appropriate forms. This includes applicant-specific information such as changes in financial position and changes in ownership or control of the applicant.

(With that in mind, one wonders whether the acquisition of .blog at auction was strictly legit).

Donuts and Radix now want ICANN to delay the “last resort” auction, which is currently slated for July 27, and “conduct a thorough and transparent investigation into the apparent discrepancies and/or changes in NDC’s .WEB/.WEBS application”.

NDC is believed to be the only one of the eight .web/.webs applicants to be refusing to settle the contention set via a private auction, where the losers get an equal share of the winning bid.

If the set goes to ICANN’s last-resort auction, ICANN gets all the cash.

The final price of .web could easily be in the ball park of $50 million, so each applicant stands to lose several million dollars if the July 27 auction goes ahead as planned.

Radix and fellow .web applicant Schlund had previously written to ICANN to request the delay, but were rebuffed in a letter last week.

The decision outlined in that letter is what the new RfR challenges.

RfRs have a long track record of being dismissed by ICANN’s Board Governance Committee, very often because the requester has not supplied ICANN with any new information with which to change its mind.

That’s a risk here, too, given that ICANN seems to have been in possession of the Rasco email since June 22, before decision to go ahead with the auction was made.

However, that decision seems to have been made by ICANN staff. An RfR makes sure it gets the attention of the ICANN board of directors.

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.

.web has an auction date

Kevin Murphy, April 29, 2016, Domain Registries

The .web gTLD will go to auction July 27, according to ICANN.

The organization released an updated auction schedule (pdf) on Wednesday night that also slates .kids/.kid for an auction on the same day.

Both auctions have confusing “indirect contention” elements, where two strings were ruled confusingly similar.

With .web, it’s lumped in with Vistaprint’s application for .webs, which lost a String Confusion Objection filed by Web.com.

Under ICANN rules, .webs is confusingly similar to to Web.com’s .web, but not to the other six .web applications.

This means that Vistaprint and Web.com basically are fighting a mini contention set auction to see who gets their applied-for gTLD.

If Web.com wins the auction for .web, Vistaprint cannot have .webs. However, if any other .web applicant wins, Vistaprint can go ahead with .webs.

Either way, there will be a .web delegated this year. Google, Donuts, Radix, Afilias, Schlund Technologies, Nu Dot Co are all contenders.

In the case of .kids/.kid, the one applicant for .kid — Google — won SCOs against DotKids Foundation and Amazon by default because both .kids applicants failed to respond to the complaints.

DotKids Foundation recently lost a Community Priority Evaluation, enabling the auction to go ahead.

Because Google is in contention with both .kids applicants, only one of the two strings will ultimately be delegated — .kids and .kid will not coexist.

The only other scheduled auction right now is that of .doctor, which is planned for May 25. Radix, Donuts and The Medical Registry will fight it out in this rather less complex battle.

It’s worth noting that if any of these contention sets unanimously choose to resolve their differences via private auction, none of the ICANN auctions will go ahead.

Web.com just gave itself another reason to bid high for .web gTLD

Kevin Murphy, November 9, 2015, Domain Registrars

Registrar group Web.com is changing its stock market ticker symbol to WEB tomorrow, in another sign that it really, really wants to be identified with the string.

The switch from WWWW may indicate that the NASDAQ-listed company’s six rivals for the new gTLD .web have a fight — and a possible big payday — on their hands when .web finally goes to auction.

Web.com is competing with Nu Dot Co, Radix, Google, Donuts, Afilias and Schlund for the gTLD.

The company has already fiercely defended its “right” to .web, filing successful String Confusion Objections against .webs applicant Vistaprint.

Vistaprint subsequently filed an ICANN Independent Review Process complaint to appeal its SCO loss.

Last month, the IRP was won by ICANN, but the panel left the door open for ICANN to reconsider its decision.

The .web auction is not likely to go ahead until the Vistaprint issue is resolved.

If ICANN decides the two strings can be delegated separately, what I think is the last barrier to the .web auction going ahead disappears.

If not, then Vistaprint finds itself as the seventh contender in the auction, which may give it the impetus to carry on challenging the ruling.

ICANN’s board plans to discuss the issue at its next meeting, December 10.

Which way it leans will give an indication of how long it will be before .web goes to auction.