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ICANN spends $5 million more than planned in first fiscal half

Kevin Murphy, February 21, 2024, Domain Policy

ICANN published its second fiscal quarter financials yesterday, revealing a roughly $5 million overspend in the second half of 2023.

The Org spent $72 million of its $74 million revenue in the six months to December 31, more than the $67 million spend it had budgeted for.

ICANN said the overspend came mainly in its Community and Engagement reporting segment, with the $4 million excess “driven by higher than planned costs for ICANN78, community programs, and meetings support”.

The same report shows that ICANN 78, which took place in Hamburg last October, cost about $900,000 more than expected largely because it spent more on air fares and had to put on more sessions than it originally expected.

It also spent about $100,000 on its 25th anniversary celebration, a line item that had not appeared in its budget. Because who can predict an anniversary, right?

Hamburg was the most-expensive meeting since the pandemic ended, costing about $5.4 million and attracting over 2,500 attendees. The Kuala Lumpur meeting a year earlier had cost $4.7 million.

ICANN’s revenue was described as “flat”, but a breakdown shows a roughly $1 million (rounded) shortfall in both registry and registrar transaction fees compared to the budget. This is likely linked to shrinkages in Verisign’s .com sales over the period.

New gTLD lottery to return in 2026

Kevin Murphy, February 16, 2024, Domain Policy

Remember The Draw? It was the mechanism ICANN used to figure out which new gTLDs from the 2012 application round would get a first-mover advantage, and it’s coming back in 2026.

The Org is currently considering draft Applicant Guidebook language setting out the rules for how to pick which order to process applications in the next round.

There’s no mention of Digital Archery this time. ICANN is sticking to the tried-and-tested Prioritization Draw, a lottery method in which applicants buy a paper ticket for a nominal sum ($100 last time) and ICANN pulls them out of a big bucket to see who goes first.

Applicants for internationalized domain names will have an advantage again, but it’s arguably not as strong as in the 2012 round, when all the IDN applicants that had bought tickets were processed first.

This time, the draw will take place in batches of 500 applications, according to the latest version of the draft AGB language.

The first batch will contain at least 125 IDN applications — assuming there are 125 — and they will be drawn first, before any Latin-script strings get a look. In subsequent batches, the first 10% of tickets drawn will belong exclusively to IDN applicants.

In the 2012 round, the first 108 applications selected were IDNs. The Vatican won the lucky #1 spot with .天主教, the Chinese term for the Catholic Church, while Amazon was the first Latin-script application with .play (which Google eventually won but still hasn’t launched, over 11 years later).

Due to California’s gambling laws, applicants will have to show up to buy a ticket in person. If they can’t make it, they can select an Angeleno proxy from a list provided by ICANN to pick it up on their behalf.

Last time around, The Draw took over nine hours to sort all 1,930 applications and was the social highlight of the community’s calendar. Santa Claus even showed up.

How to qualify for a $40,000 gTLD

Kevin Murphy, February 13, 2024, Domain Policy

Organizations from most of the countries of the world, including some very wealthy economies, could find themselves eligible for a discount of up to 85% on ICANN new gTLD application fees, according to draft rules published for public comment today.

By my count, small businesses from 177 of the world’s countries and territories could qualify for cheap applications in the next round, expected in 2026, assuming they meet the new Applicant Support Program’s other criteria.

The list of qualifying nations includes the BRIC countries (Brazil, Russia, India, China), oil-rich nations such as Saudi Arabia and the UAE, wealthy Asian territories such as Hong Kong and South Korea, and some European nations, such as Serbia and Montenegro.

The draft ASP rules propose to subsidize applications from non-profits, intergovernmental organizations, indigenous/tribal groups, and small businesses that provide a “social impact or public benefit” from anywhere in the world.

It also promises subsidies to small businesses located in and owned by people based in several UN-designated economic regions: Small Island Developing States, Least Developed Countries, Economies in Transition, and Developing Economies.

Lists of these countries can be found in this UN document. China, Singapore, South Korea and Hong Kong are among dozens on the “developing economies” list. Russia counts as an “economy in transition” along with a handful of other east European and west Asian nations.

There’s no requirement to have a public benefit or charitable mission to qualify as a “Micro or small sized business from a less-developed economy”, you just need to have fewer than 50 employees, less than $5 million in the bank, and less than $5 million of annual sales (or meet two of those three criteria).

According to my tally, there are 177 distinct territories on the applicable UN lists. The same UN document lists just 36 nations that qualify as “developed” economies.

Because the application fees for the next round are not yet fixed, the discount eligible applicants can get isn’t either. The placeholder text in the current draft says the discount will be in the range of 50% to 85%.

ICANN has previously said that the base fee could be as much as $270,000, so an 85% discount would be worth almost $230,000, reducing the fee to about $40,000. Each applicant would be limited to one gTLD.

Support applicants under any category also have to pass various background screening checks — they can’t be affiliated with another registry, for example — and have to show that paying the full base gTLD application fee would be a “financial hardship”.

This is defined as: “Cost of the subsidized base gTLD application fee ([X%] of the [$X] USD fee) is greater than 20 percent of the organization’s annual revenue”. So, if we assume a discounted fee of $40,000, only companies with revenue under $200,000 would qualify.

The 2012 round’s Applicant Support Program worked a little differently. Applicants could be from anywhere in the world, but they could earn points under the score-based rules by being from a developing nation.

There were only three applicants using the ASP in 2012, and only one — DotKids Foundation, based in Hong Kong and founded by the same businessman who founded DotAsia and currently sits on the ICANN board of directors — ended up qualifying for the cheaper application fee.

For the next round, ICANN has penciled in a Q4 2024 date to start accepting applications for the discount. The application window is expected to close a year later, at least six months before the new gTLD application window opens.

Anyone thinking about trying to game the system should note that ICANN promises that anyone “found to have abused the intent of the program” will be banned from the new gTLD program forever.

The proposed ASP rules are open for comment for 50 days here.

Donald Trump loses second UDRP case

Kevin Murphy, February 7, 2024, Domain Policy

Former US president Donald Trump has lost a second cybersquatting case related to his Mar-a-Lago resort, where he lives in Florida.

A three-person WIPO panel late last month ruled that DTTM Holdings, which has owned a trademark on the term Mar-a-Lago since 1997, had failed to show that the registrant of maralago.com, Michael Gargiulo, did not have a legitimate interest in the domain.

Gargiulo, an investor who bought the domain from a third party in 2021, had argued that “mar a lago” is a generic term, meaning “sea to lake” in Spanish and other languages. He also said it could mean the personal name “Mara Lago”.

DTTM failed to convince the WIPO panel otherwise. It ruled (pdf) that “the Complainant was unable to provide persuasive specific evidence to overcome the Respondent’s arguments”. It did not rule on whether the registration was made in bad faith.

It’s the second Mar-a-Lago case DTTM has lost recently. Late last year it lost a UDRP complaint against a company called Marq Quarius (from which Gargiulo acquired maralago.com) over the domain mar-a-lago.com.

The single panelist in the earlier case (pdf) ruled that while the registrant’s defense (that the three words in the domain corresponded to the names of dead pets) strained credulity, there was no evidence of bad-faith cybersquatting.

Trump uses maralagoclub.com for the club’s official web site.

Namecheap sues ICANN over .org price caps

Kevin Murphy, February 5, 2024, Domain Policy

Namecheap has sued ICANN in California, asking a court to force the Org to revisit its decision to lift price caps on .org and .info domain names five years ago.

Registrar CEO Richard Kirkendall announced the suit on Twitter this afternoon:

The lawsuit follows an Independent Review Process case that Namecheap partially won in December 2022, where the panel said ICANN should hire an economist to look at whether price caps are a good idea before revisiting its decision to scrap them.

The panel found that the ICANN board of directors had shirked its duties to make the decision itself and had failed to act as transparently as its bylaws mandate.

Namecheap says that over a year after that decision was delivered, ICANN has not implemented the IRP panel’s recommendations, so now it wants the Superior Court in Los Angeles to hand down an injunction forcing ICANN to do so.

Before 2019, .org was limited to 10% price increases every year, but the cap was lifted, along with caps in .info and .biz, when ICANN renewed, standardized and updated the respective registries’ Registry Agreements.

After the decision was made to scrap .org price caps, despite huge public outrage, Namecheap rounded up its lawyers almost immediately.

The caps decision led to the ulimtately unsuccessful attempt by Ethos Capital to acquire Public Interest Registry, which runs .org.

Namecheap’s new lawsuit wants the judge to issue “an order directing ICANN to comply with the recommendations of the IRP Panel”.

That means ICANN’s board would be told to consider approaching PIR and .info registry Identity Digital to talk about reintroducing price caps, to hire the economist, and to modify its procedures to avoid any future transparency missteps.

First chunks of new gTLD Applicant Guidebook drop

Kevin Murphy, February 1, 2024, Domain Policy

ICANN has released for comment the first public drafts of seven sections of the new gTLD program’s Applicant Guidebook, the first of what are expected to be quarterly comment periods for the next 18 months or so.

As I previewed last week, the documents cover topics including geographic names, blocked strings, Universal Acceptance, conflicts of interest and freedom of expression.

The documents were prepared by the ICANN staff/community Subsequent Procedures Implementation Review Team, based on the recommendations of a working group reporting to the Generic Names Supporting Organization a few years ago.

ICANN says it wants to know whether everyone thinks the AGB text it has come up with is consistent with those recommendations.

The comment period is open until March 19. ICANN hopes to have the full AGB ready by May 2025, with the next application round opening April 2026.

.ai helps UDRP cases rise in 2023, WIPO says

Kevin Murphy, January 26, 2024, Domain Policy

The number of cybersquatting cases filed with the World Intellectual Property Organization increased 7% in 2023, WIPO said this week.

The total UDRP filings, 6,192, includes national ccTLD variations that WIPO handles but not UDRP filings with other providers.

WIPO said that 82% of cases resulted in the domain being transferred to the complainant, with the complaint being denied in just 3% of cases.

The organization does not publish data on Reverse Domain Name Hijacking findings, but RDNH.com, which tracks these things, shows 31 RDNH finding at WIPO in 2023.

.com accounted for 80% of complaints. WIPO said that the most complained-about ccTLDs were .co (Colombia), .cn (China), .mx (Mexico), .au (Australia) and .ai (Anguilla).

Perhaps unsurprisingly, given its rapid growth in registrations, Anguilla’s .ai saw a sharp uptick in UDRP filings last year, up from just four in 2022 to 43 in 2023, according to the WIPO web site.

ICANN picks its first ever Supreme Court

Kevin Murphy, January 24, 2024, Domain Policy

After foot-dragging for a decade, ICANN has finally approved a slate of a dozen jurists to act as its de facto Supreme Court.

Its board of directors voted at the weekend to create the first-ever Independent Review Process Standing Panel, a pool of legal experts from which panels in future IRP proceedings — the final appeals process for ICANN decisions under its bylaws — will be drawn.

ICANN has not named the 12 people yet. The names are redacted from the published resolution, presumably because they haven’t signed contracts yet. ICANN said they are “well-qualified” and “represent a diverse breadth of experience and geography”.

The names were put forward by a cross-community working group called the IRP Community Representatives Group, which looked after the application and interview process. A thirteenth CRG pick was deemed “ineligible” by ICANN for undisclosed reasons.

The Standing Panel is intended to make IRPs faster and cheaper by drawing the three-person panel in each case from an established pool of experienced professionals. The panelists will be contracted for staggered terms of service.

The ICANN bylaws have called for the establishment of such a panel for over a decade, but its timely creation was another victim of the lethargy that consumed ICANN for years. The lack of a Standing Panel has been raised by claimants in multiple IRPs, some of which are ongoing.

Elsewhere in IRP policy-making, a separate staff/community working group called the IRP Implementation Oversight Team expects to shortly publish certain revisions to the IRP rules for public comment, but the fact that the legal language of the rules is to be written by the law firm Jones Day, which represents defendant ICANN in IRP cases, has raised some eyebrows.

ICANN picks the domain it will never, ever release

Kevin Murphy, January 24, 2024, Domain Policy

ICANN has picked the TLD string that it will recommend for safe use behind corporate firewalls on the basis that it will never, ever be delegated.

The string is .internal, and the choice is now open for public comment.

It’s being called a “private use” TLD. Organizations would be able to use it behind their firewalls safe in the knowledge that it will never appear in the public DNS, mitigating the risk of public/private name collisions and data leakage.

.internal beat fellow short-lister .private to ICANN’s selection because it was felt that .private might lure people into a false sense of security.

While it’s unlikely that anyone was planning to apply for .internal as a commercial or brand gTLD in future, it’s important to note that when it makes it to the ICANN reserved list all confusingly similar strings will also be banned, under the current draft of the Applicant Guidebook.

So reserving .internal also potentially bans .internat, which Google tells me is the French word for a boarding school, or .internai, which is a possible brand for an AI for interns (yes, I’m grasping here, but you get my point).

The public comment period is open now and ends March 21.

ICANN approves domain takedown rules

Kevin Murphy, January 24, 2024, Domain Policy

ICANN’s board of directors has formally approved amendments to its standard registry and registrar contracts aimed at forcing companies to take action against domains involved in DNS abuse.

At its meeting last weekend, the board passed a resolution amending the Registrar Accreditation Agreement and Base gTLD Registry Agreement to include tougher rules on tackling abuse.

Registrars must now “promptly take the appropriate mitigation action(s) that are reasonably necessary to stop, or otherwise disrupt, the Registered Name from being used for DNS Abuse” when provided with evidence of such abuse.

Registries have a similar obligation to take action, but the action might be to refer the abusive domain to the appropriate registrar.

The rules follow the now industry-standard definition of DNS abuse: “malware, botnets, phishing, pharming, and spam (when spam serves as a delivery mechanism for the other forms of DNS Abuse listed)”.

The changes were crafted by ICANN along with registries and registrars and voted through late last year by a hefty majority of both camps.

The two contracts are now in the hands of the ICANN CEO and her lawyers for final action before becoming enforceable.