Group to seek .io TLD takeover after OECD human rights ruling

A group composed of displaced Chagossians will ask ICANN to redelegate the increasingly popular .io top-level domain, according to the group’s lawyer.

The move, still in its very early stages, follows a recent ruling under the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, which mildly chastised the current registry, Identity Digital.

“The next move is domain reassignment,” lawyer Jonathan Levy, who brought the OECD complaint on behalf of the Chagos Refugees Group UK, told us. The proposed beneficiary would be “a group composed of Chagossians” he said.

.io is the ccTLD for the archipelago currently known as the British Indian Ocean Territory. It’s one of those Postel-era “Just Some Guy” developing-world delegations that pre-date ICANN.

But BIOT is a controversial territory. Originally the Chagos Archipelago, the few thousand original inhabitants were forced out by the UK government in the 1970s so the US military could build a base on Diego Garcia, the largest island.

Most of the surviving Chagossians and their descendants live in Mauritius, but have been fighting for their right to return for decades. In 2019, the UN ruled the UK’s current administration of BIOT is unlawful.

In recent years, since .io became popular, the ccTLD has become part of the fight.

The original and technically still-current registry for .io is a UK company called Internet Computer Bureau. ICB was acquired by Afilias in 2017 for $70 million. Afilias was subsequently acquired by Donuts, which is now called Identity Digital.

Corporate accounts filed by ICB name its ultimate owner as Beignet DTLD Holdings of Delaware, which appears to be a part of $2.21 billion private equity firm Ethos Capital, Identity Digital’s owner, which is co-managed by former ICANN CEO Fadi Chehadé.

None of these companies have a connection to BIOT beyond paying a local company called Sure (Diego Garcia) Limited for a mail-forwarding service. The only people believed to reside in the territory at all are US and UK military and contractors.

Levy, on behalf of the Chagossian refugees and a group of victims of cryptocurrency scams operated from .io domains, filed a complaint with the Ireland National Contact Point for the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct — basically a mediation service operated by the Irish government — seeking a share of the money from .io sales and/or redelegation.

According to its most-recent public accounts, ICB had turnover of £16.4 million ($19.8 million) in 2021, up from £12.8 million ($15.5 million) in 2020, but also had absolutely horrible gross margins for a registry with only one employee.

The company had cost of sales of £15.8 million and a gross margin of 3.58%. It pays no ICANN fees and the UK government receives no cut beyond the regular corporate tax ICB pays (about £26,000 in 2021).

The OECD’s Guidelines are voluntary guidelines that countries sign up to that are meant to guide how multinational companies behave with regards human rights and so on. Enforcement seems to be relatively toothless, with national NCPs only having the power to “recommend” actions.

In fact, Afilias declined to participate in mediation and appears to have received only a mild finger-wagging in the Irish NCP’s decision (pdf), which was published in September. One of its recommendations reads:

The NCP recommends that in cases in which a product, including a digital asset, is associated with long-running disputes regarding human rights, multinational enterprises should be able to demonstrate that they have carried out human rights due diligence

Levy thinks the NCP’s decision is a big deal, saying it means the OECD has validated the Chagossians’ concerns. Coupled with the UN sanction on the UK related to BIOT, he reckons it could play in their favor in a future redelegation request.

.io domain owners shouldn’t be too worried right now, however. Redelegation takes a very long time even when the losing party agrees, and it doesn’t tend to happen without the consent of the incumbent.

Meta given 30 days to stop using Threads trademark

A small UK software firm has given Facebook owner Meta, well known in the domain industry for pursuing cybersquatters, 30 days to stop using the brand name “Threads” or face legal action.

Meta launched a Twitter clone called Threads back in July and quickly gathered over 100 million users (since declining to eight million daily active users), but Threads Software of London says its UK trademark dates back to 2012.

“Threads Software Limited and its lawyers have today (30 October) written to Meta’s Instagram giving it 30 days to stop using the name Threads for their service in the UK. If it does not, Threads Software Limited will seek an injunction from the English Courts,” the company said in a press release (pdf).

The company further claimed that Meta’s lawyers have tried to buy the domain threads.app from it four times this year but were turned down each time. Meta is using threads.net, Threads Software uses threads.cloud.

Threads Software says it operates a service that “captures, transcribes, and organises all of a company’s digital messages (emails and phone calls) into one easily searchable database”.

Managing director John Yardley said in the press release: “We recognise that this is a classic ‘David and Goliath’ battle with Meta. And whilst they may think they can use whatever name they want, that does not give them the right to use the Threads brand name.”

“We want them to stop using the Threads name with immediate effect. If they do not, we will seek an injunction from the UK courts,” he added.

The irony here is of course that Meta owns some of the most-cybersquatted brands out there and is one of the most litigious enforcers of its intellectual property.

Modest pay rises for ICANN top brass

ICANN’s six top executives have been given pay raises up to 3.5%, according to resolutions passed at ICANN 78 last week.

The increases are a little ahead of US inflation but a little below the market rate if these officers were to work elsewhere, according to the resolutions.

Interestingly, interim CEO Sally Costerton is named in a pay-rise resolution for the first time, perhaps indicating she’s no longer being paid through the UK-based consulting company she owns, which has allowed ICANN to hide her compensation in its annual tax filings.

The resolution raises her “salary” by up to 3.5% for her role as senior advisor to president and SVP, Global Stakeholder Engagement, but does not mention the fact that she’s also acting CEO.

After Verisign’s sluggish year, ICANN misses funding goal by $2 million

ICANN’s fiscal 2023 revenue came in $2 million light when compared to its budget, the annual report published today shows.

The Org blamed lower-than-expected transaction fees for the shortfall, suggesting the domain industry wasn’t quite as buoyant as its accountants had hoped.

Funding for the year came in at $150 million against a budgeted target of $152 million.

The period covered is July 1, 2022 to June 30, 2023, a period in which Verisign — ICANN’s biggest contributor by some margin — repeatedly lowered its revenue estimates from .com and .net sales.

This is not a coincidence. The two outfits’ fates are intertwined. Verisign funded ICANN to the tune of $49.7 million from its legacy gTLD business in FY23, up only slightly from $49.5 million in FY22.

Overall, ICANN said that its revenue from registry transactions was $60 million versus its budget estimate of $62 million, and that registrar transactions revenue was $39 million versus its $41 million estimate.

Other registrar fees and registry fixed fees seem to have come in a bit ahead of budget, and rounding accounts for the fact that the numbers don’t make prima facie sense.

ICANN said its expenses for the year came in $10 million lower than expected, at $142 million, due to lower professional services and personnel costs. Its travel expenses were $2 million more than expected, it seems due to the Washington DC meeting being more expensive than planned.

Russia cuts off ICANN funding after pro-Ukraine stance

Russia did not pay its usual annual tribute to ICANN in the Org’s fiscal 2023, newly published funding data reveals.

Coordination Center for TLD RU usually funnels $50,000 a year into ICANN’s budget, but that was reduced to nothing in the year to June 30, 2023, according to ICANN’s FY23 annual report, published today.

While it could of course be a coincidence, I rather suspect it’s retaliation for ICANN’s overt support for Ukraine following Russia’s invasion last year.

ccTLD.ru counts the Russian Ministry of Communications and Mass Media as one of its “founding members”.

ICANN donated $1 million to the Emergency Telecommunications Cluster, a relief organization, to support Ukrainians affected by the war, and gave the Ukrainian government a platform to denounce the war at a public meeting.

Later last year, ICANN also lobbied against the Russian candidate for ITU secretary general.

The .ru registry was not the only ccTLD operator to slash funding in FY23.

Belgium already said it would cut its donation from $75,000 to $25,000 in protest at “mission creep” and perceived failures to deal with privacy regulations, and the annual report shows it made good on its threat.

But it seems to have been joined by the Netherlands and Denmark, which cut their contributions respectively by $45,000 to $180,000 and by $30,800 to $30,000. Slovenia halved its donation to $5,000.

Overall, ccTLD contributions were down $176,535 to $2,214,240.

ICANN’s bean-counters probably won’t be losing any sleep over the decline; the Org’s overall funding was $150 million in the year.

Palage’s epic rant as he asks ICANN to cancel Verisign’s .net contract

ICANN is devolving into a trade association hiding under a thinning veneer of multistakeholderism and the domain industry is becoming a cartel.

Those are two of the conclusions reached by consultant Michael Palage, who’s been involved with ICANN since pretty much the start, in an epic Request for Reconsideration in which he asks the Org to unsign Verisign’s recently renewed .net registry contract.

ICANN’s equally intriguing response — denying, of course, Palage’s request — also raises worrying questions about how much power ICANN’s lawyers have over its board of directors.

The RfR paints a picture of a relationship where Verisign receives special privileges — such as exemptions from certain fees and obligations — in exchange for paying higher fees — contributing $55 million of ICANN’s budget — some of which is accounted for quite opaquely.

Palage claims the domain industry of being “on the precipice of becoming a cartel” due to recent consolidation, and says that is being enabled by ICANN’s failure to conduct an economic study of the market.

Verisign’s .net and .com contracts are the only registry agreements that do not oblige the registry to participate in economic studies, Palage says, reducing ICANN’s ability, per its bylaws, “to promote and sustain a competitive environment in the DNS market.”

Palage writes:

The failure of ICANN to have the contractual authority to undertake a full economic study to ensure a “competitive environment in the DNS market” undermines one of its core values. This failure is resulting in a growing consolidation within the industry which is on the precipice of becoming a cartel. ne needs to look no further than four US-based companies, Verisign, PIR, GoDaddy, and Identity Digital which currently control almost the entirety of the gTLD registry market based on domain names under management. This unchecked consolidation within the industry directly and materially impacts the ability of individual consultants to make a livelihood unless working for one of the dominant market players.

While Palage says he and other registrants are being harmed by increasing .net prices, and that an economic study would help lower them, he also asks ICANN to get Verisign to migrate to the Base Registry Agreement, which would enable Verisign to raise prices at will, without the current 10%-a-year cap.

He’s also concerned that ICANN’s volunteer community is shrinking as the domain industry becomes an increasingly dominant percentage of public meeting attendance.

Figures published by ICANN show that, at the last count, 39% of attendees were from the domain industry. ICANN stopped breaking down attendee allegiance in 2020 during the pandemic and did not resume publication of this data afterwards.

“ICANN has started down the slippery slope of becoming a trade association,” Palage writes.

While his RfR was going through the process of being considered by ICANN and its Board Accountability Mechanisms Committee, Palage separately wrote to ICANN general counsel John Jeffrey to express concerns that ICANN policy-making might be risking falling foul of antitrust law.

It seems a recent meeting of the working group discussing updates to ICANN’s Transfers Policy debated whether to cap the amount registries are allowed to charge registrars for bulk transfers. Dollar amounts were discussed.

Palage suggested ICANN might want to develop a formal antitrust policy statement that could be referred to whenever ICANN policy-makers meet, in much the same way as its Expected Standards of Behavior are deployed.

If the RfR as published by ICANN lacks some coherence, it may be because ICANN’s lawyers have redacted huge chunks of text as “privileged and confidential”. That’s something that hardly ever happens in RfRs.

It seems Palage knows some things about the .net contract and Verisign’s relationship with ICANN from his term on the ICANN board, which ran from April 2003 to April 2006, a time when Verisign and ICANN were basically at war.

Because the information Palage is privy to is still considered privileged by ICANN, it was redacted not only from the published version of the RfR but also it seems from the version supplied to the BAMC for consideration.

ICANN cited this part of its bylaws to justify the redactions:

The Board Accountability Mechanisms Committee shall act on a Reconsideration Request on the basis of the public written record, including information submitted by the Requestor, by the ICANN Staff, and by any third party.

Reading between the lines, it seems most of the redactions likely refer to the Verisign v ICANN lawsuit of 2004-2005.

Fellow greybeards will recall that Verisign sued ICANN for blocking its Site Finder service, which put a wildcard in the .com zone and essentially parked and monetized all unregistered domains while destabilizing software that relied on NXDOMAIN replies.

The October 2005 settlement (pdf) forced Verisign to acknowledge ICANN as king of the internet. In exchange, it got to keep .com forever. The deal gave Verisign financial security and ICANN legitimacy and was probably the most important of ICANN’s foundational documents before the IANA transition.

So what did the board of 2005 know that’s apparently too sensitive for the board of 2023? Dunno. I asked Palage if he’d be willing to share and he politely declined.

In any event, his RfR (pdf), which among other things asked for ICANN to reopen .net contract negotiations, was dismissed summarily (pdf) by BAMC last week on the grounds that he had not sufficiently shown how he was injured by ICANN’s actions.

Papac named interim ICANN Ombudsman

ICANN has appointed Krista Papac as interim Ombudsman, following the resignation of Herb Waye earlier this year.

Papac is currently the Org’s complaints officer, a similar role to that of the Ombudsman.

The move means that an ICANN staffer is taking the structurally independent role for the first time.

ICANN chair Tripti Sinha blogged that Papac will now report directly to the board “to ensure that the confidentiality and independence of the Ombudsman Office are maintained”, but it isn’t clear whether she will also continue to report to the usual staff chain of command in her complaints officer role.

The appointment was evidently made by the board at its September 10 retreat but was not disclosed at the time. Waye resigned in July and his last day is September 30.

The board is looking for a permanent replacement for Waye via a search committee formed two weeks ago. If the hunt is anywhere near as long-winded as the CEO search, now in its ninth month, Papac could be enjoying her new gig for some time.

Single/plural gTLD combos to be UNBANNED

It’s looking like ICANN won’t ban companies from applying for plural versions of existing singular gTLDs, and vice-versa, after all.

Among the pieces of the GNSO’s new gTLD policy advice ICANN’s board of directors rejected at the weekend was a proposal to essentially ban potentially confusing singular/plural combos coexisting in the DNS.

The board threw out the advice because it reckons ICANN would be put in a position where it would have to police internet content, which is outside its mission and something it is very averse to.

The recommendations would have prevented two strings existing in the DNS if one was the plural of the other, but only if they were in the same language and had the same intended usage.

The example the GNSO gave was applications for .spring and .springs — if both were intended for English-language sites related to bouncy metal coils, they would be deemed confusingly similar and only one would be allowed to exist. But if .spring was intended to relate to the season, both would be permitted to coexist.

But ICANN is uncomfortable with this because no matter what an applicant says in its application about intended language and intended use, without some post-delegation policing actual use may vary.

“Though a gTLD applicant can arbitrarily set the language of a TLD during an application round, a registrant and end-user can only see
the script of the TLD string in its practical usage. So the singular/plural determination by the gTLD applicant does not carry
onward to the registrant and end user,” the board wrote.

“Restricting the use and potentially the content of strings registered in TLDs based on the intended use therefore raises concerns for the Board in light of ICANN’s Bylaws Section 1.1 (c),” it said, referring to the part of its bylaws that says it is not allowed to regulate internet content.

So it seems likely that plural/singular clashes are probably going to be permitted in future new gTLD round after all.

This, of course, reopens the business model of a lazy applicant going after the singular/plural of an existing registry’s string and piggybacking on its installed user base or marketing budget.

ICANN rejects a whole bunch of new gTLD policy stuff

ICANN has delivered some bad news for dot-brands, applicants from poorer countries, and others, at the weekend rejecting several items of new gTLD policy advice that the community spent years cooking up.

The board of directors on Sunday approved a scorecard of determinations, including the rejection (or non-adoption) of seven GNSO recommendations that it deems “would not be in the best interests of the ICANN community or ICANN”.

In reality, it’s the latter that seems to have been foremost in the board’s mind; most of the rejections appear to be geared toward reducing ICANN Org’s legal or financial exposure.

Notably, dot-brands are denied some of the relief from cumbersome or expensive requirements that the GNSO had wanted rid of.

The board rejected a recommendation that would exempt them from the Continued Operations Instrument — a financial bond used to pay an Emergency Back-End Registry Operator should the applicant go out of business.

“[T]he Board is concerned that an exemption from an COI for Spec 9 applications would have financial impact on ICANN since there would be no fund to draw from if such a registry went into EBERO,” the board wrote.

It also rejected a request to exempt dot-brands from rules requiring them to contractually ban and monitor abuse in their TLDs. The GNSO had argued that single-registrant TLDs do not suffer abuse, but the board said this could lead to abuse from compromised domains going unaddressed.

“The Board concludes that Recommendation 9.2, if implemented, could lead to DNS abuse for second-level registrations in a single-registrant TLD going unaddressed, unobserved, and unmitigated,” it said.

Applicants hoping to benefit from the Applicant Support Program — which in 2012 offered heavily discounted application fees to poorer applicants — also got some bad news.

The GNSO wants the support to extend to other costs such as application-writing services and lawyers, which naturally enough put the frighteners on the board, which noted “such expansion of support could raise the possibility of inappropriate use of resources (e.g. inflated expenses, private benefit concerns, and other legal or regulatory concerns)”.

The board also rejected a couple of recommendations that could be seen as weakening its role as ultimate authority over all things gTLD.

It rejected a proposal to remove the controversial covenant not to sue (CNTS) from the application process unless other recommendations related to appeals processes are implemented.

ICANN said that because it has not yet approved these other recommendations, it has rejected this recommendation.

The board also rejected a recommendation that would have limited its ability to reject a gTLD application to only when permitted to do so by the rules set out in the Applicant Guidebook.

The idea was to prevent applications being arbitrarily rejected, but the board said this “may unduly limit ICANN’s discretion to reject an application in yet-to-be-identified future circumstance(s)”.

The rejections invoke part of the ICANN bylaws that now requires the GNSO Council to convene and either affirm or amend its recommendations before discussing them with the board. Presumably this could happen at ICANN 78 next month.

The bylaws process essentially gives the board the ultimately authority to throw out the GNSO recommendations if it can muster up a two-thirds supermajority vote, something it rarely has a problem achieving.

Buckridge to replace Shears on ICANN board

Chris Buckridge will replace Matthew Shears on ICANN’s board of directors next month.

The Non-Contracted Parties House of ICANN, their arses burned by an August 18 finger-wagging from ICANN chair Tripti Sinha, somehow managed to narrow down a slate of four candidates to just one by Sinha’s end-of-month deadline, despite seeming to be at a very early stage of the election process just last week.

Buckridge will fill seat 14, reserved for a member of the NCPH and one of two GNSO-picked seats.

He was one of the preferred candidates of the Non-Commercial Stakeholders Group, which along with the Commercial Stakeholders Group makes up the NCPH.

The CSG had rejected the NCSG’s original preference to reappoint Shears, who joined the board in 2017, for a third and final term.

Buckridge comes from the Regional Internet Registry world. He was with RIPE NCC from 2006 until this June in a variety of external relations roles, dealing with European governments and regulators, which seems like a pretty good qualification for an ICANN directorship.

Sinha had written to the NCPH leaders last month to complain that they had failed to pick a director, missing an April deadline, and demanded they name a name before the end of August.