XYZ to put global block on domains banned in China

XYZ.com plans to slap a global ban on domain names censored by the Chinese government.
Chinese words meaning things such as “human rights” and “democracy” are believed to be on the block list, which an industry source says could contain as many as 40,000 words, names and phrases.
(UPDATE: Gavin Brown, CTO of XYZ back-end CentralNic, tweeted that the list is nowhere near 40,000 names long.)
The registry seems to be planning to allow the Chinese government to censor its new gTLDs, which include .xyz, .college, .rent, .protection and .security, in every country of the world.
And it might not be the last non-Chinese registry to implement such a ban.
The surprising revelation came in a fresh Registry Services Evaluation Process request (pdf), filed with ICANN on Friday.
The RSEP asks ICANN to approve the use of a gateway service on the Chinese mainland, which the company says it needs in order to comply with Chinese law.
As previously reported, Chinese citizens are allowed to register domains in non-Chinese registries, but they may not activate them unless the registry complies with the law.
That law requires the registry to be located on the Chinese mainland. XYZ plans to comply by hiring local player ZDNS to proxy its EPP systems and mirror its Whois.
But the Chinese government also bans certain strings — which I gather are mostly but not exclusively in Chinese script — from being registered in domain names.
Rather than block them at the ZDNS proxy, where only Chinese users would be affected, XYZ has decided to ban them internationally.
Registrants in North America or Europe, for example, will not be able to register domains that are banned in China. XYZ said in its RSEP:

XYZ will reserve names prohibited for registration by the Chinese government at the registry level internationally, so the Gateway itself will not need to be used to block the registration of of any names. Therefore, a registrant in China will be able to register the same domain names as anyone else in the world.

It seems that XYZ plans to keep its banned domain list updated as China adds more strings to its own list, which I gather it does regularly.
Customers outside of China who have already registered banned domains will not be affected, XYZ says.
If China subsequently bans more strings, international customers who already own matching domains will also not be affected, it says.
CEO Daniel Negari told DI: “To be clear, we will not be taking action against names registered outside of China based on Chinese government requests.”
But Chinese registrants do face the prospect losing their domains, if China subsequently bans the words and XYZ receives a complaint from Chinese authorities.
“We treat requests from the Chinese government just like we treat requests from the US government or any other government,” Negari said.
“When we receive a valid government or court order to take action against a name and the government has jurisdiction over the registration, we will take action the registration,” he said.
Up to a third of the .xyz zone — about three hundred thousand names — is believed to be owned by Chinese registrants who are currently unable to actually use their names.
The company clearly has compelling business reasons to comply with Chinese law.
But is giving the Chinese government the ongoing right to ban tens of thousands of domain names internationally a step too far?
ICANN allows anyone to file public comments on RSEP requests. I expect we’ll see a few this time.

Vox Pop denies links to free .sucks company

Vox Populi, the .sucks gTLD registry, has told DI that it is not involved with This.sucks, the company offering free .sucks domains, after evidence to the contrary was discovered.
Meanwhile, the president of ICANN’s intellectual property constituency says he’s concerned that the registry may be using This.sucks to try to misrepresent its prices.
This.sucks, as reported yesterday, is currently in pre-launch. It has said it plans to give away up to 10,000 .sucks domains to customers who want to run blog/forum sites commenting on companies, products and other general issues.
Its standard pricing would be $1 per month, a massive discount on the regular $200+ annual registry fee, which would require it to make substantial additional revenue to cover its costs.
That’s assuming it is really an independent company, of course.
Some people think it’s just a front for Vox Pop, and there are compelling reasons to believe they’re correct.
Rob Hall paid for the web site
The most compelling piece of evidence, for me, is that somebody called Robert Hall paid for design of the This.sucks web site.
The one-page launch site was created by a designer responding to an ad on the crowdsourcing web site DesignCrowd.
The title of the solicitation page is “Modern, Bold Web design job. Web brief for Robert Hall, a company in Turks and Caicos Islands”.
Rob Hall is the CEO of Momentous, the company that founded Vox Pop and as far as I know still owns most of it.
He’s the technical contact for .sucks in the IANA database, albeit with a Barbados, rather than Turks and Caicos, address.
The DesignCrowd contest seems to have been submitted around August 26 this year, two days before This.sucks existed as a legal entity in New York state.
Hall seems to have paid $370 for the winning design and $10 to five runners-up.
The site is/was hosted on Vox Pop’s server
Another compelling link between Vox Pop and This.sucks is the server on which their respective domains are hosted — it’s the same box.
According to DomainTools, this.sucks is hosted on a server with just 16 other domains. Four of those — everything.sucks and that.sucks, as well as sister sites this.rocks and that.rocks — belong to This.sucks Inc.
The remaining 12 domains — including buy.sucks, register.sucks, search.sucks — are all .sucks promotional sites owned and operated by Vox Populi.

Berard told DI in an email that Vox Pop has never hosted This.sucks sites:

I suspect that in doing the deal for the premium domain names they wanted, some remained pointed at one of our forwarding servers to which they were first assigned. But, as with the other names they have registered, that will sort itself out over time. We have never hosted their website.

It’s true that DomainTools warns that domains may still be listed for up to two weeks after they have been removed from an IP address.
But I don’t think Vox Pop’s explanation explains how this.rocks and that.rocks wound up listed as hosted on the same IP address as the .sucks domains.
The .rocks gTLD is run by Rightside, not Vox Pop, so I can’t see an obvious reason why they started out pointing to a Vox Pop box.
I asked Berard for clarification on this point but have yet to receive a reply. A This.sucks spokesperson has not responded to an inquiry about the apparently shared hosting.
Caymans link
It also turns out that somebody formed a Cayman Islands company called This.sucks Ltd on August 25 this year, three days before the New York-based This.sucks Inc was registered.
The Cayman company’s registered address is the Georgetown PO Box number for Cayman Law Group Ltd, a boutique law firm with a half-finished web site.
That’s the same address Vox Populi gave ICANN (pdf) when it transferred its Registry Agreement from its original Canadian corporate entity to a Cayman-based one this March.
As far as ICANN is concerned, Vox Pop’s legal address is the same address as the new This.sucks Ltd entity.
The New York entity’s official address is a PO Box at a strip-mall UPS store in small-town New York state.
It might be interesting, but probably not relevant, to note that Cayman Law’s domain name is owned, according to Whois, by a domainer who lost one of the first “-sucks.com” UDRP cases, back in 2003.
I asked Berard if Vox Pop had any links to the Cayman company but have not yet received a reply.
Everything.sucks
This.sucks has the same business model as was proposed by Vox Populi under its “Consumer Advocate Subsidy” program, which it proposed at the start of the year.
The company had planned to find an independent partner that would subsidize .sucks registrations in cases where the registrant was a genuine third-party critic (rather than the company itself).
The price was to be around $10 a year, the domains would be tied to a hosted forum service, and the name of the service would be Everything.sucks.
That domain, as I reported yesterday, now belongs to This.sucks Inc.
But Berard said This.sucks is not the Consumer Advocate Subsidy, for which a partner has not yet been found. He said:

This is not the consumer subsidy program we have hoped to foster with a non-profit, but it certainly is in keeping with the spirit of our effort. An effort, I must note, that continues. Somethings are harder to do than we’d like!

Why does this matter?
Whether This.sucks is a cloaked registry effort is important to intellectual property interests, which have claimed that subsidized .sucks prices are part of a “shakedown scheme” targeting trademark owners.
The IPC has long suspected that Everything.sucks was just going to be a case of Vox Pop hiding a registry service in a supposedly, but not actually, independent third-party company.
Brand owners that want to register their brand.sucks domain often have to pay over $2,000 a year, but the proposed subsidy would bring that price down to $10 as long as the registrant was not the trademark owner.
IPC president Greg Shatan told DI yesterday:

Any inkling that Vox Pop and This.sucks were linked and pretending not to be, and actively denying it, would be of great concern, not just to the IPC but to the ICANN community at large. It’s all highly suspicious. It’s very hard to believe that it is what they are claiming it is.
…
The concern centers on an apparent attempt to misrepresent their pricing and hide how much Vox Pop is actually being paid by brand owners vs. other registrants for domain registrations.
Any plans to monetize this.sucks sites would also be of considerable interest. The non-commercial nature of “sucks” sites (generically speaking) is often cited in response to cybersquatting concerns. I’m not sure how this would change that equation.

Back in March, as .sucks was getting ready to launch, the IPC wrote to ICANN to say Vox Pop was trying to “conspire with an (alleged) third party to ‘subsidize’ a complaint site should brand owners fail to cooperate in Vox Populi’s shakedown scheme”.
The IPC wrote (pdf):

Through this “subsidy,” Vox Populi effectively shows brand owners that, if they fail to register at an exorbitant price, a third party will be able to register for a pittance. This is an essential element of Vox Populi’s coercive scheme.

The IPC also claimed that the proposed subsidy would count as a “registry service” under the terms of Vox Pop’s contract and would therefore need approval by ICANN.
Berard told DI on Thursday, quite unambiguously, that This.sucks is “not a registry service”.
If This.sucks isn’t being financially supported by Vox Pop, it’s going to have to find a lot of revenue.
With a $199 basic registry fee, a 10,000-domain giveaway would cost almost $2 million.
Given that This.sucks is actively courting registrants of brand names — many of which are likely to appear on Vox Pop’s premium list — the cost could be literally 10 times as much.
Vox Pop has made it clear that it’s a subsidy, not a registry discount.
In a July blog post addressing perceived inaccuracies in the media coverage of .sucks, Berard wrote:

Whether a registration is subsidized, the price to the registrar and registry is unaffected. That is the nature of a subsidy. Neither is the program to be offered by the registry. We are talking to a number of free speech advocates and domain name companies to find the right partner.
When we do, likely sometime in the Fall, we will make sure that the information is clear and available so that, well, you can look it up.

(Thanks to George Kirikos for the tip about the existence of the Cayman company)

First dot-brand gTLD calls it quits

The South Korean industrial conglomerate Doosan has decided to formally abandon its new dot-brand gTLD, the first to do so.
The news was announced by ICANN this evening, as part of the launch of a new web page for tracking gTLD contract termination requests.
Doosan is a bloody big company with multiple billions of annual revenue, in no danger of going out of business any time soon, so it seems the termination is simply due to a lack of interest.
The .doosan gTLD is not subject to the dot-brand provisions in Specification 13 — it actually signed its contract a week or so before Spec 13 was finalized — but ICANN has determined that the string should not be transitioned to a new registry.
Intellectual property rights and the fact that nobody else owns any .doosan names figured heavily in the decision.
Even though Doosan signed its Registry Agreement in April 2014, got delegated a year ago, and has been available to use since mid-March, the company never created any domains other than the obligatory nic.doosan (which no longer resolves for me).
The termination is subject to public comment until November 9.

Company to offer .sucks domains at .com prices

A new company says it is going to sell .sucks domain names, which usually retail for around $250, for as little as $12 a year.
This.sucks Inc, which says it is not affiliated with the registry, is even planning to give away 10,000 names for free.
That’s a hell of a cost to cover — the .sucks registry fee is $199 for most names or $1,999 for names, including brands, that have been marked as premium.
A 10,000-name giveaway would cost close to $2 million per year, in other words.
But This.sucks isn’t a registrar. Instead, it wants to tie its customers in to its forum and blogging platform, which will be monetized in some way.
Spokesperson Phil Armstrong told us “our plan is to create new revenue streams from different sources, including possibly advertising.” He said:

Our goal is to build a business around giving consumers affordable and easy access to these expressive web addresses, and we’ll work with different registrars to get the best price. We think we can create a large, sustainable community that over time will generate income well above the initial costs of the registrations.

There are good reasons to believe that the company is in fact the “Consumer Advocate Subsidy” provider that .sucks registry Vox Populi promised would be launching in September.
Vox Pop said in March that the subsidizing entity — which would be an unaffiliated company — would offer .sucks domains with attached forum sites for around $10 a year.
The proposed name of the service was “Everything.sucks” — a domain now owned by This.sucks Inc that redirects to this.sucks.
But Vox Pop CEO John Berard said that This.sucks was “just another registrant” and that it was “not a registry service”.
Armstrong said: “We are not related to anything Vox Populi is doing. Not sure what they are up to, but hopefully they’ll be excited about what we are doing.”
The company’s mailing address appears to be a UPS store at a small strip mall in New York state.
The this.sucks service is currently in invitation-only beta testing “for individuals with a passion”.
There’s a sister site with a virtually identical design and mission statement at this.rocks.
In a fact sheet, This.sucks says:

At both This.Rocks and This.Sucks consumers will be able to pick the name of companies, products, people and causes they want to be the focus of the commentary and conversation. With the web address of their choosing, they will be able to moderate a blog or forum to talk about the issues, initiatives and interests that stir their passions.
The goal is to encourage individual consumers to give voice to their points-­of-­view and make it easy for like­‐minded people to join the conversation, much like Reddit for general topics, Slash/Dot for technology, CafePharma in the ethical drug industry, and Glassdoor for job seekers and employers.

Viking victor in .cruise gTLD auction

Viking River Cruises has emerged as the winner of the .cruise new gTLD contention set.
It seems to have beaten Cruise Lines International Association, which has withdrawn the only competing application, in an auction.
Both applicants originally proposed a single-registrant model, in which only the registry could own domains, but changed their plans after ICANN adopted Governmental Advisory Committee advice against so-called “closed generic” gTLDs.
There was controversy in July when CLIA claimed Viking had waited too long to change its proposed registration policies.
The group accused Viking of deliberately delaying the contention set.
ICANN, however, rejected its argument, saying applicants can submit change requests at any time.
Viking’s updated application seems to envisage something along the lines of .travel, where registration is limited to credentialed industry members, defined as:

Applicant and its Affiliates, agents, network providers and others involved in the delivery of cruise-related services, including without limitation: companies that hold a license from a governmental or regulatory body to offer cruise services, companies that provide services or equipment to cruise providers, as well as consultants, resellers, engineers, etc., working with the cruise industry.

Viking is already the registry for its dot-brand, .viking.

Uniregistry will stick with risky .hiv model for now

Uniregistry has agreed to take over the new gTLD .hiv from original registry dotHIV, and said it has no plans to immediately change the business model.
“We are going to maintain the status quo, at least at the start,” said Uniregistry general counsel Bret Fausett. “We will give it a year or so on our platform and then evaluate it.”
dotHIV launched last year with what I then described as “one of the strangest and riskiest business models of any new gTLD to date.”
It’s a not-for-profit TLD with an optional “Click-Counter” service that makes microdonations, pulled from reg fees, to HIV/AIDS charities whenever somebody visits a .hiv web site.
The idea hasn’t really caught on.
When dotHIV put its ICANN contract up for auction in April it had only 345 fee-paying registrations and total revenue was $83,000.
The auction, which made it plain that the buyer would not be allowed to make a profit, failed to meet the $200,000 reserve.
Uniregistry said in a press release that while it is a for-profit company, it will continue to run .hiv as a “social enterprise”.
Fausett said the gTLD’s numbers could go up once it’s on Uniregistry’s platform.
“We think this will get a natural bump when it moves to our registrar channel,” he said. “We have over 175 registrars on our platform, which is 4x the current .HIV distribution channel.”

M+M lays off dozens in focus on S&M, promises profit next year

Minds + Machines has outlined its plan to refocus its business on sales and marketing, which has already resulted in a couple dozen job losses, as the latest stage of its profit runway.
The new gTLD company also outlined plans to return about half of its cash reserves — mostly obtained by losing new gTLD auctions — to its shareholders.
For the first half of the year, the London-listed company reported an EBITDA loss of $1.2 million, compared to income of $5.7 million a year earlier, on revenue that was up to $3.6 million from $113,000 in the comparable 2014 period.
The company said it is “committed to achieving its stated goal of crossing over into profitability in 2016” and blamed high operating costs for the loss, but said it has been restructuring to help it return to profit.
M+M said its headcount has been reduced from 58 to 44, but that it has added ten jobs in sales and marketing, which seems to indicate at least 24 people recently lost their jobs.
The bottom line was also affected by the fact that most of the company’s cashflow to date has been generated by auction losses, and there were more of those last year than this.
The company hit three of its six “key performance indicator” targets — domains under management market share, premium sales growth and standard sales growth — but fell short of the other three.
Average revenue per name for premiums was $184 versus a $200-$225 target, and average revenue per standard name was down from $28 to $10, largely due to a deep discount promotion for .work domains. Higher prices for soon-to-launch .law could increase the average, M+M said.
The company also announced that it will spent £15 million ($23.1 million) of its cash reserves on a share buyback.
That’s almost half of the $48.3 million is has in the bank. This time last year, M+M’s share price peaked at 12p; it’s currently at 8.55p.
The price saw a spike in May, shortly before then-chairman Fred Krueger was asked to resign by the board. Krueger has since sold off the majority of his substantial shareholding, despite explicitly saying that he would not.

Apple using apple.news as (yawn) redirect service

Apple has become the latest famous brand to deploy a new gTLD domain in the wild.
The domain apple.news has been observed this week being used as a URL redirection service by its Apple News app.
It seems that when somebody shares a link to a news site via social media, using Apple News, the app automatically shares an apple.news redirect link instead.
The domains apple.news and www.apple.news do not resolve to web sites (for me at least) but Google has already indexed over a thousand apple.news URLs. Clicking on these links transparently punts the surfer to the original news source.
UPDATE: Thanks to Gavin Brown for pointing out in the comments that apple.news does resolve if you specify “https://” rather than “http://” in the URL. The secured domain bounces visitors to apple.com/news.
It puts me in mind of .co’s original flagship anchor tenant, Twitter, which obtained t.co five years ago and continues to use it as its core URL redirection service.
It’s impossible to tell what impact t.co had on the success of .co — the domain was in use from .co’s launch — but it surely had some impact.
.news, a Rightside TLD, had just over 24,400 domains in its zone file yesterday. We’ll have to see whether Apple’s move has an impact on sales.
Taryn Naidu, Rightside’s CEO, said in a press release:

This is just the start, but Apple.NEWS is the most significant use of a new top-level domain (TLD) yet, and I am very excited at the promise and potential that this development signals. Whether they’re used as a complementary domain, content-sharing links (bit.ly, but with branding) or a simple re-direct, new domain extensions have a real and important place in every company’s overarching brand strategy today.

There’s no denying that having popular software automatically generating links for your gTLD is a great way to raise awareness.
But is this as significant as Apple actually launching a web site at apple.news, or switching from .com to .apple, and encouraging people with marketing and branding to actually type those domains into their browsers? I’m skeptical.

New gTLDs growing faster than .com, latest Verisign data shows

New gTLDs grew faster than .com in the last 12 months.
That seems to be one of the conclusions that can be drawn from Verisign’s Q2 Domain Name Industry Brief, which was published (pdf) yesterday, if you dig into the numbers a little.
The headline number is that the number of all domains across all TLDs was 296 million, up sequentially by 2.2 million domains. That’s annual growth of 16.4 million domains, Verisign said.
I thought it might be interesting to see where that growth came from, so I plugged the numbers from Verisign’s last five DNIB reports into a spreadsheet, reproduced in this table.
[table id=35 /]
From these numbers, we can calculate the quarterly sequential growth, measured in domains, for the whole DNS, for .com, for new gTLDs and for ccTLDs.
That table looks like this:
[table id=37 /]
It appears from this table that .com grew by more domains than new gTLDs over the last year — 4.8 million versus 4.36 million — but the numbers are a bit misleading due to the way Verisign sources its data.
For most ccTLDs, Verisign has always used the third-party research outfit ZookNic, which has its own way of estimating registration volumes.
For new gTLDs, Verisign uses the zone files as published daily by ICANN — the same source DI and others use to measure volume.
However, for .com Verisign uses its own in-house data source. It is, after all, the .com registry.
The numbers for .com you find in the DNIB reports are exactly the same as the numbers Verisign gives financial analysts and investors when it reports its quarterly earnings.
And the company changed the way it reports those numbers in Q1 this year.
See that unusually high addition of 2.2 million names in .com in Q1 in the above table? That reflects the addition of very nearly 750,000 hidden .com names in March this year.
At that time, Verisign started counting domains that are on “hold” statuses, largely due to new ICANN policies on unverified Whois information.
The last two DNIB reports have sourced .com numbers with this disclosure:

The domain name base is the active zone plus the number of domain names that are registered but not configured for use in the respective Top-Level Domain zone file plus the number of domain names that are in a client or server hold status.

The actual Q1 growth number for .com should in the 1.4 million to 1.5 million range, which would bring .com’s total growth over the last four quarters down to roughly 4.1 million names.
An apples-to-apples comparison of extant zone-file domain growth would show new gTLDs beating .com, in other words.
But is this a fair measure of demand?
No. It’s fairer to say that .com still outsells its competition by a long way.
New gTLDs had yet to experience any significant churn by Q2 this year, as most had been on the market for under a year, so the growth numbers are more or less untempered by the renewal cycle.
While Verisign’s .com growth is net, for new gTLDs it’s almost all gross.
Verisign says in the latest DNIB has it had 8.7 million new registrations across .com and .net in the second quarter, which would be roughly eight times as many as new gTLDs — all several hundred of them combined — managed to move.

XYZ to rethink China gateway plans

XYZ.com has withdrawn its request to start selling .xyz and .college domains into China via a local gateway service provider.
The company has said it will amend and resubmit its plan to ICANN, which had told it the idea “might raise significant Stability or Security issues”.
The registry wants to be one of the first non-Chinese registries to be able to comply with government regulations, which require all domain firms to have an official license.
As we reported last week, it had signed up with local registrar ZDNS, which would proxy for registrations made by Chinese registrants.
However, it has now withdrawn its Registry Services Evaluation Process request after ICANN said it would have to refer it up the chain to a special technical committee for review.
XYZ said in a letter to ICANN:

We are withdrawing this request because our gateway model is changed since the submission of the registry request and so the request is no longer accurate. We will shortly submit a new registry request to cover the updated gateway model.

It’s not clear what the specific “security and stability” concerns were.