Huge registrar shake-up coming to .biz and .info

Afilias and Neustar will be soon able to sell .biz and .info domains direct, and may have to shut down registrars that refuse to sign up to the new 2013 Registrar Accreditation Agreement.
Those are two of the biggest changes proposed to the companies’ ICANN contracts, drafts of which were published this morning six months after their last registry agreements expired.
The new .biz and .info deals would allow both companies to vertically integrate — that is, own a controlling position in a registrar that sells domains in their respective gTLDs.
This would remove unwanted friction from their sales and marketing efforts, but would mean both registries would start competing with their own registrar channel in the retail market.
That’s currently not allowed in almost all gTLD contracts, but is expected to become commonplace in the era of new gTLDs, which have no such ownership restrictions.
These new vertical integration clauses were not unexpected; it’s been envisaged for a couple of years that the restrictions would be dropped in legacy gTLDs.
What is surprising are newly proposed clauses that would oblige Neustar and Afilias to terminate accredited registrars’ access to their TLDs if they don’t sign up to the 2013 RAA.
Under the process set out in the contracts, when registrars representing 67% of the domains in each given TLD have signed up to the 2013 RAA, all the other registrars would have between 270 and 330 days to also sign up to it or lose their ability to access the .biz/.info registries.
That would mean no selling new names and no accepting inbound transfers — a growth death sentence in the affected TLDs.
In the case of .info, in which Go Daddy has a 45% market share, it would only take the top four registrars to sign up to the 2013 RAA before the clock started ticking for the others.
However, this 67% rule would only kick in for Afilias and Neustar if Public Interest Registry and Verisign also voluntarily agree to the same rules for their .org, .com and .net gTLDs.
It’s a pretty aggressive move by ICANN to push the 2013 RAA onto registrars via its contracts with registries, but not the first.
In the separately proposed base New gTLD Registry Agreement, expected to be finalized in the next few weeks, registrars can only sell new gTLD domains if they’re on the 2013 RAA.
Other changes to the .biz and .info contracts include giving the registries the ability to block certain domains from registration to deal with security threats. Registries have been doing this since Conficker, but now they’ll be explicitly allowed to under their contracts.
They’ll also now be subject to the same emergency back-end transition provisions as new gTLDs, in the event of a catastrophic failure.
Both companies will also get to keep their ability to raise registry fees by 10% a year.
Presumably, given that the US Department of Commerce is not party to the .biz and .info deals, neither registry will get the same nasty surprise that Verisign got last year when Commerce froze its prices.
Both proposed contracts are now open for public comment at ICANN, here and here.
The previous contracts actually expired last December but were extended for six months due to ICANN’s focus on new gTLDs and the fact that it wanted to bring both agreements closer to the new gTLD contract.

Uncontested .catalonia drops out of gTLD race

The regional Government of Catalonia has withdrawn its application for .catalonia.
This is a bit of a weird one.
The application was designated officially “geographic”, but also presented as a single-registrant “dot-brand”, exclusively for the government’s use in promoting tourism.
It wasn’t contested, had no objections and was not covered by Governmental Advisory Committee advice.
Residents of Catalonia, a region of Spain, are of course already served by the .cat TLD, which served as the model for a multitude of regional and cultural gTLD applications.

TLDH bags $10m in share sale

Top Level Domain Holdings has raised roughly $10 million by selling shares to institutional investors and directors.
The company, listed on the Alternative Investment Market in London, said today it has placed 110,375,276 new ordinary shares at £0.06 apiece.
The money will be used to help the company win some new gTLD contention set auctions and to promote the uncontested geo .london, which TLDH has been hired to manage.
The company is involved in 88 new gTLDs, some as applicant and some as back-end registry provider via its Minds + Machines subsidiary.
TLDH said it expects to start launching TLDs in the fourth quarter.

Directi’s t.co? Single-letter .pw sold to Upworthy

Directi has sold u.pw to social media linking service Upworthy for what is likely to be a five-figure sum.
Upworthy will use the domain for its custom link-shorteners.
It’s the third announced single-character .pw sale to be announced. The first two, w.pw and p.pw were sold to a hosting company for $8,000 each.
I expect u.pw sold for a little more, judging by the catalog of single-letter names listed on PremiumDomains.pw, which have buy-it-now prices of $10,000 to $12,000.
It’s potentially a nicer deal in terms of visibility for the recently relaunched ccTLD too.
Year-old Upworthy, which has been funded to the tune of $4 million, is a viral video site for “worthy” content, meaning its main purpose is to have its links spread far and wide.
Another recently relaunched ccTLD, had a similar — if much more high-profile — anchor tenant in Twitter, which bought t.co for its in-house URL shortening service.
At one point, single-character .co domains were said to be selling for $1.5 million a pop, which just goes to show how far a nice TLD string can impact prices.

.eu registry contract up for grabs

The European Commission has opened up the .eu registry contract to competitive bidding.
The sort-of ccTLD has been managed by EurID since it launched 2004 but its contract, which has already been extended to its maximum term, is due to expire in October next year.
Would-be usurpers must be not-for-profit organizations based in the European Union, according to a Commission RFP, which should narrow the field quite a lot.
The .eu space has 3.7 million registered domain names, growing at 5.4% a year. Considering that the TLD is open to all in the EU, the numbers fare poorly compared to many European ccTLDs.
The deadline for submissions is June 20.

ICM price cut sees 10 times more .xxx sales

ICM Registry saw 13,348 newly added .xxx domain name registrations in May, a period during which it and its registrars were offering the names at .com prices.
That’s more than 10 times the volume it shifted in January, the last month for which official numbers are available.
ICM dropped the registry fee for .xxx from $62 to $7.85 for the whole month, ostensibly (though not actually, I suspect) as part of its antitrust settlement with PornTube owner Manwin Licensing.
Registrants could register names for periods of up to 10 years at the promotional pricing, and registrants appear to have taken advantage.
The number of add-years for May was 25,733, according to ICM, an average of 1.9 years per name. That’s compared to its January rate of 1.37, when the .com average, for comparison, was 1.24.
About a quarter of the newly added names had been previously registered at full price and later allowed to drop.
The .xxx namespace now holds over 122,000 domains, still off its December 2012 peak of 142,000, according to the company.

ICANN reveals 81 passes and one failure in latest new gTLD results batch

The weekly batch of new gTLD Initial Evaluation results has just been published, revealing 81 passes and one failure — the first failure that isn’t a dot-brand.
DOTPAY SA, a Swiss company, only scored 7 out of the necessary 8 points on its financial evaluation and is therefore now categorized as “Eligible for Extended Evaluation”.
That might be bad news for the other .pay applicant, Amazon, which will now have to wait some months for extended evaluation to take place before the contention set can be resolved.
DOTPAY’s .pay bid is the fourth application to fail Initial Evaluation.
The 81 passing applications this week are (links are to DI PRO):

.salon .music .loft .creditunion .careers .polo .vip .homedepot .mrporter .sarl .observer .dance .forsale .blue .game .market .fashion .tour .iwc .george .pink .fox .spiegel .reise kinder .hoteis .nike .arab .dev .diamonds .nico .cloud .law .tickets .photography .pay .channel .java .academy .nexus zippo .plus .enterprises .goog .apartments .supplies .gmbh .krd .fan .company .wow .spot .travelers .love .joburg .exchange .basketball .directory .art .today .money .kitchen .read .jot .vodka .icu .doha .hospital .chat .theguardian .jetzt .capital .natura .camp .protection .wow .gcc .pizza .supply .amex .wed .ott

There are now 514 passing applications. We’re up to 600 in the priority number queue.

ICANN won’t say how Demand Media passed its new gTLD background check

After badgering ICANN for a few weeks, I’ve finally got a firm “no comment” on the question of how new gTLD applicant Demand Media managed to pass its background checks.
The question of whether it’s possible for serial cybersquatters to bypass ICANN screening and be awarded new gTLDs just by setting up shell companies is still open, it seems.
As DI and other blogs have been reporting for the past few years, there was a question mark over Demand Media’s eligibility for the new gTLD program due to its history of cybersquatting.
Under ICANN rules, any company that lost three or more UDRP decisions with at least one loss in the last three years would not pass its background screening. The Applicant Guidebook states:

In the absence of exceptional circumstances, applications from any entity with or including any individual with convictions or decisions of the types listed in (a) – (m) below will be automatically disqualified from the program.
…
m. has been involved in a pattern of adverse, final decisions indicating that the applicant or individual named in the application was engaged in cybersquatting as defined in the Uniform Domain Name Dispute Resolution Policy (UDRP), the Anti-Cybersquatting Consumer Protection Act (ACPA), or other equivalent legislation, or was engaged in reverse domain name hijacking under the UDRP or bad faith or reckless disregard under the ACPA or other equivalent legislation. Three or more such decisions with one occurring in the last four years will generally be considered to constitute a pattern.

Demand Media subsidiary Demand Domains has lost over 30 UDRP cases, most recently in 2011, but its United TLD Holdco subsidiary has sailed through its Initial Evaluations.
Technically, shouldn’t it have failed screening and therefore IE?
Domain Name Wire speculated in November 2010 that ICANN had deliberately introduced loopholes in order to let Demand — and, at the time, Go Daddy — into the new gTLD program.
At that time, ICANN had just removed references to “any person or entity owning (or beneficially owning) fifteen percent or more of the applicant” in the background screening section of the Guidebook.
That might have introduced a loophole allowing subsidiaries of cybersquatters to apply.
But Demand Media seemed to think it was still at risk, asking ICANN in December 2010 to change the background check rules.
ICANN did. In the next version of the Guidebook, published in April 2011, it added the “In the absence of exceptional circumstances” qualifying language.
It’s also possible that this was the loophole that allowed Demand to pass screening.
Judging by the UDRP complaints it was involved in in the past, the company usually argued against the “bad faith” element of the policy. It often said it didn’t know about the complainant’s trademark and/or said it had offered to transfer the domain at no charge.
But more than 30 UDRP panelists didn’t buy that argument and still found against Demand. The company lost far more complaints than it won.
The fact that the company apparently managed to clean its act up a few years ago — not being hit with any complaints since 2011 — suggests that its act wasn’t all that clean to begin with.
Either way, neither ICANN nor Demand wants to talk about how the company passed screening, so I guess we’re still left wondering whether this section of the Guidebook is worth the PDF it’s written on.

Private gTLD auctions really will be private

The first new gTLD auctions to be held by Innovative Auctions is set to take place on Monday, but we won’t know which applicants took part until after the fact.
Innovative, which is managing the auction process designed by Cramton Associates, told DI it might announce the participants next week, after the auctions are over.
Failing that, we’ll have to infer the winners from which applications are subsequently formally withdrawn from contention with ICANN.
The only companies to publicly announce their participation so far are Donuts and Demand Media — which as partners are obviously not in any contention sets with each other — and .Club Domains.
Donuts has previously announced that it would submit 63 applications to auction, but 17 of those probably won’t go ahead because Uniregistry, which doesn’t like the private auction idea, has declined to take part.
Demand Media’s applicant, United TLD Holdco has committed its bids for .fishing, .green, .mom, .rip and .wow to the auction. Unless Uniregistry has changed its mind, the .mom one won’t be happening.
It also seems unlikely many winning bids will be disclosed.
Under the terms designed by Cramton, if only one applicant in an auction decides it wants to keep the outcome private, the other applicants will be contractually bound to keep schtum.
Private auctions will see money flow to losing applicants, some of which will also face ICANN-managed auctions at a later date. They may not want to reveal their wedge by having their pay-off public knowledge.

Chinese geo gTLD bidder drops out of two-way fight

The Chinese government-controlled news agency Xinhua has dropped out of the race for the new gTLD .广东 — the local name of Guangdong, China’s most populous province.
The withdrawal clears a path for the only other applicant for the string, Guangzhou Yu Wei Information Technology, to pass more quickly through the ICANN approval process.
Guangzhou Yu Wei is affiliated with Zodiac Holdings, the Cayman Islands-based portfolio applicant founded by James Seng, but it also has backing from the Guangdong provincial government.
As a formally designated Geographic string, government backing is necessary for approval.
Xinhua had not appeared especially enthusiastic about its bid. Its prioritization number of 1772 means it didn’t bother to participate in ICANN’s lottery last December.
Zodiac, on the other hand, took advantage of the IDN bias in the process and wound up with a priority of 79. It passed Initial Evaluation in early April.
The company filed a Community application, but a Community Priority Evaluation will obviously no longer be required. It intends to restrict .广东 to registrants that can prove a local presence.
Zodiac is using .cn registry CNNIC as its back-end registry provider.