First new gTLD contention set settled as Uniregistry and TLDH sign deal

Top Level Domain Holdings and Uniregistry have inked a deal to go splits on the proposed .country registry, the first publicly announced settlement of a new gTLD contention set.
The two companies are the only applicants for .country, so assuming one or both applications are approved by ICANN no auction will be required to decide who gets to run it.
It’s not yet clear which applicant will drop out of the race; it appears that TLDH and Uniregistry are waiting for their Initial Evaluation results to come out before making that call.
A new 50:50 joint venture will be formed to take over the contract. The companies said in a press release:

Under the conditional heads of terms for the proposed joint venture, either Uniregistry or TLDH will withdraw its application and, once the surviving applications is approved by ICANN, the authority to operate .country will be transferred to the new joint venture. The transfer will require ICANN approval, which the directors of the Company fully expect to be forthcoming.

Uniregistry’s prioritization number is 1232 and TLDH’s is 664. If TLDH passes Initial Evaluation, it would make sense for Uniregistry to pull out at that time to speed up the time to delegation.
TLDH CEO Antony Van Couvering said the deal is “pro-competitive and will result in lower prices for consumers”.
Uniregistry and TLDH are competing on another 20 gTLD strings, but .country is the only two-horse race they’re involved in.

Another 44 new gTLDs pass Initial Evaluation

ICANN has posted its latest weekly batch of Initial Evaluation results for new gTLD applications, with 44 new passes and no failures.
The publication brings the grand total of passing applications to 213, with only one failure to date and 51 withdrawals.
Today’s passing strings are:

.微博 (Wei-bo), .慈善 (charity), .微博 (microblogging), .cimb, .wme ,broadway, .astrium, .associates, .coach, .aaa, .chase, .app, .trading, .nra, .vip, .engineer, .voyage, .yachts, .live, .cpa, .swiss, .auction, .emerck, .site, .godaddy, .epson, .pictures, .schaeffler, .omega, .dental, .hermes, .xin, .flowers, .qvc, .bofa, .email, .hotel, .scb, .cymru, .bridgestone, .dot, .talk, .cab, .guru.

Some notable things that immediately jump out at me:

• Go Daddy’s application for the .godaddy dot-brand has passed.
• The first application for .app — one of the most heavily contested strings — has passed.
• So far none of the five Top Level Domain Holdings applications with Minds + Machines back-ends and priority numbers under 250 have passed.
• Of the four Famous Four Media bids under 250, only one has passed.
• Donuts is up to 29 passes, almost 10% of its total applications.
• Amazon and Google have clean sheets so far.

ICANN is now at priority number 250 in its IE publication running order, which means 36 applications that could have passed already haven’t.
ICANN has previously stated that these delays are mostly due to processing responses to clarifying questions and change requests.

Photos: ICANN shares new gTLD timeline at private New York meeting

ICANN has a new version of its constantly evolving new gTLD program timetable that accounts for Governmental Advisory Committee advice and other recent developments.
Staff talked through the timeline with participants at an invitation-only industry meeting in New York on Tuesday, but we have a couple photos to share more widely, provided by an attendee who declined attribution.
This first one will be familiar to new gTLD applicants who regularly attend ICANN’s update webinars, but there are a few differences compared to the version seen in Beijing (pdf), which address new roadblocks.

First, you’ll notice that there’s a new line for GAC advice, following the release of the GAC’s Beijing communique.
The slide seems to suggest that ICANN expects to have dealt with the advice before June. On the face of it, and without the full context of the staff presentation, this seems optimistic.
Second, the controversial Registry Agreement is addressed on the slide. ICANN seems to see the RA being published for public comment very soon, and finalized by the end of June.
All the new gTLD applicants and existing registry operators I’ve talked to this week seem to think this is more or less doable. Registries have much more incentive for speedy resolution than registrars did.
Third, due to the RA delay, ICANN won’t start contracting with new gTLD applicants until the end of June or beginning of July, according to the slide.
Operational dates for the Trademark Clearinghouse, Emergency Back-End Registry Operator and Uniform Rapid Suspension service all appear to be unchanged.
In this second slide, not used in Beijing, we see a visual representation of ICANN’s Initial Evaluation results posting schedule.

ICANN is currently posting about 50 results every Friday, having started off at 30 a week, but the slide shows ICANN expects to ramp up to 100 per week on May 24.
The New York meeting, one of ICANN CEO Fadi Chehade’s ongoing series of management roundtables, was attended by senior-level executives from many of the largest industry players.
As well as the new gTLD timetable, topics including the Domain Name Association, conferences and media awareness were discussed.
It was originally going to be followed by a splashy media event to officially launch the first new gTLDs, but that was delayed, due to the lack of any contracts to sign.

GAC claims its first new gTLD scalps

Two new gTLD portfolio applicants have withdrawn a total of nine applications following advice from ICANN’s Governmental Advisory Committee.
Top Level Domain Holdings, owner of Minds + Machines, said it has binned its bids for .free, .sale, .spa and .zulu “as a consequence of these warnings, and after discussion with relevant governments”.
.spa and .zulu are both on the GAC’s shortlist for further consideration on geographical/cultural grounds (Spa is also a town in Belgium) and were due to be discussed at the ICANN meeting in Durban this July.
It’s less clear why TLDH has chosen to scrap .free and .sale, however.
Both were among over 300 bids to receive GAC advice on “consumer protection” grounds, but they were by no means the only TLDH applications to get hit with the same stick.
The company has 21 applications with “consumer protection” advice.
Its bids for .book and .cloud, for example, are listed in exactly the same place in the GAC’s Beijing communique as .free and .sale, and have similar contention profiles, but have not been withdrawn.
TLDH said in a press release that it expects to get a $520,000 from ICANN for withdrawing the bids and another $144,000 from the release of its Continued Operations Instrument risk fund.
Meanwhile, entrepreneur Bekim Veseli has yanked the remaining five of his original seven gTLD bids, all of which had been hit by advice on the basis that they’re “corporate identifiers” such as .inc and .corp.
I understand this withdrawals may not have related directly to the GAC advice, however, and may be also due to the fact that they’re all highly contested strings.

.pw claims 50,000 domains registered in three weeks

Directi’s recently relaunched .pw top-level domain has racked up 50,000 domain name registrations after just three weeks of general availability, according to the company.
The number, which will put a smile on the faces of many new gTLD applicants, relates to GA only and does not include defensive registrations made during the ccTLD’s sunrise period, Directi confirmed to DI.
“Our goal was 100,000 names for the first year,” Directi CEO Bhavin Turakhia said in a press release. “The feeling of achieving 50% of the goal within the first three weeks is surreal.”
As previously reported, there were 4,000 .pw domains registered during the first half hour of GA.
Directi (running .pw as .PW Registry and/or Radix Registry) signed up 120 registrars to sell .pw names, which it brands as “Professional Web”.
It’s really the ccTLD for Palau, a small nation in the Pacific.
The registry is going for budget buyers, with registry fees and retail prices coming in a little lower than .com.

Afilias blames security crackdown for massive drop in .info domains

Afilias says a new anti-abuse policy is responsible for .info losing almost a million domains in 2012.
The .info space ended the year down 914,310 domains, an 11% decline on 2011, the biggest gTLD shrinkage in actual domain terms and second only to .tel in percentage terms, according to DI’s TLD Health Check.
The TLD ended the year with 7,402,557 domains under management, still the runaway leader of “new” gTLDs in terms of total domains.
An Afilias spokesperson blamed the DUM decline on a crackdown on abusive domain use, which impacted sales. He said in a statement:

To fight the growing scourges of spam, phishing and other Internet problems, .INFO established an industry-leading anti-abuse policy and began aggressively working with its registrar partners to take down any and all sites that violated the policy, regardless of the sales impact. This approach reinforces .INFOs strong foundation of great sites and enhances the reputation of .INFO as the ‘home of information on the Web’.

Historically, .info was favored by bad actors due to the low cost of registrations. At some points over the last ten years, it’s even been possible to register a .info domain for free.
Afilias’ crackdown affected .pro too, as then-president Karim Jiwani told us in January, but .pro managed to double in size anyway, due to new registrar partners and lower prices.
Of the 18 gTLDs tracked by TLD Health Check, only .name, .tel and .travel also suffered significant declines in domains under management in 2012.

Lawyer asks: how the hell did Demand Media pass the new gTLD cybersquatting test?

A lawyer apparently representing a rival new gTLD applicant has questioned ICANN’s background screening processes after Demand Media managed to get a pass despite its history of cybersquatting.
Jeffrey Stoler, now with the law firm Holland & Knight, last July said ICANN should ban Demand Media and its partner Donuts from applying for new gTLDs under the rules of the program.
This month, he’s written to ICANN, the GAC and the US government to express “alarm” that both companies have managed to pass their background checks. Stoler wrote:

This alarm arises from the overwhelming evidence, as referenced below, that: (a) Donuts is a “front” for Demand Media, Inc. (“Demand Media”), and (b) Demand Media’s status as precisely the kind of proven cybersquatter that ICANN’s rules were designed to weed-out of the gTLD application process.
How ICANN’s background screening panel could — in the teeth of that evidence — approve the continued participation of Donuts in the new gTLD program (the “Donuts Decision”) requires justification. This letter formally requests that ICANN, pursuant to its obligations of accountability and transparency, provide an explanation of how, and on what basis, the Donuts Decision was made.

Both Donuts and Demand Media responded with anger and disdain.
CEO Paul Stahura told ICANN that Donuts has discovered that Stoler, who has still not disclosed which client he’s representing in this matter, is actually on the payroll of a rival.

Donuts suspected his client was a competing applicant seeking to gain commercial advantage, and we have since confirmed this in fact is the case.
Not only do the letters intentionally misrepresent facts, they are a preposterous, extra-­procedural tactic that is a regrettable waste of time and community resources.

David Panos, director of Demand’s applying subsidiary, United TLD Holdco, was similarly dismissive:

Clearly, Mr. Stoler’s client has a substantial commercial interest in the new gTLD program and is seeking to eliminate its competition by mischaracterizing the relationships of other competing applicants and by restating factually inaccurate statements

What’s notable from both the Stahura and Panos letters is that neither company actually addresses Stoler’s allegations directly, resorting instead to mainly fudging and ad hominem arguments.
Stoler probably is seeking a competitive advantage for his mystery client, and his claims about Donuts being a “front” for Demand do come across as a bit of a stretch even for a lawyer, but that doesn’t mean that all of his arguments are wrong.
ICANN’s Applicant Guidebook for the new gTLD program is pretty clear: if you’ve had more than three adverse UDRP decisions, with at least one in the last four years, you’re “automatically disqualified” from the program.
Demand Media, as Stoler alleges and the public record supports, has lost about three dozen UDRP cases through subsidiaries such as Demand Domains, the most recent of which was in 2011.
So how did Demand pass its ICANN background screening?
The Guidebook does say “exceptional circumstances” are enough to get an applicant off the hook, but it’s hard to see how that would apply to Demand’s over 30 UDRP losses.
And Demand doesn’t want to talk about it.
None of its responses to ICANN that have been published to date even attempt to say why Stoler is wrong, and the company declined to comment when we asked for clarification today.
Donuts, which is using Demand as its back-end registry and has given the company the right to acquire interests in over 100 of its new gTLDs (should they be approved) didn’t want to comment either.
Which, some might say, plays right into Stoler’s hands.
If there’s a simple, straightforward explanation for why the background screening rules apparently didn’t apply to Demand Media, is it unreasonable to ask what that explanation is?

First new gTLD to fail evaluation revealed

With 132 new gTLD applications in receipt of their Initial Evaluation results, the first to fail has been revealed.
The failed application was for العلیان., an Arabic dot-brand filed by Olayan Investments Company, a 65-year-old privately held Saudi conglomerate.
It failed IE on financial grounds, according to its published results (pdf).
To pass the financial portion of the evaluations, applicants must score a minimum of eight points, scoring at least one point on each of the six questions.
While Olayan did score eight, it scored a zero on question 45, “Demonstration of Financial Capability”, which asks applicants to file audited or unaudited financial statements.
It appears that the applicant in this case did not provide enough information to be evaluated either during the application itself or in response to ICANN’s “clarifying questions”.
The application is now categorized as “Eligible for Extended Evaluation” by ICANN, meaning Olayan can provide extra information in an attempt to pass the failed question.
There’s no fee to do so in this case, but there would be a delay.
ICANN has so far delivered IE results for 132 applications for applications with priority queue numbers up to 149. Every other result to date has been a “pass”.

Donuts “almost doubles” $100m funding for new gTLD auctions

Somebody thinks new gTLDs will be a money-spinner.
Portfolio applicant Donuts, which is involved in 307 applications, has just announced a second funding round, greatly increasing its new gTLD contention set war-chest.
(UPDATE: This article originally stated, erroneously, that the funding was to the tune of $100 million. The exact amount has not actually been disclosed. Apologies for the error.)
It follows a $100 million funding round last year.
While the new amount was not disclosed, the deal “almost doubled” its funding, according to a press release, strongly suggesting it’s of a similar amount.
Existing investor Generation Partners and new investor Columbia Partners Private Capital were both involved in the round.
The company announced its first $100 million investment last year.
CEO Paul Stahura said the money was earmarked for new gTLD contention sets, many of which will be resolved at auction, and that “Donuts has further access to additional capital should the need arise”.
In a press release, he said:

We intended from the beginning to secure the gTLDs for which we applied. We enjoy tremendous support from our stockholders and lenders. This was an oversubscribed round that nearly doubles our capacity to compete. Our investors believe as strongly as we do that new gTLDs will bring relevance and specificity to registrants who have few usable choices today for Internet identities. This additional capital supports that belief, and we intend to deploy it to bring new gTLDs to market.

ICANN selects new gTLD backup providers

Neustar, Nominet and CNNIC have been picked to provide backup registry services for new gTLDs that fail.
ICANN has named the three companies as Emergency Back-End Registry Operators for the new gTLD program.
They’ll be responsible for taking over the management of any new gTLD that goes out of business, putting registrants at risk of losing DNS resolution and registry functions.
The idea is that the EBERO(s) would be paid out of funds placed in escrow by gTLD applicants, in order to gracefully wind down any failed TLD over the space of a few years.
In reality, I doubt there’s going to be much call for their services; M&A activity is a more likely outcome for gTLDs that fail to meet their sales expectations.
ICANN highlighted the geographic diversity of the three companies (Nominet is British, Neustar American and CNNIC Chinese) as a stability benefit of its selections.
The three were chosen from 14 respondents to an RFI published last year.
The absence of an EBERO was one of the shortfalls of the new gTLD program highlighted by Verisign in its recent letter warning ICANN about perceived security and stability risks.
While ICANN has acknowledged that the EBEROs are unlikely to be ready to roll before the first new gTLDs start to launch, it has noted that they don’t need to be.
If any new gTLD catastrophically fails during the first few months of launch, it will reflect extremely poorly on the financial and technical evaluations applicants have been undergoing for the last nine months.