Investors circle ICM as .xxx enters home straight

ICM Registry’s board of directors has approved a $5 million funding round, following the recent decision by ICANN to put the .xxx top-level domain onto the path to approval.
ICM president Stuart Lawley tells me he’s underwritten the whole round himself, already injecting another $500,000 of his own money into the company.
Venture capital investors have already approached the company, following the Brussels decision two weeks ago, according to Lawley.
In Brussels, ICANN’s board resolved to re-enter contract negotiations with ICM, following years of wrangling with ICANN’s appeals and independent review processes.
While .xxx’s approval and entry to the DNS root is not a slam-dunk, the only major hurdle appears to be ICANN’s Governmental Advisory Committee, and many believe the GAC is unlikely to stick its neck out on such a controversial issue.
While demand for .xxx domains is yet to be proven, there are already 162,000 pre-registrations, which would work out to a $10 million business, not including premium sunrise and landrush fees.
A report in Business Week last week said ICM could bring in $200 million per year in revenue on registrations alone.
I think that’s a pretty ambitious prediction, to be honest, and I can’t help but wonder in Business Week got ICM’s ten-year and one-year projections mixed up.
Even at $60 a pop, that’s still 3.3 million registered domains. The stars will have to align in unexpected ways for .xxx to reach that kind of penetration (pun intended).
ICM has previously projected near-term registrations in the low-mid hundreds of thousands.
ICM is currently owned by a close-knit group of investors, mainly Lawley’s circle and ICM’s management, with Lawley himself owning roughly 70% of the business.

More details on the Tuvalu-VeriSign deal

VeriSign offered Tuvalu an extra $1 million a year in exchange for the continuing right to run .tv, but the tiny island nation declined, according to a new interview.
The Australian Broadcasting Corporation has a short audio piece over here on the strained relationship between VeriSign and Tuvalu, including an interview with finance minister Lotoala Metia.
Tuvalu gets about $2.2 million a year from VeriSign, according to the piece, but the government thinks it’s being short-changed.
VeriSign offered the country another $1 million a year, on the condition that the deal would be extended for five more years. It currently expires in 2016. Tuvalu declined.
The company declined to comment to ABC, but AusRegistry chief Adrian Kinderis stepped up to defend the deal, pointing out that VeriSign took all the risk.
Kinderis also accepted the interviewer’s suggestion that the new TLD round could leave .tv “obsolete”.
Here’s a link to the stream.

Lego launches attack on new TLDs

Could little yellow plastic men be the death of the new top-level domain process?
Toymaker Lego has filed a scathing criticism of ICANN’s latest Draft Applicant Guidebook for prospective new TLD registries, saying it ignores trademark holders.
Lego, one of the most prolific enforcers of trademarks via the UDRP, said that the latest DAG “has not yet resolved the overarching trademark issue”.
DAG v4 contains new protections designed to make it easier for trademark holders to defend their rights in new TLD namespaces. But Lego reckons these protections are useless.

The Trademark Clearinghouse is NOT a rights protection mechanism but just a database. Such a database does not solve the overarching trademark issues that were intended to be addressed.

Lego also says that the Uniform Rapid Suspension service outlined in DAG v4 is much weaker than it wanted.
“It doesn’t seem to be more rapid or cheaper than the ordinary UDRP,” Lego’s deputy general counsel Peter Kjaer wrote.
Lego thinks that a Globally Protected Marks List, which was at one time under consideration for inclusion in the DAG, would be the best mechanism to protect trademarks.

ICANN still seems to ignore that cybersquatting and all kinds of fraud on the internet is increasing in number and DAG 4 contains nothing that shows trademark owners that ICANN has taken our concerns seriously.

The comment, which is repeated verbatim in a letter from Arla Foods also filed today, is the strongest language yet from the IP lobby in the DAG v4 comment period.
Rumblings at the ICANN meeting Brussels two weeks ago, and earlier, suggest that some companies may consider filing lawsuits to delay the new TLD process, if they don’t get what they want in the final Applicant Guidebook.
ICANN’s top brass, meanwhile, are hopeful of resolving the trademark issues soon, and getting the guidebook close to completion, if not complete, by the Cartagena meeting in December.

Tuvalu not happy with VeriSign deal

The government of the Pacific island nation of Tuvalu feels it’s getting a raw deal under its current contract with .tv registry manager VeriSign.
According to Radio New Zealand International, Tuvalu finance minister Lotoala Metia said VeriSign pays “peanuts” for the right to run the .tv namespace:

We are negotiating but we are tied because of the agreement that was signed before us. We cannot negotiate for an increase until 2016. Counter offers have been made but they are not acceptable to the government of the day. So we have to stick to our guns now. They’re giving us peanuts.

VeriSign, and its predecessor registry, run .tv under lease as a generic TLD. It is of course Tuvalu’s country-code. By GDP, Tuvalu is one of the poorest nations in the world.
The RNZI article reports that Tuvalu receives $2 million per year from VeriSign. That’s possibly sourced from the CIA World Factbook, which estimated that amount for 2006.
Yet the CIA also says that Tuvalu receives $1 million per quarter, based on a 12-year, $50 million deal that started in 2000.
For all these facts to be true, the deal must have been renegotiated at some point since it was originally signed.

.CO landrushers will be able to apply for trademark rejects

The landrush for .co domains will be extended by three days, to give people a chance to apply for strings that were rejected during the sunrise period, according to a registrar.
Key-Systems posted the news to its Facebook page earlier, but the .CO web site has yet to be updated with the same info.
The registrar said that the landrush, in which registrants apply for premium, non-trademarked strings, will now end on Friday, July 16 at 1600 UTC.
It also raised the prospect of a mini-spike in landrush applications in the last few days of the period.
Key-Systems said that domains covered by invalid sunrise applications – claimed trademarks which were rejected for one reason or another – will come up for grabs on July 12.
The list of such names, which could disclose the kind of bogus trademark claims made by those trying to game the system, will make very interesting reading. It’s due to be published July 10.

Bulgaria to file ICANN reconsideration appeal over rejected IDN ccTLD

Bulgaria is to appeal ICANN’s rejection of .бг, the Cyrillic version of its existing country code top-level domain, .bg.
Technology minister Alexander Tsvetkov said that the Bulgarian government will file a reconsideration request with ICANN, according to a DarikNews.bg interview.
The requested IDN ccTLD .бг was rejected because it looks quite a bit like Brazil’s existing ASCII ccTLD, .br, which could create confusion for Brazilians.
ICANN/IANA does not talk openly about ccTLD delegation issues. As far as I know, .бг is the only IDN ccTLD on the current fast-track program to be rejected on string-similarity grounds.
The Darik News interview, via Google Translate, reports Tsvetkov saying he “believes that this domain is the best way for Bulgaria” and that the government “will ask for reconsideration”.
Asked about the clash with Brazil, he said Bulgaria “will not quit” in its pursuit of its first-choice ccTLD.
Brazil has not been silent on the issue.
During the meeting on Tuesday between the ICANN board and its Governmental Advisory Committee, Brazil’s representative praised ICANN for rejecting .бг:

Brazil would like to express its support to the recent board’s decision about avoiding graphic similitude between new country codes and current country codes in Latin. This is particularly important inasmuch as any graphic confusion might facilitate phishing practices and all the problems related to it.

Many thanks to the Bulgarian reader who referred me to this Darik News interview.
For any other Bulgarians reading this, the interview also appears to contain lots of other really juicy information not related to domain names. Check it out.

ICANN Brussels – .xxx approved but not approved

The controversy over the .xxx top-level domain has for the last few years, at least from one point of view, centered on opposing views of whether it was already “approved”.
ICM Registry has long claimed that ICANN “approved” it in 2005, and believes the Independent Review Panel agreed with that position. ICANN said the opposite.
Regardless of what happened in Brussels yesterday, when the board grudgingly voted to reopen talks on .xxx (to a surprisingly muted audience response), the question of whether .xxx is “approved” is definitely not over yet.
ICM tweeted shortly after the ICANN’s board’s decision:

@ICMRegistry: We are delighted to announce that the #ICANN Board has approved the .xxx top-level domain.

But a couple of hours later, ICANN chair Peter Dengate Thrush told us at a press conference that it categorically was not “approved”.
In terms of getting its point across to the media, ICM’s message trumped ICANN’s, judging by the headlines currently scrolling past me on Google News.
I guess this boils down to a question of definitions.
From the ICANN perspective, a TLD is presumably not “approved” until a contract has been signed and the board has resolved to add it to the root.
The board’s decision yesterday merely sets out the track towards that eventuality, with a few hurdles scattered along the way. In conversation with ICM people, I get the impression they believe the hurdles are low and easily surmountable.
Crucially for ICM, the issue of community support, the stick with which ICANN nearly killed .xxx back in 2007, is now off the table. There will be a quick review of ICM’s books and technical capabilities, but the views of the porn industry now seem pretty much irrelevant.
The only real way I can see .xxx being derailed again now is if the Governmental Advisory Committee issues future advice that unequivocally opposes the TLD.
As Kieren McCarthy noted in some detail over on CircleID, the GAC has never had a hell of a lot of substantial advice to impart about .xxx in its official communiques, so it’s difficult to see where a clash could arise based on its previous missives.
But with the GAC currently using bogus “morality and public order” arguments to jerk everybody around with regards the next new TLD round, it’s not entirely impossible that it could lob one final grenade in ICM’s direction.
This story ain’t over yet.

Will ICANN punt .xxx in Brussels?

Is ICANN set to delay approval of the proposed .xxx top-level domain – again – in Brussels?
That’s my reading of ICANN’s latest document concerning ICM Registry’s long-running and controversial battle for a porn-only TLD.
This week, ICANN submitted its summary of the public comment period that ran to May 10. It’s a fair bit shorter than the one Kieren McCarthy compiled for ICM last month.
As usual, it’s written in a fairly neutral tone. But, if you’re feeling conspiratorial, the mask does slip on occasion, perhaps giving a sense of where the .xxx application could head next.
The ICANN summary occasionally breaks from reporting what a commenter actually said in order to highlight a potential problem they did not address.
Example (my emphasis):

Only two commenters directly addressed the question of further interaction with the Governmental Advisory Committee (GAC) on the .XXX sTLD Application. Both of those commenters were against seeking any further input from the GAC outside of any public comment period. Neither of these commenters – nor any other – addressed the potential violation of the ICANN Bylaws that could result from the Board’s failure to properly consider the advice of the GAC

This suggests, to me, that the ICANN board will be receiving advice to the effect that further GAC input needs to be forthcoming before it can move forward with .xxx.
If this is the case, the GAC might have to produce some advice before next Friday’s board meeting if ICM has any hope of getting back around the negotiating table prior to Cartagena in December.
That’s not the only reason to believe ICANN may punt .xxx again, however. Elsewhere in the report, we read (my emphasis again):

For those in favor of proceeding with the .XXX sTLD Application, many created an alternative option – that ICM and ICANN should proceed to a contract right away. There was substantial discussion on this point in the ICM submissions. Few commenters addressed the technical realities identified within the Process Report ‐ that prompt execution of the agreement negotiated in 2007 is not feasible.

The Process Report referenced says that it is not possible to go straight into contract talks because ICM first applied for .xxx more than six years ago.
This has been a bone of contention. ICM points to .post, which was applied for at the same time as .xxx and only approved late last year, as proof that the passage of time should be no barrier.
But ICANN president Rod Beckstrom doesn’t buy that comparison. He wrote to ICM (pdf) at the end of March noting that .post was backed by the International Postal Union, whereas .xxx is “sponsored” by IFFOR, an organization created by ICM purely to act as its sponsor.
In that letter, Beckstrom talks about due diligence to make sure ICM and IFFOR still satisfy financial and technical criteria, and a review of whether .xxx “can still satisfy the requisite sponsorship criteria”.
I’ll admit that I’m breaking out the crystal ball a bit here, and I’ve been wrong before, but I don’t think it’s looking great for ICM in Brussels.

Employ Media asks ICANN for a .jobs landrush

The company behind the .jobs sponsored top-level domain wants to loosen the shackles of sponsorship by vastly liberalizing its namespace.
Employ Media has applied (pdf) to ICANN to get rid of the current restrictions on .jobs domain ownership and open hundreds of thousands of strings to the highest bidder.
The registry wants to amend its contract with ICANN to cut the text that limits .jobs domains to the exact match or abbreviation of a company name, and add:

Domain registrations are permitted for other types of names (e.g., occupational and certain geographic identifiers) in addition to the “company name” designation.

Employ Media is basically asking for the right to open the floodgates to a complete relaunch of the .jobs TLD with very few restrictions on who can register and what strings they can register.
Phase One of the relaunch would be an RFP “to invite interested parties to propose specific plans for registration, use and promotion of domains that are not their company name”.
It sounds a little like the current .co Founders Program, or the marketing initiatives Afilias and Neustar asked for to supplement the auction of their single-character domains.
In practice, I expect that this first phase is when the DirectEmployers Association would expect to grab hundreds of thousands of .jobs domains under its universe.jobs business plan, in which it intends to offer job listings tailored to “city, state, geographic region, country, occupation [and] skill”.
Phase Two would see your basic landrush auction of any premium domains left over.
Phase three would be “A first-come, first-served real-time release of any domains not registered through the RFP or auction processes.”
While I have no strong views on the merits of this particular proposal, I do think that the application and ICANN’s response to it could wind up setting the template for how to operate a bait-and-switch in ICANN’s forthcoming round of new TLD applications.
If you say you want to do one thing with your TLD, and later decide you could make more money doing another, how much will ground will ICANN give when it comes to renegotiating your contract? It will be interesting to find out.
Reactions so far from the HR community have not been positive.
Steven Rothberg of CollegeRecruiter.com wrote that the process by which Employ Media’s sponsor, the Society for Human Resource Management, approved the new proposal “stunk”.
“The only winner here is Employ Media,” he wrote.
Comments posted at ERE.net, which has been on top of this story from the beginning, express what could be easily described as outrage over Employ Media’s plans.
The comment posted by Ted Daywalt of VetJobs.com is especially worth a read.
The Employ Media proposal has been submitted under ICANN’s Registry Services Evaluation Process, which allows comments to be submitted.

WSJ reporting bogus Indian domain name market info?

The Wall Street Journal is reporting that India “passed an Internet milestone of sorts” in the first quarter, when the number of .com domains registered in the country broke through 1 million.
Did it?
This is what the WSJ says:

[India] now has more than one million registered web sites using the suffixes .com or .net, according to data released today by VeriSign Inc., the U.S. company that tracks this sort of thing.
In its Domain Name Industry Brief, it reported that India now has a registered total of 1.037 million .com and .net domain names, up from about 800,000 in the same period the year before.

The number 1.037 million is terribly specific, considering that VeriSign’s Domain Name Industry Brief doesn’t say anything of the sort.
There’s nothing in the DNIB to suggest that anybody in India has ever registered a single .com domain.
The DNIB has never broken down .com registrations by location, and the Q1 report, released on Monday, doesn’t use the word “India” once.
If the WSJ numbers are accurate – the paper does appear to have interviewed a VeriSign India executive – I’m wondering how they were calculated.
It can’t be a case of tallying the number of .com domains managed by Indian registrars. Mumbai-based Directi alone has had more than a million .com names under its belt for a long time.
Could VeriSign be mining Whois records for location data?
It runs a thin registry, so it would have to reference Whois data acquired from its registrars in order to compute the numbers.
Or did the WSJ hit on unreliable sources? It seems possible.