Donuts acquisition of Afilias closes, integration work begins

Donuts’ acquisition of Afilias closed without incident on December 29, the companies announced last week.

The registries said that registrants and registrar partners should not see any immediate disruption, but added that it’s now working on an integration plan that should see some changes over the longer term.

“Our combined teams can now begin developing an integration plan, with a goal of minimizing disruption to those we serve,” Akram Atallah, Donuts’ CEO, said in a press release. “We expect no changes in the short term, and ample notice on any changes that are decided.”

Atallah has previously told DI that it’s likely that Afilias’ owned and operated TLDs will likely be transferred to Donuts’ registry back-end, which is hosted on the Amazon cloud.

He also said that services such as the Domain Protected Marks List, currently available in 240+ Donuts gTLDs, should soon become available in Afilias’ 20-odd.

The deal, for an undisclosed sum, was subject to scrutiny by ICANN, which could have blocked it, but its board of directors considered the merger last month with no resolution passed.

Verisign drops half a mill on pandemic relief

Verisign has donated over half a million dollars to pandemic-related causes, the company announced last week.

The donations are aimed at relieving economic side-effects of the pandemic such as food poverty and unemployment.

The .com registry operator said in a blog post it has given $275,000 to food banks in Washington DC, Maryland, Virginia, and Delaware where most of its US operations are based, and in Fribourg, Switzerland, its European HQ.

It’s also given $250,000 to Virginia Cares, an initiative dedicated to retraining unemployed Virginians for in-demand jobs in the tech sector.

Verisign was of course an inadvertent beneficiary of the pandemic, as lockdown regimes worldwide led to a boost in domain registrations as businesses such as bars and cafes moved online.

Fraud checks coming to .ch as SWITCH renews contract

Swiss ccTLD registry SWITCH has agreed to implement new security measures as part of its contract renewal with the government.

The company said Friday that it has extended its contract to run .ch names with the telecoms regulator OFCOM for five more years, bring it up to December 2026.

But as part of the renewal, SWITCH has agreed to “speed up the adoption and implementation of technical security standards”.

This will involved financial incentives for registrars to adopt DNSSEC, the registry said.

It will also introduce measures to combat fraud at the point of registration, with SWITCH saying “in the event of suspected fraudulent intent, newly registered domain names can be used only after an identity check.”

The policy appears similar to those at other ccTLDs, including .uk, where new regs are flagged under certain circumstances (such as containing coronavirus-related terms) and cannot resolve until further checks are carried out.

South African registry to be merged with film censor, broadband regulator

South African ccTLD operator ZADNA is to be merged with two other government agencies, including the film censor, under a program announced by the nation’s government this week.

The non-profit state-owned company will merged with Independent Communications Authority of South Africa (ICASA), which regulates telecoms and broadband, and the Film and Publications Board, which censors and classifies movies, under plans announced today.

It comes as part of a broader government initiative to rationalize South Africa’s state-owned enterprises.

While it’s far from uncommon for a ccTLD to be managed by a state telecoms regulator, I’m not aware of any instances where a registry shares a roof with a movies regulator.

ZADNA is currently the official ccTLD manager for .za, though in practice it’s operated under contract by non-profit ZA Central Registry.

ICANN could block Donuts from buying Afilias

In what appears to be an almost unprecedented move, ICANN is to review Donuts’ proposed acquisition of rival Afilias at the highest level, raising a question mark over the industry mega-merger.

The org’s board of directors will meet Thursday to consider, among other things, “Afilias Change of Control Approval Request”.

It’s highly unusual for a change of control to be discussed at such a high level.

Every registry contract contains clauses requiring ICANN’s consent before a registry switches owners, and it has approved hundreds over the last decade. But the process is usually handled by legal staff, without board involvement.

The only time, to my memory, that the board has got involved was when it withheld consent from .org manager Public Interest Registry earlier this year.

It’s not entirely clear why Afilias has been singled out for special treatment.

It’s probably not due to its status as a legacy gTLD registry operator because of .info — when GoDaddy bought .biz operator Neustar’s registry business earlier this year, there was no such board review.

In addition, the .info contract’s change of control provisions are very similar to those in the standard new gTLD contract.

Could it be due to Donuts executives former ties to ICANN and the perception of a conflict of interest? Again, it seems unlikely.

While Donuts CEO Akram Atallah is former president of ICANN’s Global Domains Division, former ICANN CEO Fadi Chehadé is no longer involved with Donuts owner Abry Partners, having jumped to erstwhile PIR bidder Ethos Capital this July.

Are there competition concerns? It’s a possibility.

Afilias holds the contracts for 24 gTLDs new and legacy, but supports a couple hundred more, while Donuts is contracted for over 240.

But between them, they have barely 10 million domains under management. Donuts isn’t even the market leader in terms of new gTLD registrations.

And ICANN avoids making competition pronouncements like the plague, preferring instead to refer to national competition regulators.

Could ICANN’s interest have been perked by the fact that Afilias is the back-end provider for .org’s 10 million domains, and the proposed Donuts deal comes hot on the heels of the failed PIR acquisition? Again, it’s a possibility.

But none of the dangers ICANN identified in the .org deal — such as pricing, freedom of speech, and the change from a non-profit to for-profit corporate structure — appear to apply here.

There could be technical concerns. Atallah told DI a couple weeks ago that the plan was to ultimately migrate its managed TLDs to its Amazon cloud-based registry.

But moving its clients’ TLDs to a new back-end infrastructure would require their consent — it would be up to PIR and its overlords at the Internet Society to agree to moving .org to the cloud.

I think it’s likely that a combination of all the above factors, and maybe others, are what’s driving the Afilias acquisition to the ICANN boardroom. It will be interesting to see what the board decrees.

Westerdal offloads two more gTLDs to Donuts

Donuts has bulked out its gTLD portfolio yet again, acquiring two more strings from Fegistry and Top Level Spectrum.

ICANN records show that it recently took over the contracts for .observer and .realty.

They’re both launched, active TLDs. Both selling registries are backed by investor Jay Westerdal.

.observer was bought dormant by TLS from the British newspaper of the same name in 2016 and launched the following year with .com-competitive prices.

TLS has been marketing it as a place for news organizations, though it’s unrestricted. Registrations plateaued at about 1,000 a couple of years ago and haven’t seen much movement since.

.realty is a different story.

Fegistry paid ICANN $5,588,888 at a public auction — beating Donuts, in fact — in 2014, and launched it in 2017 with a roughly $300-a-year retail price.

It’s been cruising along with about 2,200 names under management for the last couple of years, until this September and early October, when its zone file shot up to almost 18,000 domains.

This seems to have been the result of a $0.99 promotion at Epik, which has since ended.

One would have to assume that the vast majority of those new domains will be speculative and are unlikely to renew at the full $300 reg fee a year from now.

While the contracts changed hands in late October, it’s inconceivable that Donuts was not aware of the quality of the recent registrations.

It’s not the first time Westerdal’s businesses have sold to Donuts, which took .contact off Top Level Spectrum’s hands in April 2019. That gTLD entered general availability this week.

It’s also handed off responsibility for .forum to MMX, which plans to launch it with a puzzling $1,000 price tag next March, although TLS is still listed as the ICANN contractor.

TLS still runs the controversial gripe site TLD .feedback, along with the unlaunched head-scratcher .pid.

Fegistry is still fighting for .hotel, along with rival applicants, in ICANN’s quasi-judicial Independent Review Process.

Credit union gTLD changes hands to perhaps surprising buyer

Yet another new gTLD is moving to a new registry, but this time it’s not a case of a large gTLD holder bulking up its portfolio.

This time it’s .creditunion, and the new registry is 18-year-old .coop registry DotCooperation, according to ICANN records.

.creditunion was delegated to the Credit Union Nation Association, the trade group for US credit unions, in 2015 and launched in 2017.

Like .coop, it’s a tightly restricted TLD, with eligibility only for those with a “meaningful nexus to the credit union sector”.

It had 580 domains at the last count, having peaked at 640 a couple years ago. The domains are being used as primary domains by at least a couple dozen credit unions.

But volume was never the plan for .creditunion, with CUNA specifically citing .coop as its role model in its 2012 new gTLD application.

“The success of the gTLD will not be measured by the number of domain names registered. Instead, it will be measured by the level of consumer recognition and trust,” CUNA said back then.

CUNA actually announced the DotCooperation deal in a press release on its web site at the end of September, but I don’t think anyone in the domain industry noticed.

.coop, which is reserved for co-operative associations, was one of the original 2000-round new gTLDs. It’s been chugging along at relatively low volume for the last two decades, peaking at 15,000 in February 2013.

For the last few years, it’s been growing by maybe a dozen or so domains a month, and currently stands at about 8,300 names.

DotCooperation is jointly owned by the National Cooperative Business Association and the International Cooperative Alliance.

Gay charities get first taste of domain cash

Top Level Design, which runs .gay, said today it has released its first tranche of cash to LGBTQ charities.

Since its September launch, it’s handed $124,400 to non-profits CenterLink and GLAAD, the company said.

Top Level Design has long promised to give 20% of its top line to these charities. At $25 a pop, that’s a $5 donation per domain.

This initial handout seems to be high, given the current level of domains under management, presumably due to higher sunrise fees and premium domains pricing.

The gTLD currently has 6,345 domains in its zone file.

CIRA hits major .ca milestone on 20th anniversary

Canadian ccTLD registry CIRA has registered its three millionth domain, having grown .ca by over 160,000 names this year.

By happy coincidence, the milestone was hit November 30, exactly 20 years after CIRA officially took over the registry from its predecessor.

CIRA said that regs are up 34% this year, the boosted growth largely due to more small businesses coming online due to the coronavirus pandemic.

This all means that .ca is the 12th-largest ccTLD in the world, according to the registry.

.org made $97 million last year

Public Interest Registry has published its 2019 tax returns, revealing a top line of $97.1 million.

That’s a tad under the $101.1 million it reported for 2018, presumably due to the declining number of .org domains under management.

It lost roughly 200,000 names in 2019, bottoming out at 10.4 million, though it has since recovered in 2020.

The returns also reveal that back-end provider Afilias was paid $18.3 million for its trouble, and ICANN was paid $2.6 million in fees.

The Internet Society, which owns PIR and uses it for most of its funding, was paid $67.5 million, up from the $48.7 million given in 2018.

The form also list the salary and bonuses for 20-odd staffers and directors, for the salary voyeurs among you.