ICA will help you support .com price increases (but doesn’t want you to)

The Internet Commerce Association has released a new version of its semi-automated commenting tool, making it a bit easier for domainers and others to complain to ICANN about the proposed .com price increases.
Surprisingly, the tool will also help you file a comment in support of Verisign’s 7%-a-year price-raising powers, though obviously ICA would prefer you do not.
The tool is based on the one ICA launched last year when Public Interest Registry was due to get its .org price caps lifted by ICANN, but ICA general counsel Zak Muscovitch says that it’s been refined following feedback.
It allows users to identify what kind of registrant they are (domainer, end user, or just concerned netizen) and select from several options to create pre-written comments that reflect their own views. They can also enter their own free text before hitting submit.
One of the options is “I support the proposed price increase which allows for a 31% price increase through 2024”, but I can’t imagine anyone apart from Verisign staff and shareholders checking that particular box.
The .org version of the tool caused a bit of a stir last year after ICANN’s Ombudsman compared submissions made through it to “spam”. He caught some flak for that.
Muscovitch tells DI that it’s not just domainers using the service. Some registrars are directly contacting their customers to encourage them to submit comments, he said, so the views of “the public at large” are being reflected.
At the time of publication about 350 comments have been submitted, more than half of which appear to have originated via the ICA tool.
The public comment period closes February 14.
If you don’t fancy using the ICA tool, submitting a comment directly to ICANN doesn’t appear to be particularly difficult. You simply go here, click the “Submit Comment” button, and ICANN will open up your mail client’s compose window with the appropriate address pre-populated.
Perhaps predictably, I remain skeptical that this kind of thing will have any impact on ICANN’s decision to approve a contract it spent a year negotiating.
But it can’t hurt, right? After all, the reason Verisign only gets to raise prices in four out of six years is because so many people complained about the much more expansive proposed powers back in 2006, and ICANN is still reeling from the outrage over .org…

.gay hires pop star equality campaigner as spokesperson

Top Level Design has hired a pop musician with a history of gay rights activism and anti-bullying work as its new spokesperson for .gay, which launches today.
Logan Lynn has a 20-year career as a musician and TV presenter with nine studio albums under his belt. He also has experience doing public relations for LGBT charities.
He’s also been the recipient of homophobic trolling. Last year, he told People magazine about the relentless online abuse he suffered after putting his friend, Hollywood actor Jay Mohr, full-frontal nude in one of his music videos in 2018.
He wrote on Top Level Design’s blog over the weekend:

Over the past couple of years, as online abuse directed at me reached an all-time high, I realized I was in a unique position to use my platform and story to help usher in change. It’s this fight that has led to me partnering with Top Level Design on the launch of .gay.
…
We know that we will not be able to single-handedly turn the internet into a hate-free zone, but .gay is committed to doing our part, and we absolutely reject the status quo — which is to do nothing without a court order.

The registry, which kicks off its sunrise period today, has policies in place that allow it to suspend .gay domains if they’re being used for homophobic bullying. General availability begins May 20.

Ethos’ .org pricing promise may be misleading

The more Ethos Capital protests that its plans for .org pricing are not as bad as its critics think, the less I believe it.
Since November, the would-be buyer of Public Interest Registry has being publicly committing to maintain what it calls PIR’s “historic practices” related to pricing.
PIR, under its last ICANN contract, was allowed to raise prices by up to 10% per year, but it did not always exercise that right. In fact, the wholesale price of .org has been fixed at $9.93 since August 2016.
Ethos has described its price increase plans in a very specific, consistent way. In November it said:

Our plan is to live within the spirit of historic practice when it comes to pricing, which means, potentially, annual price increases of up to 10 percent on average — which today would equate to approximately $1 per year.

Last month, chief purpose officer Nora Abusitta-Ouri wrote:

We committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average

Last week, she wrote:

Ethos has committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average

Over the weekend, she added:

we are not saying that we will raise prices 10% every year — our commitment is that any price increase would not exceed 10% per year on average, if at all.

Clearly, the talking point has been copy-pasted a few times, and it always includes the words “10% per year on average”.
On average.
What does that mean? What are we averaging out here? It can’t be across the .org customer base, as registries aren’t allowed to vary pricing by registrant, so we must be talking about time. PIR has a 10-year contract with ICANN, so we must be talking about prices going up no more than 10% per year “on average” over the next decade.
If PIR, under Ethos’ stewardship, decides to raise prices by exactly 10% every year starting in 2020, the wholesale cost of a .org domain will be $25.76 by 2029, a 159% increase on today’s rate.
Assuming for the sake of this thought experiment that .org stays flat at 10 million registrations (it’s actually a little more today, but it’s declining), Ethos would be looking at a $258 million-a-year business by 2029, up from today’s $99 million.
Over the course of the 10-year contract, .org would be worth a cumulative $1.74 billion in reg revenue, up from the $993 million it would see without price increases.
But Ethos is only promising that price increases will be no more than 10% per year on average, remember, and it’s even hinted that there could be some years with no increases at all.
I noted in November that this commitment could see Ethos raise prices in excess of 10% early on, then freeze them so the increase averages back down to 10% over time.
It would of course make the most sense to front-load the price increases, to maximize the return.
At one extreme, Ethos could raise the price to $25.76 a year immediately, then lock the price down until 2029. That would make .org a $258 million-a-year business overnight, and making the cumulative 10-year revenue around the $2.58 billion mark.
Or, it could raise prices by 20% in alternate years, adding up to $1.77 billion in total top-line and a price to registrants of $24.71 by 2028.
There’s an infinity of variations on these strategies, and Ethos’ modeling is certainly more complex than the envelope upon which I just jotted these simplified figures down, but it’s pretty clear that while the company may well stick to the letter of its promises, it gets its best returns if it raises prices hard and early.
The more I read “on average” repeated in Ethos’ literature, the more convinced I become that this is exactly what it has in mind.

Possibly the strangest new gTLD acquisition yet

The company running .icu has taken over a similar-sounding but ugly dot-brand from a Chinese games company.
ShortDot took over the ICANN registry agreement for .cyou from a Chinese games company in November, recently updated ICANN records show.
The seller is Beijing Gamease Age Digital Technology Co, which makes massively multiplayer online games targeted at the Chinese market.
The company is branded as Changyou.com and CYOU is its Nasdaq ticker symbol. The .cyou gTLD was not technically a dot-brand under ICANN rules.
Changyou signed its registry agreement with ICANN five years ago, but never registered any .cyou domains.
The decision to dump .cyou is no doubt related to the fact that Changyou is currently in the process of being reacquired and delisted by Sohu, its majority owner and former parent. The domain presumably soon will have no meaning for the company, even defensively.
It’s such a clumsy, otherwise meaningless string, that surely there was one one potential home for it: the .icu registry. Just as .icu can be read as “I see you”, .cyou can be read as “see you”.
ShortDot has had an inexplicable success with .icu in the last 12 months, during which it has become the industry volume leader in new gTLD sales. Today’s zone files show over SIX MILLION domains have been registered. That’s up from about 400,000 a year ago.
Most of its sales are coming via Chinese registrars, which are selling .icu names for under a dollar for the first year. It has yet to see its first junk drop.
If SpamHaus statistics are any guide, the buyers are largely domainers, rather than spammers. SpamHaus says .icu has under a 2% “badness” rating.
So, while .cyou would look like utter rubbish to any other registry, if ShortDot can bundle it with .icu, perhaps persuading a portion of its registrants to double-up, it may be worth a bit of money.
The registry expects to launch its new acquisition in June.
It’s the second branded gTLD ShortDot has acquired and repurposed after .bond, which used to belong to a university of the same name.

XYZ expands gTLD stable as L’Oreal exits the domain game

XYZ.com has acquired four new gTLDs from the cosmetics company L’Oreal.
The portfolio registry expanded its stable with the additions of .makeup, .beauty, .hair and .skin, all of which had their contracts change hands last month, ICANN records show.
XYZ seems to have told Domain Name Wire last week that it plans to relaunch its new acquisitions this year alongside another recent purchase, .quest (sorry for the delay, Andrew, I’ve been sick).
For L’Oreal, the deal marks the end of its lofty ambitions in the new gTLD space. The company applied for 14 strings back in 2012, a mixture of generic dictionary words and brands.
Now, none remain.
A bunch of its dot-brand applications were dumped prior to contract signing. The others were turned off, unused, after L’Oreal asked ICANN to terminate its contracts.
The four non-branded strings XYZ picked up were originally intended as “closed generics” — an attempt to close competitors out of the market for industry-relevant keywords — but that was scuppered when ICANN decided to ban the concept.
L’Oreal attempted to worm its way around the ban by pricing domains at $5,500 wholesale and imposing extremely restrictive registration policies. This was pretty effective at warding off unwanted sales.
But the company did actually attempt something fairly innovative with .makeup, as I documented in 2017, registering the names of a couple hundred beauty-obsessed social media influencers in an attempt to create a registry-owned social media portal focused on pushing L’Oreal products.
The hub site, at welove.makeup, now bounces web visitors to makeup.com.
To the best of my knowledge, L’Oreal didn’t do anything with its other generics.
Still, L’Oreal’s loss is XYZ’s gain. All four are fairly strong strings that could find a market, in my view.
XYZ now has 13 gTLDs under direct contract (12 of which were acquired post-2012) and partial stakes, with Uniregistry, in three others.

Is the .co rebid biased toward Afilias? Yeah, kinda

The Colombian government has come under fire for opening up the .co registry contract for rebid in a way that seems predetermined to pick Afilias as the winner, displacing its fierce rival Neustar.
As I blogged in November, Colombia thinks it might be able to secure a better registry deal, so it plans to shortly open .co up to competitive proposals.
A company called .CO Internet, acquired by Neustar for $109 million in 2014, has been running the ccTLD for the last decade. There are currently around 2.3 million .co domains under management, according to Colombia.
With the renewal deadline looming, the government’s technology ministry, MinTIC, published an eyebrow-raising request for proposals last month.
What’s surprising about the RFP is that some of the four main technical performance criteria listed are so stringent that probably only two companies in the industry qualify — Verisign and Afilias, and so far Verisign has not been involved in the RFP process.
The companies that have been engaging with the government to date are Afilias, Neustar/.CO, Nominet, CentralNic and Donuts.
First, MinTIC wants a registry that’s had at least two million domains under management across its portfolio continuously for two years. All five registries qualify there.
Second, it wants a registry that’s been involved in the migration of a TLD of at least one million names, either as the gaining or losing back-end.
That immediately narrows the pack to just two of the five aforementioned registries — Neustar and Afilias.
Verisign would also qualify, if it’s in the bidding, but I suspect it’s not. Taking over .co would look like a “buy it to kill it” strategy, which would be horrible optics for the Colombian government.
There have only ever been three migrations over one million names, to my knowledge: the Verisign->Afilias .org transition of 2003, the Neustar->Afilias .au move of 2018, and last year’s Afilias->Neustar .in handover.
CentralNic, Nominet and Donuts have all moved numerous TLDs between back-ends, but with much smaller per-TLD domain volumes.
Third — and here’s the kicker — the successful .co bidder will have to show that it processes on average 25 million registry transactions — defined as “billable EPP (write) transactions, as well as all EPP search (read) transactions” — per day. (All of the RFP quotes in this post have been machine-translated from Spanish by Google and run by a few generous Spanish speakers for verification.)
The RFP is not entirely clear on what exact data points it’s looking at here, but my take is that qualifying transactions include, at an absolute minimum, attempts to create a domain, renew a domain, transfer a domain and check whether a domain is registered.
The vast majority of such transactions are in the check and create functions, and I believe a great deal of that activity relates to drop-catching, where registries are flooded with add requests for just-deleted domains.
Whichever way you split it, 25 million a day is a ludicrously high number. Literally only .com, which sees 2.3 billion checks and 1.5 billion adds per month, sees that kind of action.
According to Neustar, which actually runs .co, it only sees 6.4 million transactions per day on average. The requirement to handle 25 million a day is “exaggerated, unjustified and discriminatory” against Neustar, Neustar told MinTIC.
But the RFP allows for the bidding registries to spread their 25-million-a-day quota across all of the TLDs they manage, and this MAY sneak Afilias over the line.
I say MAY in big letters because I don’t believe the numbers that Afilias (and probably other registries too) reports to ICANN every month are reliable.
If you add up the reported, qualifying EPP transactions for September in Afilias’ top four legacy gTLDs — .org, .info, .mobi and .pro — you get to over 25 million per day.
But those same records show that, for example, .mobi, .pro and .info had exactly the same number of EPP availability checks that month — 215,988,497 each.
This is clearly bad data.
I reported on this issue last May, when ICANN’s Security and Stability Advisory Committee informed ICANN that major registries were providing “not reliable” or possibly “fabricated” data about port 43 Whois queries.
Afilias, which was one of the apparent offenders, told me at the time that it was addressing the issue with ICANN, but it does not yet appear to have fully fixed its reporting to enable TLD-by-TLD breakdowns of its registry activity.
It is of course quite possible, even very likely, that Afilias has on average more than 25 million qualifying EPP transactions per day, but how’s it going to prove that to the Colombian government when the numbers it reports under contract to ICANN are clearly unreliable?
It’s a little harder to determine whether Neustar would qualify under the 25-million transaction rule, because some of its largest zones are ccTLDs — .co, .in and .us — that do not publicly report this kind of data. Its comments to the RFP suggest it would not.
Numbers aside, I’ll note that there’s very probably an inherent bias towards legacy gTLD operators like Afilias and against relative newcomers such as CentralNic if you’re counting EPP transactions. As I noted above, a lot of these transactions are coming from drop-catch activity, which is more prevalent on larger, older TLDs where there are more dropping domains that are more likely to have existing backlinks and traffic.
The fourth technical requirement in the Colombian RFP that looks a bit fishy is the requirement that the new registry must have channel relationships with at least 10 of the largest 25 registrars, as listed by a web site called domainstate.com.
I can’t say I’ve looked at domainstate.com very often, if at all, but a quick look at its numbers for September strongly suggests to me that it does not count post-2012 new gTLD registrations in its registrar league table. One registrar with almost four million domains under management doesn’t even show up on the list. This arguably could give an advantage to a registry that plays strongly in legacy gTLDs.
That said, it’s probably an academic point — I don’t think any of the bidders for the .co contract would have difficulty showing that they have 10 of the top 25 registrars on board, whichever way you calculate that league table.
Cumulatively, these four technical hurdles have led some to suggest that Afilias has somehow steered MinTIC towards creating an RFP only it could win.
Apart from what I’ve discussed here, I’ve no evidence that is the case, and Afilias has not yet responded to my request for comment today.
Luckily for the bidding registries, the Columbian RFP has not yet been finalized. Comments submitted by the bidders and others are apparently going to be taken on board, so the barriers to entry for respondents could be lowered before bids are finally accepted.
MinTIC posted an update last night that extends the period that the RFP could run, and the transition period should Neustar lose the contract. A handover, should one happen at all, could now happen as late as February next year.

SaveDotOrg to protest outside ICANN HQ. #lol

Good grief.
Just when you thought the outrage over .org manager Public Interest Registry’s imminent sale to Ethos Capital couldn’t get any weirder, the #SaveDotOrg campaign has announced that it is going to physically protest ICANN’s headquarters in Los Angeles next week.
From 0900 until 1100 local time, Friday January 24, they’ll gather to demand that non-profit voices are heard in ICANN’s decision whether to approve the acquisition. From the announcement:

Join us in demanding that ICANN commit to a process that includes the voices and priorities of nonprofits and grassroots organizations. The .ORG domain isn’t up for sale without our participation. We’ll rally outside ICANN’s offices in Los Angeles on Friday, January 24. This is an important moment in the SaveDotOrg campaign, and we want you to join us!

Sloganed T-shirts and signs will be available.
The event is being organized by NTEN, the Electronic Frontier Foundation and Fight For The Future. All very lovely people; I can’t see this turning into some Hong Kong-style riot situation.
Unusual as it is, this kind of direct action against ICANN is not unprecedented.
Back in 2011, a group of pornographers and civil liberties activists gathered outside the Westin St Francis hotel in San Francisco to, where ICANN was holding its public meeting, protest the imminent approval of .xxx, which they thought was a threat to free speech online. About 25 people showed up, by my count, chanting slogans such as “We want porn! No triple-X!”. Buttman was there.
Those protesters, it turns out many years later, really had nothing to worry about; nobody has been forced to buy a .xxx domain, and my friends tell me porn is still very much available on the internet.
I rather suspect the #SaveDotOrg guys are in the same boat. Of all the arguments against the acquisition, the one claiming that free speech is at risk still seems to me the least convincing.

Ten years ago I predicted Oscar winners wanted a .movie gTLD. Was I right?

Almost 10 years ago, when DI was barely a month old, I looked at that year’s Oscar nominees and predicted that a .movie gTLD could find some demand in the movie industry. Was I right?
Of course I was. As regular readers know, I’m always right. Apart from those times I’m wrong.
In 2010, there was no .movie gTLD and no publicly announced applications, but I noted at the time that almost half of the 50 nominated movies that year included the word “movie” immediately before the dot.
This year, there were 52 nominated movies across all categories (I’m well aware that this is a pretty small sample size to draw any conclusions from, but this post is just a bit of fun) so one might reasonably expect there to be roughly 25 official sites using .movie domains among them.
There are not. Only nine of the films, including four of the nine Best Picture nominees, use freshly registered .movie domains for their official sites.
These include the likes of 1917.movie, thecave.movie, joker.movie, onceuponatimeinhollywood.movie and littlewomen.movie.
.movie, managed by Donuts, has been around since August 2015. It competes with Motion Picture Domain Registry’s .film, which was not used by any of this year’s Oscars hopefuls.
What about the rest of this year’s nominees? Did they all register fresh .com domains for their movies?
No. In fact, only 10 of the 52 movies appear to have registered new .com domains for their official sites — one more than .movie — including two of the Best Picture nominations.
These fresh .com regs include domains such as parasite-movie.com, richardjewellmovie.com, ilostmybodymovie.com, forsamafilm.com and breakthroughmovie.com.
One movie — Honeyland, a North Macedonian environmentalist documentary about bees — uses a .earth domain.
I discovered today that, rather brilliantly, the Japan-based .earth registry demands registrants “voluntarily pledge to become ambassadors for Earth and do away with actions that harm Earth and its inhabitants” in its Ts&Cs.
So, of the 52 nominated movies, only 20 opted to register a new domain for their official site — down from 24 in 2010 — and that business was split evenly between .com and new gTLDs.
Whether the movies opted for a .movie domain appears to depend in large part on the distributor.
Sony appears to be a bit of a fan of the gTLD, while Fox, Disney and Warner tend to use after-the-slash branding on their existing .com domains for their films’ official sites.
I tallied 17 movies that have their official sites on their distributor’s .com/.org domain.
There are also trends that I could not have predicted a decade ago, such as the rise of streaming services. Back in 2010, Netflix was still largely a DVD-delivery player and was not yet creating original content.
But this year, seven of the Oscar-nominated movies were made and/or distributed by Netflix, and as such the official web site is the same place you go to actually watch the film — netflix.com.
A few of the nominated animated shorts don’t need official sites either — you just head to YouTube to watch them for free.
There are currently only about 3,200 domains in the .movie zone file, about 1,200 fewer than rival .film. It renews at over $300 a year at retail, so it’s not cheaper than the alternatives by a long way.

New CEO to step into the lion’s den at auDA

Australian ccTLD manager auDA has named its next CEO: Rosemary Sinclair, current CEO of Energy Consumers Australia.
She’ll join the organization in March, about nine months after the last guy, Cameron Boardman, quit after enduring three years of controversy.
Sinclair appears to come from the consumer side of the house. As well as being a “demand-class” member of auDA, she’s also the founding CEO of ECA, which was set up to represent the rights of Australian energy customers.
She’s been involved in auDA before, sitting as a non-executive director from 2009 to 2011, and was also involved heavily in the ICANN community around the same time.
She joins the organization at a time of change, with controversial initiatives such as the release of second-level .au domains on the horizon. She’s unlikely to get an easy ride; auDA members can be a vocal, activist bunch at times.
Sinclair is a Member of the Order of Australia, an honorific handed out by the Queen, meaning she gets to put AM after her name.
She’s NOT the octogenarian former Miss Australia that pops up first when you Google her name, as much as this headline-writer wants her to be.

Secrets of the .org deal revealed, but much info remains private

ICANN has published a ream of new information about the proposed acquisition of Public Interest Registry by Ethos Capital, a deal widely criticized for what it could mean for millions of .org registrants.
The documentation was provided to ICANN by Ethos, PIR and the Internet Society, PIR’s current owner, on the understanding that certain confidential information would remain private or would be redacted.
Almost all of the juicy financial details remain unpublished, but there’s still plenty of interesting revelations among the packet’s 27 pages.
Before we dive into the details, here are the headlines:

• The deal is being partly funded by an enormous loan.
• Technically, Ethos isn’t the direct buyer. There are at least three corporate entities involved in the acquisition that we haven’t heard of before.
• Ethos won’t reveal the names of the directors of PIR’s would-be owner.
• Another former senior ICANN staffer and long-time Fadi Chehadé collaborator has been revealed as having an interest in the acquisition.

Most of the info relates to the proposed corporate ownership structure of PIR during and following the acquisition, and it’s a little bit more complex than Ethos simply signing a check to ISOC and taking the reins at PIR.
First, PIR is going to undergo what it calls a “statutory conversion” in its home state of Pennsylvania, changing its name from Public Interest Registry to Public Interest Registry LLC — essentially changing from a non-profit to a for-profit.
The company notes that this is not a change of entity — PIR will still be PIR — but is rather a change of its company type and legal name.
At the same time, a newly created non-profit fully owned by ISOC called Connected Giving Foundation will take 100% ownership of PIR LLC, before immediately selling its entire stake to the Ethos group.
But the buyer is not, directly, Ethos Capital. Instead, it’s an acquisition vehicle, created October 24 last year in Delaware, called Purpose Domains Direct, LLC. That company is owned in turn by another vehicle, formed the same day in Delaware, called Purpose Domains Holdings LLC.
Ethos controls both of these companies. It’s not unusual for acquisitions to be carried out via subsidiaries in this way.
That said, Ethos appears reluctant to reveal the names of these companies’ directors.
In its letter to ICANN asking for approval of the acquisition, apparently sent November 14 (one day after the public announcement), the names of the three Purpose Domains Direct directors are redacted. Corporation-friendly Delaware doesn’t make it easy to get at this information either.
However, in December 20 answers to a list of dozens of questions posed by ICANN about the deal, Ethos discloses that it has expanded its proposed board to five directors — the CEO of PIR (currently Jon Nevett), alongside two people selected by Ethos and two selected by “one or more minority equity holders”.
The minority owners are not named, but they could be the three entities revealed by ISOC’s CEO last November, which include funds managed by the Perot and Romney families.
The board will therefore be controlled by Ethos and PIR together, the documents state. No proposed directors other than Nevett are named and it’s not known whether the three redacted names from the November letter are still in line for seats.
The identities of individuals involved in the deal have been of keen interest since it emerged, shortly after the acquisition was announced, that former ICANN CEO Fadi Chehadé was acting as an adviser to Ethos, closely enough that he actually registered at least one domain name on Ethos’ behalf.
Ethos chief purpose officer Nora Abusitta-Ouri was a senior VP at ICANN until 2016, and CEO Erik Brooks worked for 20 years at Donuts owner Abry Partners, the private equity firm where Chehadé now works as a senior advisor.
Abry is not involved in the acquisition, the new documentation states. Neither are any current ICANN staffers or any other registries or registrars.
But it turns out that yet another former senior ICANN staffer is in fact involved.
The new documentation reveals that Allen Grogan, who worked as head of contracting for the new gTLD program and then chief of contract compliance at ICANN between 2013 and 2017, is also acting as an “advisor” on the deal.
It’s not clear whether Grogan is on the payroll of Ethos, Abry, Chehadé & Company, PIR, ISOC, or none of the above, but the smart money would surely be on him having being brought on board by Chehadé. Like so many senior ICANN officers hired during Chehadé’s tenure, the two men worked together for years at other companies.
The final nugget of new information that leaped out at me in the new docs is how the deal will be funded.
The packet reveals, I believe for the first time, that a good chunk of the $1.135 billion proposed purchase price is actually being paid for with new debt.
Ethos says that Purpose Domains Direct has taken out a total of $360 million in loans from various US banks to make up the shortfall left by its own investors.
The company said that PIR — a mature, high-margin business — will easily have the money to service this debt and, as a for-profit, pay its taxes. Repayments will be less than half of what it currently pays to ISOC every year, the documents state.
The documents were published here (pdf) on Saturday. Let me know if you spot something interesting I missed.