.kids auction is off

ICANN has postponed the planned auction of the .kid(s) gTLDs after an appeal from one of the applicants.
The last-resort auction had been penciled in for January 25, and there was a December 8 deadline for the three participants to submit their info to the auctioneer.
But DotKids Foundation, the shallowest-pocketed of the three, filed a Request for Reconsideration last Wednesday, asking ICANN to put the contention set back on hold.
The cancellation of the January auction appears to be to give ICANN’s board of directors time to consider the RfR under its usual process — it has not yet ruled on it.
DotKids and Amazon have applied for .kids and Google has applied for .kid. A String Confusion Objection won by Google put the two strings in the same contention set, meaning only one will eventually go live.
DotKids comprehensively lost a Community Priority Evaluation, which would negate an auction altogether, but it thinks the CPE got it wrong and wants to be treated the same way as other gTLD applicants whose CPE results are currently under review.
Reconsideration requests take between 30 and 90 days to process, and they rarely go the way of the requester, so the delay to the auction will likely not be too long.

CentralNic now owns .sk after $30m deal closes

CentralNic has just closed its acquisition of SK-NIC, the ccTLD operator for Slovakia, the company announced today.
The London-based firm announced the deal back in August, when it was to be worth €21.27 million up front, with a deferred performance-related cash payout of €4.85 million cash over three years.
But the deal, originally intended to close in September, was delayed by legal “complexities” and restructured from an asset purchase to a purchase of SK-NIC, including its liabilities, in its entirety.
The purchase price is now €20.27 million in advance, with €5.85 million deferred. That’s still a total of €26.12 million ($30.67 million).
The acquisition is unusual in that it sees a ccTLD transferring to control of a foreign entity, and was opposed by many in the Slovakian internet community.
A petition was organized calling for the transfer of .sk to a new independent body with more community and government oversight.
There had been fears that CentralNic would do to .sk what it has to Laos’ .la — repurpose it to mean something other than “Slovakia” — but CentralNic told DI that it will no do so.
The deal means .sk will move from its outdated old registry infrastructure to CentralNic’s standards-based EPP platform, which should make it easier for registrars to integrate.
It’s also likely to mean it’s going to be much easier for non-Slovaks to be able to register .sk domains.
SK-NIC currently has about 360,000 domains under management.

As .wed goes EBERO, did the first new gTLD just fail?

A wedding-themed gTLD with a Bizarro World business model may become the first commercial gTLD to outright fail.
.wed, run by a small US outfit named Atgron, has become the first non-brand gTLD to be placed under ICANN’s emergency control, after it lost its back-end provider.
DI understands that Atgron’s arrangement with its small New Zealand back-end registry services provider CoCCA expired at the end of November and that there was a “controlled” transition to ICANN’s Emergency Back-End Registry Operator program.
The TLD is now being managed by Nominet, one of ICANN’s approved EBERO providers.
It’s the first commercial gTLD to go to EBERO, which is considered a platform of last resort for failing gTLDs.
A couple of unused dot-brands have previously switched to EBERO, but they were single-registrant spaces with no active domains.
.wed, by contrast, had about 40 domains under management at the last count, some apparently belonging to actual third-party registrants.
Under the standard new gTLD Registry Agreement, ICANN can put a TLD in the emergency program if they fail to meet up-time targets in any of five critical registry functions.
In this case, ICANN said that Atgron had failed to provide Whois services as required by contract. The threshold for Whois triggering EBERO is 24 hours downtime over a week.
ICANN said:

Registry operator, Atgron, Inc., which operates gTLD .WED, experienced a Registration Data Directory Services failure, and ICANN designated EBERO provider Nominet as emergency interim registry operator. Nominet has now stepped in and is restoring service for the TLD.
The EBERO program is designed to be activated should a registry operator require assistance to sustain critical registry functions for a period of time. The primary concern of the EBERO program is to protect registrants by ensuring that the five critical registry functions are available. ICANN’s goal is to have the emergency event resolved as soon as possible.

However, the situation looks to me a lot more like a business failure than a technical failure.
Multiple sources with knowledge of the transition tell me that the Whois was turned off deliberately, purely to provide a triggering event for the EBERO failover system, after Atgron’s back-end contract with CoCCA expired.
The logic was that turning off Whois would be far less disruptive for registrants and internet users than losing DNS resolution, DNSSEC, data escrow or EPP.
ICANN was aware of the situation and it all happened in a coordinated fashion. ICANN told DI:

WED’s backend registry operator recently notified ICANN that they would likely cease to provide backend registry services for .WED and provided us with the time and date that this would occur. As such, we were aware of the pending failure worked to minimize impact to registrants and end users during the transition to the Emergency Back-end Registry Operator (EBERO) service provider.

In its first statement, ICANN said that Nominet has only been appointed as the “interim” registry, while Atgron works on its issues.
It’s quite possible that the registry will bounce back and sign a deal with a new back-end provider, or build its own infrastructure.
KSregistry, part of the KeyDrive group, briefly provided services to .wed last week before the EBERO took over, but I gather that no permanent deal has been signed.
One wonders whether it’s worth Atgron’s effort to carry on with the .wed project, which clearly isn’t working out.
The company was founded by an American defense contractor with no previous experience of the domain name industry after she read a newspaper article about the new gTLD program, and has a business model that has so far failed to attract customers.
The key thing keeping registrars and registrants away in droves has been its policy that domains could be registered (for about $50 a year) for a maximum period of two years before a $30,000 renewal fee kicked in.
That wasn’t an attempt to rip anybody off, however, it was an attempt to incentivize registrants to allow their domains to expire and be used by other people, pretty much the antithesis of standard industry practice (and arguably long-term business success).
That’s one among many contractual reasons that only one registrar ever signed up to sell .wed domains.
Atgron’s domains under management peaked at a bit over 300 in March 2016 and were down to 42 in August this year, making it probably the failiest commercial new gTLD from the 2012 round.
In short, .wed isn’t dead, but it certainly appears extremely unwell.
UPDATE: This post was updated December 12 with a statement from ICANN.

ICANN punts o.com auction to US watchdogs

Verisign’s proposed auction of the domain o.com might have a negative effect on competition and has been referred to US regulators.
That’s according to ICANN’s response to the .com registry’s request to release the domain, which is among the 23 single-letter domains currently reserved under the terms of its contract.
ICANN has determined that the release “might raise significant competition issues” and has therefore been referred to “to the appropriate governmental competition authority”.
It’s forwarded Verisign’s request to the US Department of Justice.
Verisign late last month asked ICANN if it could release o.com to auction as a test that could presumably lead to other single-character .com names being released in future.
The plan is for a charity auction, in which almost all the proceeds are donated to internet-related good causes.
Only the company running the auction would make any significant money; Verisign would just take its standard $7.85 annual fee.
ICANN told the company that it could find no technical reason that the release could not go ahead.
The only barrier is the fact that Verisign arguably has government-approved, cash-printing, market dominance and is therefore in a sensitive political position.
Whether its profitless plan will be enough to see the auction given the nod remains to be seen.
A certain bidder in the proposed auction would be Overstock.com, the online retailer, which has been pressuring ICANN and Verisign for the release of O.com for well over a decade and even owns trademarks covering the domain.
Disclosure: several years ago I briefly provided some consulting/writing services to a third party in support of the Verisign and Overstock positions on the release of single-character domain names, but I have no current financial interest in the matter.

Numeric .xyz names plummet despite dollar deal

XYZ.com’s effort to sell over a billion numeric .xyz domains at just $0.65 each does not appear to be gaining traction.
The number of qualifying domains in the .xyz zone file has plummeted by almost 200,000 since the deal was introduced and dipped by over 4,000 since the blanket discount went live.
The $0.65 registry fee applies to what XYZ calls the “1.111B Class” of domains — all 1.111 billion possible six, seven, eight and nine-digit numeric .xyz domains.
These domains carry a recommended retail price of $0.99.
It’s not a promotional price. It’s permanent and also applies to renewals.
Some registrars opted to start offering the lower price from June 1, but it did not come into effect automatically for all .xyz registrars until November 11
The number of domains in this class seems to be on a downward trend, regardless.
There were 272,589 such domains May 31, according to my analysis of .xyz zone files, but that was down to 74,864 on December 5.
On November 10, the day before the pricing became uniform, there were 78,256 such domains. That shows a decline of over 4,000 domains over the last four weeks.
It’s possible that the 1.111B offer is attracting registrants, but that their positive impact on the numbers is being drowned out by unrelated negative factors.
The period of the 200,000-name decline coincides with the massive mid-July junk drop, in which .xyz lost over half of its total active domains due to the expiration of domains registered for just a penny or two in mid-2015.
Many of those penny domains were numeric, due to interest from speculators from China, where such names have currency.
The period also coincides with a time in which XYZ was prohibited from selling via Chinese registrars, due to a problem changing its Real Names Verification provider.
In recent marketing, XYZ has highlighted some interesting uses of 1.111B domains, including a partnership with blockchain cryptocurrency Ethereum.
Other registrants are using the domains to match important dates and autonomous system numbers.

DotKids doesn’t want .kids auction to go ahead

One of the applicants for the .kids gTLD has asked ICANN to stop the planned last-resort auction.
DotKids Foundation is competing with Amazon for .kids and, because the two strings were ruled confusingly similar, with Google’s application for the singular .kid.
ICANN last month set a January 25 date for the three contenders to go to auction, having unfrozen DotKids’ application back in October.
DotKids’ bid had been put on hold due to it losing a Community Priority Evaluation — which found overwhelmingly that the organization did not represent a proper community — and its subsequent appeals of that ruling.
But the foundation now says that its application should be treated the same as .music, .gay, and a few others, which are currently on hold while ICANN waits for the results of a third-party review of the CPE process.
DotKids filed a Request for Reconsideration (pdf) with ICANN yesterday, immediately after being told that there were no plans to put the contention set back on hold.
Tomorrow is the deadline for the three applicants to submit their information to ICANN to participate in next month’s auction.
An ICANN last-resort auction sees the winning bid being placed in a fund for a yet-to-be-determined purpose, as opposed to private auctions where the losing bidders share the loot.

InternetNZ loses two of its three CEOs as it simplifies

InternetNZ has announced the results of a consultation into a restructuring of the organization.
The .nz ccTLD manager is to cut one of its three operating companies and reduce the number of CEOs from three to one.
NZRS, which actually runs the registry, will be folded into InternetNZ, while policy-setting body Domain Name Commission Ltd will remain a separate company in the same group.
Jordan Carter, CEO of the company since 2013, has been picked to carry on leading InternetNZ and to chair the board of DNCL, which is losing three of its 12 seats.
The company threw open the idea of a restructuring back in June, noting that it had 20 governors, three CEOs and 10 senior executives for the 35 full time employees across the three organisations
InternetNZ leadership said in a statement that they hope the changes will help the registry become more effective as it simplifies.

Neustar ditches .biz for .neustar

Registry operator Neustar has migrated all of its web sites to its .neustar gTLD, abandoning its original home at .biz.
The company announced today that its main site can now be found at home.neustar. Its old neustar.biz already redirects to the dot-brand domain.
It’s also using domains such as marketing.neustar, security.neustar and risk.neustar to market its various services.
Neustar has been using its dot-brand extensively for years, adding at least 10 new sites this year, but today marks the formal blanket switch away from its old .biz branding.
The gTLD has over 600 names in its zone file, of which about 15 resolved to active .neustar web sites according to the last scan I did. There’s probably more today.
It must have been a bit of a Sophie’s Choice for the company.
Neustar has been using its own .biz ever since it went live with the gTLD over 15 years ago, a case of eating its own dog food when few others would, but it now clearly sees a tastier future in its dot-brand business.
The company acts as the back-end for almost 200 dot-brands already — about a third of those that went live from the 2012 gTLD application round — and seems to be laying the groundwork for a big push in the next round (expected at some point after 2020).
The rebrand should give Neustar some first-hand experience of the challenges current and future clients could face when switching to a dot-brand gTLD.

Verisign wants to auction off O.com for charity

The internet could soon gets just its fourth active single-character .com domain name, after Verisign revealed plans to auction off o.com for charity.
The company has asked ICANN to allow it to release just one of the 23 remaining one-letter .com domains, which are currently reserved under the terms of the .com registry agreement.
It’s basically a proof of concept that would lead to this contractual restriction being lifted entirely.
O.com has been picked as the guinea pig, because of “long-standing interest” in the domain, according to Verisign.
Overstock.com, the $1.8 billion-a-year US retailer, is known to have huge interest in the name.
The company acquired o.co from .CO Internet for $350,000 during the ccTLD’s 2010 relaunch, then embarked upon a disastrous rebranding campaign that ended when the company estimated it was losing 61% of its type-in traffic to o.com.
Overstock has obsessed over its unobtainable prize for over a decade and would almost certainly be involved in any auction for the domain.
In fact, I wouldn’t be surprised to discover that Overstock pressured Verisign into requesting the release of o.com.
Despite the seven or eight figures that a single-letter .com domain could fetch, Verisign’s cut of the auction proceeds would be just $7.85, its base registry fee.
Regardless, it has a payment schedule in mind that would see the winning bidder continue to pay premium renewal fees for 25 years, eventually doubling the sale price.
The winner would pay their winning bid immediately and get a five-year registration, but then would have to pay 5% of that bid to renew the domain for years six through 25.
In other words, if the winning bid was $1 million, the annual renewal fee after the first five years would be $50,000 and the total amount paid would eventually be $2 million.
All of this money, apart from the auction provider’s cut, would go to a trust that would distribute the funds to internet-focused non-profit organizations, such as those promoting security or open protocols.
There’s also a clause that would seem to discourage domain investors from bidding. The only way to transfer the domain would be if the buyer was acquired entirely, though this could be presumably circumvented with the use of a shell company.
It’s an elaborate auction plan, befitting of the fact that one-character .com domains are super rare.
Only x.com, q.com and z.com are currently registered and it’s Verisign policy to reserve them in the unlikely event they should ever expire.
Billionaire entrepreneur Elon Musk this July reacquired x.com, the domain he used to launch PayPal in the 1990s, back from PayPal for an undisclosed sum.
Z.com was acquired by GMO Internet for $6.8 million in 2014.
Single-character domains are typically not reserved in the ICANN contracts of other gTLDs, whether pre- or post-2012, though it’s standard practice for the registry to reserve them for auction anyway.
Verisign’s reservations in .com and .net are a legacy of IANA policy, pre-ICANN and have been generally considered technically unnecessary for some years.
Still, there’s been a reluctance to simply hand Verisign, already a money-printing machine through accident of history, another windfall of potentially hundreds of millions of dollars by allowing it to sell off the names for profit. Hence the elaborate plan with the O.com trust fund.
The proposal to release O.com requires a contractual amendment, so Verisign has filed a Registry Services Evaluation Process request (pdf) with ICANN that is now open for public comment.
As a matter of disclosure: several years ago I briefly provided some consulting/writing services to a third party in support of the Verisign and Overstock positions on the release of single-character domain names, but I have no current financial interest in the matter.

ICANN urged to crack down on new gTLD abuse

Registries selling dirt-cheap new gTLD domains should be rewarded with lower ICANN fees when they get proactive about abuse, while registrars that turn a blind eye to spammers should be suspended, an ICANN working group will recommend.
In its second batch of findings, the Competition, Consumer Trust, and Consumer Choice Review Team (CCT) said that financial incentives and a new complaints procedure should be used to persuade registries and registrars to fight DNS abuse.
The CCT said it “proposes the development of incentives to reward best practices preventing technical DNS abuse and strengthening the consequences for culpable or complacent conduits of technical DNS abuse” in a paper published today.
The review, which drew on multiple sources of market and abuse data, original research, and analysis of third-party research, is probably the most comprehensive study into the impact of the new gTLD program to date.
It concluded that overall rates of DNS abuse did not increase as a result of the program, but that bad actors are increasingly migrating away from legacy gTLDs such as .com to 2012-round TLDs such as .top, .gdn and Famous Four Media’s stable.
Indeed, much of the paper appears to be a veiled critique of FFM’s practices.
The registrar AlpNames, known to be affiliated with FFM and responsible for most of its retail sales, is singled out as the currently accredited registrar particularly favored by abusers.
The CCT report notes that AlpNames regularly sells domains for under $1, or gives them away for free, and offered a tool allowing registrants to randomly generate up to 2,000 available domains in 27 different gTLDs, pretty much inviting abuse.
“Certain registries and registrars appear to either positively encourage or at the very least willfully ignore DNS abuse. Such behavior needs to be identified rapidly and action
must be taken by ICANN compliance as deemed necessary,” the paper says.
The review found that gTLDs with no registration restrictions and the lowest prices had the most abuse. Duh.
“Generally, the DNS Abuse Study indicates that the introduction of new gTLDs did not increase the total amount of abuse for all gTLDs,” its report says. “[F]actors such as registration restrictions, price, and registrar-specific practices seem more likely to affect abuse rates.”
Drawing on data provided by 11 domain block-lists (SURBL, SpamHaus, etc), the paper states that at least one TLD (FFM’s .science) had an abuse rate excess of 50%.
Using SpamHaus data, the paper identities FFM’s .science, .stream, .trade, .review, .download and .accountant as having over 10% abuse during the period of its study. Also on that list: Uniregistry’s low-price .click and the China-based .top and .gdn.
One thing they all have in common is that AlpNames is a leading registrar, usually accounting for at least a quarter of domains under management.
There’s no way AlpNames/FFM is not aware of the amount of bad actors in its customer base, the question is what can ICANN do about it?
The CCT team recommends that registries and registrars with over 10% of their names used for abusive purposes should be tasked by ICANN with proactively cleaning up their zones. Those that fail to do so should be subject to a new Domain Abuse Dispute Resolution Process, it said.
These companies should have their contracts suspended when they’re “associated with unabated, abnormal and extremely high rates of technical abuse”, the report recommends.
There’s a big boilerplate specifying, tellingly, that registry operators that control registrars are affected by this recommendation too.
It should be noted that there was not a full consensus of support for the idea of a DADRP. Half a dozen working group members filed minority statements opposing it.
It’s not all stick in the report, however. There’s some carrot, too.
The CCT report recommends financial incentives such as fee reductions for registries that have “proactive anti-abuse measures” in place.
It noted that there is precedent for ICANN doing this kind of thing when it implemented an anti-tasting policy that seriously restricted registrars’ ability to get registry refunds.
The CCT Review Team was formed to figure out what impacts the 2012 new gTLD round had on the domain name market.
The completion of its work is one of several gating factors to the next new gTLD application round under ICANN’s new bylaws and the old Affirmation of Commitments with the US government.
It published initial recommendations earlier this year. This new set of recommendations is now open for public comment until January 8.