Nominet members revolt over “deepest pockets wins” auction plans

A group of Nominet members and registrars have launched a petition to prevent Nominet from introducing registry-level auctions for dropping .uk domain names.

The petition, organized by Netistrar, reads: “We the undersigned members request that Nominet maintains equal registrar access to expired domain names on a first come first served basis.”

Nominet recently launched a policy consultation that lays out plans to essentially kill off the existing system of drop-catching expired domains and replace it with either registry auctions or a pay-to-play model asking fees of up to £6,000 a year.

The petition says that “these proposals technically and financially restrict a registrars ability to access expired domains”, noting that other ccTLDs “manage an expiry process without an expensive and centralized auction system.”

So far, 70 registrars and individuals (out of the about 3,000 Nominet members) have signed the petition, but they account for more than 400,000 .uk domains.

The petition will be presented at Nominet’s annual general meeting in September. The current policy consultation ends August 14.

2 Comments Tagged: .uk, auctions, drop catching, nominet

CSC becomes first foreign registrar to get the China nod

It’s probably not the best time, politically, to be bragging about doing business in China, but CSC has nevertheless just announced that it’s been given the nod to act as a registrar in China.

The company claims to be the first non-Chinese registrar to be given an official government license to operate in the country, though many registries have obtained one over the last few years since harsh new regulations came into power.

Under the Chinese rules, web site owners need a license to operate, and they can only register domains from approved registrars in approved TLDs.

It’s basically a great big censorship tool, but it doesn’t seem to have stopped every Chinese citizen from registering domains via foreign-owed registrars.

CSC has a corporate client base, so it’s got more incentive than most to follow the rules to the letter.

“CSC’s success in becoming licensed as a foreign-owned registrar positions the company as a go-to resource for global organizations doing business in China,” the company said in a press release.

1 Comment Tagged: china, csc, miit

ICANN close to becoming $200 million gift-giver

Remember how ICANN raised hundreds of millions of dollars auctioning off new gTLD contracts, with only the vaguest of ideas how to spend the cash? Well, it’s coming pretty close to figuring out where the money goes.

The GNSO Council approved a plan last Thursday that will turn ICANN into a giver of grants, with some $211 million at its initial disposal.

And the plan so far does not exclude ICANN itself for applying to use the funds.

The plan calls for the creation of a new Independent Project Applications Evaluation Panel, which would be charged with deciding whether to approve applications for this auction cash.

Each project would have to fit these criteria:

• Benefit the development, distribution, evolution and structures/projects that support the Internet’s unique identifier systems;
• Benefit capacity building and underserved populations, or;
• Benefit the open and interoperable Internet

Examples given include improving language services, providing PhD scholarships, and supporting TLD registries and registrars in the developing world.

The evaluation panel would be selected “based on their grant-making expertise, ability to demonstrate independence over time, and relevant knowledge.” Diversity would also be considered.

While existing ICANN community members would not be banned from being on the panel, it’s being strongly discouraged. The plan over and over again stresses how there must be rigorous conflict-of-interest rules in place.

What’s less clear right now is what role ICANN will play in the distribution of funds.

The Cross-Community Working Group that came up with the proposal offers three possible mechanisms, but there was no strong consensus on any of them.

The one being pushed, “Mechanism A”, would see ICANN org create a new department — potentially employing as many as 20 new staff — to oversee applications and the evaluation panel.

Mechanism B would see the same department created, but it would work with an existing independent non-profit third party.

Mechanism C would see the function offloaded to a newly created “ICANN Foundation”, but ICANN’s lawyers are not keen on this idea.

The Intellectual Property Constituency was the lone dissenting voice at Thursday’s GNSO Council vote. The IPC says that support for Mechanism A actually came from a minority of CCWG participants, depending on how you count the votes.

It thinks that ICANN should divorce itself as far as possible from the administration of funds, and that not to do so creates the “unreasonable risk” of ICANN being perceived as “self-dealing”.

But as the plan stands, ICANN is free too plunder the auction funds at will anyway. ICANN’s board of directors said as long ago as 2018:

ICANN maintains legal and fiduciary responsibility over the funds, and the directors and officers have an obligation to protect the organization through the use of available resources. In such a case, while ICANN would not be required to apply for the proceeds, the directors and officers would have a fiduciary obligation to use the funds to meet the organization’s obligations.

It already took $36 million from the auction proceeds to rebuild its reserve fund, which had been diminished by ICANN swelling its ranks and failing to predict the success of the new gTLD market.

The CCWG also failed to come to a consensus on whether ICANN or its constituent parts should be banned from formally applying for funds through the program.

Because the plan is a cross-community effort, it needs to be approved by all of ICANN’s supporting organizations and advisory committees before heading to the ICANN board for final approval.

There also looks to be huge amount of decision-making and implementation work to be done before ICANN puts its hand in its pocket for anyone.

Comment Tagged: auction proceeds, auctions, ccwg, gnso, ICANN, new gTLDs

The $135 million battle for .web could be won in weeks

Afilias is to get its day in “court” to decide the fate of the .web gTLD just 10 days from now.

The registry is due to face off with ICANN before an Independent Review Process panel in a series of virtual hearings beginning August 3.

The IRP complaint was filed late 2018 as the endgame of Afilias’ attempt to have the results of the July 2016 .web auction overturned.

You’ll recall that Verisign secretly bankrolled the winning bidder, a new gTLD investment vehicle called Nu Dot Co, to the tune of $135 million, causing rival bidders to cry foul.

If that win was vacated, Afilias could take control of .web with its second-place bid.

Afilias claims that ICANN broke its own rules by refusing to thoroughly analyze whether NDC had a secret sugar daddy, something DI first reported on two weeks before the auction.

It has put forward the entirely plausible argument that Verisign splashed out what amounts to about a month’s .com revenue on .web in order to bury it and fortify its .com mindshare monopoly against what could be its most formidable competitor.

In the IRP case to date, ICANN has been acting as transparently as you’d expect when its legal team is involved.

It first redacted all the juiciest details from the Verisign-NDC “Domain Acquisition Agreement” and the presumably damaging testimony of one of its own directors, and more recently has been fighting Afilias’ demands for document discovery.

In March, the IRP panel ruled against ICANN’s protests on almost every count, ordering the org to hand over a mountain of documentation detailing its communications with Verisign and NDC and its internal deliberations around the time of the auction.

But the ace up ICANN’s sleeve may be an allegation made by Verisign that Afilias itself is the one that broke the auction’s rules.

Verisign has produced evidence that an Afilias exec contacted his NDC counterpart five days before the auction, breaking a “blackout period” rule so serious that violators could lose their applications.

While Afilias denies the allegation, the IRP panel ruled in March that Afilias must hand over copies of all communications between itself and rival bidders over the auction period.

We’re not likely to see any of this stuff until the panel issues its final declaration, of course.

In the past, IRP panels have taken as long as six or seven months after the final hearing to deliver their verdicts, but the most-recently decided case, Amazon v ICANN, was decided in just eight or nine weeks.

3 Comments Tagged: .com, .web, afilias, auctions, ICANN, ndc, new gTLDs, verisign

.com renewals lowest in years, but Verisign sees lockdown bump anyway

.com and .net saw decent growth in the lockdown-dominated second quarter, despite Verisign reporting the lowest renewal rate since 2017.

The company last night reported that it sold more new domains in Q2 than it did in the same period last year — 11.1 million versus 10.3 million a year ago.

It added a net 1.41 million names across both TLDs in the quarter, compared to growth of 1.34 in Q2 2019.

CEO Jim Bidzos did not directly credit coronavirus for the bump, but he told analysts that the growth was driven primarily by small businesses in North America getting online. The US went into lockdown in the last week of March.

Verisign has now upped its guidance for the year. It now expects growth in domains of between 2.75% and 4%. That’s higher than the guidance it was giving out at the start of the year, pre-coronavirus.

The company had lowered this guidance to between 2% and 3.75% in April due to coronavirus uncertainties, which with hindsight clearly seems overly cautious.

On the flipside, Verisign’s estimated renewal rate for the quarter was down to only 72.8%, down from 74.2% a year ago, the worst it’s been since Q1 2017, when renewals were suffering through the tail-end of a massive Chinese junk drop.

But Bidzos said that the low rate was “primarily related to the lower overall first-time renewal rate”, suggesting that it might be more due to registrar promotions or heightened speculation a year ago than any coronavirus-related drag factor.

For Q2, Verisign reported revenue up 2.6% year over year at $314 million, with net income up from $148 million to $152 million.

The company also announced yesterday that it is freezing its prices across all of its TLDs until March 31, 2021.

You’ll recall that it gets the right to increase prices 7% starting on October 26 this year, under its new deal with ICANN and the US government, and Verisign confirmed yesterday that there will definitely be a price increase next year.

Because there’s a six-month notice period requirement in the contract, news of the timing of this increase could come as soon as September this year.

Comment Tagged: .com, .net, coronavirus, earnings, prices, versigin

ICANN washes its hands of Amazon controversy

ICANN has declined to get involved in the seemingly endless spat between Amazon and the governments representing the Amazonia region of South American.

CEO Göran Marby has written to the head of the Amazon Cooperation Treaty Organization to say that if ACTO still has beef with Amazon after the recent delegation of .amazon, it needs to take it up with Amazon.

ACTO failed to stop ICANN from awarding Amazon its dot-brand gTLD after eight years of controversy, with ICANN usually acting as a mediator in attempts to resolve ACTO’s issues.

But Marby yesterday told Alexandra Moreira: “”With the application process concluded and the Registry Agreement in force, ICANN no longer can serve in a role of facilitating negotiation”.

She’d asked ICANN back in May, shortly before .amazon and its Japanese and Chinese translations hit the root, to bring Amazon back to the table for more talks aimed at getting ACTO more policy power over the gTLDs.

As it stands today, Amazon has some Public Interest Commitments that give ACTO’s eight members the right to block any domains they feel have cultural significance to the region.

Marby told Moreira (pdf) that it’s now up to ACTO to work with Amazon to figure out how that’s going to work in practice, but that ICANN’s not going to get involved.

1 Comment Tagged: .amazon, acto, amazon, dot-brands, ICANN, new gTLDs

Google’s .new now generally available

After many months of pre-launch registration periods, Google has taken its .new gTLD to general availability today.

Names in .new are not cheap, have strict usage restrictions, and are not available at most of the larger registrars.

You may recall that Google is doing something quite innovative with the gTLD — each .new domain must resolve to a page in which the visitor can immediately (or after logging in) create something new, such as a blog, image, spreadsheet, presentation, webcast and so on.

Over 500 domains have been claimed during sunrise and limited registration periods so far, and dozens are live and functioning according to spec already.

I’ve seen prices ranging from about $450 at Gandi to $550 at 101domain. Google Domains prices names at about $540.

Due to the high registry pricing and restrictions, many registrars do not seem to be carrying the TLD. But GA started just a few minutes ago at time of posting so it’s possible more might come online shortly.

Comment Tagged: .new, google, new gTLDs

$11 billion dot-brand blames coronavirus as it self-euthanizes

Another new gTLD you’ve never heard of and don’t care about has asked ICANN to terminate its registry contract, but it has a rather peculiar reason for doing so.

The registry is Shriram Capital, the financial services arm of a very rich Indian conglomerate, and the gTLD is .shriram.

In its termination notice, Shriram said: “Due to unprecedented Covid-19 effect on the business, we have no other option but to terminate the registry agreement with effect from 3lst March 2020.”

Weird because the letter was sent in May, and weird because Shriram Group reportedly had revenue of $11 billion in 2017. The carrying cost of a dot-brand isn’t that much.

Registries don’t actually need an excuse to terminate their contracts, so the spin from Shriram is a bit of a mystery.

Shriram had actually been using .shriram, with a handful of domains either redirecting to .com sites or actually hosting sites of their own.

It’s the 79th dot-brand to self-terminate. ICANN expects to lose 62 in the fiscal year that started three weeks ago.

Comment Tagged: dot-brands, ICANN, new gTLDs, shriram, termination, trademarks

ICANN still has no clue how coronavirus will affect the domain industry

ICANN is still in the dark about how the coronavirus pandemic is going to affect the domain industry’s fortunes and its own budget, judging by a blog post published overnight by CEO Göran Marby.

In the post, Marby outlined his 10 priorities (six created by himself, four by the ICANN board) for the recently commenced fiscal year, and the impact of the virus is front and center.

Notably, it appears that ICANN is thinking about creating a new department or hiring a new senior “economist” to track the domain market and forecast trends.

Bullet #6 on Marby’s list is:

Develop a plan for the potential economist function within ICANN org to follow and evaluate Domain Name System (DNS) market trends.

Background: I’ve heard the question asked, “Is the DNS market changing?” My answer is yes, probably. The questions we need to ask now are, what’s good for the end user, and what will be bad?

My read on this is that we might be looking at a new VP — an astrologer-in-chief, if you like — whose job it would be to read the tea leaves, stare into a crystal ball, rummage through pigeon guts, and predict budget-affecting market moves before they happen.

That’s a function currently occupied by the office of CFO Xavier Calvez, but his track record is spotty, having in previous years failed to predict basic stuff like junk drops in the new gTLD space.

Another of Marby’s goals, set by the board, is:

Develop and implement a plan to ensure continued financial stability in a world affected by COVID-19.

Background: While ICANN’s financial situation is sound at the moment, the impact of the unprecedented effect of the COVID-19 pandemic on the world economy is still unknown.

ICANN’s recently passed FY21 budget predicts an 8% slump in revenue due to an estimated 33% plummet in new gTLD registrations and a 2.3% drop in legacy gTLD regs, as well as a loss of 62 fee-paying dot-brand gTLDs and 380 accredited registrars.

That said, it’s also saving millions by eschewing face-to-face meetings until the whole coronavirus mess is sorted.

It’s not entirely clear how ICANN arrived at its numbers, but it seems the domain industry is looking into unknown waters right now.

It’s undeniable that the pandemic-related lockdown mandates around the world have proved a huge boon to the industry, as bricks-and-mortar businesses retreat online to try to save their livelihoods, but it’s unclear whether this boost will continue as nations emerge from quarantine and into record-setting recessions.

ICANN’s budget is dependent more than anything else on registration volumes in gTLDs, so its fiscal stability will depend on whether people continue to buy and renew domains as they lose their jobs and their companies go out of business.

It seems inevitable that companies going bust and dropping their domains is a trend we’re going to face over the coming few years, but as long as there’s enough liquidity in the domainer community that shouldn’t prove a massive issue for ICANN, which does not care who registers a domain, merely that it is registered.

Aside from budgeting concerns, the impact of coronavirus on ICANN meetings is #1 on Marby’s list of priorities.

Work with Supporting Organization and Advisory Committee leaders, community members, and the Board to define and implement a phased plan to return to face-to-face meetings. This plan will ensure the provision of safe and effective meeting formats that support the ongoing work of the community as well as allow robust remote participation options for anyone unable to attend in person. The final plan will be integrated with regional and global engagement activities.

Background: Face-to-face meetings have always been an important part of ICANN’s DNA. Despite the current pandemic-related restrictions, the Board, community, and org must ensure that we remain able to collaborate, and that we are still able to attract new participants into ICANN.

Since March, every meeting that would usually be held face to face, including the two big public meetings, has instead been held over Zoom, which has drawbacks and limitations. This October’s Hamburg meeting will also be online-only.

Marby to a great extent has his hands tied here.

As long as the virus rages out of control in ICANN’s native US, he’s going to be limited to hosting meetings in locations not only where the coronavirus has been tackled to the degree where large congregations are permitted but also where Americans are allowed to travel quarantine-free.

The next scheduled public meeting is due to take place in Cancun, Mexico in March 2021, but that country currently has locked its border to travelers from the north.

And regardless of what laws are in place next March, ICANN’s going to have to get a read on whether any community members will feel safe enough to travel — to a windowless room where everyone wears masks two meters apart for 10 hours a day — before going ahead with an expensive in-person meeting.

It seems more likely that F2F meetings will resume first on a regional level before going fully international. Travel narriers within the European Union, for example, are relatively low, so it’s not impossible to imagine small meetings going ahead with only participants from that community.

Comment Tagged: budget, coronavirus, ICANN

ICANN throws out “Ugly Houses” UDRP appeal

ICANN has rejected an unprecedented attempt to get a UDRP decision overturned using the Reconsideration process.

The Board Accountability Mechanisms Committee late last week summarily dismissed a Request for Reconsideration filed by a group called the Emily Rose Trust.

Emily Rose had lost a UDRP case in May concerning the domain name uglyhousesri.com, which it had been using for the last couple of years to run a home renovation-and-resale service in Rhode Island.

The complainant was a company called HomeVestors, which has been running a near-identical service called We Buy Ugly Houses (a phrase it has trademarked) for substantially longer.

The National Arbitration Forum panelist had decided that the domain was confusingly similar to the mark, and that the similarity of the services constituted bad faith use.

In filing the rather poorly-written RfR, Emily Rose argued among other things that “Ugly Houses” is a generic term not protected by the mark.

But ICANN did not consider the merits of its request, instead rejecting the RfR for being outside the scope of the process.

The BAMC said that UDRP decisions do not involved the action or inaction of the ICANN board or staff, and are therefore not subject to board Reconsideration.

While UDRP decisions are often contested in court, this RfR makes it clear that ICANN is not an avenue for appeal in individual cases.

Comment Tagged: bamc, cybersquatting, emily rose, homevestors, ICANN, reconsideration, rfr, udrp