One year on, Namecheap still fighting aborted .org takeover and may target GoDaddy and Donuts next

Even though Ethos Capital’s proposed takeover of Public Interest Registry was rejected last May, registrar Namecheap is still doggedly pursuing legal action against ICANN’s handling of the deal, regardless.

The Independent Review Process complaint filed last February is still active, with Namecheap currently fighting a recent ICANN motion to dismiss the case.

The company is also demanding access to information about GoDaddy’s acquisition of Neustar and Donuts’ acquisition of Afilias, and is threatening to file separate actions related to both those deals.

Namecheap has essentially two beefs with ICANN. First, that it should not have lifted price caps in its .org, .biz and .info registry contracts. Second, that its review of Ethos’ bid for PIR lacked the required level of transparency.

ICANN’s trying to get the IRP complaint thrown out on two fairly simple grounds. First, that Namecheap lacks standing because it’s failed to show a lack of price caps have harmed it. Second, that it rejected the PIR acquisition, so Namecheap’s claims are moot.

In its motion to dismiss (pdf), its lawyers wrote:

Namecheap’s entire theory of harm, however, is predicated on the risk of speculative future harm. In fact, nearly every explanation of Namecheap’s purported harm includes the words “may” or “potential.” Namecheap has not identified a single actual, concrete harm it has suffered.

…

Namecheap’s claims related to the Change of Control Request should be dismissed because ICANN’s decision not to consent to the request renders these claims moot
and, separately, Namecheap cannot demonstrate any harm resulting from this decision.

In December, Namecheap had submitted as evidence two analyses of its business prospects in the event of registry price increases, one compiled by its own staff, the other prepared by a pair of outside expert economists.

While neither shows Namecheap has suffered any directly quantifiable harm, such as a loss of revenue or customers, Namecheap argues that that doesn’t matter and that the likelihood of future harm is in fact a current harm.

A mere expectation of an increase in registry prices is sufficient to show harm. This is because such expectation reduces Namecheap’s expected profits and its net present value.

It further argues that if Namecheap was found to not have standing, it would give ICANN the ability to evade future IRP accountability by simply adding a 12-month delay to the implementation of controversial decisions, pushing potential complainants outside the window in which they’re able to file for IRP.

On the PIR change of control requests, Namecheap says it’s irrelevant that ICANN ultimately blocked the Ethos acquisition. The real problem is that ICANN failed in its transparency requirements related to the deal, the company claims.

The fact that ICANN withheld its consent is no excuse for refusing to provide full transparency with respect to the actions surrounding the proposed acquisition and ICANN’s approval process. Namecheap’s claims relate to the non-transparent process; not the outcomes of such process. Irrespective of the outcome, lack of transparency increases the level of systemic risk in Namecheap’s business environment.

…

How did ICANN come to its decision? Was an imminent request for a change of control known to ICANN, when it took the decision to remove the price control provisions? What was discussed in over 30 hours of secret meetings between ICANN org and the Board? What discussions took place between ICANN, PIR and other entities involved? All these questions remain unanswered

Namecheap refers to two incidents last year in which ICANN hid its deliberations about industry acquisitions by conducting off-the-books board discussions.

The first related to the PIR deal. I called out ICANN for avoiding its obligation to provide board meeting minutes in a post last May.

The second relates to the board’s consideration of Donuts’ proposed (and ultimately approved) acquisition of Afilias last December. Again, ICANN’s board discussed the deal secretly prior to its official, minuted December 17 meeting, thereby avoiding its transparency requirements.

In my opinion, this kind of bullshit has to stop.

Namecheap is also now threatening to bring the Afilias deal and GoDaddy’s acquisition of Neustar’s registry business last April into the current IRP, or to file separate complaints related to them, writing in its response to ICANN’s motion (pdf):

Namecheap seeks leave to have ICANN’s actions and inactions regarding its consideration of the Neustar and Afilias changes of control reviewed by this IRP Panel. If, per impossibile such leave is not granted, Namecheap reserves all rights to initiate separate proceedings on these issues.

The deals are similar because both involve the change of control of legacy gTLD contractors with millions of domains under management that have recently had their price caps lifted — Afilias ran .info and Neustar ran .biz.

Comment Tagged: acquisition, afilias, change of control, donuts, ethos, godaddy, ICANN, irp, namecheap, neustar, pir, transparency

Defensive windfall on the cards for .spa? It’s not just for spas any more

Forthcoming new gTLD .spa has published its planned launch dates and registrations policies, and it’s not just for spas any more.

Asia Spa and Wellness Promotion Council, the registry, has informed ICANN that it plans to take .spa to sunrise for 30 days starting April 20 and expects to go to general availability around the start of July.

But despite being a “Community” gTLD under ICANN rules, it appears to be also marketing itself at any Italian company that uses the S.p.A corporate suffix, which is generally equivalent to the US Inc/Corp and UK Plc.

According to its eligibility criteria (pdf), under the heading “Coincidental Community Guidelines”, proof of an Italian business address should be enough for any SpA company to qualify to register.

The registry’s web site at nic.spa currently says:

Apart from the spa and wellness industry, .spa can also be a abbreviation to represent:

• Società per Azioni (a form of corporation in Italy, Public Limited Companies By Shares)
• Sociedad por acciones (Joint-stock company in South American Countries)

This offers a great opportunity for entitles in Italy and South American Countries to registered a wonderful name.

This is interesting, because ASPWC applied for .spa as a Community applicant dedicated to the spa and wellness industry.

The primary reason it’s getting to run .spa rather than rival applicant Donuts is that ASPWC won a Community Priority Evaluation, enabling it to avoid a potentially costly auction against its deeper-pocketed competitor.

There’s no mention of Italians or South Americans in its 2015 CPE result (pdf).

Donuts fought the CPE result in ICANN’s Cooperative Engagement Process for three years, but eventually backed away for unknown reasons.

In its original application, ASWPC spends a lot of time discussing its “intended use” of .spa and possible overlap with other meanings of the string. Among this text can be found:

The use of “S.p.A.” as a short form for the Italian form of stock corporation: “Società Per Azioni” is also relatively much less prevalent than the word as intended for the spa community. Furthermore, a more proper and popular way of denoting the form of corporation is “S.p.A.” with the periods included. While this is an important usage of the string “SpA”, the Registry believes that it should not take away from the significant meaning of the word “spa” in its intended use for the spa community as a TLD. Furthermore, additional preventive measures can be put in place to mitigate against any concerns for abusive utilization of the TLD in this manner.

I could find no text explicitly ruling out the Italian corporate use in the application, nor could I find any indication that it was part of the hard-C “Community” upon whose behalf ASWPC was applying for, and eventually won, the gTLD.

The application does seem to envisage some kind of reserved names list that could include S.p.A companies, but that doesn’t appear to be what the registry has in mind any more.

Comment Tagged: .spa, aswpc, community, community priority evaluation, cpe, donuts, ICANN, launch, new gTLDs, sunrise

Two more dot-brands take the easy way out

A US insurance giant with close to $50 billion in annual revenue has taken the decision to kill off its two dormant dot-brand gTLDs.

Nationwide Mutual Insurance has informed ICANN that it wants to cancel its .nationwide and .onyourside gTLD contracts.

Neither was being used beyond the obligatory nic.example web sites.

In fact, it appears that Nationwide cared so little about its dot-brands that both NIC sites inadvertently plug another, unaffiliated gTLD.

The text on both sites reads:

To better serve our members, Nationwide has secured a top-level domain.

Now, when you visit a Nationwide.Insurance website, you can have confidence that it’s from the company you trust – Nationwide.

But Nationwide does not run .insurance, that’s owned by fTLD. It does however have nationwide.insurance registered and parked with the same messaging.

They’re the 87th and 88th dot-brands to cancel their ICANN registry agreements.

Comment Tagged: .onyourside, dot-brands, ICANN, nationwide, new gTLDs, termination

RobinHood.club showered with five-star reviews after .com confusion

In a world where it’s still common for internet users to automatically assume companies use the .com version of their brand, instead of a new gTLD, it’s sometimes refreshing to see the opposite scenario occur.

It was a mixed blessing for a German price comparison app developer, which found itself confused with an American stock-trading app of the same name this week.

The company, which uses robinhood.club as its primary domain, received a handful of negative, one-star reviews on the Google app store, apparently from people who confused it with the scandal-hit trading app, which can be found at robinhood.com.

The American RobinHood was of course the app of choice for the Reddit users who last week clubbed together to pump the stock of floundering bricks-and-mortar games retailer GameStop, in order to frustrate the plans of big short-selling hedge funds and in many cases make some healthy profits screwing over The Man.

When RobinHood limited trading of GameStop and other stocks, it faced accusations of siding with billionaire Wall Street pros at the expense of armchair investors, and the unaffiliated German app maker seems to have taken some of the overspill of this criticism.

But the negative impact was short-lived. When news of the confusion filtered back to Reddit, hundreds of users — who presumably had never used the app — flooded to the store to leave five-star reviews to counteract the one-stars.

At time of writing, every review appears to be related in one way or the other to the stock-trading scandal, and the German app holds an average rating of over four stars.

Comment Tagged: .club, gamestop, reddit, robinhood

EURid reports 3% growth in final quarter before Brexit crunch

The .eu ccTLD grew by 108,682 domains in the fourth quarter of 2020, the last reporting period before the full impact of Brexit is felt.

The registry said this week that it ended December with 3,684,984 names under management, a number which also includes .ею and .ευ. That’s a 3% increase over the three months.

Portugal was the big driver, due to local registrar promotions. It was up 64.8% sequentially and 116% year-over-year. Portuguese registrants owned 105,895 names at the end of the year.

The Q4 numbers show 77,000 names registered to UK registrants and do not reflect the impact of the Brexit transition, which ended at the end of the year.

EURid said last month that it had suspended around 80,000 domains belonging to about 48,000 registrants, as the UK fell out of eligibility.

Some of those will likely be recovered during Q1, as UK-resident EU citizens are still eligible for .eu domains.

Comment Tagged: .eu, brexit, eurid

Webcentral to change its branding yet again after tricky takeover

Pioneering Aussie registrar Webcentral is to undergo yet another rebranding under its new ownership.

The company said last week that its new strategy “will include the transition to a single brand, with a standardised set of core products”.

It also plans to bring its customer support back to Australia. It is currently outsourced overseas.

Its current brands include Melbourne IT, Netregistry, WME and Domainz. There’s no word on which of these, if any, will survive.

The company was founded as Melbourne IT and became one of the first half-dozen registrars accredited by ICANN over two decades ago.

It rebranded as Arq Group in 2018 after a series of acquisitions, and then again to Webcentral Group last year after a series of divestitures.

Late last year, it became majority-owned by a company called 5G Networks, beating a rival offer from Web.com.

That takeover is currently subject to protests to government regulators by shareholder Keybridge Capital, which believes the 5G takeover was coerced.

Comment Tagged: melbourne it, webcentral

Fire the board! Registrars attempt a coup at Nominet

The registrars are revolting — again — at Nominet.

Members representing 12.2% of the .uk registry’s voting rights have put their names to a call for five of the company’s unelected directors, including CEO Russell Haworth, to be fired and replaced with two hand-picked alternatives.

The plan is to shake up the company by slashing wholesale .uk prices and donating more money to worthy “public benefit” causes.

Nominet has warned in response that such a move would be “highly disruptive to our work and our team”.

The campaign, which can be found at PublicBenefit.uk, was kicked off by the registrar Krystal Hosting, which has about 45,000 .uk domains under management.

Signatories want to call an Extraordinary General Meeting that would vote on kicking out Haworth, along with chair Mark Wood, registry managing director Eleanor Bradley and directors Benjamin Hill and Jane Tozer.

Four elected non-exec directors and two non-elected directors would remain.

A second resolution would replace these directors with former BBC Trust chair Sir Michael Lyons and former RIPE NCC managing director Axel Pawlik, who have both confirmed their interest in the positions. Lyons would be chair.

Only 5% of Nominet’s voting rights — calculated largely from how many domains each member manages — are needed to call an EGM. At 12.2%, the campaign has already succeeded in passing that threshold. It would need 50%+1 of those attending the EGM to actually carry the resolutions.

The campaign claims that Nominet has gone downhill ever since Haworth was appoint five years ago.

It claims that the amount of money Nominet donates to “public benefit” causes has shrunk from £26 million ($35.5 million) in the preceding five years to £9.8 million in the five years since. That’s even while its wholesale prices for .uk domains increased 50% from £2.50 to £3.75 a year.

Director pay has gone up by 70% over the same period, it claims.

The registry also stands accused of frittering away money on acquisitions and pointless diversification into non-core businesses. Krystal founder Simon Blackler wrote:

This is not a VC-backed Silicon Valley startup that needs to take risks, make speculative acquisitions, “pivot” or worry about unnecessary diversifications. This is Nominet, the guardian of the .UK namespace and we’d like it back, please.

A second — and arguably more-important, if you’re a cynic — goal is to get the price of .uk domains to come down. This would reduce the carrying cost of portfolios held for resale by some Nominet members.

In response, Haworth has blogged that “an EGM and change of board at this time would be highly destabilising to Nominet and disrupt a range of fantastic programmes that are currently underway or planned”. He wrote:

I understand that there are frustrations and disagreements about how we run the business, and we are open to looking at those and making any adjustments that are in the interests of the company and the wider stakeholder community we serve. More on that to come.

The company has just approved a pricey multi-year investment in improving the registry infrastructure, he wrote.

The board has also approved a new Registry Advisory Council, which would be made up of members and have the ability to make recommendations on pricing, which could address concerns that Nominet has not been especially responsive to its members, he wrote.

Nominet came under fire last year when it unilaterally closed down the discussion forums on its web site, announcing and executing the move during its Annual General Meeting, saying posters had become “increasingly aggressive and hostile” towards Nominet staff.

At time of writing, 153 Nominet members, including four of the top 20 by .uk domain volume, have signed up to the campaign.

UPDATE: This article was updated 1248 UTC to correct the composition of the board and voting thresholds.

1 Comment Tagged: .uk, egm, krystal, nominet, publicbenefit.uk

.club back over a million names as Clubhouse drives growth

The .club gTLD’s zone file is back into seven figures as of last week, largely due no doubt to the increasing popularity of the new Clubhouse app.

As of yesterday, 1,005,145 domains could be found in the .club file, up from a recent low of 960,000 in early January.

The Clubhouse app, unaffiliated with .CLUB Domains, launched in April last year but started gathering mainstream media attention in mid-January, prompting a flurry of speculation in .club names. From what I gather, it’s an audio chatroom service.

It’s currently invitation-only, and only available on Apple’s iOS devices, which limits it reach. One assumes there could be upside potential for .club when the app fully opens up.

.club peaked at about 1.25 million domains in late 2019.

Comment Tagged: .club, .club domains, clubhouse

Eight years after asking, Israel to get its Hebrew ccTLD

Israel is likely to be awarded the Hebrew-script version of its ccTLD, at a meeting of ICANN’s board of directors next week.

ICANN is poised to approved ישראל. (the dot goes on the right, in accordance with Hebrew writing practice), which means “Israel”, on February 8.

The beneficiary will be not-for-profit ISOC-IL, which has been running .il for the last 25 years. The Latin-script version currently has just shy of 270,000 domains under management.

ISOC-IL first expressed its interest in an internationalized domain name ccTLD (pdf) in 2012, but only received final technical approval from ICANN last May.

The proposal appears to have been held up by government delays in selecting a registry operator — government approval is a requirement under ICANN’s increasingly inappropriately named IDN ccTLD “Fast Track” program, which began in 2009.

It’s debatable how much demand there is for Hebrew domains. There are fewer than 10 million speakers in the world and most are very familiar with the Latin script.

Verisign’s gTLD קום., a transliteration of .com, has fewer than 1,700 domains in its zone file today, and is on a downward trend, two years after launch. Most are registered via local registrar Domain The Net, which had planned to compete with ISOC-IL for the IDN contract.

Comment Tagged: cctlds, domain the net, fast track, hebrew, ICANN, idns, isoc-il, israel

Time is running out for Net4 as ICANN questions Indian court ruling

Struggling registrar Net 4 India has been hit with an unprecedented fourth concurrent breach-of-contract notice by ICANN, but an Indian court has ruled that ICANN should NOT terminate its accreditation.

It also turns out that Public Interest Registry wants to terminate its Registry-Registrar Agreement with Net4, after it failed to deposit about $22,000 in its account to cover renewal fees, putting 1,644 .org domains at risk.

The latest ICANN breach notice is much the same as the two delivered in December, both of which suggest that Net4 has been transferring its customers’ domains to a partner registrar, OpenProvider, without the registrants’ knowledge or consent.

They further suggest that Net4 has not enabled its customers to renew their domains or reclaim them after they’ve expired, and claim that the company has consistently refused to hand over records proving that its disputed transfers were legit.

Net4 also owes ICANN thousands in past due fees.

The company has been in quasi-judicial insolvency proceedings since 2017 over $28 million in unpaid bank loans that were acquired by a debt recovery agency called Edelweiss; its first breach notice came two years later when ICANN first learned of the case.

For some reason, ICANN did not terminate or suspend Net4’s contract back then.

With hindsight, this may have proven a bad move — during India’s first coronavirus lockdown last year, hundreds of Net4 customers started complaining about lost domains and non-existent customer service.

It was not until December last year that these complaints were escalated to the level of formal breach notices, and more threats to terminate its Registrar Accreditation Agreement.

Net4, in response, asked its insolvency court for a ruling preventing ICANN and PIR from terminating their respective agreements. It reckons it can get is house in order in the next five or six weeks.

ICANN presented what appears to be a wealth of evidence of the company’s misconduct and argued that the court has no jurisdiction over ICANN anyway, because the RAA is governed by California law and ICANN has no presence in India.

Nevertheless, the National Company Law Tribunal in New Delhi has ruled, in a virtually impenetrable word soup of a document (pdf) that reads like it was vomited up by a Victorian-era college freshman who’d just rolled up and smoked an entire legal dictionary, that ICANN and PIR should not “terminate these agreements at least until three months from hereof”.

That would stay Net4’s executive until April 25. The latest ICANN breach notice gives the company until February 19 to come back into compliance, though technically there’s nothing stopping it starting termination proceedings today based on past notices.

The orders given to ICANN and PIR are more “requests”, due to the fact that the court couldn’t decide whether its words had any jurisdictional power over either.

Rather hilariously, ICANN said in a press release late Friday:

When a registrar fails to allow registrants to renew, transfer, and manage their domain names, ICANN will not hesitate to take whatever actions are necessary, up to and including termination of the registrar, to protect registrants’ rights and interests.

These are words that ring hollow, given that it’s allowed Net4 to slide three times already and has been hesitating since June 2019.

Comment Tagged: .org, ICANN, insolvency, net 4 india, net4, pir