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ICANN probing Donuts and Tucows over anti-Jewish web site

Kevin Murphy, November 16, 2018, Domain Policy

ICANN is investigating Tucows and Donuts over a web site that hosts antisemitic, white supremacist content.
CEO Goran Marby said in a letter published this week that he has referred a complaint about the web site judas.watch to ICANN’s Compliance department.
The web site in question says it is dedicated to documenting “anti-White traitors, agitators and subversives & highlighting Jewish influence.” It appears to be half database, half blog.
Its method of “highlighting Jewish influence” is possibly the most disturbing part — the site tags people it believes are Jewish with a yellow Star of David, mimicking the way the Nazis identified Jews during the Holocaust.
The site is quite liberal in how it applies these stars, going so far as to label UK Labour Party leader Jeremy Corbyn, who has been fighting off his own allegations of antisemitism for years, as Jewish.
Over 1,600 people and organizations are currently listed. Posts there also seem keen to highlight its subjects’ sexual orientation.
As far as I can tell, there are no direct calls to violence on the site, and the level of what you might call “hate speech” is pretty mild. It publishes the social media handles of its subjects, but I could not find any physical addresses or phone numbers.
The complaint to ICANN (pdf) came from WerteInitiative (“Values Initiative”), which appears to be a small, relatively new Jewish civil society group based in Germany.
WerteInitiative said judas.watch “poses a direct threat to the named persons with unforeseeable consequences for them, and especially so for the identified Jews”.
“We want this site banned from the Internet and ask for your help in doing so: can you help us to find out who behind this page is, so we can get it banned in Germany?” the letter concludes.
The domain has been behind Whois privacy since it was registered in 2014, so the registrant’s name was not public even prior to GDPR.
Marby, in response (pdf), says the complaint “raises a serious issue”.
While he goes to some lengths to explain that ICANN does not have the authority, contractual or otherwise, to demand the suspension of any domain name, he said he has nevertheless referred the complaint to Compliance.
Compliance has already reached out to the organization for more information, Marby said.
He also encouraged WerteInitiative to talk to .watch registry Donuts and judas.watch registrar eNom (owned by Tucows), as well as the hosting company, to see if that could help resolve the issue.
While ICANN is always adamant that it does not venture into content regulation, it strikes me that this exchange shows just what a tightrope it walks.
It comes against the backdrop of controversy over the suspension by GoDaddy of the domain Gab.com, a Twitter clone largely hosting far-right voices that have been banned from other social media platforms.

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Bad.monster? Two more gTLDs have been acquired

Kevin Murphy, November 14, 2018, Domain Registries

Two more new gTLDs have changed hands, DI has learned.
XYZ.com has picked up former dot-brand .monster from recruitment web site Monster.com, while newbie registry Intercap Holdings has acquired .dealer from Dealer.com.
Both ICANN contracts were reassigned last month.
Neither acquiring company has announced their purchases or published their launch plans yet.
That said, XYZ has already registered a few intriguing domains: bad.monster, good.monster, my.monster and go.monster.
It appears that go.monster — slogan: “It’s Alive!” — will be the registry’s launch site. It’s the only one I could get to resolve.
It’s the second example I can think of of a dot-brand gTLD being acquired by a registry that intends to run it as a generic.
In 2016, Top Level Spectrum acquired .observer from the newspaper of the same name.
Most dot-brands that don’t want their TLDs any more choose to retire them. That number is up to 45 now.
.dealer wasn’t technically a dot-brand — it had no Spec 13 in its contract — but its 2012 application certainly made it look like a dot-brand, with most of the domains reserved for Dealer.com and its affiliates. It looked defensive.
Shayam Rostam, chief registry officer of ICH, told me the plan for .dealer is to primarily target car dealers (also its former owner’s market) but that it will be unrestricted and open to all comers.
Intercap wants to get its January launch of .inc out of the way before turning its attention to .dealer, so we’re probably looking at mid-late 2019 for a launch, Rostam said.
It also needs to do some housekeeping such as moving the TLD to Uniregistry’s back-end.
What do y’all think about these TLDs? Could .monster be the next .guru? Could .dealer find a home in the burgeoning legal cannabis market? Comment below!

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First non-brand gTLD to go dark

Kevin Murphy, November 14, 2018, Domain Registries

The number of new gTLDs to voluntarily terminate their ICANN contracts has hit 45, with the first non-brand calling it quits.
It’s a geo-gTLD, .doha, which was meant to represent the Qatari capital of Doha.
There were no registered domains. Despite being delegated in March 2015, it never launched.
The registry was the country’s Communications Regulatory Authority, which also runs local ccTLD .qa.
No reason was given for the request — registries are allowed to terminate their contracts for any reason, with notice.
The registry’s web site hasn’t been updated in some time, so perhaps resources are an issue.
Given Doha is a protected geographic term, it’s unlikely to return in future unless the government changes its mind in future application rounds.
Dot-brand gTLDs to go the same way since I last reported the number include .blanco, .spiegel, .bond, .epost, .active and .zippo.

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Two controversial new gTLDs launching in January

Kevin Murphy, November 13, 2018, Domain Registries

Five years after the first batch of new gTLDs hit the market, registries continue to drip-feed them into the internet.
At least two more are due to launch on January 16 — .dev and .inc.
.dev is the latest of Google’s portfolio to be released, aimed at the software developer market.
It proved controversial briefly when it first was added to the DNS in 2014, causing headaches for some developers who were already using .dev domains on their private networks.
Four years is plenty of time for all of these collisions to have been cleaned up, however, so I can’t imagine many problems emerging when people start buying these names.
.dev starts a one-month sunrise January 16, sells at early access prices from February 19 to 28 before going to regular-price general availability.
Google has already launched one of its own products, web.dev, a testing tool for web developers, on a .dev domain.
Launching with a pretty much identical phased launch plan is .inc, from new market entrant Intercap Holdings, a Caymans-based subsidiary of a Toronto firm founded by .tv founder Jason Chapnik and managed by .xyz alumnus Shayan Rostam.
Intercap bought the .inc contract from Edmon Chong’s GTLD Limited earlier this year for an undisclosed sum. GTLD Ltd is believed to have paid in excess of $15 million for the TLD at auction.
.inc has proved controversial in the past, attracting criticism from states attorneys general in the US, which backed another bidder.
It may prove controversial in future, too. I have a hunch it’s going to attract more than its fair share of cybersquatters and will probably do quite well out of defensive registration fees.

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Afilias bought .io for $70 million

Kevin Murphy, November 9, 2018, Domain Registries

Did you know Afilias owns .io? I didn’t, but it paid $70 million for the popular alternative TLD 18 months ago.
A recently published financial statement in Ireland shows that the company spent $70.17 million cash — a 10x revenue multiple — for 100% of Internet Computer Bureau Ltd in April 2017.
ICB runs .io, .ac and .sh, the ccTLDs for the British Indian Ocean Territories (.io), Ascension Island (.ac), and Saint Helena, Ascension and Tristan Da Cunha (.sh).
Afilias has never publicly announced the deal, and I haven’t seen it reported elsewhere, so I thought it was worth blogging up here.
At the time, the deal was characterized to registrars as a back-end contract win.
But it seems that Afilias actually purchased the back-end provider, then migrated (not as smoothly as it usually does) the TLDs over to its own infrastructure.
That would have opened up .io to all the registrars already plugged in to Afilias’ TLDs, potentially greatly increasing its reach.
But it’s probably not just the back-end Afilias has acquired.
Would a registry service provider spend 10 times annual revenue on a ccTLD back-end contractor, unless it had a damn good reason to believe that it would be able to at least recoup its investment, either through a long-term contract or some other mechanism?
It’s quite possible Afilias actually bought the .io ccTLD Manager.
The ccTLD Manager listed by ICANN in the IANA database is “IO Top Level Domain Registry”, but “c/o Sure (Diego Garcia) Limited”. That changed a week or so ago from “IO Top Level Domain Registry, Cable & Wireless”
Sure is the arm of telecommunications firm Cable & Wireless that provides internet access to remote islands in various parts of the world.
I don’t know what “IO Top Level Domain Registry” is.
Afilias tells me confidentiality arrangements are in place.
.io has proven popular as a TLD for technology startup companies that couldn’t get the .com they wanted.
Across its small portfolio, ICB was a $6.9 million business last year, but .io, with a reported 270,000 domains, must account for the large majority of that.
Due to the timing of the deal, ICB contributed $5.3 million to Afilias’ top line and was the main reason its revenue grew last year, its 2017 accounts reveal.
In 2017, Afilias saw revenue grow from $106.7 million to $113.6 million. Profit before tax was down slightly, from $38.6 million to $36 million
Again, that was due largely to ICB, which contributed $1.4 million of red ink to the bottom line.
Afilias is a private company, by the way, which is why these numbers all refer to 2017. It’s the final full year of it being based in Ireland, before its move to the US for tax reasons.
The disclosure also reveals that Afilias took a 45% stake in Dot Global, manager of the .global gTLD registry, in December 2017.
Dot Global had revenue of $1.9 million and a $320,000 loss last year, the report states.
doMEn, the Montenegro ccTLD (.me) operator in which Afilias has a 36.85% share, made a profit of $2.59 million on revenue of $7.39 million, it says. Both of those numbers were down slightly on 2016.
Afilias also says in the filing that it expects revenue to be down in 2018, due to the renegotiation of back-end contracts. I gather the contract with Public Interest Registry, which reportedly could cost about $10 million a year, is the main problem.
Given the accounts were signed off in May this year, it seems that this decline is expected despite the lucrative .au ccTLD contract, which Afilias signed at the end of 2017.

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Uniregistry calls for domain Bill of Rights as Schilling says Gab.com was not booted

Kevin Murphy, November 9, 2018, Domain Services

Uniregistry has called for a “Domain Bill of Rights” to protect free speech in a world were domain takedowns can be used to de-platform controversial speakers.
Meanwhile, CEO Frank Schilling has told DI that the company did not expel the right-wing social network Gab.com from Uniregistry’s platform, and would have allowed it to stay.
In a press release this week, Uniregistry COO Kanchan Mhatre said that while the company rejects “hatred and bigotry”, free speech is an “inalienable” human right.
The company called for the new agreement “to guarantee every domain name owner a formal ‘due process’ when being faced with accusations and demands for censorship”.
Schilling said that Uniregistry’s idea for a Domain Bill of Rights is still in the early stages. It has sketched out 10 draft bullet points but is not ready to publish them yet.
The press release was issued to coincide with Tim Berners-Lee’s proposal for a “Contract for the Web”, a set of broad principles governing rights and responsibilities online.
But it also coincided with the ongoing controversy over Gab.com, the microblogging platform favored by right-wing voices, including many white supremacists, that have been kicked off Twitter.
The guy who murdered 11 people at a Synagogue in Pittsburgh last month used Gab, a back-breaking straw which prompted GoDaddy to inform the network it intended to suspend its domain unless it was immediately moved to another registrar.
It’s not the first time GoDaddy has shut down the far right for breaching its terms of service. Last year, it took the same action against a neo-Nazi site.
The Gab.com domain briefly wound up at Uniregistry, before Epik CEO Rob Monster stated publicly that he would offer Gab a home. Gab took him up on his offer, and transferred away from Uniregistry.
Uniregistry’s Schilling confirmed that “We did not ask gab.com to leave our platform… they were welcome to stay subject to law”.
Monster said in a blog post largely praising Gab and founder Andrew Torba that “De-Platforming is Digital Censorship”. He noted that for Gab, “there is a duty to monitor and lightly curate, keeping content within the bounds of the law”.

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Wagner takes dig at Verisign as GoDaddy reports $310 million domain revenue

Kevin Murphy, November 7, 2018, Domain Registrars

GoDaddy CEO Scott Wagner ducked a question about how the company will react to future .com price increases during its third-quarter earnings call yesterday, but used the opportunity to take a gentle swipe at Verisign.
Asked by an analyst whether the first 7% price increase, almost certainly coming in 2020, would have any effect on GoDaddy’s gross margins (ie, will they shrink as the company swallows increased costs, or swell as it increases its own prices above 7%), Wagner said:

the last time VeriSign took a price increase the industry passed that through to the end registrant.
.com and more importantly the software around bringing somebody’s .com to life is valuable and, modestly, we’re providing the value in that relationship around taking a domain name and actually turning it into something that somebody cares about.

I’m interpreting that as a pop at the idea that Verisign enjoys the fat registration margins while GoDaddy is the one that actually has to market domains, up-sell, innovate, deal with customers, and so on.
The remarks came just a few days after Verisign, in a blog post, branded GoDaddy and other secondary-market players “scalpers”, infuriating domainers.
Wagner was talking to analysts as the market-leading registrar reported revenue for Q3 of $679.5 million, up 16.7% year over year.
Revenue from domains, still the biggest of its three reporting business segments, was $309.5 million, up 14.0% compared to the year-ago quarter. GoDaddy now has 18 million customers and over 77 million domains under management.
Overall net income was down to $13.2 million from $22.4 million, as operating expenses rose over 16% to hit $642 million, after the company invested more in marketing, development and so on. Its operating income was $37.5 million.
Contrast this with Verisign’s performance for the same quarter, reported two weeks ago.
It saw revenue about the same as GoDaddy’s domains revenue — $306 million — but net income of $138 million and operating income of $195 million.
GoDaddy and Verisign could find themselves competing before long. As part of its deal with the US government to allow it to raise .com wholesale prices once more, the government also lifted its objection to Verisign becoming a registrar, just as long as it does not deal in .com names.

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Will ICANN take a bigger slice of the .com pie, or will .domainers get URS?

Kevin Murphy, November 5, 2018, Domain Registries

Will ICANN try to get its paws on some of Verisign’s .com windfall? Or might domainers get a second slap in the face by seeing URS imposed in .com?
With Verisign set to receive hundreds of millions of extra dollars due to the imminent lifting of .com price caps, it’s been suggested that ICANN may also financially benefit from the arrangement.
In a couple of blog posts Friday, filthy domain scalper Andrew Allemann said that ICANN will likely demand higher fees from Verisign in the new .com registry agreement.
Will it though? I guess it’s not impossible, but I wouldn’t say it’s a certainty by any means.
Verisign currently pays ICANN $0.25 per transaction, the same as almost all other gTLDs. Technically, there’s no reason this could not be renegotiated.
Putting aside some of the legacy gTLD contracts, I can only think of two significant cases of ICANN imposing higher fees on a registry.
The first was .xxx, which was signed in 2011. That called for ICM Registry, now part of MMX, to pay $2 per transaction, eight times the norm.
The rationale for this was that ICANN thought (or at least said it thought) that .xxx was going to be a legal and compliance minefield. It said it envisaged higher costs for overseeing the then-controversial TLD.
There was a school of thought that ICANN was just interested in opportunistically boosting its own coffers, given that ICM was due to charge over $60 per domain per year — at the time a ludicrously high amount.
But risk largely failed to materialize, and the two parties last year renegotiated the fees down to $0.25.
The second instance was .sucks, another controversial TLD. In that case, ICANN charged registry Vox Populi a $100,000 upfront fee and per-transaction fees of $1 per domain for the first 900,000 transactions, four times more than the norm.
While some saw this as a repeat of the .xxx legal arse-covering tactic, ICANN said it was actually in place to recoup a bunch of money that Vox Pop owner Momentous still owed when it let a bunch of its drop-catch registrars go out of business a couple years earlier.
While the .sucks example clearly doesn’t apply to Verisign, one could make the case that the .xxx example might.
It’s possible, I guess, that ICANN could make the case that Verisign’s newly regained ability to raise prices opens it up to litigation risk — something I reckon is certainly true — and that it needs to increase its fees to cover that risk.
It might be tempting. ICANN has a bit of a budget crunch at the moment, and a bottomless cash pit like Verisign would be an easy source of funds. A transaction fee increase of four cents would have been enough to cover the $5 million budget shortfall it had to deal with earlier this year.
On the other hand, it could be argued that ICANN demanding more money from Verisign would unlevel the playing field, inviting endless litigation from Verisign itself.
ICANN’s track record with legacy gTLDs has been to reduce, rather than increase, their transaction fees.
Pre-2012 gTLDs such as .mobi, .jobs, .cat and .travel have all seen their fees reduced to the $0.25 baseline in recent years, sometimes from as high as $2.
In each of these cases, the registries concerned had to adopt many provisions of the standard 2012 new gTLD registry agreement including, controversially, the Uniform Rapid Suspension service.
Domainers hate the URS, which gives trademark owners greater powers to take away their domains, and the Internet Commerce Association (under the previous stewardship of general counsel Phil Corwin, since hired by Verisign) unsuccessfully fought against URS being added to .mobi et al over the last several years, on the basis that eventually it could worm its way into .com.
I’m not suggesting for a moment that ICANN might reduce Verisign’s fees, but what if URS is the price the registry has to pay for its massive .com windfall?
It’s not as if Verisign has any love for domainers, despite the substantial contribution they make to its top line.
Since the NTIA deal was announced, it’s already calling them “scalpers” and driving them crazy.
ICA lost the .com price freeze fight last week, could it also be about to lose the URS fight?

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Trump gives Verisign almost $1 billion in free money

Kevin Murphy, November 5, 2018, Domain Registries

The Trump administration may have just handed Verisign close to $1 billion in free money.
That’s according to the back of the envelope I’m looking at right now, following the announcement that the National Telecommunications and Information Administration is reinstating Verisign’s right to increase .com registry fees.
As you may have read elsewhere already (I was off sick last week, sorry about that) a new amendment to the Verisign-NTIA Cooperative Agreement restores Verisign’s ability to raise prices by 7% per year in four of the six years of the deal.
The removal of the Obama-era price freeze still needs to be incorporated into Verisign’s ICANN contract, but it’s hard to imagine ICANN, which is generally loathe to get into pricing regulation, declining to take its lead from NTIA.
Verisign would also have to choose to exercise its option to increase prices in each of the four years. I think the probability of this happening is 1 in 1.
Layering this and a bunch of other assumptions into a spreadsheet, I’m coming up with a figure of roughly an extra $920 million that Verisign will get to add to its top line over the next six years.
Again, this isn’t an in-depth study. Just back-of-the-envelope stuff. I’ll talk you through my thinking.
Not counting its occasional promotions, Verisign currently makes $7.85 for every year that a .com domain is added or renewed, and for every inter-registrar transfer.
In 2017, .com saw 40.89 million add-years, 84.64 million renew-years and 3.79 million transfers, according to official registry reports.
This all adds up to 129,334,643 revenue events for Verisign, or just a tad over $1 billion at $7.85 a pop.
Over the four-year period of the price increases transaction fees will go up to $8.40, then $8.99, then $9.62, then $10.29. I’m rounding up to the nearest penny here, it’s possible Verisign may round down.
If we assume zero transaction growth, that’s already an extra $762.2 million into Verisign’s coffers over the period of the contract.
But the number of transactions inevitably grows each year — more new domains are added, and some percentage of them renew.
Between 2016 and 2017, transaction growth was 3.16%.
If we assume the same growth each year for the next six years, the difference between Verisign’s total revenue at $7.85 and at the new pricing comes to $920 million.
Verisign doesn’t have to do anything for this extra cash, it just gets it.
Indeed, the new NTIA deal is actually less restrictive on the company. It allows Verisign to acquire or start up an ICANN-accredited gTLD registrar, something it is currently banned from doing, just as long as that registrar does not sell .com domains.
Verisign’s .net contract also currently bans the company from owning more than 15% of a registrar, so presumably that agreement would also need to be amended in order for Verisign to get into the registrar business.
I say again that my math here is speculative; I’m a blogger, not a financial analyst. There may be some incorrect assumptions — I’ve not accounted for promotions at all, for example, and the 3.16% growth assumption might not be fair — and there are of course many variables that could move the needle.
But the financial markets know a sweetheart deal when they see one, and Verisign’s share price went up 17.2% following the news, reportedly reaching heights not seen since since the dwindling days of the dot-com bubble 18 years ago.
The reason given for the lifting of the price freeze was, for want of a better word, bullshit. From the NTIA’s amendment:

In recognition that ccTLDs, new gTLDs, and the use of social media have created a more dynamic DNS marketplace, the parties agree that the yearly price for the registration and renewal of domain names in the .com registry may be changed

Huh?
This seems to imply that Verisign has somehow been disproportionately harmed by the rise of social media, the appearance of new gTLDs and some unspecified change in the ccTLD marketplace.
While it’s almost certainly true that .net has taken a whack due to competition from new gTLDs, and that the domain marketplace overall may have been diminished by many small businesses spurning domains by choosing to set up shop on, say, Facebook, .com is still a growing money-printing machine with some of the fattest margins seen anywhere in the business world and about a 40% global market share.
If the Trump administration’s goal here is to make some kind of ideological statement about free markets, then why not just lift the price caps altogether? Give Verisign the right to price .com however it pleases?
Or maybe Trump just wants to flip the bird to Obama once more by reversing yet another of his policies?
Who knows? It doesn’t make a lot of sense to me.

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Kirikos lawyers up after ICANN etiquette fight

Kevin Murphy, October 25, 2018, Domain Policy

Domain investor George Kirikos has hired lawyers to send nastygrams to ICANN after a fight over the rules of etiquette on a working group mailing list.
Kirikos claims there’s a “campaign of intimidation” against him by fellow volunteers who do not agree with his opinions and forthright tone, but that he “has not done anything wrong”.
In response, ICANN CEO Goran Marby this evening revealed that he has assigned his general counsel and new deputy, John Jeffrey, to the case.
Even by ICANN standards, it’s a textbook case of a) manufacturing mountains out of molehills, and b) how it can become almost impossible to communicate like sensible human beings when everyone’s tangled in red tape.
The dispute started back in May, when Kirikos got into a fight with IP lawyer Greg Shatan on the mailing list of the Rights Protection Mechanisms working group.
Both men are volunteers on the group, which seeks to refine ICANN policy protecting trademark owners in gTLDs.
The argument was about the content of a World Intellectual Property Organization web page listing instances of UDRP cases being challenged in court.
Kirikos took a strident tone, to which Shatan took exception.
Shatan then reported Kirikos to the working group’s co-chairs, claiming a breach of the Expected Standards of Behavior — the informal code of conduct designed to prevent every ICANN discussion turning into a flame war and/or bare-knuckle alley fight.
Under GNSO PDP rules, working group volunteers have to agree to abide by the ESB. Group chairs have the ability to kick participants who repeatedly offend.
At this point, the sensible thing to do would have been for Shatan and Kirikos to hug it out and move on.
But this is ICANN.
What actually happened was a pointless procedural back-and-forth between Kirikos, Shatan, and working group chairs Phil Corwin of Verisign and Brian Beckham of WIPO, which resulted in Kirikos hiring two lawyers — Andrew Bernstein of Torys and regular ICANN participant Robin Gross of IP Justice.
It’s believed to be the first time a WG participant has hired counsel over a mailing list argument.
Far too boring to recount here, Corwin’s timeline of events can be found from page 24 of this transcript (pdf) of remarks delivered here in Barcelona during ICANN 63, while the Bernstein/Kirikos timeline can be found here (pdf).
The rub of it is that Kirikos reckons both Corwin and Beckham are biased against him — Beckham because Kirikos voted against his chairship, Corwin because of a similar dispute in a related working group earlier this year — and that the ESB is unenforceable anyway.
According to Bernstein: “Mr. Kirikos has strong concerns that whatever process ICANN purports to operate with respect to Mr. Shatan’s complaint, it will not be fairly or neutrally adjudicated.”
He added that Kirikos had said that “due to the precise language of Section 3.4 of the Working Group Guidelines, Mr. Shatan lacked a basis to initiate any complaint”.
That language allows complaints to be filed if the ESB is “abused”. According to Corwin’s account, Kirikos — well-known as a detail-oriented ICANN critic — reckons the correct term should be “violated”, which rendered the ESB “null and void and unenforceable” in this instance.
Bernstein has since added that the ICANN board of directors never intended the ESB to be anything but voluntary.
The sum of this appears to be that the dispute has had a chilling effect on the RPM working group’s ability to get anything done, consuming much of its co-chairs’ time.
Kirikos lawyering up seems to have compounded this effect.
Now, as ICANN 63 drew to a close this evening, CEO Marby said in a brief prepared statement that the WG’s work has “more or less stalled for the last several months” and that he’s assigned general counsel John Jeffrey to “look into the issues surrounding this matter”.
ICANN “takes the issue very seriously”, he said.
As well it might. The Kirikos/Shatan incident may have been blown waaaaay out of proportion, but at its core is a serious question about civil discourse in ICANN policy-making.
Personally, I hold out hope it’s not too late for everyone to hug it out and move on.
But this is ICANN.

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