Next new gTLD round unlikely before 2022

ICANN is unlikely to accept any more new gTLD applications until a full decade has passed since the last round was open.
That’s the conclusion of some ICANN community members working on rules for the next round.
Speaking at ICANN 61 in Puerto Rico this weekend, Jeff Neuman, co-chair of the New gTLD Subsequent Procedures Working group, presented a “best case” timetable for the next round.
The timetable would see the next new gTLD application window opening in the first quarter of 2021, nine years after the 2012 round.
But Neuman acknowledged that the timeline would require all parts of the ICANN community — working groups, GNSO Council, board of directors, staff — to work at their most efficient.
With that in mind, 2021 seems optimistic.
“Even if we hit the 2021 date, that’s still a decade after the launch of the last round, which is crazy,” Neuman said.

The timetable assumes the GNSO wraps up its policy development a year from now, with the ICANN board approving the policy mid-2019.
It then gives the ICANN staff about six months to publish an updated Applicant Guidebook, and assumes whatever is produced is approved within about six months, after the first pass of public comments.
It’s worth noting that the 2012 round’s AGB hit its first draft in 2008 and went through half a dozen revisions over three years before it was finalized, though one imagines there would be less wheel-reinventing required next time around.
After the board gives the AGB the final nod, the timeline assumes ICANN staff about six months to “operationalize” the program.
But one unidentified ICANN staffer, who said she was “the person that will be ultimately responsible for the implementation” of whatever the GNSO comes up with, said during this weekend’s session that she doubted this was realistic.
She said ICANN the organization would need “at least 12 months” between the ICANN board approving the AGB and the application window opening. That would push the window to late 2021.
The Subsequent Procedures policy work is of course not the only gating factor to the next round.
There’s also a potential bottleneck in work being carried out to review rights protection mechanisms, where fears of filibustering have emerged in an already fractious working group.
All things considered, I wouldn’t place any bets on an application window opening as early as 2021.

3 Comments Tagged: ICANN, icann 61, new gTLDs, puerto rico

Donuts scraps 200 companies, consolidates under Binky Moon

Donuts has consolidated all of its original portfolio of new gTLD contracts under a single LLC, scrapping almost 200 shell companies in the process.
At least 196 contracts, each of which were originally allocated to a unique LLC, have been assigned now to Binky Moon LLC.
This seems to have happened back in late November, but ICANN only added the transfers to its published list of reassignments last week.
When Donuts applied for over 300 gTLDs back in 2012, each application belonged to a different shell company. Apparently randomly generated names — such as New Sky LLC, Sand Shadow LLC and Bitter Fields LLC — were chosen for each.
This was for “tax and other purposes” that made sense when Donuts was a new company, I’m told.
Now, with Donuts by one measure the fastest-growing tech company in the world, it made more sense to “retire” the old LLCs and realize the “operational efficiencies” of consolidation, a spokesperson said.
Not all of Donuts’ contracts belong to Binky Moon. When the company acquired 2003-round .travel last month it assigned the Registry Agreement to Dog Beach LLC.

5 Comments Tagged: binky moon, donuts, ICANN, new gTLDs

ICANNWiki fans protest funding cut

ICANN should continue to fund the independent ICANNWiki project, according to high-profile industry supporters.
As I first reported back in December, ICANN plans to stop giving a $100,000 annual grant to ICANNWiki, a repository of about 6,000 community-sourced articles on the people and organizations involved in the ICANN community.
While ICANNWiki does not merit an explicit mention in ICANN’s latest proposed budget, both organizations have confirmed to DI that the funding is for the chop, as ICANN attempts to rein in spending in the face of depressed revenue.
About a quarter of the 41 comments filed on the budget express support for the wiki.
Consultant Kurt Pritz, a 10-year veteran of ICANN and one of the key architects of its new gTLD program, wrote that the wiki “has been an essential part of the ICANN culture for many years… often saving ICANN meetings from terminal ennui.”
Roland LaPlante, chief marketing officer of Afilias (one of about 15 sponsors listed on ICANNWiki’s front page), wrote:

The complete withdrawal of funding from ICANN so abruptly not only threatens the viability of the project, but rather disrespectfully junks the valuable time and resources that the community has invested over the years. Ultimately the loss of ICANNWiki would be a loss to our overall sense of community.
ICANN should continue to support ICANNWiki at a reasonable level in the next fiscal year. At a minimum, please consider giving the team time to find other sources of funding.

Sandeep Ramchandani, CEO of Radix, concurred, writing:

ICANNNWiki benefits the entire ICANN community. Cutting the funding entirely would effectively halt its operations and be a disservice to the community it serves. It is in ICANN and the community’s best interest to continue funding it in an amount that works for ICANN long-term, and provide ICANNWiki sufficient time to develop a more sustainable business plan.

Simon Cousins, CEO of Chinese market localization specialist Allegravita, said:

Before ICANNWiki, there was precious little information on industry fundamentals in China, and since Allegravita has supported the pro-bono translation of ICANNWiki content into Chinese, the vital platform that is ICANNWiki has been acknowledged hundreds of times.
We do not support the immediate and full withdrawal of funding for ICANNWiki. We guardedly support incremental, annual decreases to give ICANNWiki the time necessary to generate new sponsorship income to cover their costs.

Pablo Rodriguez of .pr ccTLD operator PRTLD, host of ICANN 61 and an ICANNWiki sponsor, wrote:

We believe that they should not be cut out from the ICANN’s Budget, instead, they should be supported and embraced to continue their engaging approach and work with ICANN’s Community and as well newcomers, veterans, special programming for beginners and others in order to deliver what is ICANN and what does the organization do and so forth.

Several other commentators on ICANN’s budget asked ICANN to maintain the funding and I was unable to find any comments supporting its withdrawal.
It’s worth noting that ICANN’s $100,000 is not ICANNWiki’s only financial support. It says it receives an additional $61,000 a year from corporate sponsorship, and as a wiki much of its output is produced by volunteers.
It has been in existence for a decade, but ICANN has only been giving it money for three years.
The costs associated with running it appear to be mostly centered not on maintaining the web site but on its outreach and promotional activities, such as attending meetings and the popular caricatures and card decks it distributes.
It could be argued that ICANNWiki is pretty good value for money when compared to cost of a dedicated outreach professional (the average cost of an ICANN staffer has been estimated at $175,000+ in the latest budget).
ICANNWiki will host an “Edit-A-Thon” during the current ICANN 61 public meeting in San Juan, Puerto Rico on Tuesday at 0900 local time.

Comment Tagged: budget, ICANN, icannwiki

Is ICANN still over-estimating revenue from “stagnating” gTLD industry?

ICANN may have slashed millions from its revenue estimate for next year, but it has not slashed deeply enough, according to registrars and others.
Industry growth is flat, and below even ICANN’s “worst case” expectations for the fiscal year starting July 1, registrars told the organization in comments filed on its FY19 budget last week.
The Registrars Stakeholder Group said that “the FY 2019 budget fails to recognize that overall industry growth is flat.”
ICANN’s budget foresees FY19 revenue of $138 million, up $3.5 million on the projected result for FY18.
“These revenue projections presume growth in the domain market that is not aligned with industry expectations,” the RrSG said, pointing to sources such as Verisign’s Domain Name Industry Brief, which calculated 1% industry growth last year.
ICANN’s predictions are based on previous performance and fail to take into account historical “one-time events”, such as the Chinese domain speculation boom of a couple years ago, that probably won’t be repeated, RrSG said.
RrSG also expects the number of accredited registrars to decrease due to industry consolidation and drop-catching registrars reducing their stables of shell accreditations.
(I’ll note here that Web.com has added half a dozen drop-catchers to its portfolio in just the last few weeks, but this goes against the grain of recent trends and may be an aberration.)
RrSG said ICANN’s budget should account for reduced or flat accreditation fee revenue (which as far as I can tell it already does).
The comment, which can be read in full here, concludes:

Taken together, these concerns represent a disconnect between ICANN funding projections, and the revenue expectations of Registrars (and presumably, gTLD Registries) from which these funds are derived. In our view, ICANN’s assessment of budgetary “risks” are too optimistic , and actual performance for FY19 will be significant lower.

For what it’s worth, the Registries Stakeholder Group had this to say about ICANN’s revenue estimates:

Reliable forecasts, characterised by their scrutiny and realism, are fundamental to put together a realistic budget and to avoid unpleasant surprises, such as the shortage ICANN is experiencing in the current fiscal year. The RySG advises ICANN to continue to conduct checks on its forecasts and to re-evaluate the methodology used to predict its income in order to prevent another funding shortfall such as that which the organization experienced in FY18.

6 Comments Tagged: budget, drop catching, ICANN, new gTLDs, rrsg, rysg

Community calls on ICANN to cut staff spending

ICANN should look internally to cut costs before swinging the scythe at the volunteer community.
That’s a key theme to emerge from many comments filed by the community last week on ICANN’s fiscal 2019 budget, which sees spending on staff increase even as revenue stagnates and cuts are made in other key areas.
ICANN said in January that it would have to cut $5 million from its budget for the year beginning July 1, 2018, largely due to a massive downwards revision in how many new gTLD domains it expects the industry to process.
At the same time, the organization said it will increase its payroll by $7.3 million, up to $76.8 million, with headcount swelling to 425 by the end of the fiscal year and staff receiving on average a 2% pay rise.
In comments filed on the budget, many community members questioned whether this growth can be justified.
Among the most diplomatic objections came from the GNSO Council, which said:

In principle, the GNSO Council believes that growth of staff numbers should only occur under explicit justification and replacements due to staff attrition should always occur with tight scrutiny; especially in times of stagnate funding levels.

The Council added that it is not convinced that the proposed budget funds the policy work it needs to do over the coming year.
The Registrars Stakeholder Group noted the increased headcount with concern and said:

Given the overall industry environment where organizations are being asked to do more with less, we are not convinced these additional positions are needed… The RrSG is not yet calling for cuts to ICANN Staff, we believe the organization should strive to maintain headcount at FY17 Actual year-end levels.

The RrSG shared the GNSO Council’s concern that policy work, ICANN’s raison d’etre, may suffer under the proposed budget.
The At-Large Advisory Committee said it “does not support the direction taken in this budget”, adding:

Specifically we see an increase in staff headcount and personnel costs while services to the community have been brutally cut. ICANN’s credibility rests upon the multistakeholder model, and cuts that jeopardize that model should not be made unless there are no alternatives and without due recognition of the impact.
…
Staff increases may well be justified, but we must do so we a real regard to costs and benefits, and these must be effectively communicated to the community

ALAC is concerned that the budget appears to cut funding to many projects that see ICANN reach out to, and fund participation by, non-industry potential community members.
Calling for “fiscal prudence”, the Intellectual Property Constituency said it “encourages ICANN to take a hard look at personnel costs and the use of outside professional services consultants.”
The IPC is also worried that ICANN may have underestimated the costs of its contractual compliance programs.
The Non-Commercial Stakeholders Group had some strong words:

The organisation’s headcount, and personnel costs, cannot continue to grow. We feel strongly that the proposal to grow headcount by 25 [Full-Time Employees] to 425 FTE in a year where revenue has stagnated cannot be justified.
…
With 73% of the overall budget now being spent on staff and professional services, there is an urgent need to see this spend decrease over time… there is a need to stop the growth in the size of the staff, and to review staff salaries, bonuses, and fringe benefits.

NCSG added that ICANN could perhaps reduce costs by relocating some positions from its high-cost Los Angeles headquarters to the “global south”, where the cost of living is more modest.
The ccNSO Strategic and Operational Planning Standing Committee was the only commentator, that I could find, to straight-up call for a freeze in staff pay rises. While also suggesting moving staff to less costly parts of the globe, it said:

The SOPC – as well as many other community stakeholders – seem to agree that ICANN staff are paid well enough, and sometimes even above market average. Considering the current DNS industry trends and forecasts, tougher action to further limit or even abolish the annual rise in compensation would send a strong positive signal to the community.

It’s been suggested that, when asked to find areas to cut, ICANN department heads prioritized retaining their own staff, which is why we’re seeing mainly cuts to community funding.
I’ve only summarized the comments filed by formal ICANN structures here. Other individuals and organizations filing comments in their own capacity expressed similar views.
I was unable to find a comment explicitly supporting increased staffing costs. Some groups, such as the Registries Stakeholder Group, did not address the issue directly.
While each commentator has their own reasons for wanting to protect the corner of the budget they tap into most often, it’s a rare moment when every segment of the community (commercial and non-commercial, domain industry and IP interests) seem to be on pretty much the same page on an issue.

Comment Tagged: alac, budget, gnso, ICANN, ipc, ncsg, rrsg, rysg, staff

Amazon’s .amazon gTLD may not be dead just yet

South American governments are discussing whether to reverse their collective objection to Amazon’s .amazon gTLD bid.
A meeting of the Governmental Advisory Committee at ICANN 61 in Puerto Rico yesterday heard that an analysis of Amazon’s proposal to protect sensitive names if it gets .amazon will be passed to governments for approval no later than mid-April.
Brazil’s GAC rep said that a working group of the Amazon Cooperation Treaty Organization is currently carrying out this analysis.
Amazon has offered the eight ACTO countries commitments including the protection of such as “rainforest.amazon” and actively supporting any future government-endorsed bids for .amazonas.
Its offer was apparently sweetened in some unspecified way recently, judging by Brazil’s comments.
ACTO countries, largely Brazil and Peru, currently object to .amazon on the grounds that it’s a clash with the English version of the name for the massive South American rain forest, river and basin region, known locally as Amazonas.
There’s no way to read the tea leaves on which way the governments will lean on Amazon’s latest proposal, and Peru’s GAC rep warned against reading too much into the fact that it’s being considered by the ACTO countries.
“I would like to stress the fact that we are not negotiating right now,” she told the GAC meeting. “We are simply analyzing a proposal… The word ‘progress’ by no means should be interpreted as favorable opinion towards the proposal, or a negative opinion. We are simply analyzing the proposal.”
ICANN’s board of directors has formally asked the GAC to give it more information about its original objection to .amazon, which basically killed off the application a few years ago, by the end of ICANN 61.
Currently, the GAC seems to be planning to say it has nothing to offer, though it may possibly highlight the existence of the ACTO talks, in its formal advice later this week.

Comment Tagged: amazon, dot-brands, gac, geographic, ICANN, icann 61, new gTLDs, puerto rico

Namecheap’s Move Your Domain Day actually works

Namecheap appears to have done a year’s worth of transfers in a single day, on its annual Move Your Domain Day promotion.
The company said this week that the promotion, which ran on March 6 this year, saw 20,590 domains transferred in from other registrars.
That’s pretty good compared to its usual transfer activity.
Registry report data shows that Namecheap usually gets 1,000 to 1,500 inbound transfers per month, across all gTLDs.
Move Your Domain Day was originally set up to capitalize on protests over GoDaddy’s support for the Stop Online Piracy Act in late 2011.
That year, when it benefited from greater publicity, the company said it saw over 40,000 transfers.
During the promotion, Namecheap discounts transfers and donates $1.50 per domain to the Electronic Frontier Foundation.
This year, the EFF will be getting a check for $30,885.
Namecheap said earlier in the week that it was having problems processing inbounds from GoDaddy, which it claimed was throttling automated Whois queries, but said it would process the transfers regardless.

Comment Tagged: eff, godaddy, move your domain day, namecheap

ICANN mulls $68 million raid on auction war chest

ICANN wants to put away another $68 million for a rainy day and it’s considering raiding its new gTLD auction war chest in order to do so.
It’s also thinking about dipping into the pool of cash still left over from new gTLD application fees in order to bolster is “reserve fund” from its current level of $70 million to its target of $138 million.
But, as a relief to registrants, it appears to have ruled out steep fee increases, which had been floated as an option.
The reserve fund is basically a safety net that ICANN could use to keep the lights on in the event that revenue should suddenly plummet dramatically and unexpectedly.
If, for example, Verisign returned to its old antagonistic ways and refused to pay its .com fees for some reason, ICANN would lose about a third of its annual revenue but would be able to tap its reserve until the legal fisticuffs were resolved.
ICANN said in a discussion document (pdf) this week that it took $36 million from the reserve since 2014 in order to complete the IANA transition. Over the same period, its annual budget has swelled from about $85 million to $138 million and contributions back into the reserve have been minimal.
That’s left it with a meager $70 million squirreled away, $68 million shy of its longstanding target level of one year’s budget.
ICANN is now saying that it wants to replenish the fund in less than five years.
About $15 million of its target would come from cost-cutting its operations budget over the period.
It also wants to take at least $36 million from the new gTLD auction proceeds fund, which currently stands at $104 million (with another $132 million incoming should Verisign successfully obtain .web over the objections of rival bidders).
The remaining $17 million could come from “leftover” new gTLD application fees — that fund is currently about $80 million — or from more cost-cutting or more auction proceeds, or from a combination of the three.
A fourth option — increasing the per-transaction fees registrants are charged via their registries and registrars — appears to have been ruled out.
My back-of-the-envelope maths suggests that an annual per-transaction increase of about $0.07 would have been needed to raise $68 million over five years.
The proposal is open for public comment until April 25.

Comment Tagged: auctions, budget, ICANN, new gTLDs, reserve fund

ICANN strikes back at “offensive” .gay bidder

ICANN has responded harshly to claims that a probe of its handling of applications for the .gay gTLD was fixed from the outset.
Writing to dotgay LLC lawyer Arif Ali this week, ICANN lawyer Kate Wallace said claims that the investigation “had a pre-determined outcome in mind” were “as offensive as they are baseless”.
FTI Consulting gave ICANN the all-clear in January, dismissing allegations that ICANN staff had interfered with Community Priority Evaluations of .gay and other gTLDs conducted by the Economist Intelligence Unit.
But dotgay quickly responded by calling the FTI report a “whitewash”, saying “a strong case could be made that the purported investigation was undertaken with a pre-determined outcome in mind.”
Now, in an unusually pointed letter (pdf) Wallace calls dotgay out for its “insulting” implications.

While dotgay LLC may have preferred a different evaluation process and may have desired a different outcome, that is not evidence that FTI undertook its investigation “with a pre-determined outcome in mind.”
Your accusations in this regard are as offensive as they are baseless. The Board initiated the CPE Process Review in its oversight role of the New gTLD Program to provide greater transparency into the CPE process. There was no pre-determined outcome in mind and FTI was never given any instruction that it was expected to come to one conclusion over another.
…
Your assertions that FTI would blatantly violate best investigative practices and compromise its integrity is insulting and without any support, and ICANN rejects them unequivocally.

Wallace works for ICANN outside counsel Jones Day — which contracted with FTI for the investigation — but states that she is writing at the behest of the ICANN board of directors.
The board “is in the process of considering the issues” raised by Ali and gay rights expert lawyer William Eskridge, she wrote.
The board’s agendas for next week’s ICANN 61 public meeting in Puerto Rico have not yet been published.
dotgay wants to avoid a costly (or lucrative) auction against other .gay applicants by gaining “community” status, but it failed its CPE in 2014, largely because its definition of “gay” over-stretches, and has been appealing the decision ever since.

1 Comment Tagged: .gay, community, cpe, dotgay, eiu, fti, ICANN

Namecheap accuses GoDaddy of delaying transfers

GoDaddy broke ICANN rules and US competition law by delaying outbound domain transfers yesterday, and not for the first time, according to angry rival Namecheap.
March 6 was Namecheap’s annual Move Your Domain Day, a promotion under which it donates $1.50 to the Electronic Frontier Foundation for every inbound transfer from another registrar.
It’s a tradition the company opportunistically started back in 2011 specifically targeting GoDaddy’s support, later retracted, for the controversial Stop Online Piracy Act, SOPA.
But yesterday GoDaddy was delivering “incomplete Whois information”, which interrupted the automated transfer process and forced Namecheap to resort to manual verification, delaying transfers, Namecheap claims.
“First and foremost this practice is against ICANN rules and regulations. Secondly, we believe it violates ‘unfair competition’ laws,” the company said in a blog post.
Whois verification is a vital part of the transfer process, which is governed by ICANN’s binding Inter-Registrar Transfer Policy.
GoDaddy changed its Whois practices in January. As an anti-spam measure, it no longer publishes contact information, including email addresses vital to the transfer process, when records are accessed automatically over port 43.
However, GoDaddy VP James Bladel told us in January that this was not supposed to affect competing registrars, which have their IP addresses white-listed for port 43 access via a system coordinated by ICANN.
Did GoDaddy balls up its new restrictive Whois practices? Or can the blame be shared?
Namecheap also ran into problems with GoDaddy throttling port 43 on its first Move Your Domain Day in 2011, but DI published screenshots back then suggesting that the company had failed to white-list its IP addresses with ICANN.
This time, the company insists the white-list was not an issue, writing:

As many customers have recently complained of transfer issues, we suspect that GoDaddy is thwarting/throttling efforts to transfer domains away from them. Whether automated or not, this is unacceptable. In preparation for today, we had previously whitelisted IPs with GoDaddy so there would be no excuse for this poor business practice.

Namecheap concluded by saying that all transfers that have been initiated will eventually go through. It also asked affected would-be customers to complain to GoDaddy.
The number of transfers executed on Move Your Domain Day over the last several years appears to be well into six figures, probably amounting to seven figures of annual revenue.

1 Comment Tagged: godaddy, ICANN, irtp, namecheap, throttling, transfers, whois