Cloudflare selling all domains at cost: “All we’re doing is pinging an API”

Content delivery network provider Cloudflare has promised to sell domains in all TLDs at the wholesale cost, with no markup, forever.
The company made the commitment yesterday as it announced its intention to get into the registrar business.
Founder Matthew Price used the announcement to launch a blistering attack on the current registrar market, which he said is charging “crazy” prices and endlessly upselling their customers with unwanted, worthless products. He blogged:

why should registrars charge any markup over what the TLDs charge? That seemed as nutty to us as certificate authorities charging to run a bit of math. When we see a broken market on the Internet we like to do something about it.
…
we promise to never charge you anything more than the wholesale price each TLD charges. That’s true the first year and it’s true every subsequent year. If you register your domain with Cloudflare Registrar you’ll always pay the wholesale price with no markup.
For instance, Verisign, which administers the .com TLD, currently charges $7.85 per year to register a .com domain. ICANN imposes a $0.18 per year fee on top of that for every domain registered. Today, if you transfer your .com domain to Cloudflare, that’s what we’ll charge you per year: $8.03/year. No markup. All we’re doing is pinging an API, there’s no incremental cost to us, so why should you have to pay more than wholesale?

There are catches, of course.
For starters, the service is not available yet.
Price wrote that Cloudflare will roll it out gradually — for inbound transfers only — to its “most loyal” customers over an unspecified period. Even customers on its cheapest plans will get access to the queue, he wrote.
Eventually, he said, it will be available “more broadly”.
It will be interesting to see if the no-markup pricing could become available to non-customers too, and whether it sticks to its business model when its support lines start ringing and it becomes apparent the business is actually big ole cash vampire.
Cloudflare has been ICANN-accredited for several years, but it’s only been offering registrations to high-value enterprise customers so far.
My records show that it has not much more than 800 domains under management, all in .com, .net, .org and .info.
The announcement was made, perhaps not coincidentally, a couple days after CRM software provider Zoho made headlines when its 40 million customers were taken offline because its former registrar suspended zoho.com over a trivial level of abuse. In response to the screw-up, Zoho transferred the domain to Cloudflare.

11 Comments Tagged: cloudflare, ICANN, pricing, tierra, zoho

MMX waving goodbye to .london? Boss puts focus on renewal profits, China

MMX’s revenue from domain renewals could cover all of its expenses within the next 24 months, if everything goes to plan, according to CEO Toby Hall.
Hall was speaking to DI this evening after the company reported its first-half financial results, which saw revenue up 22% to $6.4 million and a net loss of $14.7 million, which compared to a loss of $526,000 a year earlier.
MMX’s huge loss for the period was largely — to the tune of $11.8 million — attributable to the restructuring of an “onerous” contract with one of its gTLD partners.
Hall refuses point blank to name that partner, but for reasons I discussed last year, I believe it is .london sponsor London & Partners, which is affiliated with the office of the Mayor of London.
When L&P selected MMX to be its registry partner for .london back in 2012, I understand a key reason was MMX’s promise to pay L&P a fixed annual fee and commit to a certain amount of marketing spend.
But two years ago, after it became clear that .london sales were coming in waaaay below previous management’s expectations, MMX renegotiated the deal.
Under the new deal, instead of committing to spend $10.8 million on marketing the TLD itself, MMX agreed to give half that amount to L&P for L&P to do its own marketing.
It appears that L&P has already spunked much of that cash ineffectively, or, as MMX put it:

a significant portion of that marketing budget has been spent by the partner with minimal impact on revenues in the current year and no expectation of any material uplift in future periods

MMX seems to have basically written off the .london deal as a bad call, and now that MMX is no longer in the registry back-end or registrar businesses, it seems unlikely that the .london partnership will be extended when it expires in three years.
Again, Hall would not confirm this bad contract was for .london — I’m making an informed guess — but the alternatives are limited. The only other TLDs MMX runs in partnership currently are .review and .country, and not even 2012 MMX management would have bet the farm on those turkeys.
Another $2.1 million of the company’s H1 net loss is for “bad debt provisions” relating the possibility that certain US-based registrar partners may not pay their dues, but this provision is apparently related to a new accounting standard rather than known deadbeats threatening to withhold payments.
If you throw aside all of this accountancy and look at the “operating EBITDA” line, profit was up 176% to $661,000 compared to H1 2017.
While the loss may have cast a cloud over the first half, Hall is upbeat about MMX’s prospects, and it’s all about the renewals.
“Renewal revenue will be more than all the costs of business within 24 months,” he said. To get there, it needs to cross the $12 million mark.
He told DI tonight that “an increasing percentage of our business is based on renewals… just on renewal revenue alone we’ll be over $10 million this year”.
Renewal revenue was $4.7 million in 2017 and $2.4 million in 2016, he said. In the first half, it was was up 40% to $3.4 million.
MMX’s acquisition of porn domain specialist ICM Registry, which has renewal fees of over $60 per year, will certainly help the company towards its 2018 goal in the second half. ICM only contributed two weeks of revenue — $250,000 — in H1.
Remarkably, and somewhat counter-intuitively, the company is also seeing renewal strength in China.
Its .vip gTLD, which sells almost exclusively in China, saw extremely respectable renewals of 76% in the first half, which runs against the conventional wisdom that China is a volatile market
Hall said that .vip renewals run in the $5 to $10 range, so apparently TLD volume is not being propped up by cheap wholesale renewal fees. The TLD accounts for about 30% of MMX’s renewal revenue, Hall said.
About 60% of .vip’s domains under management are with Chinese registrar Alibaba. The biggest non-Chinese registrar is GoDaddy, with about 3% of the namespace.
More exposure to China, and specifically Alibaba, is expected to come soon due to MMX’s repurposing of the 2012-logic gTLD .luxe, which is being integrated into the Ethereum blockchain.
MMX said last week that some six million (mostly Chinese) users of the imToken Ethereum wallet will in November get the ability to register .luxe domains via imToken and easily integrate them with their Ethereum assets.
The announcement was made at the Alibaba Cloud Computing Conference in China last week, so you can probably guess imToken’s registrar of choice.

Comment Tagged: .london, .vip, china, earnings, financials, icm registry, Minds + Machines, mmx, new gTLDs, renewals

Emoji domains now easier to use

Emoji domains have become marginally easier to navigate to in the last month, following an update to Google’s Chrome browser.
Google has added “Emoji” to the context menu that appears when users right-click in any editable text field — including the address/search bar.
Clicking the option brings up a searchable list of common emojis that can be inserted into the address bar for either search or, with the addition of a typed-in TLD, navigation.
TLDs currently supporting emojis include .ws, .fm and .to. ICANN has ruled out support for emojis in the gTLDs for security reasons.
When the domain is resolved, the emojis render in the address bar as Punycode-converted Latin characters beginning with the usual “xn--” prefix, at least under my default configuration.
The whole process is still a bit fiddly, so I wouldn’t all rush out to build your businesses on emoji domains just yet.
The context menu feature appears to have been on the experimental track in Chrome for at least a month, but was more recently turned on by default, at least on all the Chrome 69 installs I’ve tested.
If you don’t get the emoji option in your context menu, you should be able to turn it on by navigating to chrome://flags/#enable-emoji-context-menu and selecting the Enabled option.

2 Comments Tagged: .fm., .to, .ws, chrome, emojis, google

Chutzpah alert! DotKids wants ICANN handout to fight gTLD auction

New gTLD applicant DotKids Foundation has asked ICANN for money to help it fight for .kids in an auction against Amazon and Google.
The not-for-profit was the only new gTLD applicant back in 2012 to meet the criteria for ICANN’s Applicant Support Program, meaning its application fee was reduced by $138,000 to just $47,000.
Now, DotKids reckons ICANN has a duty to carry on financially supporting it through the “later stages of the process” — namely, an auction with two of the world’s top three most-valuable companies.
The organization even suggests that ICANN dip into its original $2 million allocation to support the program to help fund its bids.
Because .kids is slated for a “last resort” auction, an ICANN-funded winning bid would be immediately returned to ICANN, minus auction provider fees.
It’s a ludicrously, hilariously ballsy move by the applicant, which is headed by DotAsia CEO Edmon Chung.
It’s difficult to see it as anything other than a delaying tactic.
DotKids is currently scheduled to go to auction against Google’s .kid and Amazon’s .kids application on October 10.
But after ICANN denied its request for funding last month, DotKids last week filed a Request for Reconsideration (pdf), which may wind up delaying the auction yet again.
According to DotKids, the original intent of the Applicant Support Program was to provide support for worthy applicants not just in terms of application fees, but throughout the application process.
It points to the recommendations of the Joint Applicant Support working group of the GNSO, which came up with the rules for the support program, as evidence of this intent.
It says ICANN needs to address the JAS recommendations it ignored in 2012 — something that could time quite some time — and put the .kids auction on hold until then.

1 Comment Tagged: .kid, .kids, amazon, applicant support, auction, dotkids, google, ICANN, last resort, new gTLDs

Afilias gets Guinness record for .au migration

Afilias has got its recent takeover of .au recognized by Guinness as an official world record.
The company was given the title of “Largest Migration of an Internet Top-Level Domain in a Single Transition” at an event in New York today, according to a company press release.
It relates to its migration of .au from former registry provider Neustar to its own back-end a few months ago.
Australia’s .au ccTLD had about 3.1 million names under management at the time, about 400,000 names more than the previous record — the 2003 .org transition Afilias also handled.
I understand there’s a licensing fee due to Guinness for this kind of (let’s face it) shameless-but-effective PR stunt, but no guarantee the record will actually be printed in future editions of the annual Guinness Book of World Records.
I hope the fresh salt in Neustar’s wounds isn’t stinging too badly this evening.

Comment Tagged: .au, afilias, auda, guinness, migration, neustar

KSK vote was NOT unanimous

ICANN’s board of directors on Sunday voted to approve the forthcoming security key change at the DNS root, but there was some dissent.
Director Avri Doria, a Nominating Committee appointee, said today that she provided the lone vote against the DNSSEC KSK rollover, which is expected to cause temporary internet access problems for potentially a couple million people next month.
I understand there was also a single abstention to Sunday’s vote.
Doria has released a dissenting statement, in which she said the absence of an external, peer-reviewed study of the risks could prove a problem.

The greatest risk is that out of the millions that will fail after the roll over, some that are serious and may even be critical, may occur; if this happens the lack of peer reviewed studies may be a liability for ICANN, perhaps not legal, but in terms of our reputation as protectors of the stability & security of internet system of names.

She added that she was concerned about the extent that the public has been notified of the rollover plan, and questioned whether the current risk mitigation plan is sufficient.
Doria said she found comments filed by Verisign (pdf) particularly informative to her eventual vote, as well as comments from the At-Large Advisory Committee (pdf), Business Constituency (pdf) and Registries Stakeholder Group (pdf).
These groups had called for more study and data, better outreach, more clearly defined success/failure benchmarks, and more delay.
Doria noted in her dissenting statement that the ICANN board did not have a chance to quiz any of the minority of the members of the Security and Stability Advisory Committee who had called for further delay.
The board’s resolution, apparently arrived at after two hours of formal in-person discussions in Brussels at the weekend, is expected to be published shortly.
The rollover, which has already been delayed a year, is now scheduled to go ahead October 11.
Any impact is expected to be felt within a couple of days, as the change ripples out across the DNS.
ICANN says that any network operator impacted by the change has a simple fix: turn off DNSSEC. Then, if they want, they can update their keys and turn it back on again.

1 Comment Tagged: board, dns, DNSSEC, ICANN, ksk, ksk rollover, root, security, verisign

ICANN turns 20 today (or maybe not)

ICANN is expected to celebrate its 20th anniversary at its Barcelona meeting next month, but by some measures it has already had its birthday.
If you ask Wikipedia, it asserts that ICANN was “created” on September 18, 1998, 20 years ago today.
But that claim, which has been on Wikipedia since 2003, is unsourced and probably incorrect.
While it’s been repeated elsewhere online for the last 15 years, I’ve been unable to figure out why September 18 has any significance to ICANN’s formation.
I think it’s probably the wrong date.
It seems that September 16, 1998 was the day that IANA’s Jon Postel and Network Solutions jointly published the organization’s original bylaws and articles of incorporation, and first unveiled the name “ICANN”.
That’s according to my former colleague and spiritual predecessor Nick Patience (probably the most obsessive journalist following DNS politics in the pre-ICANN days), writing in now-defunct Computergram International on September 17, 1998.
The Computergram headline, helpfully for the purposes of the post you are reading, is “IANA & NSI PUBLISH PLAN FOR DNS ENTITY: ICANN IS BORN”.
Back then, before the invention of the paragraph and when ALL CAPS HEADLINES were considered acceptable, Computergram was published daily, so Patience undoubtedly wrote the story September 16, the same day the ICANN proposal was published.
A joint Postel/NetSol statement on the proposal was also published September 17.
The organization was not formally incorporated until September 30, which is probably a better candidate date for ICANN’s official birthday, archived records show.
Birthday meriments are expected to commence during ICANN 63, which runs from October 20 to 25. There’s probably free booze in it, for those on-site in Barcelona.
As an aside that amused me, the Computergram article notes that Jones Day lawyer Joe Sims very kindly provided Postel with his services during ICANN’s creation on a “pro bono basis”.
Jones Day has arguably been the biggest beneficiary of ICANN cash over the intervening two decades, billing over $8.7 million in fees in ICANN’s most recently reported tax year alone.

6 Comments Tagged: barcelona, iana, ICANN, icann 63, jon postel, jones day, network solutions

Van der Laan to leave ICANN board

Former Dutch politician Lousewies van der Laan is to leave the ICANN board of directors next month and be replaced with the former CEO of the Serbian ccTLD.
ICANN said yesterday that Danko Jevtovic, who headed RNIDS from 2013 until July last year, has been selected to occupy van der Laan’s seat following the Annual General Meeting in Barcelona.
Van der Laan, who had been selected by the Nominating Committee for a second term, has had to decline the offer “due to unforeseen family obligations”, ICANN said.
Jevtovic will take his seat at the same time as fellow NomCom appointee, Tripti Sinha of the University of Maryland, who oversees management of the DNS D-root server and replaces term-limited George Sadowsky.
El Salvadorean ccTLD founder Rafael “Lito” Ibarra is the third NomCom appointee this year, starting his second term next month.

Comment Tagged: board, ICANN, nomcom

Set buttocks to clench! ICANN approves risky KSK rollover

ICANN has approved the first rollover of the domain name system’s master security key, setting the clock ticking on a change that could cause internet access issues for millions.
The so-called KSK rollover, when ICANN deletes the key-signing key that has been used as the trust anchor for the DNSSEC ecosystem since 2011 and replaces it with the new one — will now go ahead as planned on October 11.
The decision was made yesterday at the ICANN board of directors’ retreat in Brussels.
ICANN chief technology officer David Conrad posted this to an ICANN mailing list this morning:

The Board voted to approve the resolution for ICANN org to move forward with the revised KSK rollover plan. So barring unforeseen circumstances, the KSK-2017-signed ZSK will be used to sign the root zone on 11 October 2018.

The rollover was due to happen October 11 last year, but ICANN delayed it when it emerged that many DNS resolvers weren’t yet configured to use the new key.
That’s still a problem, and nobody knows for sure how many endpoints will stop functioning properly when the new KSK goes solo.
While most experts weighing in on the rollover, including Conrad, agreed that the risk of more delay outweighed the risk of rolling now, that feeling was not unanimous.
Five members of the 22-member Security and Stability Advisory Committee — including top guys from Google and Verisign — last month dissented from the majority view and said ICANN should delay again.
The question now is not whether internet users will see a disruption in the days following October 11, but how many users will be affected and how serious their disruptions will be.
Based on current information, as many as two million internet users could be affected.
ICANN is likely to take flak for even relatively minor disruptions, but the alternative was to continue with the delays and risk an even bigger impact, and even more flak, in future.
The text of ICANN’s resolution and the rationale behind it will be published in the next day or so.

2 Comments Tagged: DNSSEC, ICANN, ksk, ksk rollover, rollover, ssac

Mediators hired as Whois reformers butt heads

ICANN has hired professional mediators to help resolve strong disagreements in the working group tasked with reforming Whois for the post-GDPR world.
Kurt Pritz, chair of the Expedited Policy Development Process for Whois, last week told the group that ICANN has drafted in the Consensus Building Institute, with which it has worked before, to help “narrow issues and reach consensus”.
Three CBI mediators will brief the EPDP group today, and join them when the WG meets face-to-face for the first time at a three-day session in Los Angeles later this month.
Their goal is not to secure any particular outcome, but to help the disparate viewpoints find common ground, Pritz told the group.
It’s been Pritz’s intention to get the mediators in since day one — he knew in advance how divisive Whois policy is — but it’s taken until now to get the contracts signed.
The EPDP WG’s job is to create a new, privacy-conscious, consensus Whois policy that will apply to all gTLD registries and registrars. Its output will replace ICANN’s post-GDPR Temporary Specification for Registration Data, which in turn replaced the longstanding Whois policy attached to all ICANN registry and registrar contracts.
Since the working group first convened in early August — about 500 emails and 24 hours of painful teleconferences ago — common ground has been hard to find, and in fact the EPDP group did not even attempt to find consensus for the first several weeks of discussions.
Instead, they worked on its first deliverable, which was finalized last week, a “triage report” that sought to compile each faction‘s opinion of each section of ICANN’s Temp Spec.
The idea seemed sensible at the time, but with hindsight it’s arguable whether this was the best use of the group’s time.
The expectation, I believe, was that opposing factions would at least agree on some sections of text, which could then be safely removed from future debate.
But what emerged instead was this, a matrix of disagreement in which no part of the Temp Spec did not have have at least one group in opposition:
The table is potentially misleading, however. Because groups were presented with a binary yes/no option for each part of the spec, “no” votes were sometimes recorded over minor language quibbles where in fact there was agreement in principle.
By restricting the first few weeks of conversation to the language of the Temp Spec, the debate was arguably prematurely hamstrung, causing precious minutes to trickle away.
And time is important — the EPDP is supposed to deliver its consensus-based Initial Report to the ICANN 63 meeting in Barcelona about five weeks from now.
That’s going to be tough.
What’s becoming increasingly clear to me from the post-triage talks is that the WG’s task could be seen as not much less than a wholesale, ground-up, reinvention of the Whois wheel, recreated with GDPR as the legal framework.
Who is Whois for?
Discussions so far have been quite mind-expanding, forcing some fundamental rethinking of long-held, easy assumptions, at least for this lurker. Here’s an example.
One of the fundamental pillars of GDPR is the notion of “purposes”. Companies that collect private data on individuals have to do so only with specific, enumerated purposes in mind.
The WG has started by discussing registrars. What purpose does a registrar have when it collects Whois data from its registrants?
None whatsoever, it was claimed.
“To execute the contract between the registrant and the registrar, it’s really not necessary for registrars to collect any of this information,” GoDaddy head of policy James Bladel, representing registrars, told the group on its latest call Thursday.
Registrars collect data on their customers (not just contact data, but also stuff like credit card details) for billing and support purposes, but this is not the same as Whois data. It’s stored separately and never published anywhere. While covered by GDPR, it’s not covered by Whois policy.
Whois data is only collected by registrars for third parties’ purposes, whether that third party be a registry, ICANN, a data escrow agent, a cop, or an intellectual property enforcer.
“Other than a few elements such as domain name servers, there is nothing that is collected in Whois that is needed for the registrar to do their business,” At-Large Advisory Committee chair Alan Greenberg told the WG. “All of them are being collected for their availability to third parties, should they need it.”
While this may seem like a trivial distinction, drawing a hard line between the purposes of registries, registrars and ICANN itself on the one hand and law enforcement, cybersecurity and IP lawyers on the other is one of the few pieces of concrete advice ICANN has received from European data protection regulators.
There’s by no means unanimous agreement that the registrars’ position is correct, but it’s this kind of back-to-basics discussion that makes me feel it’s very unlikely that the EPDP is going to be able to produce an Initial Report with anything more than middling consensus by the October deadline.
I may be overly pessimistic, but (mediators or no mediators) I expect its output will be weighted more towards outlining and soliciting public comment on areas of disagreement than consent.
And the WG has not yet even looked in depth at the far thornier issue of “access” — the policy governing when third parties such as IP lawyers will be able to see redacted Whois data.
Parties on the pro-access side of the WG have been champing at the bit to bring access into the debate at every opportunity, but have been
Hey, look, a squirrel!
The WG has also been beset by its fair share of distractions, petty squabbles and internal power struggles.
The issues of “alternates” — people appointed by the various constituencies to sit in on the WG sessions when the principles are unavailable — caused some gnashing of teeth, first over their mailing list and teleconference privileges and then over how much access they should get to the upcoming LA meeting.
Debates about GDPR training — which some say should have been a prerequisite to WG participation — have also emerged, after claims that not every participant appeared clued-in as to what the law actually requires. After ICANN offered a brief third-party course, there were complaints that it was inadequate.
Most recently, prickly Iranian GAC rep Kavouss Arasteh last week filed a formal Ombudsman complaint over a throwaway god-themed pun made by Non-Com Milton Mueller, and subsequently defended by fellow non-resident Iranian Farzaneh Badii, in the Adobe Connect chat room at the September 6 meeting.
Mueller has been asked to apologize.

7 Comments Tagged: barcelona, cbi, Consensus Building Institute, epdp, gdpr, ICANN, icann 63, privacy, whois