GAC new gTLD veto refuses to die

ICANN’s Governmental Advisory Committee seems to be trying yet again to resurrect the government right of veto over controversial new top-level domain applications.
The GAC has proposed changes to the new gTLDs Applicant Guidebook that – at least on the face of it – would remove ICANN’s power to overrule GAC objections.
The changes would also make it much more likely that a gTLD application could be killed off due to the objections of a single nation.
If adopted, they would also make the already unpredictable process of anticipating the result of GAC objections considerably more ambiguous.
The supposedly “complete” Guidebook published by ICANN last month currently includes a warning that the GAC is working on its objecting rules, and that these will be included in future.
The GAC Communique (pdf) issued at the ICANN meeting in Dakar on Friday includes these proposed rules as an annex, and they’re not great if you’re a likely new gTLD applicant.
Consensus objections
If the GAC issues a consensus objection to an application, the Guidebook currently states that a “strong presumption” would be created that the application should fail.
But ICANN’s board would be able to overrule it with a so-called “Bylaws consultation”, the same process it used to approve .xxx earlier this year.
In its proposed revisions, the GAC inexplicably wants to delete the references to the Bylaws consultation.
My understanding is that the GAC is not proposing a change to the Bylaws, so the right of the board to initiate a consultation and overrule a GAC objection would still exist.
But the GAC seems to be asking for applicants to be given far less information about that process than they need, making its own powers appear greater than they are.
This could raise the psychological barrier to initiating a Bylaws consultation and create the perception that a consensus GAC objection always kills an application, which may not be the case.
The Dakar communique defines GAC consensus as “the practice of adopting decisions by general agreement in the absence of any formal objection”, which creates its own set of worries.
Non-consensus objections
A much bigger change is proposed to the way ICANN handles GAC “concerns” about an application.
This is GAC code for a non-consensus objection, where one or more governments has a problem with an application but the GAC as a whole cannot agree to object.
This is the objection mechanism that will very likely capture applications for gTLDs such as .gay, but it could basically cover any string for any reason.
Using the Guidebook’s current wording, there would be no presumption that this kind of application should be rejected. It would be in ICANN’s discretion to initiate a Bylaws consultation.
But the GAC wants something that sounds rather a lot like a Bylaws consultation made mandatory.
“The ICANN Board is expected to enter into dialogue with the GAC to understand the scope of concerns,” it says. “The ICANN Board is also expected to provide a rationale for its decision.”
This basically means that an application for .gay that was objected to by just two or three governments would have to undergo the pretty much the same level of scrutiny as .xxx did.
The political pressure on ICANN to kill the application would be much more intense than it would under the Guidebook’s current rules.
Here’s a table of the GAC’s proposed changes.
[table id=2 /]
In summary, the GAC wants to give more weight to fringe objections and to make the whole process potentially much more confusing for applicants.
I can’t see ICANN sensibly adding the GAC’s text to the Guidebook without at the very least some edits for clarity.

ICM extends .xxx sunrise

ICM Registry, which has evidently seen a last-minute rush of defensive registration applications this week, has extended its sunrise period until Monday.
It had been due to end at 4pm UTC today.
The company just issued this statement:

Due to unprecedented demand in the last week and following several requests from major registrars for more processing time for their backlogs, ICM Registry has extended the Sunrise A and Sunrise B registration periods for an additional three days to conclude Monday, October 31, 2011 at 16:00 UTC (Noon ET). This extension provides prospective registrants valuable time to secure their domains and protect their brands.

Sunrise A is for people in the porn business, B is the “block” for companies outside the “biz” that want to make sure their brands do not become associated with porn.
Guess which has been most popular. (It’s B.)
ICM originally said it expected 10,000 sunrise registrations, but it blew through that estimate weeks ago. The last published count was 42,000, on Monday, with “thousands” coming in daily,
If it hits 70,000 by Monday I will not be surprised.

.xxx sunrise on track for 50,000 domains

ICM Registry has seen over 42,000 sunrise applications since September 7, with “thousands more pouring in each day”, according to the company.
With a last-minute rush possible by porn-scared brand owners before the process closes this Friday, .xxx may well hit 50,000 sunrise applications.
The 42,000 number seems to cover all three sunrise phases – the ‘B’ process for non-porn companies and the AT and AD processes for pornographers.
Sunrise B applications cost $162 at the registry level and over $200 from registrars. ICM’s breakeven point was 10,000 applications, so it will be profitable to the tune of several million dollars.
Because Sunrise B applications incur a one-time fee, ICM has essentially made a windfall now at the expense of recurring revenues from renewals.

Registrars not happy with VeriSign abuse plans

VeriSign has been talking quietly to domain name registrars about its newly revealed anti-abuse policies for several months, but some are still not happy about its plans for .com malware scans.
The company yesterday revealed a two-pronged attack on domain name abuse, designed to counteract a perception that .com is not as secure a space as it should be.
One prong, dealing with law enforcement requests to seize domains, I covered yesterday. It’s already received criticism from the Electronic Frontier Foundation and American Civil Liberties Union.
The other is an attempt to introduce automatic malware scanning into the .com, .net and .name spaces, rather like ICM Registry has said it will do with all .xxx domains.
Unlike the daily ICM/McAfee service, VeriSign’s free scans will be quarterly, but the company intends to also offer a paid-for upgrade that would search domains for malware more frequently.
On the face of it, it doesn’t seem like a bad idea.
But some registrars are worried about the fading line between registrars, which today “own” the customer relationship, and the registries, which for the most part are hidden away in the cloud.
Go Daddy director of network abuse Ben Butler, asked about both of yesterday’s VeriSign proposals, said in a statement that they have “some merit”, but sounded several notes of caution:

This is going to make all registrars responsible for remediation efforts and negative customer-service clean up. The registrar at this point becomes the “middle man,” dealing with customers whose livelihood is being negatively impacted. As mentioned in their report, the majority of sites infected with malware were not created by the “bad guys.”
While there is an appeal process mentioned, it could take some time to get issues resolved, potentially leaving a customer’s website down for an extended period.
This could also create a dangerous situation, allowing registries to gain further control over registrars’ operations – as registrars have the relationship with the registrant, the registrar should be responsible for enforcing policies and facilitating remediation.

It has also emerged that VeriSign unilaterally introduced the malware scanning service as a mandatory feature of .cc and .tv domains – which are not regulated by ICANN – earlier this year.
The changes appear to have been introduced without fanfare, but are clearly reflected in today’s .tv registration policies, which are likely to form the basis of the .com policies.
Some registrars weren’t happy about that either.
Six European registrars wrote to VeriSign last month to complain that they were “extremely displeased” with the way the scanning service was introduced. They told VeriSign:

These changes mark the beginning of a substantive shift in the roles of registries regarding the monitoring and controlling of content and may lead to an increase of responsibility and liability of registries and registrars for content hosted elsewhere. As domain name registrars, we hold the position that the responsibilities for hosted content and the registration of a domain name are substantially different, and this view has been upheld in European court decisions numerous times. In this case, Verisign is assuming an up-front responsibility that surpasses even the responsibilities of a web hoster, and therefore opens the door to added responsibilities and legal liability for any form of abuse.
…
In the end, the registrar community will have to face the registrant backlash and criticism, waste countless hours of support time to explain this policy to the registrants and again every time they notice downtimes or loss of performance. These changes are entirely for the benefit of Verisign, but the costs are delegated to the registrants, the registrars and the hosting service providers.

The registrars were concerned that scanning could cause hosting performance hits, but VeriSign says the quarterly scan uses a virtual browser and is roughly equivalent to a single user visit.
They were also worried that the scans, which would presumably ignore robots.txt prohibitions on spidering, would be “intrusive” enough to potentially violate European Union data privacy laws.
VeriSign now plans to give all registrars an opt-out, which could enable them to avoid this problem.
It looks like VeriSign’s plans to amend the Registry-Registrar Agreement are heading for ICANN-overseen talks, so registrars may just be digging into a negotiating position, of course.
But it’s clear that there is some unease in the industry about the blurring of the lines between registries and registrars, which is only likely to increase as new gTLDs are introduced.
In the era of new gTLDs, and the liberalization of ICANN’s vertical integration prohibitions, we’re likely to see more registries having hands-on relationships with customers.

ICANN hunts for anti-cybersquatting database provider

ICANN is in the process of looking for an operator for the Trademark Clearinghouse that will play a crucial brand protection role in new top-level domains.
An RFI published last week says that ICANN is looking for an exclusive contractor, but that it may consider splitting the deal between two companies — one to provide trademark validation services and the other to manage the database.
The TMCH is basically a big database of validated trademarks that registrars/registries will have to integrate with. It will be an integral part of any new gTLD launch.
Registries are obliged by ICANN rules to hold a sunrise period and a Trademark Claims service when they go live, both of which leverage the clearinghouse’s services.
Rather than having to submit proof of trademark rights to each gTLD operator, brand owners will only have to be validated by the TMCH in order to be pre-validated by all gTLDs.
I estimate that the contract is worth a few million dollars a year, minimum.
If the ongoing .xxx sunrise period is any guide, we might be looking at a database of some 30,000 to 40,000 trademark registrations in the first year of the TMCH.
One potential TMCH provider currently charges $100 for the initial first-year validation and a recurring $70 for re-validation in subsequent years.
ICANN has not ruled out the successful TMCH provider selling add-on services too.
But the organization also seems to be at pains to ensure that the clearinghouse is not seen as another gouge on the trademark industry.
The RFI contains questions such as: “How can it be assured that you will not maximize your registrations at the expense of security, quality, and technical and operational excellence?”
The two providers that immediately spring to mind as RFI respondents are IProta and the Clearinghouse for Intellectual Property (CHIP).
Belgium-based CHIP arguably has the most institutional experience. It’s handled sunrise periods for Somalia’s .so, the .asia IDN sunrise, a few pseudo-gTLD initiatives from the likes of CentralNIC (de.com, us.org, etc), and is signed up to do the same for .sx.
Its chief architect, Bart Lieben of the law firm Crowell & Moring, is also well-known in the industry for his work on several sunrise period policies.
IProta is a newer company, founded in London this year by Jonathan Robinson, an industry veteran best known for co-founding corporate domain registrar Group NBT.
The company is currently managing the .xxx sunrise period, which is believed to be the highest-volume launch since .eu in late 2005.
“IPRota is very well positioned on the basis of our recent and past experience so I think we almost certainly will go ahead and respond,” Robinson confirmed to DI.
Domain name registries and registrars could conceivably also apply, based on their experience handling high-volume transactional databases and their familiarity with the EPP protocol.
ICANN sees the potential for conflicts of interest — its RFI anticipates that any already-contracted party applying to run the TMCH will have to impose a Chinese wall to reduce that risk.
The RFI is open for responses until November 25. ICANN intends to name its selected provider February 14, a month after it starts accepting new gTLD applications.
This is another reason, in my view, why submitting an application in January may not be the smartest move in the world.

IFFOR hires McCarthy to handle .xxx outreach

Kieren McCarthy, CEO of the .nxt new top-level domains conference, has reportedly joined the International Foundation For Online Responsibility to manage policy communications.
IFFOR is the sponsoring organization for ICM Registry’s new gTLD, responsible for setting the policies that will govern .xxx domain names.
ICM’s opponents in the Free Speech Coalition fear IFFOR, claiming it will be both toothless in the light of ICM’s “veto power” over policies (which ICM disputes) and dangerous to .xxx domain holders.
As well as outreach, McCarthy will be tasked with “developing the tools through which Internet community members and IFFOR Policy Council members can reach consensus positions”, according to Xbiz.
He has the right background. He’s the former general manager for public participation at ICANN, and lately one of its fiercest critics. More recently, he’s also done some consulting work for ICM.
Hopefully one of his first actions at IFFOR will be to add DI to the press release mailing list, so I don’t have to source Xbiz the next time the organization has news to report.

Will URS really be as cheap as ICANN says?

I’m having a hard time believing that trademark holders will be able to enforce their rights in new top-level domains for just $300.
The Uniform Rapid Suspension policy (pdf) is one of the new systems ICANN is putting in place to deter cybersquatters from abusing trademarks in new gTLDs.
It’s very similar to the existing UDRP, but it’s quicker and it only deals with the suspension – not transfer – of infringing domain names.
No URS arbitration provider has yet been appointed, but ICANN’s Applicant Guidebook, which spells out the policy, currently estimates a price of $300 per single-domain filing.
At least twice during the newdomains.org conference in Munich this week I heard ICANN representatives quote a price between $300 and $500.
I’m wondering how realistic this is.
Typically, domain arbitration fees are split between the provider, which receives a third, and the panelist, who receives the remaining two thirds.
With a $300 fee, that’s $100 to the provider and $200 to the sole panelist – who must be an experienced trademark lawyer or similar – compared to a $500/$1,000 split with the UDRP.
My question is: how many trademark lawyers will get out of bed for $200?
The URS gives panelists between three and five days to come up with a decision, but I’m guessing that you’d be lucky, for $200, to buy three to five hours of a panelist’s time.
Even I charge more than $200 for half a day’s work.
The Rapid Evaluation Service recently introduced by ICM Registry, which serves essentially the same purpose as URS but for the .xxx gTLD, costs $1,300 in National Arbitration Forum fees.
Like URS, the RES is designed for a speedy turnaround – just three days for a preliminary evaluation – of clear-cut cybersquatting cases.
Like URS, complaints submitted using RES have a tight word-count limit, to minimize the amount of work panelists have to do.
With that in mind, it seems to me that a $300 fee for URS may be unrealistic. Even the $500 upper-end ICANN estimate may be optimistic.
It will be interesting to see if ICANN’s negotiating clout with likely URS providers is better than ICM’s and, more importantly, to see whether $200 is enough to buy consistent, reliable decisions from panelists.

RodBeckstrom.xxx will never see the light of day

ICM Registry has reserved the names of dozens of ICANN directors, former directors and members of staff from the new .xxx top-level domain.
RodBeckstrom.xxx, it seems, is going to be permanently protected from cybersquatters.
I’ve reported before that thousands of celebrity names – about 4,300, it has since emerged – were placed into Registry Reserved status.
I can’t believe it did not occur to me until now to see if any domain industry “personalities” were also given the same preemptive protection.
It seems that every current member of the ICANN board has had their name reserved. One borderline case appears to be Ray Plzak, who’s only protected as RaymondAPlzak.xxx.
Two former ICANN directors who left the board this year – Peter Dengate Thrush and Rita Rodin Johnston – are also reserved, though Rita only as RitaRodin.xxx.
Further back, there’s spotty coverage. Raimundo Beca (left the board in 2010), former CEO Paul Twomey (2009) and Michael Palage (2006) have their names reserved, but many others have not.
Lots of ICANN staffers have been bestowed reserved status too, but again it appears to be quite random whether they’re included or not.
It does not appear to be based on rank (some VPs are excluded, but some mid-level employee names are reserved) or profile (some reserved names will be unfamiliar to anybody who does not attend ICANN meetings).
ICM has also reserved the names of all of its own employees.
I have been unable to find any big industry names from outside ICM and ICANN that are on the list. Bob Parsons is going to have to defensively register bobparsons.xxx, for example.
It’s worth noting that it’s against ICM’s rules to register any personal name under .xxx that is not the registrant’s own legal name or stage name, no matter what their intentions are.
Unlike .com, with .xxx registrants have to enter into an agreement with the registry – not just the registrar – when they buy a .xxx name.
It’s quite possible – though I’ve yet to confirm – that ICM will be able to disable any unauthorized personal name registered in .xxx without the offended party having to file an expensive claim.
And because registrants’ identities will be checked by ICM at the time of registration, even if they use Whois privacy, that should presumably be fairly easy to enforce in most cases.

Watch ICM’s first .xxx TV commercials

ICM Registry has posted its first wave of TV commercials for .xxx onto YouTube.
The theme running through the four commercials is that not registering a .xxx may save you a bit of cash, but that registering one will make you rich.
Or something.
I can’t say I “get” the humor, but I’m probably not the demographic.
Here’s the first three. The character, “King Gavin”, is played by Gavin McInnes, founder of Vice magazine.



ICM says the commercials will start to air on TV in the US soon.

How much money will ICM make from .xxx blocks?

There’s a pretty ludicrous report in the Australian media today, claiming that Aussie businesses are being forced to pay AUD $400 million to ICM Registry to protect their brands in .xxx.
The laughable number ($411 million) appears to have been fabricated from whole cloth. The report in the Murdoch-owned Herald Sun does not even bother trying to source or justify it.
But it’s becoming increasingly clear that ICM is going to make some money out of its .xxx sunrise, including from Sunrise B – the one-time defensive “blocks” that do not result in a domain registration.
The company priced Sunrise B at $162 per domain based on an assumption that it would see 10,000 of them. Any fewer and it would lose money, any more and it would profit.
According to official registry reports, no TLD launched in the last five years – .asia, .co, .jobs, .mobi – saw more than about 10,000 domains defensively registered during its sunrise period.
But my hunch is that .xxx will blow those out of the water. I would not be at all surprised if the final number tops 20,000 names.
It’s just a hunch at this point, based on a comparison to the .co launch – which had a reported 11,000 sunrise applications last year – and four main assumptions:
First, that 10,000 was a conservative estimate. I don’t think ICM would have risked making a big loss.
Second, based on a very small number of conversations, I think that some companies are not taking any chances. They’re applying for blocks in more second-tier brands that maybe they strictly need to.
Third, ICM has a much larger registrar channel than .co enjoyed, and much more aggressively FUDdy registrar marketing tactics.
ICM has approved about 70 registrars, compared to the 10 that .CO Internet had at launch, and a lot of registrar promotion has focused on the “Protect Your Brand!” angle, which was discouraged by .co.
Fourth, the vast amount of mainstream media attention the .xxx sunrise has been receiving, most which has doggedly followed the same line as the registrar FUD.
While the value of defending against typosquatting during the .co sunrise last year was probably more important to trademark holders from a security and traffic loss perspective, the brand protection angle did not receive nearly the same amount of press as .xxx has.
ICM president Stuart Lawley has done dozens of media interviews since the sunrise kicked off last week. I even heard him on a UK radio news show aimed at teenagers.
And this press has been going on for over six years, remember. ICANN first approved .xxx in 2005, and the story has been in and out of the media ever since.
It’s worth noting that a Sunrise B block, with its one-time fee, basically denies ICM Registry a bunch of recurring revenue events forever.
Nike is going to be paying $20 to .CO Internet for its defensively registered nike.co domain name every year until the end of time, in addition to the up-front sunrise fee.
If it blocks nike.xxx, it will pay $162 to ICM now but it will also deny the registry its $60 fee for every year it could have been a renewing domain. In three years, ICM’s losing revenue.
But Sunrise B is very probably going to be profitable for ICM. At 20,000 applications, its top line would be $3.24 million, with profit probably pushing seven figures.
Nowhere near $411 million, obviously, but not a bad payday for selling domain names that will never resolve.