auDA probably won’t pass on full Afilias savings to registrants

Switching .au’s back-end to Afilias will cut auDA’s per-domain costs by more than half, but registrants are not likely to benefit from the full impact of the savings.
auDA’s Bruce Tonkin, who led the committee that selected Afilias to replace incumbent Neustar, told DI this week that the organization is likely to take a bigger cut of .au registration fees in future, in order to invest in marketing.
That would include marketing the ability of Aussies to register .au domains at the second level for the first time — a controversial, yet-to-roll-out proposal.
Tonkin confirmed that the back-end fee auDA will be paying Afilias is less than half of what it is currently paying Neustar — the unconfirmed rumor is that it’s 40% of the current rate — but said that Afilias was not the cheapest of the nine bidders.
While .au names are sold for a minimum of two years, the current wholesale price charged to registrars works out to AUD 8.75 ($6.85) per year, of which Neustar gets AUD 6.33; auDA receives the other AUD 2.42.
A back-end fee of roughly $5 (US) per domain per year is well above market rates, so it’s pretty clear why auDA chose to open the contract to competition.
Tonkin explained the process by which Afilias was selected:

We first considered scoring without price, and Afilias received the highest score for non-financial criteria.
We then considered pricing information to form an assessment of value for money. The average pricing across the 9 [Request For Tender] responses was less than half of the present registry back-end fee ($6.33). Afilias was close to the average pricing, and while it was not the cheapest price — it was considered best value for money when taking into account the highest score in non-financial criteria.

I asked Afilias for comment on rumors that its price was 60% down on the current rate and received this statement:

Afilias believes auDA chose us based on the best overall value for the Australian internet community. The evaluation heavily weighted expertise, quality and breadth of service over price. While we don’t know what others bid, Afilias works to be competitive in today’s market. Attempts to price significantly higher than market without a value proposition are unrealistic and could even be considered price gouging.

It’s not known what price Neustar bid for the continuation of the contract, but I expect it will have also offered a deep discount to its current rate.
By switching, auDA is basically going to be saving itself over AUD 3 per domain per year, which works out to a total of AUD 9 million ($7 million) per year at least.
But the organization has yet to decide how much of that money, if any, to pass on to its registrars and ultimately registrants.
The auDA board of directors will meet in March to discuss this, Tonkin (who is in charge of the registry transition project but not on the board) said.
“We don’t want to set expectations that the wholesale price is going to change massively,” he said.
“I don’t expect it’s going to be any higher than the current wholesale price,” he said.
But he said he expects auDA to increase its slice of the pie in order to raise more money for marketing. The organization does “basically no marketing” now, he said.
“There’s certainly strong interest in doing more to market and grow the namespace,” he said. “One option is that more money is put into marketing the namespace and growing awareness of .au… That AUD 2.42, I expect that to change.”
This would include marketing direct second-level registrations, an incoming change to how .au names are sold that has domain investors worried about confusion and market dilution.
Outrage over the 2LD proposal — it appears to be a done deal, even if the details and timeline have yet to be finalized — has started attracting the attention of business media in Australia recently.
But auDA’s own research shows that opposition is not that substantial outside of these “special interests”.
A survey last year showed that 40% of .com.au registrants “support” or “strongly support” the direct registration proposal, with 18% “opposed” or “strongly opposed” Another 42% were completely unaware of the changes.
Support among .org.au registrants was lower, and it was higher among .net.au registrants.
But 36% of “special interests” — which appears to mean people who discovered the survey due to their close involvement in the domain industry — were opposed to the plan.
There’s no current timeline for the introduction of direct registrations, but the back-end handover from Neustar to Afilias is set to happen July 1 this year.
Neustar acquired AusRegistry, which has been running .au since 2002, for $87 million a couple of years ago.

4 Comments Tagged: .au, afilias, auda, back-end, direct, neustar, second-level

Should ICANN cut free travel, or its own staff?

Is ICANN’s suddenly limited budget best spent on its staff wages or on flights and hotels for certain volunteers?
That’s the debate that’s been emerging in the ICANN community in the last few weeks since ICANN revealed it would have to make some “tough choices” in the face of lower than expected revenue from a stagnant domain industry.
Members of the ICANN Fellowship program have started a petition calling for the organization to look at its own staffing needs before cutting the number of Fellows it supports in half.
The petition is not signed (though I have a pretty good idea who started it) and at time of publication, it has 194 signatures.
The Fellowship program sees ICANN pay for the travel and lodging, along with a per diem allowance, of up to 60 community members at each of its three annual major meetings.
They’re usually ICANN newbies and generally from less-developed regions of the world.
But because ICANN is trying to cut $5 million from its fiscal 2019 budget it wants to reduce the number of supported Fellows down to 30 per meeting.
ICANN says (pdf) that the average cost to send a Fellow to a meeting is $3,348, which would work out at or $200,880 per meeting or $602,640 per year.
Cutting the program in half would presumably therefore save a tad over $300,000 a year.
It’s not nothing, but it’s chickenfeed in a budget penciled in at $138 million for FY19.
While Fellows are not the only people seeing budget cutbacks, the only one of five broad areas that will actually see growth in ICANN’s FY19 budget is staffing costs.
The organization said personnel spend will go up from $69.5 million to $76.8 million in its next fiscal year.
That’s based on the staff growing by 34 people in the fiscal year to June 30. Those people will then earn a full year’s wages in FY19, rather than the partial year they earned in FY18.
It also plans to increase headcount by four people in FY19, and to give employees an average of 2% pay rises (cut from 4%).
The end-of-year headcount would be 425. That means headcount will have doubled since about September 2013. It was at under 150 when the new gTLD program kicked off in 2012.
Does ICANN really need so many staff? It’s a question people have been asking since before headcount even broke into three digits (over 10 years ago).
The petition organizers wrote that ICANN could not only maintain but increase funding for Fellows by just lowering staffing levels by one or two people, adding:

Given that most of the fellows are from developing countries, the Fellowship Program is not only a learning platform for capacity building to empower volunteers with the skills needed to create a positive impact both within ICANN and in their home countries, but also it is practically the only way to overcome the insurmountable financial burden faced by individuals coming from world regions where even access to drinking water is problematic, not to mention access to computers and quality IT infrastructure that is taken for granted in developed countries.

There’s no denying that attending ICANN meetings can be a pricey undertaking. I come from the developed world and I’ve skipped a few for cost reasons.
But there’s no point ICANN splashing out its cash (which is after all a quasi-tax gathered ultimately from domain registrants) on a Fellowship program unless it knows what the ROI is.
Are the Fellows worth the money?
There’s a kind of running joke — that, disclosure alert, I participate in regularly — that Fellows are mainly good for being strong-armed into singing ICANN’s praises at the open-mic Public Forum sessions held at two of the three meetings each year.
But that’s probably not entirely fair. The program has supported some committed community members who are certainly not slackers.
There are two former Fellows — Léon Felipe Sanchez Ambia and Rafael Lito Ibarra — currently sitting on the ICANN board of directors, and at least one I know of on the GNSO Council.
There are also about 10 members of ICANN staff who were former fellows and ICANN has documented several more participants who are still active in formal roles in ICANN.
Would these people have gotten so involved with ICANN if that financial support had not been there for them originally? I don’t know.
ICANN has attempted in the past to put some hard numbers on the value of the program, and the results are perhaps not as encouraging as when one cherry-picks the success stories.
It conducted a survey last year (pdf) of all 602 former Fellows and managed to get a hold of 597 of them. It wanted to know whether they were still engaged in the ICANN community.
But only 53%, 317 people, even bothered to respond to the survey. Of those who did respond, 198 said they were still involved in the ICANN community.
Basically, of the 600 Fellows ICANN has subsidized to attend ICANN meetings over the last 10 years, just one third say they are still participating.
Is that a good hit rate?
Would it be worth firing a couple of ICANN staffers — or at least allowing a position or two to fall to attrition — in order to keep the Fellowship program funded at current levels?
I honestly have no strong opinion either way on this one, but I’d be interested to hear what you have to say.
No doubt ICANN is too. Its public comment period on the FY19 budget is still open.

8 Comments Tagged: budget, fellows, fellowship, ICANN

Brandsight starts beta with “large corporations”

New brand management registrar Brandsight says it has started a beta test of its initial service.
Head of marketing Elisa Cooper tells DI the service is being tested by prospective clients at unspecified “large corporations”.
Brandsight Domain Name Management is a portfolio management system for large corporate domain controllers.
The company reckons its service is more streamlined than the competition, leveraging “big data” and modern user interface techniques to make brand managers’ lives easier.
Features include the ability to make sure domains are forwarding to where they’re supposed to. There’s also an industry news feed, according to a press release.
Brandsight was formed last year and staffed by former senior staffers from Fairwinds and MarkMonitor who thought they’d spotted a gap in the market.

Comment Tagged: brandsight, trademarks

ICANN would reject call for “diversity” office

ICANN’s board of directors would reject a call for an “Office of Diversity”, due to its current budget crunch.
The board said as much in remarks filed to a public comment period that got its final report this week.
The report of the CCWG-Accountability Work Stream 2 working group had recommended several potential things ICANN could do to improve diversity in the community, largely focused on collecting and publishing data on diversity.
“Diversity” for the purposes of the recommendations does not have the usual racial connotations of the word. Instead it means: geography, language, gender, age, physical disability, skills and stakeholder group.
Some members of the working group had proposed an independent diversity office, to ensure ICANN sticks to diversity commitments, but this did not gain consensus support and was not a formal recommendation.
Some commenters, including (in a personal capacity) a current vice chair of the Governmental Advisory Committee and a former ICANN director, had echoed the call for an office of diversity.
But ICANN’s board said it would not be able to support such a recommendation:

Given the lack of clarity around this office, lack of consensus support within the subgroup (and presumably within the CCWG-Accountability and the broader community), and noting the previously-mentioned budget and funding constraints and considerations, the Board is not in a position to accept this item if it were to be presented as a formal consensus-based recommendation

In general terms, it encouraged the working group to consider ICANN’s “limited funding” when it makes its final recommendations.
It added that it may be difficult for ICANN to collect personal data on community members, in light of the General Data Protection Regulation, the EU privacy law that kicks in this May.
All the comments on the report can be found here.

Comment Tagged: accountability, diversity, gdpr, ICANN, privacy

Registries reject lower fees for anti-abuse prowess

Registries have largely rejected a proposal for them to be offered financial incentives to lower the amount of abuse in their gTLDs.
That’s despite the idea gaining broad support from governments, intellectual property interests and restricted-registration registries.
The concept of ICANN offering discounted fees to registries that proactively fight abuse was floated by the Competition, Consumer Trust, and Consumer Choice Review Team (CCT) back in November.
It recommended in its draft report, among other things:

Consider directing ICANN org, in its discussions with registries, to negotiate amendments to existing Registry Agreements, or in negotiations of new Registry Agreements associated with subsequent rounds of new gTLDs to include provisions in the agreements providing incentives, including financial incentives for registries, especially open registries, to adopt proactive anti-abuse measures.

“Proactive” in this case would mean measures such as preventing known bad actors from registering domains, rather than just waiting for complaints to be filed.
Given that registries have been calling for lower ICANN fees in other instances, one might expect to see support from that constituency.
However, the Registries Stakeholder Group said in a document filed to ICANN’s public comment period on the CCT’s latest recommendations that, it “opposes” the idea of such financial incentives. It said:

The RySG supports recognizing and supporting the many [registry operators] that take steps to discourage abuse, but opposes amending the RA as recommended, to mandate or incentivize ‘proactive’ anti-abuse measures.

The RySG complained that such a system would require lots of complex work to arrive at a definition of abuse and what kinds of measures would qualify as “proactive”.
Even if such definitions could be found, and amendments to the standard RA successfully negotiated, there’s still no guarantee that bad registries would sign up for the incentives or stick to their promises, “resulting in no net improvement to the current situation”, the RySG said.
The group is also concerned that adding more anti-abuse clauses to the RA could increase registries’ risk of liability should they be sued over abuse carried out by their customers.
Not all registries agreed with the RySG position, however.
The informal Verified Top-Level Domains Consortium, which comprises the two registries behind .bank, .insurance and .pharmacy, filed comments supporting the proposal.
It said that gTLDs with vetted eligibility requirements see no abuse but have lower registration volumes and therefore pay higher ICANN fees on a per-domain basis. It said:

ICANN should help to offset these costs to create a more level playing field with high-volume unrestricted registries, i.e., to enhance competition as well as consumer trust. If ICANN made it more financially advantageous to verify eligibility, other registries may be encouraged to adopt this model. The outcome would be the elimination of abuse in these verified TLDs.

Outside of the industry itself, the Governmental Advisory Committee and IP interests such as the Intellectual Property Constituency and INTA, filed comments supporting anti-abuse incentives.
The IPC “strongly” supported the recommendation, but added that the finer details would need to be worked out to ensure that lower ICANN fees did not translate automatically to lower registration fees and therefore more abuse.
Shocking nobody, it added that “abuse” should include intellectual property infringements.
Conversely, the Non-Commercial Stakeholders Group said it “strongly” opposes the recommendation, on the basis that it would push ICANN into a “content policeman” role in violation of its technical mandate:

ICANN is not a US Federal Trade Commission or an anti-fraud unit or regulatory unit of any government. Providing guidance, negotiation and worse yet, financial incentives to ICANN-contracted registries for anti-abuse measures is completely outside of our competence, goals and mandates. Such acts would bring ICANN straight into the very content issues that passionately divide countries — including speech laws, competition laws, content laws of all types. It would invalidate ICANN commitments to ourselves and the global community. It would make ICANN the policemen of the Internet, not the guardians of the infrastructure. It is a role we have sworn not to undertake; a role beyond our technical expertise; and a recommendation we must not accept.

Also opposed to incentivizing anti-abuse measures was the Messaging, Malware and Mobile Anti-Abuse Working Group (an independent entity, not an ICANN working group), which said there’s no data to support such a recommendation.

The reports provide no data that showcase what the implications of altering the economic underpinnings of a highly competitive market may entail, including inadvertent side effects such as registries that already sell low price domains being rewarded with lower ICANN fees. In fact, it may ultimately result in a race to the bottom and higher rates of domain abuse.

Instead, M3AAWG said that ICANN should concentrate is contractual compliance efforts on those registries that the data shows already have large amounts of abuse — presumably meaning the likes of .top, .gdn and the Famous Four Media stable.
ICANN itself filed a comment on the proposal, pointing out that it is not able to unilaterally impose anti-abuse measures into registry agreements.
One imagines that lowering fees at a time when its own budget is under a lot of pressure would probably not be something ICANN would be eager to implement.
These comments and more were summarized in ICANN’s report on the CCT public comment period, published yesterday. The comments themselves can be found here.
The comments feed back into the CCT review team’s work ahead of its final report, which is due to be published some time during Q1.
Under its bylaws, the CCT review is one of the things that ICANN has to complete before it opens the next round of new gTLD applications.

Comment Tagged: abuse, cct, ICANN, new gTLDs, security, spam

Domain universe grows almost 1% in 2017 despite new gTLD slump

The total number of registered domain names in all TLDs was up 0.9% in 2017, despite a third-quarter dip, according to the latest data compiled by Verisign.
The latest Domain Name Industry Brief, published yesterday, shows that there were 332.4 million domains registered at the end of the year.
That’s up by 1.7 million names (0.5%) on the third quarter and up 3.1 million names (0.9%) on 2016.
Growth is growth, but when you consider that 2015-2016 growth was 6.8%, under 1% appears feeble.
The drag factors in 2017 were of course the 2012-round new gTLDs and Verisign’s own .net, offset by increases in .com and ccTLDs.
New gTLD domains were 20.6 million at the end of the year, down by about 500,000 compared to the third quarter and five million names compared to 2016.
As a percentage of overall registrations, new gTLDs dropped from 7.8% at the end of 2016 to 6.2%.
The top 10 new gTLDs now account for under 50% of new gTLD regs for the first time.
The numbers were primarily affected by big declines in high-volume spaces such as .xyz, which caused the domain universe to actually shrink in Q3.
Verisign’s own .com fared better, as usual, with .net suffering a decline.
The year ended with 131.9 million .com names, up by five million names on the year, exactly offsetting the shrinkage in new gTLDs.
But .net ended up with 14.5 million names, a 800,000 drop on 2016.
In the ccTLD world, total regs were up 1.4 million (1%) quarterly and 3.4 million (2.4%) annually.
Excluding wild-card ccTLD .tk, which never deletes domains and for which data for 2017 was not available to Verisign, the growth was a more modest 0.7 million (0.5%) quarterly and 2.3 million (1.8%) annually.
The DNIB report for Q4 2017 can be downloaded here (pdf).

2 Comments Tagged: .com, .net, cctlds, dnib, newgTLDs, verisign

Donuts may make .travel names easier to buy after acquiring its first legacy gTLD

Donuts has added .travel to its swelling portfolio of gTLDs, under a deal with original registry Tralliance announced today.
It’s the company’s first acquisition of a legacy, pre-2012 gTLD, and the first “community” gTLD to join its stable of strings, which now stands at 239.
.travel went live in 2005, a part of ICANN’s 2003 round of “sponsored” TLD applications.
As a sponsored TLD, .travel has eligibility and authentication requirements, but executive vice president Jon Nevett told DI that Donuts will look at “tinkering with” the current process to make domains easier to buy.
The current system requires what amounts to basically a self-declaration that you belong to the travel community, he said, but you have to visit the registry’s web site to obtain an authentication code before a registrar will let you buy a .travel domain.
Given that the community captured by .travel is extremely broad — you could be somebody blogging about their vacations and qualify — it seems to be a barrier of limited usefulness.
Nevett said Donuts has no immediate plans to migrate the TLD away from the Neustar back-end upon which it currently sits.
The rest of its portfolio runs on its own in-house registry platform, and one imagines that .travel will wind up there one day.
While .travel is one of Donuts most-expensive domains — priced at $99 retail at its own Name.com registrar — Nevett said there are no plans to cut pricing as yet.
There may be discounts, he said, and possibly promotions involving bundling with other travel-related gTLDs in its portfolio.
Donuts already runs .city, .holiday, .flights, .cruises, .vacations and several other thematically synergistic name spaces.
.travel had about 18,000 domains registered at the last count, with EnCirca, Name.com, 101domain, Key-Systems and CSC Corporate as its top five registrars.
It peaked 10 years ago at just under 215,000 registrations, largely due to to speculative bulk registrations made by parties connected to the registry that were dumped a couple of years later.
It’s been at under 20,000 names for the last five years, shrinking by small amounts every year.
The price of the acquisition was not disclosed.

Comment Tagged: .travel, acquisition, donuts, neustar, new gTLDs, tralliance

ICANN chief to lead talks over blocked .amazon gTLD

ICANN CEO Goran Marby has been asked to help Amazon come to terms with several South American governments over its controversial bid for the .amazon gTLD.
The organization’s board of directors passed a resolution last week accepting the suggestion, which came from the Governmental Advisory Committee. The board said:

The ICANN Board accepts the GAC advice and has asked the ICANN org President and CEO to facilitate negotiations between the Amazon Cooperation Treaty Organization’s (ACTO) member states and the Amazon corporation

Governments, prominently Peru and Brazil, have strongly objected to .amazon on the grounds that the “Amazon” river and rain-forest region, known locally as “Amazonas” should be a protected geographic term.
Amazon’s applications for .amazon and two Asian-script translations were rejected a few years ago after the GAC sided with its South American members and filed advice objecting to the gTLDs.
A subsequent Independent Review Process panel last year found that ICANN had given far too much deference to the GAC advice, which came with little to no evidence-based justification.
The panel told ICANN to “promptly” take another look at the applications and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications”.
Despite this, the .amazon application is still classified as “Will Not Proceed” on ICANN’s web site. That’s basically another way of saying “rejected” or “denied”.
Amazon the company has promised to protect key domains, such as “rainforest.amazon”, if it gets to run the gTLDs. Governments would get to help create a list of reserved, sensitive domains.
It’s also promised to actively support any future bids for .amazonas supported by the governments concerned.
.amazon would be a dot-brand, so only Amazon would be able to register names there.

4 Comments Tagged: amazon, gac, ICANN, new gTLDs, trademarks

Economist would sue ICANN if it publishes private emails

The Economist Intelligence Unit has threatened to sue ICANN if it publishes emails related to its evaluations of “community” gTLDs.
That’s according to a document published by ICANN this week, in which the organization refused to reveal any more information about a controversial probe into the Community Priority Evaluations the EIU conducted on its behalf.
EIU “threatened litigation” should ICANN publish emails sent between the two parties, the document states.
New gTLD applicant DotMusic, which failed its CPE for .music but years later continues to fight for the decision to be overturned, filed a Documentary Information Disclosure Policy request with ICANN a month ago.
DIDP is ICANN’s equivalent of a Freedom of Information Act.
DotMusic’s request among many other items sought the release of over 100,000 emails, many sent between ICANN and the EIU, that ICANN had provided to FTI Consulting during FTI’s investigation into whether the CPEs were fair, consistent and absent ICANN meddling.
But in its response this week, ICANN pointed out that its contract with EIU, its “CPE Provider”, has confidentiality clauses:

ICANN organization endeavored to obtain consent from the CPE Provider to disclose certain information relating to the CPE Process Review, but the CPE Provider has not agreed to ICANN organization’s request, and has threatened litigation should ICANN organization breach its contractual confidentiality obligations. ICANN organization’s contractual commitments must be weighed against its other commitments, including transparency. The commitment to transparency does not outweigh all other commitments to require ICANN organization to breach its contract with the CPE Provider.

DotMusic’s DIDP sought the release of 19 batches of information, which it hopes would bolster its case that both the EIU’s original reviews and FTI’s subsequent investigation were flawed, but all requests were denied by ICANN on various grounds.
In more than one instance, ICANN claims attorney-client privilege under California law, as it was actually ICANN’s longstanding law firm Jones Day, rather than ICANN itself, that contracted with FTI.
The FTI report cleared ICANN of all impropriety and said the EIU’s CPE process had been consistent across each of the gTLD applications it looked at.
The full DIDP request and response can be found here.
ICANN has yet to make a decision on .music, along with .gay, .hotel, .cpa, and .merck, all of which were affected by the CPE reviews.

Comment Tagged: .music, community, cpe, dotmusic, economist, eiu, fti, ICANN, new gTLDs

Hundreds of words and acronyms banned from .au, domains frozen

auDA has added hundreds of words, phrases and acronyms to its list of strings that are banned in .au and locked domains containing those strings.
There were only about 40 strings on the old banned list; now it’s closer to 300.
auDA has added to the list the names of brands protected by direct legislation, such as “Australian Motorcycle Grand Prix” and “Australian Defence Force Reserves”.
Also, phrases such as “What a Great Place for the Great Race” and “Commonwealth games Bronze”.
But what will be most concerning for non-cybersquatter .au registrants will be the acronyms and dictionary words that have been added.
These include the word “university” and acronyms such as “ran”, “adi” and “ara”, which could quite easily appear as substrings of legitimate words such as “grandma”, “radio” and “karate”.
Registrants of domains that exactly match the newly banned strings will find themselves unable to renew those domains, according to an auDA FAQ:

All words, phrases or acronyms on the list at Schedule A have been blocked from registration at the Registry. If you believe that you should be able to renew the domain name, you will need to demonstrate to your Registrar and auDA that you have Ministerial consent to use the domain name or your use of the domain name does not attract the restriction.

If there’s only a partial, substring match, registrants won’t be able to transfer the domain to a different registrant, according to the FAQ:

auDA has placed a lock on domain names that contain words, phrases or acronyms which appear on the list in Schedule A to prevent the transfer of these names to third parties. auDA will remove the lock where registrants can provide the requisite consent, or demonstrate that the use of the domain name does not attract the restriction.

The list was expanded following an auDA policy review that looked at what words are protected under Australian legislation.
The review itself acknowledged that the banned list is a bit of a blunt instrument, as in many cases it’s not the string that is banned but rather the use of the string.
Presumably, if you own “karate.com.au” it will be fairly straightforward to show you’re not infringing the rights of the Australian Regular Army.
The registry’s advice to registrants who believe their names are affected is to lawyer up:

Registrants are encouraged to check whether their domain name/s contain any words, abbreviations, acronyms or phrases appearing on the Schedule. If a name appears on the Schedule, registrants should seek independent legal advice on appropriate action. auDA cannot provide legal advice.

The new list of banned words can be found here. I’ve taken a screen capture of the old list from Google’s cache of January 20, here.

1 Comment Tagged: .au, auda, banned