.gay, .music and others in limbo as ICANN probes itself

Several new gTLD applicants have slammed ICANN for conducting an investigation into its own controversial practices that seems to be as opaque as the practices themselves.
Seven proposed new gTLDs, including the much-anticipated .music and .gay, are currently trapped in ICANN red tape hell as the organization conducts a secretive probe into how its own staff handled Community Priority Evaluations.
The now broad-ranging investigation seems have been going on for over six months but does not appear to have a set deadline for completion.
Applicants affected by the delays don’t know who is conducting the probe, and say they have not been contacted by anyone for their input.
At issue is the CPE process, designed to give genuine “community” gTLD applicants a way to avoid a costly auction in the event that their choice of string was contested.
The results of the roughly 25 CPE decisions, all conducted by the independent Economist Intelligence Unit, were sometimes divergent from each other or just baffling.
Many of the losers complained via ICANN’s in-house Requests for Reconsideration and then Independent Review Process mechanisms.
One such IRP complaint — related to Dot Registry’s .inc, .llc, .llp applications — led to two of the three-person IRP panel deciding last July that ICANN had serious questions to answer about how the CPE process was carried out.
While no evidence was found that ICANN had coached the EIU on scoring, it did emerge that ICANN staff had supplied margin notes to the supposedly independent EIU that had subsequently been incorporated into its final decision.
The IRP panel majority wrote that the EIU “did not act on its own in performing the CPEs” and “ICANN staff was intimately involved in the process”.
A month or so later, the ICANN board of directors passed a resolution calling for the CEO to “undertake an independent review of the process by which ICANN staff interacted with the CPE provider”.
Another month later, in October, the Board Governance Committee broadened the scope of the investigation and asked the EIU to supply it with documents it used to reach its decisions in multiple controversial CPE cases.
A couple of weeks ago, BGC chair Chris Disspain explained all this (pdf) to the applicants for .music, .gay, hotel, .cpa, .llc, .inc, .llp and .merck, all of which are affected by the delay caused by the investigation.
He said that the investigation would be completed “as soon as practicable”.
But in response, Dot Registry and lawyers for fellow failed CPE applicant DotMusic have fired off more letters of complaint to ICANN.
(UPDATE: Dot Registry CEO Shaul Jolles got in touch to say his letter was actually sent before Disspain’s, despite the dates on the letters as published by ICANN suggesting the opposite).
Both applicants note that they have no idea who the independent party investigating the CPEs is. That’s because ICANN hasn’t identified them publicly or privately, and the evaluator has not contacted the applicants for their side of the story.
DotMusic’s lawyer wrote (pdf):

DotMusic’s rights are thus being decided by a process about which it: (1) possesses minimal information; (2) carried out by an individual or organization whose identity ICANN is shielding; (3) whose mandate is secret; (4) whose methods are unknown; and (5) whose report may never be made public by ICANN’s Board.

He added, pointedly:

The exclusion of directly affected parties from participation eerily reproduces the shortcomings of the EIU evaluations that are under scrutiny in the first place.

Dot Registry CEO Shaul Jolles, in his letter (pdf), quoted Disspain saying at a public forum in Copenhagen this March that a blog post addressing the concerns had been drafted and would be published “shortly”, but wasn’t.
He suggested the investigation is “smoke and mirrors” and, along with DotMusic, demanded more information about the investigator’s identity and methods.
It does strike me as a looking a bit like history repeating itself: ICANN comes under fire for non-transparently influencing a supposedly independent review and addresses those criticisms by launching another non-transparent supposedly independent review.
No matter what I feel about the merits of the “community” claims of some of these applicants, it has been over five years now since they submitted their applications and the courtesy of transparency — if closure itself its not yet possible — doesn’t seem like a great deal to ask.

Comment Tagged: .cpa, .gay, .hotel, .inc, .llc, .llp, .music, bgc, community, cpe, dot music, dot registry, eiu, ICANN, irp, merck, reconsideration, rfr

XYZ acquires .storage, its 10th gTLD

XYZ.com said today that it has acquired the half-launched new gTLD .storage from its original owner.
The terms of the deal were not disclosed, but CEO Daniel Negari said in a blog post that it has been funded using some of the “excess of cash flow” from sales of .xyz domains.
The original .storage registry was Extra Space Storage, which rents out physical storage units in the US.
It started its protracted launch period a little over a year ago but had not planned to go to general availability until July this year.
Having apparently passed through its sunrise period and a special landrush for the storage industry, which ended in January, it has fewer than 800 domains in its zone file.
It looks like XYZ will be essentially relaunching the gTLD from scratch, with a new sunrise period penciled in for November and an early access period and GA slated for December.
Pre-launch pricing is around the $80 mark at the few registrars I checked today, and it looks like that will remain under the new management.
That’s despite XYZ talking today about .storage as a “premium” vertically-focused TLD along the lines of its $3,000 .cars or $750 .theatre.
The company said that it will not hold back reserved names at higher, premium pricing. Even nice-looking domains such as cloud.storage will be available at the base fee, it said.
The new acquisition becomes the 10th that XYZ has a hand in running, if you count the three car-related gTLDs it manages in a joint venture with Uniregistry. The others are .security, .rent, .protection, .theatre, and .college.

1 Comment Tagged: .storage, .xyz, acquisition, extraspace, xyz.com

ICANN changes Panama meeting dates to avoid Muslim holiday

ICANN has changed the dates of next year’s ICANN 62 public meeting to accommodate the Muslim festival of Eid al-Fitr.
Eid is the movable festival marking the end of the fasting month Ramadan, when observant Muslims are allowed to start eating during daylight hours again.
In 2018, it runs from June 14-15, which would have made things difficult for Muslims hoping to attend ICANN’s mid-year meeting, previously slated to begin June 18.
So ICANN has pushed it back a week. ICANN 62 will now begin June 25. As a mid-year Policy Forum, it is the shortest meeting of the year.
The meeting is due to be held in Panama City, Panama.
Its the second change for the Panama meeting. ICANN had originally planned to meet there for ICANN 56 in mid-2016, but relocated the event to Helsinki due to the panic about Zika virus.

Comment Tagged: icann. icann 62, panama

More change at the top at Donuts as Tindal steps down

Donuts has lost co-founder and COO Richard Tindal, who has announced his retirement.
Tindal was one of the four domain industry executives who founded Donuts in order to take advantage of ICANN’s new gTLD program about seven years ago.
No reason was given for his departure, which was announced in a blog post, beyond “retirement”.
Co-founders Paul Stahura, Jon Nevett and Dan Schindler are all still with the company, but founding CEO Stahura recently stepped into the chairman’s role to give venture capitalist Bruce Jaffe the corner office.
Tindal had previously worked in senior roles for Verisign, Neustar and Demand Media (now Rightside).

2 Comments Tagged: donuts, new gTLDs

Second emergency registry tested with dead dot-brand

ICANN is running its second test of the Emergency Back-End Registry Operator system, designed as a failover for bankrupt gTLDs.
This time, the EBERO under the microscope is CORE Association, one of the three approved providers.
It this week took over operation of .mtpc, a dot-brand gTLD that Mitsubishi applied for, was delegated, never used, and then decided it didn’t want to run any more.
ICANN said:

ICANN is conducting a test of the Emergency Back-End Registry Operator program. Simulating an emergency registry operator transition will provide valuable insight into the effectiveness of procedures for addressing potential gTLD service interruptions. Lessons learned will be used to support ICANN’s efforts to ensure the security, stability and resiliency of the Internet and the Domain Name System.

The first test was conducted by ICANN and EBERO provider Nominet earlier this year, using the similarly unloved dot-brand .doosan.
I expect we’ll see a third test before long, using CNNIC, the third EBERO provider.
It would have plenty of dead dot-brands to choose from.

Comment Tagged: .mtpc, core, doosan, ebero, ICANN, mitsubishi, new gTLDs

MMX stung for $7.7 million by crappy .london contract?

Did MMX take a $7.7 million accounting hit to renegotiate a crappy .london gTLD contract? It looks a bit like that to me.
Found in the company’s full-year 2016 financial results yesterday is the disclosure that it had to pay off an undisclosed gTLD partner after originally making “overly ambitious” predictions about its likely popularity.
The deal apparently had MMX — then under previous management as Minds + Machines — making guaranteed payments to its partner on the assumption that it would sell a lot more domains than it eventually did.
.london currently has about 56,000 names in its zone file, down from a post-launch peak of about 65,000.
According to its statement to the markets, MMX recorded a 2016 one-time contract restructuring expense of $3.8 million and has added a $3.9 million intangible asset to its balance sheet in relation to the contract.
That’s a total of $7.7 million, but CEO Toby Hall told DI that the cash payment was nowhere near that amount. He said:

in reality we have paid no where near that amount and much of this is the accounting treatment of a new contract that we believe has the potential to deliver future economic value to the business and will be covered from future revenues.

The gTLD in question is not named in the statement, and Hall also declined to name it in response to a DI inquiry, but MMX says of the contract:

In very early 2012, at the time when ICANN was still accepting new generic Top Level Domain applications, the then Executive Team entered into an overly ambitious agreement that it believed would provide value to the overall profile of the Group. The agreement had very significant financial commitments over the life of the contract and did not include any clauses that could allow the Group to renegotiate those commitments should the specific top-level domain not perform to the agreed financial projections. The growth of this top-level domain has not come close to meeting those expectations and the agreement has proven – and would have continued proving – to be a significant drag on the Group’s ability to generate positive cashflow from the given TLD.
In late Q4 of 2016 the current Executive team was able to successfully conclude renegotiations of certain components of the agreement by either restructuring or buying out certain financial commitments thus making it more economically viable going forward. As a result of the renegotiation effort, the Group has revised its modeling and believes that it can derive future economic benefit from the renegotiated contract. Accordingly, based on Management’s review, a portion of the buy out ($3.8million) has been expensed as a one-off restructuring cost while the remaining portion ($3.9million) will be capitalized as an intangible asset with future economic benefit.

All the evidence points to .london being the gTLD in question.
First, MMX says that the deal was entered into in “very early 2012”, which ties up with the timing of the request for proposals by the Mayor’s marketing office, London & Partners.
Second, MMX doesn’t have any other partner-based gTLDs that would plausibly have such ambitious commitments.
Third, MMX has previously stated that it was renegotiating some “burdensome” contracts. Last year, without relating it to a renegotiation, it said in a trading update that it was “encouraging to see an increasingly commercial and flexible approach from London & Partners, our Dot London partners”.
Fourth, word on the street back in 2012 was that L&P (which remember is affiliated with the London Mayor, an elected political office) had gone with tax-haven-based MMX rather than UK-based non-profit Nominet because MMX (then Minds + Machines) had offered the best financial incentives.
The scrapping of the old deal is perhaps another indicator of the hubris that accompanied the opening of the new gTLD program five years ago.
While L&P is the “owner” of .london, for want of a better word, in practice I gather that MMX runs it pretty much as if the gTLD was part of its regular portfolio.
The news of the contract changes were made in MMX’s audited 2016 results, which showed its billings doubling to $15.8 million during the year.
Revenue was $15 million, up from $6.3 million in 2015. Less partner payments, revenue was $13.5 million versus $5.5 million a year earlier.
The statement has half a dozen or more bottom lines, depending on what costs you exclude, but the one MMX wants us to look at is “Billings Operating EBITDA before one off restructuring costs”, which was $4.2 million compared to a loss of $6.6 million in 2015.
That, in other words, means that an unprofitable company has become a profitable one.
A lot of that has to do with the revenue from hundreds of thousands of .vip domain sales in China and a swingeing restructuring that led to headcount being slashed from 43 people to 20 people.
The company also sold off its registrar business to Uniregistry and started outsourcing its back-end functions to Nominet.
For 2017, the company has already disclosed two huge sales that will boost domains under management considerably, but at the risk of concentrating a larger part of MMX’s business outlook in just a few hands.
UPDATE: This article was updated a few hours after publication to clarify what MMX has said in relation to .london in previous trading statements.

7 Comments Tagged: .london, earnings, london & partners, mmx, new gTLDs

Hey, you! Listen to the ICANN board webcast more private sessions

ICANN’s board of directors is to live stream two sessions during an upcoming retreat, and if you’re at all interested in ICANN you really ought to tune in.
The webcasts are part of an ongoing pilot program designed to increase transparency at the very top of ICANN’s policy-making reverse-hierarchy.
The public, listen-only sessions seem to have been cherry-picked from the broader program of a retreat in Geneva over the May 6-7 weekend, and are:

Marketplace Dynamics Session I: Registries and Registrars
Saturday, 6 May, 11:15 – 12:00 UTC
Internet Governance Engagement Strategy with a Focus on the Internet Governance Forums (IGFs): Proposal to the Board
Sunday, 7 May, 09:00 – 10:00 UTC

Neither session sounds earth-shatteringly exciting, but both will be worth a listen in my view.
If nobody listens, ICANN could fairly say that streaming board meetings is a waste of money and stop doing it rather than expanding the program in future. That reduction of transparency would be in nobody’s interests.
The most recent live sessions occurred during ICANN 58 in Copenhagen last month, but until I ranted on Twitter nobody apart from me was listening.
That’s despite the fact that increased board transparency has been something the community has been crying out for for years.
So if you agree with transparency but find the chosen topics boring, perhaps just open the Adobe Connect room, hit mute, and go for brunch or play with your kids or something.
The Adobe links can be found here.
Disclosure: now that I’ve written this post, I think it’s almost inevitable that I will accidentally miss one or both of these sessions. You’re welcome to mock me should that happen (though you’ll only know whether I was there if you tune in yourself).

4 Comments Tagged: ICANN

MarkMonitor tells .feedback to take a hike after “breach” claim

MarkMonitor is to voluntarily terminate its registrar relationship with Top Level Spectrum after the .feedback registry hit it with a breach of contract notice.
Troy Fuhriman, director of domain management at the registrar, told DI today that the company has just sent TLS a letter stating that it no longer wishes to sell .feedback names.
TLS earlier this month accused MarkMonitor of breaking the terms of its Registry-Registrar Agreements by leaking details of that agreement to media outlets including yours truly.
While TLS CEO Jay Westerdal told DI that an apology from MarkMonitor would be enough to make the termination threat go away, MarkMonitor has clearly decided against that route.
“We’re going to terminate all accreditation agreements for .feedback,” he said. “In part it’s a response to ICANN’s finding that Top Level Spectrum violated its Pubic Interest Commitments, and what we believe is a retaliatory breach notification from them.”
MarkMonitor and a small posse of high-profile clients including Facebook recently won a Public Interest Commitment Dispute Resolution Policy complaint against .feedback, related to the transparency of its launch policies and pricing.
It was in that complaint that MarkMonitor released details contained in the RRA that TLS deemed to be confidential.
Terminating the agreement means that MarkMonitor will no longer be able to sell .feedback names as a registrar and will have to transfer its existing registrations to a different registrar.
Not many clients are affected. MarkMonitor had only 45 .feedback domains under management at the last count (which was still enough to make it the fourth-largest independent .feedback registrar).
Most of these domains will be moved to 101domain, which with fewer than 200 domains is still the leading .feedback registrar.
UPDATE: Westerdal says that MarkMonitor was in fact terminated on Monday. Neither party claims that MarkMonitor made any effort to comply with the breach notice by apologizing.

3 Comments Tagged: .feedback, facebook, ICANN, markmonitor, new gTLDs, picdrp, tls, top level spectrum

ICANN attendance shrank in Denmark

Attendance at ICANN’s recent meeting in Copenhagen was down about 8% on the comparable meeting a year earlier in Marrakech, according to ICANN statistics.
There were 2,089 at the Denmark meeting, down from 2,273 reported a year ago in Morocco.
The decline appears to be largely a result of relatively lower local participation. Africa is usually under-represented at ICANN meetings, but there was a surge in Marrakech, with almost 956 attendees hailing from the continent.
About half of Copenhagen participants — 1,012 people, of which 417 were first-timers — were European.
The number of remote participation attendees was much higher in Copenhagen. ICANN counted 4,428 unique users logging into Adobe Connect meeting rooms, compared to 3,458 in Marrakech.
Both Copenhagen and Marrakech, ICANNs 55 and 58, are designated as “community forums”, meaning they follow the traditional ICANN schedule. ICANN 56 was a shorter, policy-focused meeting and ICANN 57 was a longer meeting with a focus on outreach.
The stats for Copenhagen can be downloaded here (pdf).

Comment Tagged: copenhagen, ICANN, icann 55, icann 58, marrakech

Afnic CEO quits, heads to new mystery job

Afnic CEO Mathieu Weill has abruptly quit the French domain registry and is heading to a new job elsewhere.
The .fr registry said Weill will be replaced on an interim basis by his deputy, Pierre Bonis, from May 1.
A formal search for a permanent replacement will begin “in the coming weeks”, Afnic said.
Weill has been with the company, which also manages the ccTLDs for French overseas territories, since 2005.
He oversaw the growth of .fr from 300,000 names to 3 million in that time, according to his LinkedIn profile.
He told DI that he has a new job lined up with a different company, but that he’s unable to disclose his new role yet.

1 Comment Tagged: afnic