ICANN to slash costs as Verisign’s magic money tree dries up

ICANN is looking for $8 million of cost savings, $3 million more than it expected a quarter ago, amid gloomy predictions about the domain industry’s likely performance this year.

The Org last week told community members that it’s having to revise its expected revenue down by $3 million to $145 million after it became clear domain sales won’t be as good as previously thought. The new budget is due to be approved by the board this coming weekend.

“ICANN faces an inflation of its costs and also happens to face a lack of inflation of its funding,” CFO Xavier Calvez said on one of two conference calls explaining the changes.

ICANN’s bean counters are now predicting a 4% decline in transaction fees from legacy gTLDs — a line item mostly comprising .com — for ICANN’s fiscal 2025, which begins this July. Back in December, when the first draft of the budget was published, the prediction was for 0% growth.

The grim numbers match Verisign’s own growth story for the rest of the calendar year. Company bosses last week predicted .com/.net to grow at between 0.25% and negative 1.75%, a downwards revision on its guidance in February.

Talking to Verisign and other registries and registrars and looking at the monthly transaction data they file is the main way ICANN formulates its budget predictions.

“We gauged very strong expectations of a contraction in domain name registrations,” ICANN programs director Mukesh Chulani said.

Meanwhile, ICANN estimates transaction fees for new gTLDs will increase 7% in FY25, obviously from a much lower base then legacy, compared to the December estimate of 2% growth.

ICANN was already expecting its funding to miss its spending requirements by $5 million, but that figure is now $8 million. But rather than run ops at a loss, ICANN has instead put this number on a line labelled “Cost Savings Initiatives” in order to present a balanced bottom line.

Where these cost savings might come from doesn’t seem to have been figured out yet, and there’s some community worry that services might be affected by cuts.

There was some talk of finding efficiencies in the travel budget or with contractors, but those budgets are $13 million and $24 million respectively, so any cuts there could be swingeing.

By far the largest expenditure line item is staff, which costs $90 million. But there’s been no change to the expected number of ICANN full-timers in the budget, so layoffs don’t seem to be on the cards just yet.

Comment Tagged: budget, ICANN, verisign

Community revolts over ICANN’s auction proceeds power grab

Parts of the ICANN community have revolted over ICANN’s move to make it easier to turn off the mechanisms used to appeal its decisions.

Both registries and registrars, along with their usual opponents in the business and intellectual property communities, have told the Org that a proposal to change its foundational bylaws are overly broad and creates new powers to diminish ICANN’s accountability.

Meanwhile, the Intellectual Property Constituency seems to have escalated its beef with ICANN related to the proposals, entering into a Cooperative Engagement Process with ICANN. CEP is usually, but not always, a precursor to an expensive, quasi-judicial Independent Review Process case.

The row relates to the Grant Program, which launched a month ago and will see ICANN hand out $217 million it gained from auctioning registry contracts during the 2012 new gTLD program application round.

The rules of the program were developed by the Cross-Community Working Group on New gTLD Auction Proceeds.

The CCWG was afraid that ICANN might wind up frittering away most of the money on legal fees unless unsuccessful grant applicants, and third parties, were banned from appealing grant decisions they didn’t like. So its Recommendation 7 proposed a bylaws amendment that would prevent the Independent Review Process and Request for Reconsideration process from being used with reference to the Grant Program.

What ICANN came up with instead is a bylaws amendment that could be applied not only to the Grant Program, but also potentially to any future activities.

Specifically, ICANN’s proposed amendment gives future CCWGs, assuming they have sufficient community representation, the ability to recommend exceptions to the accountability mechanisms, which ICANN could then accept without having the amend the bylaws every time.

But almost every constituency that has filed an opinion on the proposals so far thinks ICANN has gone too far.

The IPC said says ICANN’s proposal is “unacceptably broad and exceeds what is necessary to give effect to Recommendation 7” adding:

The IPC is also concerned that making such a broad Bylaws amendment could have the consequence of normalizing the idea of removing access to accountability mechanisms, rather than this being an exceptional event. This is not something that should be encouraged.

The Registries Stakeholder Group said the proposal “creates an alternative path for amending the Bylaws that contradicts the existing amendment processes”

“The Accountability Mechanisms are foundational to ICANN’s legitimacy. Access to Accountability Mechanisms should be prevented only in rare circumstances with the clear support of the Empowered Community,” it added.

The Registrar Stakeholder Group concurred, writing:

Robust Accountability Mechanisms are a lynchpin of ICANN’s broader accountability structure. They should only be disallowed, if ever, in very specific circumstances, and as a result of the full bylaw amendment process. The proposed bylaws amendment vests CCWGs with the power to disallow Accountability Mechanisms which we believe is inappropriate.

Several commenters pointed out that CCWGs are less formal ICANN policy-making structure, with fewer checks and balances than regular Policy Development Processes.

The only dissenting view came from the At-Large Advisory Committee, which said it “strongly supports” ICANN’s proposed amendment, writing:

Although any limitation in accountability is potentially onerous, the ALAC is comfortable that the three conditions proposed in the amendment only allow such limitations in situations where a more specific Bylaw limitation would also be approved by the Empowered Community.

In a related development, the IPC has taken the highly unusual move of entering CEP with ICANN, suggesting it is on the IRP path.

The IPC had filed a Request for Reconsideration late last year, at a time when it appeared that ICANN had outright rejected Recommendation 7 (having previously approved it), but ICANN’s board threw it out mostly on the grounds that the IPC could not show it had been harmed, which the IPC found curious.

If the IPC were to go to IRP, it would be unprecedented. The mechanism has only ever been used by companies defending their commercial interests, never by one of ICANN’s own community groups on a matter of principle.

Comment Tagged: accountability, alac, auctions, bylaws, ccwg, gnso, grant program, ICANN

Two seats up for grabs on Nominet board

The .uk registry, Nominet, has opened up its call for nominations for its 2024 non-executive director elections.

There are two seats up for grabs this year, currently occupied by Simon Blackler of Krystal Hosting and Ashley La Bolle of Tucows, both of whom were originally elected in 2021 and are eligible for reelection if they choose to stand again.

Blackler, you may recall, was the instigator of the PublicBenefit.uk campaign, which resulted in a boardroom bloodbath three years ago.

The seats represent half of the member-elected NEDs on Nominet’s board.

Non-members are eligible for nomination but only members may nominate and vote. Votes are weighted so the members with the most domains under management get the most votes, albeit with a cap to avoid capture by the largest players.

The deadline for nominations is July 7, and the vote takes place in September. Elections have historically reliably highlighted divisions in the .uk community.

Comment Tagged: .uk, election, nominet

War takes steep toll on .ua domains

Ukraine’s ccTLD saw a sharp decline in domains under management in the first quarter as the country entered its third year of Russia’s invasion, according to the local registry.

The number of registered .ua domains was down 8% at 471,716 at the end of March, Hostmaster said.

The decline is mostly due to 123,000 domains that had been prevented from expiring at the outset of the war in 2022 being gradually deleted from November last year, the registry said.

.ua is still taking 255 new registrations per day, regardless, the company said.

2 Comments Tagged: .ua, hostmaster

.de worst TLD for CSAM — report

Germany’s ccTLD, .de, was the worst in the world for hosting child sexual abuse material last year, according to the latest data from the Internet Watch Foundation, which many registries rely on for helping take down such material.

IWF said it found 802 unique .de domains hosting CSAM in 2023, a 1,995% increase compared to 2022. The second and third worst were .com and .ru, with 744 and 691 domains respectively. IWF noted that CSAM domains in .com were down 10% in the year.

Other TLDs in the top 10 were .cc, the non-DNS .onion, .top, .xyz, .pw, .ws and .net. The fastest-grower was Samoa’s .ws, managed by Global Domains International, which saw an increase to 2,966% to 184 unique domains.

.de was also the worst for commercial CSAM operations, IWF said. It found 783 such sites in 2023, all of which “openly displayed images and videos of child sexual abuse on the homepage”. That number in 2022 was zero, the report says.

Comment Tagged: .de, csam, denic

.com still shrinking because of China

Verisign’s .com gTLD shrunk by over a quarter million domains in the first quarter due to softness in China and US registrars’ pesky habit of putting up prices and the pain is likely to continue for the rest of the year, according to Verisign.

There were about 159.4 million .com domains and 13.1 million .net domains at the end of March, down a combined 270,000 from the end of 2023, Verisign said during its first-quarter earnings call on Thursday. Most of the decline appears to be in .com.

Registrations from Chinese registrars, which are about 5% of the total, were down about 360,000 in the period. Not ideal, but a lot less sharp of a drop than the 2.2 million it lost in Q4.

There were 9.5 million new registrations across both zones in the quarter, compared to 10.3 million in the year-ago period.

But CEO Jim Bidzos told analysts that competition from low-priced new gTLDs, some of which sell year one for under a dollar, is likely harming .com’s growth among cost-conscious Chinese registrants.

But he said the company is also seeing “softness” from US registrars, which he said are increasingly focused on increasing average revenue per user and putting up retail prices. This leads to fewer new registrations and renewals.

Bidzos said Verisign expects to introduce new marketing programs in the second half of the year — around the same time as the company’s base .com wholesale fee goes up from $9.59 to $10.26 — to help offset these declines.

The renewal rate for Q1 is expected to be about 74% compared to 75.5% a year ago. Bidzos said the total domain base shrinkage could be worse in Q2 due to the larger number of names coming up for renewal.

The company lowered its guidance for the year to between 0.25% growth and negative 1.75%. In February, it had guided flat, with a 1% swing in either direction.

Verisign’s top and bottom lines continue to grow during the quarter, with revenue up 5.5% at $384 million and net income up from $179 million to $194 million.

Comment Tagged: .com, earnings, financials, verisign

ICANN publishes its Woke Manifesto. Here’s my hot take

ICANN’s antics rarely surprise me after close to a quarter-century of coverage, but today it’s published what I can only describe as its “Woke Manifesto” and while reading through it this afternoon I pretty much peeled my uvula raw and ragged, alternating as I did between howls of outrage and uncontrollable fits of incredulous laughter.

On the latest step of its descent into solipsistic pomposity, Org has released its Diversity and Inclusion Toolkit, an interactive web page and associated documents and survey templates designed to help the ICANN community’s various constituencies become more diverse, equitable and inclusive.

“It is designed to empower our community groups in assessing, measuring, and promoting diversity within and across their membership,” ICANN wrote in its introduction, attributed to outgoing policy VP David Olive.

A laudable goal in theory, but in practice what ICANN has come up with is often hilarious, poorly sourced, badly edited, baffling, hypocritical, self-contradictory, and condescending to both the people it wants to include and the people it perceives are already over-included. In parts, sadly, it’s borderline misandrist and maybe a little bit accidentally racist.

The Manifesto is the result of ICANN’s work to implement the recommendations of the Final Report (pdf) of the Cross Community Working Group on Accountability, the most-recent phase of one of ICANN’s interminable navel-gazing exercises.

Recommendation 1.6 of that report states:

ICANN staff should provide support and tools for the SO/AC/Groups to assist them in assessing their diversity in an appropriate manner. ICANN should also identify staff or community resources that can assist SO/ACs or other components of the community with diversity-related activities and strategies.

Or does it? If we believe the new Manifesto, Rec 1.6 actually states:

ICANN staff should provide support and tools for the SO/AC/groups to assist them in assessing their diversity in an appropriate manner. ICANN should also identify staff or community resources that can assist SO/ACs or other components of the community with diversity-related activities and strategies.D&I requires equity to succeed.

The emphasis in that second pull-quote is mine. The lack of a space after the period before the last sentence is ICANN’s error.

It looks like at some point, possibly quite recently, ICANN has sneaked in the reference to “equity”.

If you’re triggered by the DEI (Diversity, Equity, Inclusion) abbreviation, best look away now. The Manifesto contains all the other zeitgeisty buzz-words you probably also hate.

Microaggressions? Check. Privilege? Check. Identity? Check. Intersectionality? Check. Unconscious bias? Check. Psychological safety? Check.

An easily overlooked footnote seems to explain why “equity” has made its way into the document:

In this toolkit we refer to “diversity” and “inclusion,” but “equity” is also a significant concept to understand. Equity refers to fairness and justice, recognizing that we do not all start from the same place and must therefore make adjustments to imbalances; for example promoting the inclusion of people from marginalized/underrepresented populations. It is distinguished from equality, which means providing the same to all.

I take no position on whether this is a good or bad way to tackle inequality of outcome, if it exists, at ICANN, but let’s be honest, this is just another way of describing what has been known as “positive discrimination” or “affirmative action” in other contexts.

But while affirmative action usually refers to issues of race in North America, such as in the ongoing debate about university admission policies, ICANN’s Manifesto is notable for containing no direct references to skin color whatsoever.

ICANN’s “7 key elements of diversity”, which come from the CCWG-Accountability’s report, are: geographical/regional representation, language, gender, age, physical disability, diverse skills, and stakeholder group or constituency.

Let’s look at what the Manifesto says about some of these identity categories. Yes, I’m going there.

“You were so worried you came from Iran”

Possibly the most egregiously condescending and baffling part of the Manifesto is “Ideas for indivdual action” (pdf) (the misspelling of “individual” is in the original, in the title, on the cover page), which offers suggested language to avoid offending people on the basis of gender, age, disability, or geography.

I’ve no idea to whom this document is addressed (I infer it’s able-bodied, Anglophone men), but it seems ICANN thinks it has a problem with people referring to East Asian community members as “Orientals”. Because apparently it’s the 1950s. In the same breath, it suggests that “whitelist” — a term commonly used in the security industry to refer to lists of explicitly permitted domains — is as offensive as “Chinaman”.

It’s worth noting that the word has been used repeatedly by ICANN itself, including quite recently. Under October 2023 terms, you can’t even apply to be an accredited registrar without agreeing to “whitelist” ICANN’s domains.

In a glorious example of accidental misogyny, the document (six years in the making) later says that people should avoid using forms of address such as “Mrs” or “Ms” because: “This language implies that having a disability is not an ordinary aspect of being human”.

The document is all over the place on issues of gender, on some pages directly contradicting ICANN’s own current practices and on others internally contradicting itself.

At one point, it says “there is no need to mention gender, i.e. saying ‘a female lawyer’ diminishes the professional status of that person”. This from the organization that put out this press release celebrating its two “female leaders”, last year.

At another point, it says we should use “Ombudsperson” instead of “Ombudsman”, while ICANN itself recently made the switch to “Ombuds” instead.

The document is also confused about whether biological reality exists. It tells us that we should accept that “that we are all biased by virtue of our biology” and a couple pages later admonishes against terms such as “biologically male” because “These terms imply that gender is a biological and binary fact that can only be changed through surgery — if at all”.

The most jaw-dropping gender-related moment comes when the document attempts to explain the concept of “privilege” and offers some suggestions as to how those who possess it may overcome it to increase the inclusiveness of their communities.

I swear I’m not making this quote up:

If you have male privilege: Hold back, and allow female community members to speak before you do. If they do speak and are not acknowledged, call this out and give credit for their input.

ICANN wants to make “Ladies first” official doctrine? Perhaps it is the 1950s.

While I don’t doubt there are some women in the ICANN community who would whoop with delight at the chance of automatically getting first dibs at the mic, I know there are many others who will find the suggestion that men should give them special treatment, and subsequently pat them on the head for their contributions, deeply offensive.

“I hear you’re a racist now, Father”

It’s not just gender and age where the Manifesto seems to trip over its own desire to virtue signal without thinking through whether what it’s actually saying is internally consistent.

We’re told to avoid “Asking people of a different appearance where they are from” and a few pages later to “Show an interest in other people’s cultures and backgrounds, ask questions with sincere and respectful curiosity”.

How, ICANN, how?! How can I show an interest in this new friend’s culture if I’m not allowed to ask him where he’s from? Am I only supposed to show an interest in his culture if he shares my “appearance”. Can I only talk to people of the same race? Is that what you want, ICANN?!

We’re talking largely about ICANN meetings here, remember. People from over 100 countries on every continent flock into a drab, windowless conference center three times a year. It’s the most natural thing in the world, unwinding at an after-hours cocktail reception, to ask somebody where they’re from.

If, in the hotel bar after eight hours of patiently not interrupting anybody you think you might not fully intersect with, somebody asks you “Where are you from?”, regardless of whether you share common visual characteristics, chances are it’s because your lanyard has flipped over and they’re asking the name of your employer in order to quickly triage business opportunities.

Speaking as somebody who was an immigrant in the US for the best part of a decade, I know it can be irritating after the hundredth time you’re asked your nationality, but I never found it to be, as ICANN would have us believe, an “aggression”, micro or otherwise.

“I’m Disabled!”

The document defines a microaggression as “the everyday messages we send to other people through our language and behavior that cause them to feel devalued, slighted, discouraged or excluded”. We’re told: “What makes microaggressions offensive isn’t the exact words or actions but, instead, the underlying meaning that reveals bias”.

The first example ICANN gives of a microaggression?

A weak handshake with insincere smile.

I find this hugely offensive on a personal level.

My lived experience is as an effete Englishman with a congenitally pathetic handshake, also suffering from the effects of decades of underfunded NHS dentistry and still recovering from an ischemic stroke that rendered my hand-shaking hand about as strong as a sloth’s yawn.

There’s nothing I find more macroaggressive at an ICANN meeting — apart from perhaps a French woman I barely know attempting to kiss me on the cheek — than an American with a $5,000 suit and teeth the color of a Grand Wizard’s hood trying to tear my arm off at the hip when he or she moves to greet me.

But apparently, under ICANN’s rules, the combination of my disability and nationality makes me the bigot. Thanks ICANN, I’m going to feel really psychologically safe at my next meeting.

“What exactly does IT stand for?”

On a professional level, what really boils my piss is this directive, which appears under a section entitled “Use respectful language”:

Avoid jargon: Minimize your use of jargon, shorthand and acronyms that may not be understood by newcomers or people with different experience and skillsets

I totally agree, of course. It’s long since past the point that even some ICANN community veterans often have no clue what ICANN is talking about without a quick google or reference to a glossary.

So why in the Jiminy Cricket is ICANN introducing this package of Orwellian social guidance with the sentence “I am thrilled to announce the launch of ICANN’s Diversity and Inclusion Toolkit, a pivotal resource to support the implementation of the Work Stream 2 (WS2) recommendations.”

Work Stream 2? Work Stream 2 of what? The blog post doesn’t say, and you have to get several clicks deep into the Manifesto itself before you’ll find a reference to, or link to, the CCWG report.

Who is this aimed at? Insiders. Nobody else could possibly understand this stuff.

3 Comments Tagged: ICANN

Alibaba, Name.com among new RDRS opt-ins

Eleven registrars representing millions of domain names signed up to support ICANN’s Registration Data Request Service last month. One registrar dropped out.

One of Chinese tech giant Alibaba’s registrars was among the additions. Alibaba Cloud Computing (Beijing), which has 2.6 million names under management, is a notable addition given that one of its sister registrars was recently hit with an ICANN Compliance action due to alleged abuse inaction.

Also opting in to the Whois band-aid service were Identity Digital’s Name.com (2.2 million names), three of its sister companies, and Newfold Digital’s Register.com (1.5 million names). Nominalia, P.A Vietnam, and Ubilibet also signed up.

Realtime Register dropped out of the voluntary service, the third registrar to opt out since RDRS launched in Novemeber.

ICANN says its coverage is now 57% of the total gTLD domains out there, up from 55% in February. It has 86 registrars on-board in total, including most of the largest.

RDRS is a two-year pilot that offers people who want access to private Whois records, largely intellectual property interests and law enforcement, a simpler way to connect with the registrars holding that data.

Comment Tagged: ICANN, privacy, rdrs, whois

.my domains to be sold globally next month

The .my namespace is to be opened up to international registrants next month under a deal between the Malaysian registry and Caymans-based Internet Naming Co, according to INCO’s CEO.

Shayan Rostam said that MYNIC will continue to be the registry for .my, but that INCO will look after it outside Malaysia. The deal will allow non-Malaysians to register .my domains for the first time, he said. Currently, some registrars offer local presence services to get around the rules.

INCO already runs a portfolio of gTLDs, the initial batch acquired from UNR a few years ago, and adding .my should bring the ccTLD to a wider range of registrars. There’s going to be a new Registry-Registrar Agreement that is “less restrictive” than the old one, Rostam said.

.my has been around since 1987 and currently has about 313,000 domains under management, split roughly 50:50 between the second-level under .my and third level under .com.my. There are also lesser-used spaces such as .org.my and .net.my.

Rostam said the third-level spaces will still be reserved for Malaysians, but that no local nexus will be required under the second-level. It’s a similar idea to how Colombia’s .co was operated when it relaunched in 2010.

The TLD is of course potentially attractive because it’s an English word commonly used in domains, albeit usually at the start of the name rather than the end. According to my database, “my” is the most commonly-registered ccTLD-match two-letter domain among dot-brands.

Rostam said that he expects to start the relaunch with an Early Access Period, with prices starting at about $25,000, in late May, with full general availability in June.

Renewal pricing in GA is expected to be around the $30 mark — substantially cheaper than current retail prices — but registrars are expected to run first-year promotions in the sub-$10 area,

There will also be a list of premium-priced domains that could pump the pricing up to between $100 and $10,000 per year.

There’s no formal sunrise period — ccTLDs are not governed by ICANN rules and .my has of course been around for almost 40 years — but brand-protection registrars have been given special early access in case they have clients that want protection, Rostam said.

Under a separate deal, INCO has also taken over management of .forum and .feedback on behalf of two of Jay Westerdahl’s companies, Rostam confirmed.

Comment Tagged: .feedback, .my, forum, inco, internet naming co, mynic

The Swiss can register .swiss domains from next week

The Swiss government is relaxing the registration rules for its .swiss gTLD so that regular people will be able to register names there from next week.

Previously available only to registered legal entities in Switzerland, from April 24 any Swiss person at home or abroad will also be able to buy .swiss domains.

The TLD will still be heavily regulated, however. You’ll only be able to register domains that match your own name or the name that you are commonly known by. You won’t be able to register common family names without an accompanying given name.

Swiss people living elsewhere will be able to register, but will be forbidden from using their names for commercial purposes.

.swiss lives alongside the country’s official ccTLD, .ch, which is derived from the Latin name for the multilingual nation.

While .swiss is perhaps more internationally recognizable, to date it has attracted only about 26,000 registrations, compared to the 2.5 million in decades-old .ch.

Comment Tagged: .swiss