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Verisign announces ANOTHER price increase as regs slide

Verisign posted a rare decrease in its .com/.net registered name base in the second quarter, but said it is going to raise its .net prices next year anyway.

The company also massively slashed its growth outlook for domain sales this year.

The annual cost of a .net name will go up 10%, the maximum permissible under its contract with ICANN, to $9.92 from February 1 next year, the registry said

Registrants will as usual be able to lock-in the current renewal fee of $9.02 for up to 10 years if they renew before the hike kicks in.

It’s the first .net price increase since 2018. The TLD has been stagnating in volume terms for several years, due no doubt in part to behavioral changes following the introduction of new gTLDs starting in late 2013.

The news came as Verisign reported that its domain base shrunk during Q2.

The company ended June with 174.3 million names under management, up 2.2% over a year earlier but down 350,000 domains compared to the end of Q1.

The split was 161.1 million for .com and 13.2 million for .net — that’s a sequential decrease of 200,000 for .com and a decrease of 200,000 for .net. Both rounded, of course.

CEO Jim Bidzos told analysts tonight that renewals were affected by a great many first-time registrations from China not renewing. General post-pandemic and macro-economic factors also played a role, he said.

The preliminary renewal rate was 75.9% compared to 76.0% a year earlier, but the number of new regs was down to 10.1 million from 11.7 million over the same period.

Verisign reported Q2 revenue up 6.8% on a year ago at $352 million, with net income of $167 million compared to $148 million. Its operating margin swelled to 67.1% percent from 64.7%.

Bidzos told analysts that the company is cutting its registered name growth prediction for the year to between 0.5% and 1.5%, a huge decrease from the already-downgraded estimate of 1.75% and 3.5% it made after the first quarter.

He said that he expects Q3 and Q4 to go much the same way as Q2.

Bidzos said he thinks the current factors affecting regs are a bump in the road and he expects things to stabilize over time.

UPDATE 2148 UTC — The article was updated to correct the comparison of the decrease in .com/.net regs.

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CentralNic signs Greenland deal

CentralNic says it has won a contract to supply registry management software to Greenland’s ccTLD.

It appears to be a software licensing deal rather than an outsourced registry back-end contract.

Greenland’s .gl domain is management by local telco Tusass, which awarded the contract.

Greenland is one of three countries comprising Denmark. CentralNic also supports .fo, for the Faroe Islands.

It’s not known how many names are registered in .gl, but with a population of barely 56,000 the number of local registrations is likely to be tiny.

The are no residency requirements to register .gl names, however, and prices are .com-competitive.

Perhaps its best-known domain was Google’s discontinued link-shortener service goo.gl.

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Early “dot-brand” adopter wants to scrap its gTLD

One of the first adopters of the dot-brand gTLD concept, which has an active portfolio of resolving domains, has asked ICANN to tear up its registry contract.

The Australian Cancer Research Foundation said it no longer wishes to operate .cancerresearch, which it has used since 2014.

It’s a bit of a strange, possibly unique, situation, which may explain why its termination request, submitted in April, is only now being published by ICANN.

Technically, .cancerresearch was more like a closed generic than a dot-brand. It did not have a trademark on the string or the Specification 13 exceptions in its registry contract, which would make it a dot-brand.

Instead, ACRF had the TLD delegated, registered a bunch of resolving names to itself, and never officially launched. There was never even a sunrise period.

Pretty significant loophole in the rules for the 2012 application round if you ask me.

But ICANN is treating .cancerresearch as if it was a dot-brand anyway. Because nobody except ACRF ever owned any domains there, there’s no need to transition to a new registry to protect registrants.

This also means nobody else will be able to apply for the same string for two years, assuming an application window opens in that period.

ACRF still has live non-redirecting web sites on domains such as lung.cancerresearch, breast.cancerresearch and donate.cancerresearch.

It’s the first gTLD termination request since last October.

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Verisign to mandate 2FA for .com registrars

Over 2,000 registrars are likely to be affected by a new Verisign policy making two-factor authentication mandatory when logging into the company’s registrar portal.

ICANN has given the preliminary nod to a Verisign proposal to make 2FA, which has been available on an optional basis for over a decade, mandatory.

Voluntary adoption of the security feature has been light since it was first introduced in 2009. According to Verisign’s Registry Services Evaluation Process request (pdf) only around 200 registrars currently use it.

There were 2,446 active .com registrars at the last count. The RSEP also applies to .net and .name.

The 2FA system requires registrars to enter a one-time password, in addition to their usual credentials, whenever they log in to their accounts.

The change only applies to registrars logging into Verisign’s web site to manage their accounts, not to registrants who have .com domains. It does not apply to under-the-hood EPP transactions.

The company is hoping to implement the change pretty damn quick — its June 30 RSEP states that it will start to give registrars a 30-day noticed period the following day, before ICANN had even formally approved the change.

ICANN approval (pdf) came yesterday, so presumably 2FA will become mandatory in a matter of days.

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Unstoppable valued at over $1 billion after huge new investment

Unstoppable Domains has received a huge new funding round that the company says means it now has a valuation in excess of $1 billion.

The $65 million Series A round was led by Pantera Capital, with a whopping 17 other venture capital firms taking part, according to the company.

Unstoppable is an alt-root player, offering blockchain-based domains in nine TLDs such as .nft, .blockchain, .crypto and .wallet.

Much of its work to date has been on persuading crypto currency users to use Unstoppable domains to replace the otherwise cumbersome and confusing addresses of their crypto wallets, but the names can also be used to address web sites if you use the right browser software.

Unlike the regular domain name industry, where much of the investment attractiveness comes from the possibility of high-margin recurring renewal revenue, Unstoppable sells its names for a one-time fee. It presumably has other revenue sources in mind for long-term growth.

The traditional domain name industry, ICANN, and potential new gTLD applicants should pay attention.

If, as seems likely, some of the TLD strings Unstoppable is using in its alt-root are applied for in the next new gTLD round, a well-funded competitor that has already proven itself litigious when it comes to name collisions could prove a formidable opponent.

Of course, some potential applicants might see a well-funded alt-root player as an invitation to apply for colliding strings in the hope of a quick pay-off at private auction.

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ICANN staffer to referee closed generics fight

Kevin Murphy, July 28, 2022, Domain Policy

An ICANN policy staffer seems set to chair discussions between governments and the gTLD community over how to regulate “closed generic” domains in the next round of new gTLD applications.

ICANN has put forward its own conflict resolution specialist Melissa Peters Allgood to facilitate the talks, and the Governmental Advisory Committee and GNSO Council have apparently concurred, according to recent correspondence.

“We are of the view that Ms. Allgood’s experience, qualifications, and neutrality in the matter meets the suggested criteria from the GAC and the GNSO Council,” ICANN chair Maarten Botterman told his GAC and GNSO counterparts.

The talks will attempt to reach a consensus on how closed generics can be permitted, but limited to applications that “serve a public interest goal”.

A closed generic is a dictionary-word gTLD that the applicant hopes to operate as a dot-brand even though it does not own a matching trademark. Think Nike operating .sneakers and excluding Adidas and Reebok from registering names there.

While the GNSO community was unable to come to consensus on whether they should be permitted in subsequent rounds, the nine-year-old “public interest goal” GAC advice is still applicable.

The GAC and GNSO have agreed that the talks will exclude the propositions that closed generics should be unrestricted or banned outright.

Once both parties have formally agreed to Allgood’s appointment, and to the size and makeup of the discussion group, Allgood will prepare more paperwork outlining the problem at hand before talks start to happen, according to Botterman.

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Covid vaccine maker takes RDNH loss to ICANN board

Kevin Murphy, July 26, 2022, Domain Policy

An Indian pharmaceuticals firm with a $2 billion turnover has complained at the highest level of ICANN after it was handed a Reverse Domain Name Hijacking decision over the .com matching its company name.

Zydus Lifesciences, which produces mainly generic drugs but last year earned government approval to manufacture a Covid-19 vaccine, says a UDRP panel “exhibited extreme bias” when it threw out its UDRP complaint against the owner of zydus.com last month.

The company had claimed the anonymous registrant was cybersquatting, but the WIPO panel instead found RDNH.

The panel was not convinced that the registrant should have been aware of Zydus’ existence when he registered the name in 2004, and said his use of the name — which it characterized as a fanciful five-letter generic — to redirect to various affiliate marketing sites was not “bad faith”.

But now Zydus is claiming that the panel ignored evidence that it was already a very large company, with a $110 million turnover, at the time of registration, and says the UDRP decision shows evidence of bias against developing-world companies. The latter card is played pretty hard.

I believe this is only the second time that a UDRP decision has been challenged with a formal Request for Reconsideration with the ICANN board of directors, and there’s a pretty good chance it will be summarily dismissed like the first one.

Zydus will probably have to sue, or pay up.

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Guy asks ICANN to shut down prostitution site

Kevin Murphy, July 26, 2022, Uncategorized

A man is using ICANN’s Request for Reconsideration process to try to take down a domain that appears to be used as a marketplace for sex workers, many of whom appear to be offering prostitution services.

The requester says that the site in question, adultsearch.com (NSFW) is breaking the law in the US, where prostitution is in most places illegal, and that it should be taken down.

He says he contacted the registrar, Namecheap, but did not get a satisfactory response. He says he then contacted ICANN Compliance, but was given the brush off.

He’s now using RfR (pdf) to bring the matter to ICANN’s board of directors.

“Take it down, offline. If it were child pornography, which is illegal, too. Would I have to ask twice…?” he writes.

The site in question is essentially a collection of classified ads posted by people offering in-person sexual services. While many ads talk in coded terms about legal services such as “massage”, alongside sexually explicit photographs, many others are fairly explicit that they’re offering sex.

The site has listings for scores of countries, but the default front-page ads come from the US, broken down by state and city.

The requester says he was moved to file the complaint after meeting a young immigrant woman involved in illegal prostitution from a young age. He provides some details of her situation, though not enough to personally identify her.

Regardless, he asked ICANN to redact that portion of the request before posting it publicly, but ICANN didn’t.

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No smoking! Rules laid down as .kids reveals launch dates

DotKids Foundation has published its launch dates and its fairly strict rules about what kinds of content are permitted and prohibited on .kids domains.

The sunrise period for trademark holders will run from August 11 to September 14, to be followed a week later by a “community sunrise” targeting non-profits “with a main mission of championing children’s rights, children’s well-being, education or child-welfare” that runs until October 19.

Then comes the “pioneer domains” program, where DotKids seeks to recruit a suite of anchor tenants who it can name at launch when it goes into full general availability on November 29. Just in time for Christmas.

But .kids will be far from a free-for-all, with a bunch of regulations on content.

Content bans include the stuff you might expect related to violence, drugs, pornography, kids drinking and smoking, and gambling (but only where the gambling is with “lawful currencies”, presumably because video games nowadays are rife with virtual-currency gambling).

The policies are laid out in several documents here.

While content rules such as these may seem to amount to an effective ban on user-generated content, DotKids is actively encouraging its registrants to use their sites to engage with kids and provide a “platform for children’s voices to be heard”.

Developers on .kids domains will need to have a decent moderation budget, it seems.

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Nominet sold security unit for a dollar after blowing $23.5 million

Nominet has found itself out of pocket to the tune of $23.5 million after selling its CyGlass network security business for a dollar.

Chair Andrew Green told members last week that the .uk registry sold CyGlass to a group of its employees for the nominal sum after deciding to divest itself of non-core businesses. He said in an email:

As our involvement in CyGlass is now at an end, I am in a position to share the approximate cost of the unsuccessful investment in CyGlass with members. In addition to the $6.3m cost of purchase, Nominet invested around $16.0m in supporting the ongoing running cost of the business. Costs associated with closure will be c$1.2m – approximately equivalent to continuing to support the business for a further two months. That totals c$23.5m. Converting back to GBP over a relatively long period is complex, but the total cost over 2+ years is approximately £18m.

At the time it was sold, it was costing Nominet $600,000 a month to keep CyGlass running, he said.

The strategy of diversification from the core registry business was made under previous management and ultimately was partly the cause of last year’s boardroom bloodbath that eventually led to Green’s appointment on a back-to-basics platform.

Green told members that CyGlass “struggled as a result of changing work patterns following the Covid pandemic”, adding:

While there has been continuing interest in the offering from customers, the pipeline of opportunities has been slow in converting to new long-term customers. As a result Annual Recurring Revenue – a key driver of investor interest – has been growing imperceptibly

Now independent, CyGlass recently told the security trade press it is seeking partnerships to drive growth.

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