Last-minute bombshell in Nominet election — it may be ILLEGAL

Nominet’s current non-executive director election may be illegal, according to a legal opinion commissioned by one of the candidates.

Candidate Jim Davies, along with fellow former director Angus Hanton, say barrister Iain Mitchell KC has said that elements of Nominet’s voting practices are “clearly unlawful”, and they’ve asked Nominet to scrap them.

If Nominet accepts the opinion, it could mean the election — which is going on right now — could become a one-member-one-vote affair rather than the current system where you get more votes based on how many .uk domains you manage.

Davies and the other signatories to a letter sent to Nominet believe the company’s extremely complex “weighted voting” system is illegal under the UK’s Companies Act. They write:

This is a very serious issue for Nominet, particularly as there is an AGM and Board Election happening soon. Based on counsel’s opinion, we believe the only lawful way to conduct that meeting (and future meetings) would be one member, one vote.

Should Nominet agree and change the system, it would mean that big registrars such as GoDaddy and Tucows would get the same number of votes — one — as individual Nominet members.

This would most likely advantage IP lawyer Davies and fellow candidate Kieren McCarthy, who is a reporter rather than a registrar, at the expense of third candidate Volker Greimann, who works for Key-Systems, the large registrar owned by CentralNic.

Davies, in echoes of the PublicBenefit.uk campaign that led to a boardroom bloodbath last year, has set up a web site at WeightedVoting.uk to encourage fellow members to read the opinion and sign the letter.

While confidence in the company has arguably improved under its new leadership, member hackles were raised recently with the admission that Nominet had spunked millions of dollars on a failed attempt to enter the security market.

Voting in the NED elections began on Monday and runs until the end of the month. The results will be announced October 5, the day before Nominet’s AGM.

UPDATE: A Nominet spokesperson reached out with the following statement:

We acknowledge the receipt of a legal opinion commissioned by one of our members. We believe that our long-standing election process and voting rights are lawful and are being applied in accordance with our founding documents. We believe they have served and continue to serve both Nominet and its members well. Therefore, the election and voting will continue as planned. We will consult with our legal advisers prior to responding to our member.

4 Comments Tagged: .uk, elections, nominet, publicbenefit.uk, weightedvoting.uk

ICANN finished year $24 million ahead but loses $29 million on the markets

ICANN came out of fiscal 2022 $24 million ahead of its budget due to lower travel expenses and greater domain sales than expected, but blew $29 million on poor investments, according to financial results published today.

The Org ended June having received $150 million, mostly from registries and registrars, which was $5 million more than it had budgeted for.

Fixed, variable and transaction-based fees accounted for most of the difference. Registrars sold more domains than ICANN predicted, and fewer registries and registrars cancelled their contracts.

Verisign of course was the biggest contributor, accounting for over a third of revenue — $49 million for .com/.net fees alone. On the registrar side, GoDaddy contributed over $11.2 million.

GoDaddy’s contribution is actually a little higher than all the 131 participating ccTLDs’ voluntary donations combined, which came in at $11 million.

Expenses were $125 million, against a budget of $143 million. That was mostly due to the fact that two of its three meetings were held entirely online, so ICANN didn’t have to pay its staff and volunteers’ travel expenses.

It spent $3 million on meetings in the year, against a $10 million budget.

When the budget was passed in May 2021, ICANN had expected all three meetings to take place in person, with international travel “unrestricted” despite the pandemic.

Expenses were also affected by a lower-than-expected headcount. Average headcount was down by three on FY21 at 389, compared to the 405 predicted by the budget.

Despite the over-performance at the operating level, ICANN’s balance sheet actually declined compared to a year earlier.

It had funds under management of $505.5 million compared to $520 million, having lost $29 million due to “investment declines in the Reserve Fund due to volatility in the financial markets”. Its portfolio is still $9 million ahead compared to five years ago, however.

1 Comment Tagged: budget, earnings, financials, ICANN

CentralNic picks up marketing firm for up to $19 million

CentralNic has made yet another acquisition, this time of a young Israeli online marketing company in a deal worth up to $19 million.

The company said it is buying M.A Aporia Ltd for $11.2 million, with the possibility of up to an extra $7.8 million in performance-related payouts by 2024.

Aporia provides services that research audiences and target advertising. CentralNic said it had revenue of $35 million last year, along with gross profit of $3.5 million and EBITDA of $2 million.

But CentralNic said the company is an exclusive supplier and therefore won’t increase its top line in the short term. Instead, it will improve margins and earnings by cutting out a middleman from the online marketing business.

CEO Ben Crawford described the move as “disintermediating the value chain… removing transaction costs and friction losses”.

Comment Tagged: acquisition, aporia, centralnic

Whois Disclosure System to cost up to $3.3 million, run for one year

ICANN has published its game plan for rolling out a Whois Disclosure System ahead of next week’s ICANN 75 public meeting in Kuala Lumpur.

The Org reckons the system will take nine months to build and will cost up to $3.3 million to develop and run for two years, although it might wind up getting shut down after just one year.

The Whois Disclosure System, previously known as SSAD Light, is a mechanism whereby anyone with an ICANN account — probably mainly IP lawyers in practice — can request unredacted private Whois data from registrars.

The system is to be built using retooled software from the current Centralized Zone Data Service, which acts as a hub for researchers who want to request zone files from gTLD registry operators.

ICANN’s design paper (pdf), which contains many mock-ups of the likely user interface, describes the new system like this:

Just as in CZDS, a requestor navigates to the WHOIS Disclosure System web page, logs into their ICANN Account, and is presented with a user experience much like the current CZDS. In this experience, requestors can see pending and past requests as well as metadata (timestamps, status, etc.) associated with those requests. For a requestor’s pending requests, they can see all the information related to that request.

Requests filed with the system will be routed to the relevant registrar via the Naming Services Portal, whereupon the registrar can choose how to deal with it. The system doesn’t change the fact that registrars have this discretion.

But the system will be voluntary for not only the requesters — who can still contact the registrar directly if they wish — but also the registrars. One can imagine smaller and frequently abused registrars won’t want the hassle.

The cost of this system will be $2.7 million in staffing costs, with $90,000 in external licensing costs and another $500,000 in contingency costs. Because ICANN has not budgeted for this, it will come from the Supplemental Fund for Implementation of Community Recommendations, which I believe currently has about $20 million in it.

This is far and away cheaper than the full-fat SSAD originally proposed by the GNSO, which ICANN in January estimated could cost up to $27 million to build over five years.

While cheaper, there are still substantial questions remaining about whether it will be popularly used, and whether it will be useful in getting private Whois data into the hands of the people who say they need it.

ICANN is saying that the Whois Disclosure System will run for one year “at which point the data sets collected will be analyzed and presented for further discussion between the GNSO Council and Board”.

The design paper will be discussed at multiple ICANN 75 sessions, starting this weekend.

3 Comments Tagged: gdpr, ICANN, icann 75, privacy, ssad, ssad light, whois, whois disclosure system

ICANN director’s registry CEO job up for grabs

DotAsia is looking for a new CEO after 15 years of operation, DI understands.

Edmon Chung has been made Acting CEO and the board of the registry will start looking for a replacement by October 7, according to a source.

I’m told the board passed a resolution last week stating: “In pursuit of the fundamentals of transparency, accountability and fair competition, and in the DotAsia community best interests, the CEO contract should be put for open tender”.

Chung, who joined ICANN’s board of directors a year ago, will not be barred from reapplying for his job.

DotAsia, which of course runs .asia, was one of the successful registries in ICANN’s 2003 “sponsored” gTLD round.

The TLD launched in 2017 and currently has around 200,000 domains under management.

The DotAsia Organization in a non-profit entity with a complicated organizational structure involving several Asian ccTLDs.

1 Comment Tagged: dotasia, ICANN

MarkMonitor to join Newfold in $300 million deal

Corporate domain registrar MarkMonitor is to be sold to Newfold Digital for $302.5 million cash, the companies announced today.

The company’s current owner, Clarivate, bought NarkMonitor for an undisclosed sum in 2017 and sold off its brand protection unit two years later.

So Newfold’s getting the registrar business and domain management services to add to its stable, which already includes Network Solutions, Register.com, Web.com, and Domain.com.

MarkMonitor has about a million gTLD domains under management and an unknown number of ccTLD domains.

The company has about 2,000 clients around the world, the companies said in a press release.

MarkMonitor expects about $80 million of revenue and $35 million of EBITDA this year.

Comment Tagged: acquisition, clarivate, markmonitor, newfold

New ICANN contracts chart the death throes of Whois

Whois is on its death bed, and new versions of ICANN’s standard contracts put a timeline to its demise.

The Org has posted proposed updates to its Registrar Accreditation Agreement and Registry Agreement, and most of the changes focus on the industry-wide transition from the Whois standard to the newer Registration Data Access Protocol.

We’re only talking about a change in the technical spec and terminology here. There’ll still be query services you can use to look up the owner of a domain and get a bunch of redactions in response. People will probably still even refer to it as “Whois”.

But when the new RAA goes into effect, likely next year, registrars and registries will have roughly 18 months to make the transition from Whois to RDAP.

Following the contract’s effective date there’ll be an “RDAP Ramp-up Period” during which registrars will not be bound by RDAP service-level agreements. That runs for 180 days.

After the end of that phase, registrars will only have to keep their Whois functioning for another 360 days, until the “WHOIS Services Sunset Date”. After that, they’ll be free to turn Whois off or keep it running (still regulated by ICANN) as they please.

ICANN’s CEO and the chair of the Registrars Stakeholder Group will be able to delay this sunset date if necessary.

Most registrars already run an RDAP server, following an order from ICANN in 2019. IANA publishes a list of the service URLs. One registrar has already lost its accreditation in part because it did not deploy one.

There’ll be implementation work for some registrars, particularly smaller ones, to come into compliance with the new RAA, no doubt.

There’ll also be changes needed for third-party software and services that leverage Whois in some way, such as in the security field or even basic query services. Anyone not keeping track of ICANN rules could be in for a sharp shock in a couple of years.

The contracted parties have been negotiating these changes behind closed doors for almost three years. It’s been almost a decade since the last RAA was agreed.

The contracts are open for public comment until October 24.

Comment Tagged: ICANN, ra, raa, rdap, rdds, whois

Kiwi Farms domain lands at Epik

The primary domain for the controversial web forum Kiwi Farms, kicked out by Cloudfare at the weekend, has been transferred to Epik.

Whois records show the domain kiwifarms.net landed at Epik in the last hour or so. It’s still using Cloudflare’s name servers at the time of writing, so it’s still resolving to a “blocked” message from its old registrar.

Cloudflare blocked the name, reluctantly, on Saturday, citing “an imminent and emergency threat to human life”, believed to refer to a transgender activist and Twitch streamer targeted for death threats by Kiwi Farms users.

The site, whose users reportedly bully, doxx and swat trans people, has been linked to three suicides since it was launched in 2013.

The question for Epik and its new CEO now is whether they let the domain stay under its roof, or whether the same concerns cited by Cloudflare make it too toxic to touch.

UPDATE 1724 UTC: Not long after this post was published, the domain started using Epik’s name servers.

10 Comments Tagged: cloudflare, epik, kiwi farms

CentralNic passes on abandoned dot-brand

CentralNic has sold on the dead dot-brand it acquired last year, to a company run by Sav.com’s CEO.

.case was originally owned by CNH Industrial, a large maker of industrial machinery, but it was sold off to CentralNic subsidiary Helium last year when the company dumped its portfolio of unwanted dot-brands.

I speculated at the time that it was acquired merely to be sold — Helium previously acted as an interregnum operators of .fans, and that turned out to be correct. CentralNic did nothing with it — the NIC page still shows images of diggers — and it has no registered domains.

The new owner is a company called Digity, whose president is Sav.com CEO Anthos Chrysanthou.

Comment Tagged: .case, centralnic, digity, dot-brands, helium

Cloudflare blocks anti-trans site for “emergency threat to human life”

Internet infrastructure provider Cloudflare has “blocked” a site it provides domain services to after identifying “an imminent and emergency threat to human life”.

The company said on Saturday that it has reluctantly stopped providing services to Kiwi Farms, a web forum whose users reportedly bully and carry out doxxing and swatting attacks on transgender people and activists.

Visitors to kiwifarms.net are now presented with a message from Cloudflare stating: “Due to an imminent and emergency threat to human life, the content of this site is blocked from being accessed through Cloudflare’s infrastructure.”

A linked blog post explaining the decision said:

This is an extraordinary decision for us to make and, given Cloudflare’s role as an Internet infrastructure provider, a dangerous one that we are not comfortable with. However, the rhetoric on the Kiwifarms site and specific, targeted threats have escalated over the last 48 hours to the point that we believe there is an unprecedented emergency and immediate threat to human life unlike we have previously seen from Kiwifarms or any other customer before.

The move is likely linked to a campaign by a trans Twitch streamer, who reportedly has been campaigning for Cloudflare to drop the site after multiple threats to her life, including a recent swatting (where armed police are tricked into showing up at your door).

Last week, the company had tried to explain its continued support for the domain by stating that one two previous occasions it has blocked sites, authoritarian governments have used that precedent to try to get human rights sites pulled.

At this stage, it appears that Cloudflare is using its status as the site’s DNS provider to implement the block. It’s still the domain’s registrar, and so far the Whois record does not reflect an attempt to move it elsewhere.

The domain was registered with DreamHost until last year, but was asked to leave following the suicide of a software developer, one of three suicides reportedly linked to Kiwi Farms users’ behavior.

Could Epik be its next destination? The company is a strong proponent of free speech, but even it has a line when it comes to violence. This could be Epik’s new CEO‘s first big test.

Comment Tagged: cloudflare, dreamhost, epik, kiwi farms