Verisign’s IDN gTLDs “could increase phishing” say Asian registries

It’s a bad day for Verisign.
As the company pins its growth hopes partially on its applications for IDN gTLDs — in the wake of losing its price-raising powers over .com — ccTLD registries from Asia-Pacific have raised serious concerns about its bids.
The Asia Pacific Top Level Domain Association says that many of its members reckon the proposed IDN transliterations of .com “could give rise to an increased risk of phishing and other malicious abuses”.
Verisign has applied for a dozen transliterations of .com and .net in scripts such as Hebrew, Cyrillic and Arabic. The strings themselves are meaningless, but they sound like “com” and “net”.
It’s for this reason that APTLD reckons they could cause problems. In an October 1 letter to ICANN, published today, the organization said:

In addition to the potential for user confusion, some [Working Group] members also noted that the creation of transliterated TLDs, without the development of adequate registration and eligibility polices and procedures, could give rise to an increased risk of phishing and other malicious abuses of the new spaces.
…
The WG notes that this potential problem manifests itself at the second level, and is not unique to tranlisterated TLDs, but would argue that the very nature of these TLDs, and their close similarity to existing TLDs, makes them particularly high-risk targets.

The letter does not single out Verisign, and does not represent a consensus APTLD view.
There are also worries among APTLD members about the application for .thai in Latin script, which could clash with Thailand’s IDN ccTLD, and various translations of “.site”.
APTLD notes that the new gTLD evaluation process only contains checks for visual similarity between TLDs.
The only way to block an application based on phonetic confusion is to file a String Confusion Objection, but the only entity eligible to object to Verisign’s applications is Verisign itself.

9 Comments Tagged: .com, .net, aptld, ICANN, new gTLDs, verisign

Winners and losers in the new .com pricing regime

Today’s shock news that Verisign will be subject to a .com price freeze for the next six years will have broad implications.
The US Department of Commerce has told the company it will have to continue to sell .coms at $7.85 wholesale until 2018, barring exceptional circumstances.
Here’s my initial take on the winners and losers of this new arrangement.
Domain investors
Volume .com registrants are of course the big winners here. A couple of dollars a year for a single .com is pretty insignificant, but when you own tens or hundreds of thousands of names…
Mike Berkens of Most Wanted Domains calculated that he’s saved $170,000 $400,000 over the lifetime of the new .com deal, and he reckons fellow domainer Mike Mann will have saved closer to $800,000 $2 million.
Brand owners
The other big constituency of volume registrants are the brand owners who spend tens or hundreds of thousands of dollars a year maintaining defensive registrations — mostly in .com — that they don’t need.
Microsoft, for example, owns over 91,000 domain names, according to DomainTools. I’d hazard a guess that most of those are defensive and that most are in .com.
Registries
There’s potentially trouble on the horizon for new gTLD applicants and existing registry operators. Verisign is looking for new ways to grow, and it’s identified its patent portfolio as an under-exploited revenue stream.
The company says it has over 200 patents either granted or pending, so its pool of potential licensees could be quite large.
Its US portfolio includes patents such as 7,774,432, “Registering and using multilingual domain names”, which appear to be quite broad.
Verisign also owns a bunch of patents related to its security business, so companies in that field may also be targeted.
Registrars
Verisign’s registrars will no longer have to pass their cost increases on to consumers every year.
While this may help with renewal rates, it also means registrars won’t be able to sneak in their own margin increases whenever Verisign ups its annual fees.
IDN buyers
Another area Verisign plans to grow is in internationalized domain names, where it’s applied to ICANN for about a dozen non-Latin variants of .com and .net.
Those registry deals, assuming they’re approved by ICANN, will not be governed by the .com pricing restrictions. Now that Verisign’s growth is getting squeezed, we might expect higher prices for IDN .com variants.
ICANN
ICANN may have suffered a small reputational hit today, with Commerce demonstrating it has the balls to do what ICANN failed to do six years ago, but money-wise it’s doing okay.
The new .com contract changes the way Verisign pays ICANN fees, and Commerce does not appear to have made any changes to that structure. ICANN still stands to get about $8 million a year more from the deal.
The Department of Commerce
Unless you’re a Verisign shareholder, Commerce comes out of this deal looking pretty good. It played hard-ball and seems to have won a lot of credibility points as a result.

11 Comments Tagged: .com, commerce, ICANN, idns, ntia, patents, verisign

Verisign loses right to increase .com prices

Verisign has sensationally lost the right to increase .com prices under a new deal struck with the US Department of Commerce.
In a statement to the markets just now, the company announced that the .com contract approved by ICANN earlier this year has now also been approved by Commerce, but with no more price increases:

Verisign’s current pricing of $7.85 per domain name registration will continue for the six-year term of the Agreement. Second, Verisign no longer has the right to four price increases of up to seven percent over the six-year term.

The company will only be able to increase prices with prior Commerce approval in response to “extraordinary” circumstances such as a security problem, or when the competitive landscape changes.
For example, if .com loses its “market power”, pricing restrictions could be lifted entirely, subject to Commerce approval.
Similarly, if ICANN approves a Consensus Policy that changes Verisign’s cost structure, the company could apply for price-increasing powers.
The deal is a huge blow for Verisign’s shareholders, wiping tens — potentially hundreds — of millions of dollars from the company’s top line over the coming six years.
Its share price is sure to nose-dive today. It’s already trading down 15% before the New York markets open.
It’s also an embarrassment to ICANN, which seems to have demonstrated that it’s less capable of looking after the interests of registrants than the US government.
That said, the new contract appears to have kept ICANN’s new fee structure, meaning the organization will be about $8 million a year richer than before.
In a Securities and Exchange Commission filing, Verisign said the new pricing provisions came in Amendment 32 to its Cooperative Agreement with Commerce:

Amendment 32 provides that the Maximum Price (as defined in the 2012 .com Registry Agreement) of a .com domain name shall not exceed $7.85 for the term of the 2012 .com Registry Agreement, except that the Company is entitled to increase the Maximum Price of a .com domain name due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS as described in the 2012 .com Registry Agreement, provided that the Company may not exercise such right unless the DOC provides prior written approval that the exercise of such right will serve the public interest, such approval not to be unreasonably withheld. Amendment 32 further provides that the Company shall be entitled at any time during the term of the 2012 . com Registry Agreement to seek to remove the pricing restrictions contained in the 2012 .com Registry Agreement if the Company demonstrates to the DOC that market conditions no longer warrant pricing restrictions in the 2012 .com Registry Agreement, as determined by the DOC. Amendment 32 also provides that the DOC’s approval of the 2012 .com Registry Agreement is not intended to confer federal antitrust immunity on the Company with respect to the 2012 .com Registry Agreement and extends the term of the Cooperative Agreement through November 30, 2018.

On a conference call with analysts, Verisign CEO Jim Bidzos said that the deal was in the best interests of the company. It still gives the company the presumptive right for renewal, he said.
Growth, he said, will come in future from an expansion of its .com installed base, new IDN gTLD variants, and providing back-end registry services to other new gTLDs.
“We’re still a growth company,” he said.
“We have a patent portfolio we haven’t really exploited,” he said, referring to about 200 patents granted and pending. “We think there’s a revenue opportunity there.”
Larry Strickling, assistant secretary at Commerce, said in a statement:

Consumers will benefit from Verisign’s removal of the automatic price increases. At the same time, the agreement protects the security and stability of the Internet by allowing Verisign to take cost-based price increases where justified.

The full Amendment 32 is posted here.

8 Comments Tagged: .com, commerce, ICANN, pricing, verisign

ICANN massively expands the reserved domains list for new gTLDs

ICANN’s board of directors has given the Olympic and Red Cross brands – along with those of a batch of intergovernmental organizations — special second-level protection in new gTLDs.
Its new gTLD program committee this week passed two resolutions, one protecting the International Olympic Committee and Red Cross/Red Crescent, the other protecting IGOs that qualify for .int domain names.
New gTLD registries launching next year and beyond will now be obliged to block a list of names and acronyms several hundred names longer than previously expected.
Domain names including who.tld and reg.tld will be out of bounds for the foreseeable future.
In a letter to the GNSO, committee chair Cherine Chalaby said:

The Committee adopted both resolutions at this time in deference to geopolitical concerns and specific GAC advice, to reassure the impacted stakeholders in the community, acknowledge and encourage the continuing work of the GNSO Council, and take an action consistent with its 13 September 2012 resolution.

The first ICANN resolution preempts an expected GNSO Council resolution on the Olympics and Red Cross — which got borked earlier this month — while the second is based on Governmental Advisory Committee advice coming out of the Toronto meeting in October.
The resolutions were not expected until January, after the GNSO Council had come to an agreement, but I’m guessing the World Conference on International Telecommunications, taking place in Dubai next week, lit a fire under ICANN’s collective bottoms.
The full text of the resolutions will not be published until tomorrow, but the affected organizations have already been given the heads-up, judging by the quotes in an ICANN press release today.
The press release also noted that the protections are being brought in before the usual policy-making has taken place because it would be too hard to introduce them at a later date:

In approving the resolutions, the New gTLD Program Committee made it clear it was taking a conservative approach, noting that restrictions on second-level registration can be lifted at a later time depending on the scope of the GNSO policy recommendations approved by the Board.

The new Reserved Names List will presumably be added to the Applicant Guidebook at some point in the not too distant future.
Meanwhile, Wikipedia has a list of organizations with .int domain names, which may prove a useful, though non-comprehensive, guide to some of the strings on the forthcoming list.

9 Comments Tagged: ICANN, igos, ioc, new gTLDs, olympics, red cross, reserved names

Unsnubbed? ICANN brass get tickets to ITU curtain-raiser

ICANN’s chairman and CEO have been invited to the World Conference on International Telecommunications next week, as “special guests” of the International Telecommunications Union.
It’s a token gesture of friendship at best, with the invitation only good for the opening ceremony, rather than any substantive policy discussions.
But it’s a contrast to the ITU’s treatment of former ICANN CEO Rod Beckstrom, who was snubbed when he asked for observer status for an ITU Plenipotentiary in 2010.
This year’s invitation is not, however, a reversal of that policy. ICANN’s not technically going to be an observer this time either.
WCIT, which begins on Monday in Dubai, will see the ITU’s member governments convene to redraft their governing International Telecommunications Regulations.
There’s been a bit of a commotion in the US over the last several months over the potential for a power grab by the ITU. Some governments would sooner the ITU handled ICANN’s functions.
But the conventional wisdom at the moment — supported by ITU chief Hamadoun Toure’s strenuous denials — is that ICANN is probably safe.
ITU conferences are notoriously opaque. You can’t even download policy proposals unless you’re a member, and getting an invitation to attend in person has some political value.
That’s why anyone interested in knowing what’s likely to go down at WCIT could do worse than check out .nxt, where Kieren McCarthy earned huge kudos this week by publishing over 200 previously secret documents.

Comment Tagged: ICANN, itu, wcit

Europe rejects ICANN’s authority as it warns of problems with 58 new gTLDs

The European Commission has issued a list of 58 new gTLD applications it considers problematic, thumbing its nose at ICANN’s procedures for handling government objections to new gTLDs.
The list, sent to all applicants this afternoon, draws in several applications that were not already subject to Early Warnings from other GAC nations, including .sex, .sexy and .free.
Remarkably, the cover letter says that the gTLDs are not “Early Warnings” as described by the ICANN Applicant Guidebook and says the Commission may continue to work outside the established process in future:

The position outlined in this letter is without prejudice to any further action that the Commission might decide to undertake in order to safeguard the rights and interests of the European Union and of its citizens.
For the sake of clarity, the Commission does not consider itself legally bound to the processes, including the means of recourse, outlined in the new gTLD Applicant Guidebook and/or adopted by ICANN, unless a legal agreement between the latter and the Commission exists.

While that’s little more than a statement of fact — governments are of course free to do whatever they want in their own jurisdictions — it’s giving applicants much more reason to be nervous.
Even if they don’t receive GAC Advice against their applications, the EC may decide to take other action against them.
The fact that the letter also explicitly states that the warnings are definitely not official Early Warnings — meaning applicants on the list won’t even qualify for the extra refund if they drop out — sends a worrying signal that the EC is not in the mood to play by ICANN’s rules.
As for the list itself, the Commission’s letter states that it’s “non-exhaustive” and that it focuses on bids that “could possibly raise issues of compatibility with the existing legislations (the acquis) and/or with policy positions and objectives of the European Union”.
The fact that the list contains ICM Registry’s .adult and .sex applications, but not its identical .porn bid, seems to confirm that the list does not cover all the gTLDs the Commission has a problem with.
The letter (pdf) states that the Commission will attempt to enter into “further discussions” with the applicants on the list (pdf).

6 Comments Tagged: early warnings, european commission, gac, gac advice on new gtlds, ICANN, new gTLDs

Seized .eu, .be counterfeiting domains now pointing to US government servers

At least three of the European domain names seized in this year’s batch of Cyber Monday anti-counterfeiting law enforcement are now pointing to servers controlled by the US government.
We’ve found that chaussuresfoot.be, chaussurevogue.eu and eshopreplica.eu are now hosted on the same IP addresses as SeizedServers.com, the US Immigration and Customs Enforcement site.
But the three domains, believed to be among the 132 grabbed ahead of this year’s online shopping rush, display warnings incorporating the logos of multiple European law enforcement agencies.
While domains in .dk, .fr, .ro and .uk were also targeted by this year’s transatlantic crackdown, none appear to be using SeizedServers.com.
According to an ICE press release yesterday, this was the first year that Operation In Our Sites, which kicked off at this time in 2010, has included overseas law enforcement.
The partnership, coordinated between ICE and Europol, was code-named Project Transatlantic.

Comment Tagged: .be, .eu, europol, ice, operation in our sites, project transatlantic

Trademark Clearinghouse fees to be capped at $150

Submitting your trademarks to ICANN’s forthcoming Trademark Clearinghouse will cost a maximum of $150 per mark, according to ICANN CEO Fadi Chehade.
In a new blog post, Chehade provides an update to its contract talks with IBM, which will provide the Clearinghouse back-end, and Deloitte, which will be the first submission agent.
It’s shaping up to mimic the registry-registrar model, mapped to the trademark world, and Chehade has confirmed that Deloitte will most likely have competition at the ‘registrar’ level:

Deloitte’s validation services are to be non-exclusive. ICANN may add additional validators after a threshold of minimum stability is met.

The fee for Deloitte to validate trademarks for inclusion in the Clearinghouse will be capped at $150, Chehade said, with discounts for multiple trademarks and multi-year registrations.
IBM will charge Deloitte and gTLD registries for database access on a per-API-call basis, but prices there have not yet been disclosed.
Chehade also provided an update on the so-called “straw man” solution to the trademark community’s unhappiness with the current strength of new gTLD rights protection mechanisms.
For the most part, the update is merely a procedural defense of the changes that ICANN wants to make to the Sunrise and Trademark Claims processes, such as the creation of a “Claims 2” service.
The argument is, essentially: “This isn’t policy, it’s implementation.”
ICANN “policies” have to go through community processes before becoming law, whereas “implementation” is somewhat more flexible. Things are often classified as implementation when there are pressing deadlines.
The one change identified by Chehade as possibly needing community work is the extension of Trademark Claims from trademarks only to trademark+keyword or typo registrations.
He said he plans to publish the full straw man model, which has been developed behind closed doors with selected members of the GNSO, later this week.

1 Comment Tagged: ICANN, new gTLDs, sunrise, trademark claims, trademark clearinghouse

Cops seize 132 domains in Cyber Monday crackdown

Law enforcement agencies in the US and Europe have shut down 132 domain names in order to stop the selling of counterfeit merchandise online.
According to the US Immigration and Customs Enforcement agency, the now-annual Cyber Monday crackdown included domain names in the .eu, .be, .dk, .fr, .ro and .uk ccTLDs.
Law enforcement from those countries were involved, via Europol, in their respective local seizures, while ICE nabbed 101 domains in generic TLDs whose registries are based in the US.
One person was also arrested, and ICE plans to seize $175,000 in ill-gotten gains sent to a PayPal account connected with the sites.
It’s the third year in a row that ICE has led an operation of this kind before “Cyber Monday”, which in recent years has become the most popular day of the year for e-commerce deals.
The operation started when ICE and Europol “received leads from various trademark holders regarding the infringing websites”, ICE said in a press release.

2 Comments Tagged: counterfeiting, ice, seizures

Melbourne IT may sell off businesses as ICANN delays hit bottom line

Melbourne IT is looking into selling some of its business units after warning the Australian markets today that 2012 profit is likely to come in below 2011 levels.
The brand protection registrar, listed on the Australian Stock Exchange, partly blamed delays to ICANN’s new gTLD program for an expected 10% dip in earnings before interest and tax.
The company said it is “in the process of pursuing possible ownership alternatives for its current portfolio of businesses”, and that overseas buyers have already been identified.
While Melbourne did not specify which units face the chop, my hunch is that it’s not talking about its domain name business.
Digital Brand Management services, which includes its registrar, is performing “strongly” despite the delays, the company said.
However, its small business, enterprise and legal content management businesses are suffering from competition and spending freezes among government clients, the company said.
Even the registrar business is facing challenges. In the first half of 2012, its total domains under management dropped 8%. The brand management side of that business is now bigger.

Comment Tagged: ICANN, melbourne it, new gTLDs