ICA baffled by plan to outlaw domaining in India

The Internet Commerce Association isn’t happy about a plan to ban domain investing in India’s .in domain, saying it will “destroy a valuable and thriving secondary market”.

NIXI, the government-overseen ccTLD registry, already has a policy in its Registrar Accreditation Agreement that bans registrars from “squatting, grabbing, hoarding, infringement, auctioning, drop catch or selling of the .IN domain names at a exceptionally higher price than the published MRP”.

The registry says that registrars are using registrants as proxies to get around this rule, and is now proposing to extend the ban from registrars to registrants as well.

It’s the latest in a series of strange, Draconian policy pronouncements from NIXI, which increasingly gives the impression of being ruled by fiat. Last year, it banned people from buying more than two domains at once.

The ICA, which represents the interests of domainers, has responded to the policy proposal with 10 arguments against it, largely designed to shame NIXI for acting against the Indian government’s pro-market stance, suggesting the change may well be illegal, and pointing out it is probably shooting itself in both feet at once, financially speaking.

On that last point, ICA general counsel Zak Muscovitch wrote:

NIXI will potentially face a dramatic loss of revenue as a result of its purported policy change as affected registrants will be compelled to drop their domain names and thereby not remit any renewal fees or fees for new registrations. In effect, NIXI will be going backwards in time by greatly reducing the number of registrations and its associated revenue thereby possibly having to rely upon new government funding for its operations

The number of affected registrations could potentially be in the hundreds of thousands or millions. You would be well advised to conduct a study to determine the volume of affected registrations prior to making such a monumental decision. After changing the policy, you will likely no longer be “one of the Fastest Growing Domain in the Asia Pacific”, but rather the opposite.

While NIXI does not regularly publish its numbers, it is believed to have well over three million domains under management. It’s a big ccTLD, but relatively small compared to India’s population of 1.4 billion. The only other country with a comparable population, China, has about 20 million .cn domains.

Millions of domains to be deleted as Freenom loses its first TLD

Controversial free-domains registry Freenom has lost its deal with the government of Gabon after years of abuse. The government has retaken its ccTLD and will delete as many as seven million .ga domains.

That’s according to the French ccTLD registry, AFNIC (pdf), which says it has been helping migrate the TLD from Freenom to Gabonese government entity ANINF for the last year.

The technical handover will begin today and run until June 7, this coming Wednesday, according to ANINF.

AFNIC said the migration is happening due to “the failure of the company Freenom, which has managed the .ga TLD up until now, to provide the Internet community with a satisfactory service.”

ANINF said it wants to: “Put an end to abusive practices, through the will and support of the Gabonese State, which have had a negative impact on the image of the country and its influence on the Internet.”

Freenom’s business model is to allow people to register domains for free, then bring them in-house and monetize them when they expire or are suspended for abuse such as spam and phishing — something that happens rather a lot.

Security blogger Brian Krebs reported last week that abuse levels originating from ccTLD domains have plummeted since Freenom’s troubles began earlier this year.

ANINF reckons there are currently over seven million domains in .ga, and says most of those will be deleted.

That would make .ga the seventh-largest TLD overall and fourth-largest ccTLD after China, Germany and the UK. But Gabon has a population of just 2.3 million with a relatively low internet penetration of 62%.

Could it be the beginning of the end for Freenom?

Presumably most of the domains Gabon will delete are owned and currently monetized by Freenom, so it will be losing a large parking network when ANINF swings the ban hammer.

There’s also reason to believe .ga will not be the last ccTLD it loses. The tech contact in the IANA record for Mali’s .ml switched from Freenom’s Netherlands-based subsidiary to a Mali government agency back in March, suggesting a takeover is also imminent there.

Then of course there’s the lawsuit by Facebook owner Meta, filed earlier this year, which accuses Freenom of cybersquatting and seeks a ruinous amount in damages.

Freenom has not allowed anyone to register domains in any of its managed TLDs — .ml, .ga, .cf, .gq and .tk — since at least January 1 this year.

I asked Freenom to explain this a few weeks ago and the company declined to comment.

ANINF says the migration this week will cause disruptions, but says it’s been reaching out to registrars with legit registrations to minimize the turbulence for their customers.

IDNs — small and shrinking

It’s no secret that internationalized domain names haven’t exactly been flying off the shelves since they were first introduced over a decade ago, but the latest ICANN data shows registration volumes are shrinking.

According to its second annual IDN Progress Report (pdf), there were 1.52 million IDN names across all gTLDs (including Latin-script TLDs) at the end of 2022, which was down 2.94% from a year earlier.

ICANN pointed out that this is actually a slower decline than in previous years, where the average shrinkage from 2019 to 2021 was 11.36%.

Chinese-script names were perhaps unsurprisingly the most common, representing 50% of the total, with Latin coming second-place with 26%. Some Latin-script languages need representing as IDNs to accommodate diacritics like cedillas and umlauts.

Korean, Cyrillic and Japanese followed in popularity. The multitude of scripts used in India fall into the “other” category, with less than 1% of the total — fewer than Hebrew — despite the country’s vast population.

The relatively low number of registrations is spread across ASCII and IDN gTLDs. Ninety-one of the 1,172 total gTLDs are IDN gTLDs and 462 gTLDs support IDNs at the second-level, regardless of top-level script.

ICANN’s report does not cover ccTLDs, presumably because the zone files are not usually readily available, but we know from ccTLD registry that their own IDNs can be somewhat popular.

Russia reports 681,000 .РФ names today, while China recorded 190,000 .中国 names mid-2022.

ICANN has made IDNs and universal acceptance a cornerstone of its current strategic plan and there’s likely to be a push for IDN applications in the next new gTLD rounnd.

.com shrinks again, but prices to go up again

Verisign plans to increase .com prices again this year, as its latest quarterly results show its top line and margins swelling despite renewals and overall domains under management shrinking.

The company ended 2022 with 173.8 million .com and .net regs in the domain name base, only up 0.2% from the start of the year. Only a quarter ago, it had predicted growth of between 0.25% and 1%.

A year ago, it had predicted that metric to grow between 2.5% and 4.5%, but it reduced its outlook every quarter and eventually missed even its barrel-bottom estimate. The two TLDs shrank by about 400,000 names in Q4.

For 2023, the company expects domain growth of between no growth at all and 2.5%.

The poor performance in volume terms came about as result of post-pandemic effects and China volatility, CEO Jim Bidzos told analysts. He did not blame the last few years of price increases for the dip.

The preliminary renewal rate for Q4 was 73.2% compared to 74.8% in the same quarter of 2021, but new regs were down across the two TLDs also — 9.7 million compared to 10.6 million over the same periods.

But of course domains under management alone is a poor way to measure Verisign’s cash-printing machine.

The company reported 2022 net income of $674 million which was down from $785 million a year earlier when it had benefited from a one off tax-related boost of $165.5 million.

Annual revenue was up 7.3% at $1.42 billion, a touch ahead of the 7% .com price increase it imposed during the year. Operating margin for 2022 was 66.2%, up from 65.3%.

For the quarter, net income was $179 million compared to $330 million (with the aforementioned tax benefit) on revenue that was up 8.5% at $369 million. Margin was 66.5% compared to 65.3% for Q4 2021.

The company said .com prices will go up again in September 1, from $8.97 to $9.59 per year.

New gTLDs grow in China as .cn regs slide

China-based registrations of .cn domains decreased in the first half of last year, while new gTLD swelled to pick up the slack, according to the local registry’s semi-annual report.

CNNIC published the English translation of its first-half 2022 statistical report in December, showing a steep decline in .cn regs, from 20,410,139 at the end of 2021 to 17,861,269 at the end of June last year.

These appear to be registrations made by registrants based in China. Verisign’s Domain Name Industry Brief for Q2 2022 shows .cn at 20.6 million.

While .cn slumped, new gTLDs saw an uptick of almost a million names in China, from 3,615,751 domains to 4,590,705 over the six months. New gTLDs accounted for 13.6% of all China-registered domains, the CNNIC report says.

The report also shows that the number of Chinese-registered .com names dropped by about half a million, to 10,093,729 from 10,649,851, over the period.

The full report can be viewed here (pdf).

Domain universe shrinks again: .com and .cn down, .au up

The number of registered domain names in the world shrank again in the third quarter, with mixed results across various TLDs, according to Verisign’s latest Domain Name Industry Brief.

There were 349.9 million names across all TLDs at the end of September, down 1.6 million sequentially but up 11.5 million compared to Q3 2021, the DNIB states.

The industry has downsized in every quarter this year, judging by Verisign’s numbers.

The company’s own .com, suffering from post-Covid blues, macroeconomic factors and (possibly) pricing issues, dragged the overall number down in Q3 by 200,000 domains, ending with 160.9 million.

But China’s .cn was hit harder, ending the period down from 20.6 million to 18 million. As I pondered in September, this may be due to how Verisign sources data.

Australia’s .au benefited from the launch of second-level availability, which boosted its number by 400,000 domains, ending with 4 million and overtaking .fr and .eu to become the seventh-largest ccTLD.

The ccTLD world overall shrunk sequentially by 1.7 million names but grew by 5.7 million on the year to end the quarter with 132.4 million.

New gTLDs ended with 27.3 million names, up 300,000 sequentially and 3.8 million year over year.

Millions of .cn domains disappear

China is reported another huge dip in domain registrations in the first half of the year, with millions of .cn names dropping.

CNNIC, the local registry, said yesterday that there were 17.86 million .cn names registered at the end of June, down from the 20.4 million it reported at the end of 2021 but above the 15.09 million it reported ago.

Such extreme fluctuations in Chinese registrations can often be explained by the country’s highly restrictive policies, which require registry and registrar licenses and registrant identification.

It remains to be seen how the numbers will effect the overall market trends Verisign reports with its quarterly Domain Name Industry Brief, where the .cn figures often do not tally with CNNIC’s published statistics.

Verisign to crack down on Chinese domains

Verisign has asked for permission to implement a more stringent regime for denying or suspending .com and .net domain names registered in China, to comply with the country’s strict licensing rules.

The changes appear to mean that customers of Chinese registrars who have not verified their identities, which Verisign says is a “very small percentage”, will be prevented from registering new domains and may lose their existing domains.

The company has filed a Registry Services Evaluation Process request with ICANN, proposing to tweak the registrant verification system it has had in place for the last five years in a few significant ways.

China has a system called Real Name Verification, whereby Chinese citizens have to provide government-issued ID when they register domains. Local, third-party Verification Service Providers such as ZDNS typically carry out the verification function for Verisign and other foreign registries.

The big change is that Verisign will no longer allow names to be registered without a valid code.

The RSEP says that attempts by China-based registrars to register domains without the required government verification code will result in the EPP create command failing, meaning the domain will not be registered.

Under the current system, outlined in a 2016 RSEP (pdf), the name is registered and Verisign presumably takes the money, but the domain is placed on serverHold status, meaning it is not published in the zone and will not resolve.

The new system will also allow Verisign to retroactively demand codes for already-registered names, when they come up for renewal or transfer, with the option to suspend or delete the names if the codes are not provided. The RSEP (pdf) states:

With regard existing domain names without the required verification codes, which currently comprise a very small percentage of domain name registrations from registrars licensed to operate in the People’s Republic of China, Verisign intends to address compliance issues with these domain names directly with registrars. Verisign reserves the right to deny, cancel, redirect or transfer any domain name registration or transaction, or place any domain name(s) on registry lock, hold or similar status

It’s not clear what a “very small percentage” means in hard numbers. A small slice of a big pie is still a mouthful.

Verisign has substantial exposure to the Chinese market. On the odd occasion when .com shrinks, it’s largely due to speculative registrations from China not being renewed, such as in the second quarter this year.

The RSEP names the service the Domain Name Registration Validation Per Applicable Law service. While it’s in theory applicable to any jurisdiction’s laws, in practice it’s all about addressing the demands of the Chinese government.

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.

Controversial Chinese firm among two newly revealed UNR gTLD buyers

Two more former UNR top-level domains have formally changed hands following the company’s fire sale over a year ago.

The ICANN contracts governing .llp and .help have been reassigned, the former to Intercap Registry and the latter to a new-to-the-industry Seychelles-based company called Innovation service Ltd, ICANN records show.

Intercap is a relatively known quantity, already running the .inc, .dealer and .box gTLDs.

Innovation is an entirely different kettle of fish.

The company appears to be led by a Hong Kong entrepreneur named Heng Lu, best known for making millions obtaining IPv4 addresses from Afrinic, the African Regional Internet Registry, and leasing them to clients in China for a huge profit.

Heng Lu is also the founder of Cloud Innovation Ltd, another Seychelles shell. It is currently embroiled in a string of lawsuits with Afrinic, which last year tried to revoke Cloud’s membership and therefore its IPv4 space.

The case(s) of Cloud versus Afrinic are pretty convoluted and a bit off-beat for this blog, but at one point last year it led to Afrinic’s bank accounts being frozen by the Mauritius Supreme Court, putting IP address management across the whole continent at risk.

ICANN would certainly have been aware of this already when it approved the transfer of the .help gTLD to what appears to be a related company. After the Mauritius injunction, Afrinic pleaded with ICANN for financial help, which ICANN provided.

The two transfers mean we now know the identities of the buyers of 17 of the 23 gTLD contracts UNR put up for sale in April 2021. ICANN took a long time to approve the reassignments due to worries about IP rights.