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

ICANN may have got lucky with a URS vendor

ICANN may have found a vendor willing to provide Uniform Rapid Suspension services for new gTLDs at $500 or less per case, without having to rewrite the policy to do so.
Last month, Olof Nordling, director of services relations at ICANN, gave the GNSO Council a heads-up that the URS policy may have to be tweaked if ICANN were to hit its fee targets.
But last week, following the receipt of several responses to a URS vendor Request For Information, Nordling seems to have retracted the request.
In a message to Council chair Jonathan Robinson, he wrote:

The deadline for responses to the URS RFI has passed and I’m happy to inform you that we have received several responses which we are now evaluating. Moreover, my first impression is that the situation looks quite promising, both in terms of adherence to the URS text and regarding the target fee. This also means that there is less of an urgency than I previously thought to convene a drafting team (and I’m glad to have been proven wrong in that regard!). There may still be details where such a drafting team can provide useful guidance and I will get back to you with further updates on this and other URS matters as we advance with the evaluations.

The target fee for URS has always been $300 to $500 per case, between a fifth and a third of the fee UDRP providers charge.
Following an initial, private consultation with UDRP providers WIPO and the the National Arbitration Forum, ICANN concluded that that it would miss that target unless the URS was simplified.
But some GNSO members called for a formal, open RFP, in order to figure out just how good a price vendors were willing to offer when they were faced with actual competition.
It seems to have worked.
During a session on URS at the Toronto meeting last month, incumbents WIPO and NAF were joined by a new would-be arbitration forum going by the name of Intersponsive.
Represented by IP lawyers Paul McGrady and Brad Bertoglio, the new company claimed it would be able to hit the price target due to software and process efficiencies.
NAF also said it would be able to hit targets for most URS cases, but pointed out that the poorly-described policy would create complex edge cases that would be more expensive to handle.
WIPO, for its part, said a cheaper URS would only be possible if registrants automatically lost the cases if they failed to respond to complaints.
This angered big domainers represented by the Internet Commerce Association and free speech advocates in the GNSO, who feared a simpler URS meant fewer registrant rights.
It’s not yet known which vendors are in with a shot of winning the URS contract, but if ICANN has found a reasonably priced provider, that would be pretty good news for registrants and IP owners.

8 Comments Tagged: ICANN, intersponsive, naf, new gTLDs, uniform rapid suspension, urs, wipo

Australia leads the charge as governments file 242 new gTLD warnings

Governments of the world have filed 242 warnings on new gTLD applications, more than half of which came from Australia.
Warnings were filed against 145 strings in total, and in most cases governments issued the same warnings against all competing applications in a given contention set.
Australia was responsible for 129 warnings, accounting for most of the 49 warnings received by Donuts.
There are some surprises in there.
Notably, there were no warnings on any of the strings related to sex, sexuality or porn.
Given the amount of effort the GAC put into advising against .xxx, this is a big shock. Either governments have relaxed their attitudes, or none were willing to single themselves out as the anti-porn country.
No government warned on .gay.
The largest single recipient of warnings, with 49, was Donuts, the largest portfolio applicant.
The most-warned application, with 17 warnings, was DotConnectAfrica’s .africa. The company is contesting the gTLD without government support, and African nations objected accordingly.
Nigeria also warned Delta Airlines about its proposed .delta dot-brand,
The string “delta” is a protected ISO 3166 sub-national place name, as Delta is likely to discover when the Geographic Names Panel delivers the results of its evaluation.
Australia objected to .capital on the same grounds.
Top Level Domain Holdings was hit with warnings from Italy and South Africa based on a lack of government support for its geographic applications .roma and .zulu.
Remarkably, Samoa warned the three applications for .website on the grounds that they would be “confusingly similar” to its own ccTLD, .ws, which is marketed as an abbreviation for “website”.
The US warned on all 31 of Radix Registry’s applications, saying that the Directi company inappropriately included an email from the FBI in its bids, suggested an endorsement when none exists.
Australia, among its 129 warnings, appears to have won itself a lot of friends in the intellectual property community.
It’s objected to .fail, .sucks, .gripe and .wtf on the grounds that they have “overly negative connotations” and a lack of “sufficient mechanisms to address the potential for a high level of defensive registrations.”
It also issued warnings to applicants planning gTLDs covering “regulated sectors”, including .accountant, .architect and .attorney, without sufficient safeguards to protect consumers.
Generic strings with single-registrant business models — such as Google’s .app and .blog bids — are also targeted by Australia on competition grounds.
Australia more than any other governments appears to be trying to use its warnings as a way to enter into talks with applicants, with a view to remedial action.
Whether this will be permitted — applicants are essentially banned from making big changes to their applications — is another matter entirely.
The full list of warnings can be found here.

2 Comments Tagged: early warnings, gac, ICANN