VeriSign scores big win in .com pricing lawsuit

VeriSign has successfully had an antitrust lawsuit, which claims the company has been raising .com domain name prices anti-competitively, dismissed by a California court.
While it’s encouraging news if you’re a VeriSign shareholder, the Coalition for ICANN Transparency, which filed the suit, will be allowed to amend and re-file its complaint.
The basis for the dismissal (pdf) goes to the central irony of CFIT – the fact that, despite its noble name, it’s not itself a particularly transparent organization.
CFIT was set up in 2005 in order to sue ICANN and VeriSign over their deal that gave VeriSign the right to raise the price of .com and .net domains, and to keep its registry contracts on favorable terms.
While it was cagey about who was backing the organization, those of us who attended the ICANN meeting in Vancouver that year knew from the off it was primarily a front for Momentous.ca, owner of Pool.com and other domainer services.
In dismissing the case last Friday, Judge Ronald Whyte decided that CFIT’s membership is vague enough to raise a question over its standing to sue on antitrust grounds. He wrote:

By failing to identify its purported members, CFIT has made it impossible to determine whether the members are participants in the alleged relevant markets, or whether they have suffered antitrust injury. Because the [Third Amended Complaint] identifies no members of CFIT, it must be dismissed.

While CFIT had disclosed some time ago Pool.com’s involvement, it recently tried to add uber-domainer Frank Schilling’s Name Administration Inc and iRegistry Corp to the list of its financial supporters.
But Whyte was not convinced that the two companies were CFIT “members” with standing to sue.
Whyte decided that CFIT’s complaint, “fatally fails to allege facts showing that iRegistry or Name Administration were financial supporters or members at the time the complaint was filed”.
He also denied CFIT’s demand for a jury trial.
CFIT wants VeriSign to return all the excess profits it has made on .com registrations since it started raising its prices above $6.
If CFIT were to win, it would severely curtail VeriSign’s ability to grow its registry business, and could lead to billions being wiped off its accounts.
The organization has been given leave to file a fourth amended complaint, so it’s not over yet.

3 Comments Tagged: .com, antitrust, cfit, ICANN, iregistry, name administration, pricing, verisign

ICANN terminates another registrar

Another tiny domain name registrar has been given its marching orders by ICANN.
Best Bulk Register, which looks to have only a few hundred domains under management, will be shut down March 4, according to a letter (pdf) from ICANN’s compliance department.
The company had failed to pay over $10,000 in fees, and was not providing Whois services as required by the Registrar Accreditation Agreement, according to ICANN.
The registrar’s web site does not currently appear to resolve.
Best Bulk has until tomorrow to pick a registrar to take over its domains, or ICANN will pick one for it.

2 Comments Tagged: best bulk register, compliance, ICANN

Dot Africa needs a registry

DotConnectAfrica, one of the organizations planning to apply to ICANN to run .africa as a new top-level domain, has put out its feelers for a technical back-end partner.
In a press release, DCA today solicited expressions of interest from registry services providers. “Presence and/or experience in developing markets” is said to be “preferred but not a must”.
I expect there will be quite a few EOIs winging their way to the company in the next few days.
The whole of Africa only has about 110 million internet users currently. But with only 11% penetration, there’s pretty good growth potential. And chances are there’s not a great deal of ccTLD lock-in yet.
The nearest equivalent existing TLD is .asia, which has about 185,000 active registrations.
That’s less than half as many as .asia had post-landrush, but still represents a nice chunk of change for a back-end provider that does not have to pony up the cash for marketing.
DCA is one of two organizations known to be pursuing a .africa bid, and easily the highest-profile of the two. The other is called Dot Africa.
As a geographical name protected by ICANN’s new TLDs Applicant Guidebook, .africa will only be awarded to an applicant with proven governmental support.
That likely means that it will be the African Union, not ICANN, that ultimately decides the winner. In this slide deck, DCA says it has support from the AU and from 20% of African governments.

2 Comments Tagged: africa, african union, dot africa, dot africa connect, ICANN, new TLDs

Why ICANN dropped registrar ownership rules

ICANN has quietly published a list of 10 reasons explaining why it decided to start allowing domain name registrars and registries to buy each other.
Last November, ICANN’s board of directors voted to drop so-called “vertical integration” rules that previously prevented registries owning more than a small percentage of registrars.
Now, under the forthcoming new top-level domains program, the likes of eNom and Go Daddy will be able to apply to become gTLD registries, and registries like VeriSign and Neustar will be able to apply to run their own registrar businesses.
The decision was unexpected, appeared to be a U-turn, and ICANN’s explanation was not articulated sufficiently to sate critics such as the US Department of Commerce.
So now ICANN has published a “Draft Rationale” (pdf), a 17-page document that outlines some of the thinking that went into the decision.
In a nutshell, ICANN dropped the VI rules to increase competition, to avoid antitrust lawsuits, and because the harms that could arise due to cross-ownership are best addressed by other means.
Here are the rationale’s 10 major bullet points in full:

• None of the proposals submitted by the GNSO reflect a consensus opinion; as a result, the Board supported a model based on its own factual investigation, expert analysis, and concerns expressed by stakeholders and the community.
• ICANN’s position and mission must be focused on creating more competition as opposed to having rules that restrict competition and innovation.
• Rules permitting cross-ownership foster greater diversity in business models and enhance opportunities offered by new TLDs.
• Rules prohibiting cross-ownership require more enforcement and can easily be circumvented.
• Rules permitting cross-ownership enhance efficiencies and almost certainly will result in benefits to consumers in the form of lower prices and enhanced services.
• Preventing cross-ownership would create more exposure to ICANN of lawsuits, including antitrust lawsuits, which are costly to defend even if ICANN believes (as it does) that it has no proper exposure in such litigation.
• The new Code of Conduct, which is to be part of the base agreement for all new gTLDs, includes adequate protections designed to address behavior the Board wants to discourage, including abuses of data and market power. Data protection is best accomplished by data protection tools, including audits, contractual penalties such as contract termination, punitive damages, and costs of enforcement, as well as strong enforcement of rules. By contrast, market construction rules can be circumvented and cause other harms.
• Case-by-case re-negotiation of existing contracts to reflect the new crossownership rules will permit ICANN to address the risk of abuse of market power contractually.
• In the event ICANN has competition concerns, ICANN will have the ability to refer those concerns to relevant antitrust authorities.
• ICANN can amend contracts to address harms that may arise as a direct or indirect result of the new cross-ownership rules.

The document still needs to be approved by the ICANN board of directors before it can be considered official.
It appeared without fanfare on the ICANN web site a little over a week ago.

Comment Tagged: department of commerce, ICANN, new TLDs, ntia, vertical integration

Afilias lawyers up for TLD applicants

Registry services provider Afilias has expanded its relationship with the law firm Crowell & Moring to support prospective new top-level domain applicants.
The two companies said this morning that they have entered into a memorandum of understanding under which Crowell will provide legal and business consultation to Afilias’s new TLD clients.
Afilias, along with VeriSign and Neustar, is expected to one of the major beneficiaries of the introduction of new TLDs, due to its experience managing the technical back-end for several existing TLDs.
Here at the .nxt conference in San Francisco this week, one oft-repeated message is that applicants can smooth their TLD application with ICANN by signing up an incumbent to provide the back-end.
Crowell is one of a small number of law firms with a specialist domain name consulting arm. It is affiliated with the IP Clearinghouse, which wants to play a key role in new TLD launches.

1 Comment Tagged: .nxt, afilias, crowell & moring, ICANN, new TLDs

Neustar wins .gay contract

Neustrar has signed a deal to provide back-end registry services to DotGay LLC, one of the companies hoping to apply for .gay as a new top-level domain.
There are currently two companies planning to apply for .gay that I’m aware of. The other, the Dot Gay Alliance, has chosen Minds + Machines as its back-end partner.
The positioning is quite interesting. Scott Seitz, CEO of DotGay, played up the need for more security and stability in a TLD that may find itself the target of homophobic cyber-attacks.
In a press release due out tomorrow, Seitz says:

While security is always a concern for any gTLD, the GLBT community is at a higher risk of discrimination, making system integrity a critical component in the selection of a registry partner.

Neustar, which runs .biz and several other TLDs, has more experience running high-traffic registries than M+M. However, this fact will likely not be relevant to which company wins .gay.
Under the ICANN new TLDs program, applicants have to prove themselves capable of running a registry, but contested TLD applicants are not compared against each other based on technical prowess.
It’s much more likely that the two (or more) .gay applications will live or die based on community support or, failing that, how much money they are prepared to pay at auction.
The .gay TLD is likely to also be a flashpoint for controversy due to ongoing debates about governments’ ability to block TLDs based on “morality and public order” objections.
Recent mainstream media coverage has focused on .gay as a likely test case for governmental veto powers.

6 Comments Tagged: dotgay, dotgay alliance, ICANN, Minds + Machines, neustar, new TLDs

New TLD rulebook unlikely to get March nod

ICANN’s new top-level domains Applicant Guidebook is unlikely to get its final approval at ICANN’s March meeting, according to the senior staffer responsible for the program.
Senior vice president of stakeholder relations Kurt Pritz, who gave the keynote at today’s .nxt conference, later told me the Guidebook “probably won’t be approved in San Francisco”.
But impatient new TLD applicants may not have to wait too long afterward for the Guidebook to get the nod and the program to launch.
Pritz said that the Guidebook, currently in a “Proposed Final” version, will likely be revised following ICANN’s upcoming talks with its Governmental Advisory Committee.
But whatever emerges from the GAC consultation will not necessarily be opened for public comment, which would add a month or two of delay to the process. That will be for the board to decide.
Pritz indicated that the community needs to understand that one day ICANN will produce a version of the Guidebook that will be for voting, not commenting.
That’s likely to come sooner rather than later.
It seems to me to be quite likely that a version of the Guidebook emerging in the weeks following San Francisco will be submitted straight to the ICANN board of directors for approval.
During his keynote, which he gave following ICANN CEO Rod Beckstrom’s unexpected eleventh-hour cancellation, Pritz said he wanted “to reset expectations and what I think our job is going forward”.
“Public discussion needs to turn to: should we launch the new gTLD process or should we not?” he said during his remarks.
The keynote was upbeat, talking about the Guidebook being a “road map”, not a series of “road blocks”.
Referring to the recently relaunched .me and .co country-code TLDs, which have been successfully marketed as generic TLDs, Pritz said:

To a certain extent new TLDs are already off and running. There’s a first mover advantage there, so the rest of us need to catch up.

2 Comments Tagged: .nxt, applicant guidebook, gac, governmental advisory committee, ICANN, new TLDs, san francisco

ICANN chief cancels .nxt keynote

With the first-ever .nxt conference on new top-level domains just hours away from opening its doors, it looks like star speaker Rod Beckstrom has canceled his appearance.
ICANN’s president and CEO, who was featured prominently on the web site of the San Francisco conference as recently as Sunday, no longer appears on the agenda.
His keynote slot, scheduled for 10am local tomorrow, has been filled by Kurt Pritz, ICANN’s senior vice president of stakeholder relations and point man for the new TLD program.
While Pritz perhaps lacks the name recognition and stage presence of Beckstrom, it could be argued that his more granular insight into the program may actually make him a better-value speaker.
Juan Diego Calle, CEO of .CO Internet, is still scheduled for the second keynote, on Wednesday. Here’s hoping he can provide an update on .co’s post-Super Bowl performance.
UPDATE: Conference organizer Kieren McCarthy has confirmed that Beckstrom was unable to make it to San Francisco in time for the keynote, but said he may still attend later.

7 Comments Tagged: .nxt, ICANN, kurt pritz, new TLDs, rod beckstrom

99 super-short .uk domains registered

Nominet, the .uk registry, has allocated 99 one and two-letter .uk domain names to trademark holders including the Financial Times and Manchester United.
Most of the companies successfully applying for short .co.uk, .org.uk and .net.uk domains under Nominet’s recently closed sunrise period are household names.
Most also chose to acquire both .org.uk and .co.uk variants of their trademark. Only ten of the single-letter and two of the single-number options were claimed. Yahoo managed to get y.co.uk.
Overstock.com, which is currently branding itself as o.co, did not receive o.co.uk, despite having a trademark on the term, possibly for the reasons I outlined here.
One of the big winners appears to be a domainer. Scott Jones acquired 3.org.uk, s.co.uk, s.org.uk, pc.co.uk and pc.org.uk.
Nominet said: “A small number of contested domains will be involved in an auction phase to determine the successful registrant.”
The first sunrise was for owners of UK registered trademarks. The next round, set to kick off February 14, is for owners of “unregistered” rights.
The full list of domains registered can be downloaded here.

5 Comments Tagged: .uk, nominet, sunrise

UDRP reform effort begins

ICANN has kicked off a review of its Uniform Dispute Resolution Policy, the occasionally controversial process used to adjudicate cybersquatting complaints.
The GNSO Council on Thursday voted to ask ICANN staff for a so-called “Issues Report” on UDRP, indicating that reform of the process is likely.
This is the relevant portion of the resolution, passed unanimously:

RESOLVED #2, the GNSO Council requests an Issues Report on the current state of the UDRP. This effort should consider:
* How the UDRP has addressed the problem of cybersquatting to date, and any insufficiencies/inequalities associated with the process.
* Whether the definition of cybersquatting inherent within the existing UDRP language needs to be reviewed or updated. The Issue Report should include suggestions for how a possible PDP on this issue might be managed.

Issues Reports commissioned by the Council are expected within 15 days, and 15 days after that the Council is expected to vote on whether to kick off a Policy Development Process.
A PDP could lead to changes to the UDRP that would be binding on all ICANN-accredited registrars and their customers.
While the UDRP has proven very effective at dealing with clear-cut cases of cybersquatting over the last 12 years, critics claim that it is often interpreted too broadly in favor of trademark interests.
If you read this blog regularly, you’ll know I frequently report on unfathomable UDRP decisions, but these are generally the exception rather than the rule.
Unrelated to UDRP, the GNSO Council has also voted against asking ICANN for an Issues Report on registry/registrar best practices for mitigating domain abuse.
Business interests wanted registrars to take more measures (voluntarily) to curb activities such as phishing, but registrars think this kind of rule-making is beyond the scope of the GNSO.
After a lot of heated debate and arcane procedural wrangling, the Council decided instead to ask for a “discussion paper”, a term that has no meaning under ICANN’s rules, meaning a PDP is less likely.

3 Comments Tagged: cybersquatting, gnso council, ICANN, phishing, udrp