Domain industry shrank in Q4, but as usual there’s a big BUT

The worldwide domain name count shrank in the fourth quarter, according to newly released Verisign data, but as usual the numbers were hugely impacted by big swings in just a few TLDs.

The latest Domain Name Industry Brief (pdf), which is mainly compiled from zone file counts, shows that 2020 ended with 366.3 million names, down by 4.4 million or 1.2% compared to the end of the third quarter.

It’s the free and almost-free TLDs that swung the math.

Remarkably, industry wild-card .tk actually shrank during the quarter. This is highly unusual, as the registry’s business model is based on giving out names for free, never deleting domains, and monetizing the traffic to expired or suspended names.

It saw domains down by 2.8 million names over the quarter, from 27.5 million to 24.7 million.

Another big dipper was .icu, which sells cheap (usually under $1) and appeals to speculators largely in China.

While it slipped out of the top 10 TLDs, meaning the DNIB no longer breaks out its numbers, DI’s own zone file counts show its zone decline from 5.3 million to 3.4 million during Q4, a 1.9 million decline.

Notably spammy new gTLD .top, which also costs next to nothing and is popular in China, also had a role to play. Its zone count was down by about 900,000 between September 30 and December 31.

Those three TLDs alone account for a loss of 5.6 million names, far more than the 4.4 million industry-wide quarterly drop calculated by Verisign.

The impact of .icu’s continued spiral downwards is likely to be felt in Q1 2021 also. It’s lost another 2.4 million zone file names since the start of the year.

Verisign said the the universe of ccTLD domains contracted by 1.7 million of 1% during the quarter, ending the year with 158.9 million names.

The .tk shrinkage of course more than accounts for this dip. Without it, ccTLDs would be up by 1.1 million names or 1.1%. The major, top-10 ccTLDs mostly showed six-figure growth, the DNIB reflects.

New gTLDs were down 4.2 million names or 13.8% sequentially, ending the quarter with 26 million.

In addition to the aforementioned .top and .icu, this figure appears to have been affected by six-figure losses in some of the highest-volume, lowest-priced new gTLDs, including .club, .site .work and .vip.

In the main legacy gTLDs, Verisign’s own .com grew by 1.5 million names, from 151.8 million to 150.3 million, during the quarter. Its .net was again flat at 13.4 million. Public Interest Registry’s .org gained a (rounded) 100,000 names, ending the year at 10.3 million.

The annual numbers across the industry for 2020 have better optics. The DNIB shows that domain volume was up by 4.0 million or 1.1% year over year.

That breaks down into a 6.3 million increase in .com, a 1.3 million increase across the ccTLDs, and a 3.3 million decrease in new gTLDs, not all of which can be explained away by factoring out .icu and .top.

ShortDot adds fourth gTLD to its stable, plans March launch

Another unused new gTLD has changed hands, ending up at ShortDot, the registry best-known for high-volume .icu.

ShortDot confirmed to DI today that it has acquired .cfd from its former owner, DotCFD.

The original plan for .cfd, one of the Boston Ivy collection of investment-related new gTLD applications, was for it to represent CFDs, or “contracts for difference”, a risky type of financial instrument that has proved sufficiently controversial that they’re not even legal in the US.

Since 2012, when the string was first applied for, CFDs have come in for serious criticism from market regulators and others due to the risk of significant losses they present to retail investors.

No .cfd domains have ever been sold, and it doesn’t appear to have ever properly launched, even though it’s been in the DNS root for five years.

But ShortDot COO Kevin Kopas tells me the plan is to repurpose the domain for an entirely different market.

“When we were contemplating the purchase and subsequent marketing angle we found that the traditional meaning of a CFD in the finance world doesn’t have the most positive connotation to it,” he said.

“We’re branding .cfd for the Clothing & Fashion Design industry and will be marketing it to entrepreneurs, bloggers, vloggers and others that are on the cutting edge of the fashion industry,” he said.

If that sounds like a stretch, you’re probably right — as far as I can tell, the fashion industry has never used that acronym and creating demand there will be a tall order. We’re in “professional web” territory here.

But Kopas said that ShortDot is already working with some influencers in the space “to create some pioneer cases that will go live at launch”. It’s also planning to attend fashion industry events after pandemic travel restrictions are over.

The company is planning to launch the domain with a first-come, first-served sunrise period beginning March 10 and ending April 12. General availability is slated for April 13 with a seven day early access period.

It’s the fourth unwanted gTLD ShortDot has acquired, repurposed and relaunched.

Its biggest success to date is .icu, a low-cost domain that proved popular almost exclusively in China and currently has 2.5 million domains in its zone file (down from a peak of 6.3 million less than a year ago).

ShortDot has shifted, then lost, so many .icu domains over the last two years that you’ve really got to factor out its influence if you want to get any sensible picture of what the new gTLD industry’s growth looks like.

It also runs .bond (2,500 names in its zone today) and .cyou (with 65,000).

CSC becomes first foreign registrar to get the China nod

It’s probably not the best time, politically, to be bragging about doing business in China, but CSC has nevertheless just announced that it’s been given the nod to act as a registrar in China.

The company claims to be the first non-Chinese registrar to be given an official government license to operate in the country, though many registries have obtained one over the last few years since harsh new regulations came into power.

Under the Chinese rules, web site owners need a license to operate, and they can only register domains from approved registrars in approved TLDs.

It’s basically a great big censorship tool, but it doesn’t seem to have stopped every Chinese citizen from registering domains via foreign-owed registrars.

CSC has a corporate client base, so it’s got more incentive than most to follow the rules to the letter.

“CSC’s success in becoming licensed as a foreign-owned registrar positions the company as a go-to resource for global organizations doing business in China,” the company said in a press release.

No ICANN tax relief for Chinese registrars

ICANN has declined a request from dozens Chinese registrars for a fee waiver due to the impact of coronavirus.

In February, almost 50 China-based accredited registries and registrars said they were suffering financially as a result of the outbreak and asked ICANN for an “immediate fee waiver” to “greatly help stabilize our business in the difficult time”.

ICANN has denied this request. In a letter (pdf), senior director of gTLD accounts and services Russ Weinstein wrote:

While we sympathize with the potential financial impact this unprecedented event may have on contracted parties, we are not prepared to provide a waiver at this time. We are closely monitoring the situation and its impact on the domain industry. We are interested in hearing more from representatives from the contracted parties to better understand the problems both the contracted parties and the registrants are facing and ideas for potential solutions.

As I said back in February, what was then largely a Chinese problem looked likely to quickly become a global problem, which unfortunately seems to be the course we’re on. Just six weeks later, China isn’t even the worst-affected country any more.

Even without fee waivers, ICANN has noted that it expects a “significant” impact on it is 2020-21 budget due to the pandemic.

Ethos clarifies .org price rises, promises to reveal number of censored domains

Public Interest Registry and would-be owner Ethos Capital have slightly revised the set of promises they hope to keep if ICANN approves the $1.13 billion acquisition.

Notably, in updating their proposed Public Interest Commitments (pdf), they’ve set out in plain dollar terms for the first time the maximum annual price PIR would charge for a .org domain over the coming seven years.

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Previous versions of the PICs just included a formula and invited the reader to do the math(s).

The two companies are proposing to scrap price caps altogether after June 2027.

If ICANN rejects the deal, under its current contract PIR would be free to raise its prices willy-nilly from day one, though some believe it would be less likely to do so under its current ownership by the non-profit Internet Society.

The new PICs also include a nod to those who believe that PIR would become less sensitive to issues like free speech and censorship — perhaps because China may lean on Ethos’ shadowy billionaire backers. The document now states:

Registry Operator will produce and publish annually a report… This report will also include a transparency report setting forth the number of .ORG domain name registrations that have been suspended or terminated by Registry Operator during the preceding year under Registry Operator’s Anti-Abuse Policy or pursuant to court order.

A few other tweaks clarify the launch date and composition of its proposed Stewardship Council, a body made up of expert outsiders that would offer policy guidance and have a veto on issues such as changes to .org censorship and privacy policy.

The PICs now ban family members of people working for PIR from sitting on the council, and clarify that it would have to be up and running six months after the acquisition closes.

Because .org is not a gTLD applied for in 2012, the PICs do not appear to be open for public comment, but post-acquisition changes to the document would be.

ICANN currently plans to approve or deny the acquisition request by April 20, just 11 days from now.

Delay .org deal because of… coronavirus? Gimme a break

Opponents of Public Interest Registry’s proposed acquisition by Ethos Capital are now claiming that ICANN should delay approval of the deal due to coronavirus.
A statement, released yesterday by digital rights group Access Now with the apparent approval of several other like-minded groups, outlines a few reasons why coronavirus means ICANN should reject, or at least delay its consideration of, the deal.
ICANN is currently working towards a March 20 deadline to deliver its verdict.
Peter Micek, general counsel for Access Now, said in the statement:

Far from routine, this transfer would further imperil crucial channels of trusted information in a precarious time. From Médecins Sans Frontières to Wikipedia to many of the world’s hospitals, organizations that disseminate accurate health information and connect affected communities with public resources depend on the .ORG domain. Now is not the time to shift the ground beneath their online activities.

Could a $0.97 increase in the cost of wikipedia.org this year see Wikipedia’s hive mind crumble and turn into the digital equivalent of Jenny McCarthy’s brain? Will it prompt MSF volunteers to retreat, screaming, from the front lines? I don’t think so.
The statement goes on to suggest that China would be able to use its substantial financial and political clout to lean on Ethos’ secretive backers to something something something coronavirus. Kenneth Roth, executive director of Human Rights Watch said:

The Chinese government routinely uses economic pressure to censor critics or inconvenient information, such as about its disastrous early cover-up of the coronavirus outbreak. Investors in the private equity firm that wants to buy the .ORG domain inevitably will have economic interests that Beijing could threaten.

While there may well be a nugget of truth in there, I fail to see how it applies to the current pandemic. Is the argument that China will pressure Ethos’ billionaire money men to close down domains belonging to organizations disseminating accurate Covid-19 information? It seems a stretch.
China already has substantial powers to shut down domains within its own borders, and requires registries operating in the country to comply with Draconian censorship rules. I’m not aware of any cases of these existing powers being exercised against domains globally.
A third argument is that ICANN is using coronavirus as a convenient smokescreen to quietly approve the acquisition while everyone else is busy ram-raiding corner stores for toilet paper.
Daniel Eriksson, head of technology at Transparency International, said in the statement:

If this transfer goes ahead during the current crisis as planned, we’ll look back on it as an example of vested interests taking advantage of the extraordinary situation created by the COVID-19 pandemic to further their own concerns at the expense of the broader good of society. We need to be vigilant against any such actions, and this is precisely the role of many civil society organizations that have a watchdog function. We need maximum transparency and integrity around the sale of .ORG, and that is simply not possible if the sale is rushed through at a moment when peoples’ attention is elsewhere.

Again, this seems like a stretch. The announcement of the acquisition predates the discovery of Covid-19 by weeks, and it has been subject to intense scrutiny, engagement, comment and unprecedented — albeit imperfect — levels of transparency ever since. This is an acquisition being negotiated to a large extent in the public square.
I’ll be generous and suggest a fourth explanation: this is probably just a poor-taste (but, let’s face it, successful) attempt to grab headlines by linking the #SaveDotOrg campaign, however thinly, to the pandemic currently occupying the world’s collective conscious.
There are plenty of good arguments that could be — and are being — made in favor of further delay and scrutiny of the deal, but I don’t think coronavirus is one of them.

Roundup: domain industry starts to respond to coronavirus pandemic

With much of the world already laboring under coronavirus-related movement and assembly restrictions, many domain industry companies have started to publicly outline their business continuity plans.
Some companies have already implemented blanket home-working rules, while others are ready to pull the trigger on such regimes just as soon as local government policy or other circumstances require it.
Here’s a roundup of what some of these companies have said over the last few days.
It’s not an exhaustive list — I’m sure many companies have unannounced contingencies in place — and it should be noted that some of these announcements may well be out of date already, due to the speed at which the virus risk, and government responses to it, are changing.

• In Italy, the nation hardest-hit by the virus outside of China, local ccTLD registry Registro.it said: “Due to the current health emergency, there may be delays in the processing of legal and administrative procedures in the coming days. Activities related to the registration and maintenance of domains will be carried out as usual”.
• NIC Chile, the .cl registry, has imposed a ban on outsiders attending its offices, effective today, “in order to safeguard the health of its clients and officials”.
• Portugal’s Associação DNS.PT, the .pt registry, has gone a step further, saying Friday that it has already adopted remote working. It added that it was not aware of any confirmed cases and that it expected business to continue as normal.
• An undated notice on DNS Belgium’s web site states: “To guarantee maximum business continuity, we temporarily close our office and all work from home.”
• Dutch ccTLD registry SIDN said Friday that “most” of its employees are working from home, and it will minimize in-person contacts to “strictly necessary” meetings. It does not expect disruption to services.
• Austrian Nic.at said that employees “who are not tied to the Vienna or Salzburg office locations due to their work can work from home by telework”, adding “strict hygiene measures apply in the offices”.
• In Denmark, DK-Hostmaster said that customer support will now be conducted purely via email, with phone support suspended until March 27.
• It’s the same story in Poland for .pl domains, according to a notice on the NASK web site.
• Afilias said Thursday that it has contingency plans in place to keep its registry business ticking over even if staff fall ill or office closures are mandated. It’s also stepped up office cleaning and made hand sanitizer available to staff. Employees will be able to home-work should the need arise, the company said.
• Corporate registrar family Com Laude said that it’s updated its business continuity and disaster recovery plans to account for the pandemic threat, including providing remote-working solutions for its staff.
• Network Solutions, part of Web.com, told customers Friday that its workforce is geared up to work from home too, and that customer service should be unaffected during the crisis.
• British registrar Astutium said it won’t book any in-person meetings with clients for the next 90 days, and that if anyone shows up for an already-booked meeting they will be required wash thoroughly before they’re let through the door.

I’ve not heard any reports yet of members of the industry with confirmed infections. So that’s good.

Chinese registrars ask ICANN to waive fees due to Coronavirus

Almost 50 registries and registrars based in China have asked ICANN to temporarily waive its fees due to the economic impact they say Covid-19 — the new Coronavirus — is having on them.
They’ve all put their names to a February 21 letter (pdf) that ICANN published over the weekend, saying they “believe that it’s essential that ICANN provides immediate fee waiver to registries and registrars in China”.
The letter, signed by more than half of the currently accredited registrars in China, notes the cancellation of the Cancun public meeting, adding:

We highly respect and welcome ICANN’s approach to keep our community safe. Meanwhile, the contracted parties in China, including their staff, suppliers, and relevant business counterparts, are being hit and suffered by the 2019-nCoV in a much greater scale than in other countries and regions combined since January 2020. Many of the staff members have been restrained to perform sales and support functions at the level they are required to. There are significant delays in collections, payments and wire transfers. While we expect that the scale of 2019-nCoV could not go greater, the business growth estimate in 2020 has been jeopardized and the time of recovery can be very long.
While domestic aid on tax, rentals, etc. are being discussed and confirmed, we believe that it’s essential that ICANN provides immediate fee waiver to registries and registrars in China. The waiver of 2020 fees, including annual fees and transaction fees, will greatly help stabilize our business in the difficult time.

This is not a small ask. ICANN collects fees based on transaction volume, and many millions of transactions originate in China. That’s particularly true in the new gTLD space, where China dominates.
The Chinese companies say that ICANN could afford to waive the fees due to the money they say ICANN will save by cancelling Cancun and other international travel.
My hunch is that ICANN won’t agree to these demands. While China is currently undoubtedly disproportionately affected by Covid-19, that situation is rapidly changing.
In the coming weeks and months it’s quite possible — worst-case scenario — the rest of the world could be similarly affected. Is ICANN prepared to set a precedent that could see it sacrifice its entire annual budget? I doubt it.
All previous requests for ICANN to waive its fees for various other reasons have been denied.

ICANN might cancel Spring Break over Covid-19 fears

ICANN’s next public meeting, which is due to kick off in Cancun, Mexico less than three weeks from now, is in peril of being canceled due to fears about Covid-19, aka Coronavirus.
CEO Göran Marby is to host a call with community leaders in a few hours to discuss the issue. ICANN has assembled a “crisis management team” to monitor the spread of the disease.
The fear isn’t that attendees could pick up the virus from Mexican locals — there’s not a single confirmed case in Mexico yet — but rather that an already-infected person might show up and transmit the disease to others, who might then take it back home with them.
Or — even worse — ICANN is considering the possibility of “a ‘cruise ship’ scenario in which a suspected or confirmed case is identified during the meeting, necessitating the mass-quarantine of all attendees and locals”.
That’s a reference to the cruise ship currently anchored off Japan, where 3,400 people have been quarantined for the last couple of weeks.
Imagine that. Trapped at an ICANN meeting for weeks. The boredom might kill more people than the virus.
Given that the vast majority of Covid-19 cases so far — over 70,000 — have been in China, ICANN is also worried about Chinese attendees getting racially profiled and hassled by others.
ICANN notes that the Mobile World Congress in Barcelona has been cancelled, and Cisco has cancelled a conference that had been slated to go ahead in Australia around the same time.
Could ICANN follow suit? It wouldn’t be the first time ICANN has changed is meeting plans due to a virus outbreak. Could ICANN 67 be the first remote-only ICANN meeting? It certainly seems like a possibility.

As Cancun looms, ICANN bans China travel because of Coronavirus

ICANN has banned its staff from travelling to China because of Coronavirus.
The organization said at the weekend that it has implemented the ban, which includes connecting flights of “an abundance of caution”. The ban includes the mainland as well as Hong Kong and Macau.
The move matches travel bans imposed on staff by other multi-national technology outfits, and comes as countries including the US place precautionary restrictions on flights from China.
ICANN has in the recent past changed the venues of public meetings twice due to worries about the unrelated Zika virus, but it has no meetings lined up in China any time soon.
Next month, the community will meet in Cancun, Mexico. According to the European Centre for Disease Control, there are currently no reported cases of the disease in that country.
There are usually plenty of Chinese nationals at ICANN meetings, of course, which could put ICANN in a tricky ethical/practical position as 67 draws closer, depending on how the global spread of the disease progresses.
ICANN said: “As of now, we fully intend to move forward with ICANN67 in Cancún, Mexico.”
The ECDC says there have been 20,626 confirmed cases of the virus since it was identified in December, almost all in China, and 427 deaths, all Chinese.