IRP panel tells ICANN to stop being so secretive, again

ICANN’s dismal record of adverse Independent Review Process decisions continued last week, with a panel of arbitrators telling the Org to shape up its transparency and decision-making processes.

The panel has essentially ruled that ICANN did everything it could to be a secretive as possible when it decided to remove price controls from its .org and .info registry contracts in 2019.

This violated its bylaws commitments to transparency, the IRP panel found, at the end of a legal campaign by Namecheap commenced over three years ago.

Namecheap wanted the agreements with the two registries “annulled”, but the panel did not go that far, instead merely recommending that ICANN review its decision and possibly enter talks to put the price caps back.

But the decision contains some scathing criticisms of ICANN’s practice of operating without sufficient public scrutiny.

Namecheap had argued that ICANN broke its bylaws by not only not applying its policies in a non-discriminatory manner, but also by failing to adequately consult with the community and explain its decision-making.

The registrar failed on the first count, with the IRP panel ruling that ICANN had treated registry contract renegotiations consistently over the last 10 years — basically trying to push legacy gTLDs onto the 2012-round base Registry Agreement.

But Namecheap succeeded on the second count.

The panel ruled that ICANN overused attorney-client privilege to avoid scrutiny, failed to explain why it ignored thousands of negative public comments, and let the Org make the price cap decision to avoid the transparency obligations of a board vote.

Notably, the panel unanimously found that: “ICANN appears to be overusing the attorney-client privilege to shield its internal communications and deliberations.”

As one example, senior staffers would copy in the legal team on internal communications about the price cap decision in order to trigger privilege, meaning the messages could not be disclosed in future, the decision says.

ICANN created “numerous documents” about the thinking that went in to the price cap decision, but disclosed “almost none” of them to the IRP due to its “overly aggressive” assertion of privilege, the panel says.

As another example, staffers discussed cutting back ICANN’s explanation of price caps when it opened the subject to public comment, in order to not give too much attention to what they feared was a “hot” and “sensitive” topic.

ICANN’s failure to provide an open and transparent explanation of its reasons for rejecting public comments opposing the removal of price controls was exacerbated by ICANN’s assertion of attorney-client privilege with respect to most of the documents evidencing ICANN’s deliberations…

ICANN provided a fairly detailed summary of the key concerns about removing price caps, but then failed to explain why ICANN decided to remove price caps despite those concerns. Instead, ICANN essentially repeated the explanation it gave before receiving the public comments.

The panel, which found similar criticisms in the earlier IRP of Dot Registry v ICANN, nevertheless decided against instructing ICANN to check its privilege (to coin a phrase) in future, so the Org will presumably be free to carry on being as secretive as normal in future.

Namecheap also claimed that ICANN deliberately avoided scrutiny by allowing Org to remove the price caps without a formal board of directors resolution, and the panel agreed.

The Panel finds that of the removal of price controls for .ORG, .INFO, and .BIZ was not a routine matter of “day-to-day operations,” as ICANN has asserted. The Price Cap Decision was a policy matter that required Board action.

The panel notes that prior to the renewal of .org, .info and .biz in 2019, all other legacy gTLD contracts that had been renewed — including .pro, which also removed price caps — had been subject to a board vote.

“ICANN’s action transitioning a legacy gTLD, especially one of the three original gTLDs (.ORG), pursuant to staff action without a Board resolution was unprecedented,” the panel writes.

Quite why the board never made a formal resolution on the .org contract is a bit of a mystery, even to the IRP panel, which cites lots of evidence that ICANN Org was expecting the deal to go before the board as late as May 13, 2019, a month before the anticipated board vote.

The .org contract was ultimately signed June 30, without a formal board resolution.

(Probably just a coincidence, but Ethos Capital — which went on unsuccessfully to try to acquire .org registry Public Interest Registry from ISOC later that year — was formed May 14, 2019.)

The IRP panel notes that by avoiding a formal board vote, ICANN avoided the associated transparency requirements such as a published rationale and meeting minutes.

The panel in conclusion issued a series of “recommendations” to ICANN.

It says the ICANN board should “analyze and discuss what steps to take to remedy both the specific violations found by the Panel, and to improve its overall decisionmaking process to ensure that similar violations do not occur in the future”.

The board “should consider creating and implementing a process to conduct further analysis of whether including price caps in the Registry Agreements for .ORG and .INFO is in the global public interest”

Part of that process should involve an independent expert report into whether price caps are appropriate in .info and especially .org.

If it concludes that price controls are good, ICANN should try to amend the two registry agreements to restore the caps. If it does not conduct the study, it should ask the two registries if they want to voluntarily restore them.

Finally, the panel wrote:

the Panel recommends that the Board consider revisions to ICANN’s decision-making process to reduce the risk of similar procedural violations in the future. For example, the Board could adopt guidelines for determining what decisions involve policy matters for the Board to decide, or what are the issues on which public comments should be obtained.

ICANN is on the hook to pay the panel’s fees of $841,894.76.

ICANN said in a statement that it is “is in the process of reviewing and evaluating” the decision and that the board “will consider the final declaration as soon as feasible”.

1 Comment Tagged: .biz, .info, .org, donuts, godaddy, ICANN, identity digital, irp, namecheap, neustar, pir, price caps

Nominet blew six figures vanity-publishing ex-CEO’s book

Nominet spent £135,000 to publish an upcoming book by a CEO who has since been kicked out, to promote a business it has since divested, it has emerged.

Thoughts from the Big Chair: A Leader’s Guide to Digital Transformation, by Russell Haworth, is due to be published in April, after Nominet paid the hefty sum to publisher Forbes.

Haworth quit the company almost two years ago, just hours before he could be forced out in a member mutiny, but the publishing deal evidently pre-dates that chaotic period for the .uk registry by about a year.

Nominet chair Andy Green, who was installed months later as part of a broad institutional reform package, told members in late December that he was surprised to discover Haworth was going ahead with publication.

It was designed to help promote the company’s “Cyber business” in the US, but since that loss-making business has since been abandoned, the assets sold off for a dollar, the book currently has “no value to Nominet”, Green told members.

Judging by the Amazon blurb, it appears the focus of the book is now “digital leadership”, and one assumes it’s more about building the former CEO’s personal brand at Nominet’s expense.

On his LinkedIn page, Haworth said last month he decided to write the book during the Covid-19 pandemic and that it’s “written for senior execs and board members of meduim sized businesses who are looking to navigate their transformation journey, and what they should consider”.

Haworth is currently the UK CEO of Sweden-based Byggfakta Group, which makes software for the construction industry.

There’s no chance of getting the money back because there’s been no breach of contract, Green told members. Haworth owns all rights and liabilities to the book, so Nominet is not on the hook to buy “significant quantities” of it, he said.

Green added that he would be reluctant to approve such a deal had he been at the helm and was not aware of it until recently.

Comment Tagged: .uk, nominet

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).

Comment Tagged: .cn, .com, cnnic, dnib, new gTLDs, verisign

Domainers grumble as GoDaddy cranks up commission fees

GoDaddy has “simplified” its commission structure across three secondary-market acquisitions, leading in many cases to domainers making less money in future from their sales.

The company said there will now be a standard 25% commission across its Afternic, Uniregistry and Dan aftermarkets, which will be reduced to 15% if domainers use GoDaddy’s name servers (and therefore landing pages).

The move prompted online grumbles from customers of Dan, which GoDaddy acquired last year. They’d been paying 9% commission on their sales, so they’re losing out no matter what name servers they use.

The low commissions had proven a draw for domainers prior to the acquisition, and the increase was widely expected following the acquisition last June.

It’s better news for Afternic customers, who were paying 20%. GoDaddy cherry-picked some data to suggest domainers could come out slightly ahead, depending on their mix of sales marketplaces.

The changes are effective February 1.

1 Comment Tagged: afternic, dan, godaddy, uniregistry

Namecheap says it won legal fight over .org price caps

Namecheap claims to have won a fight against ICANN over the lifting of contractual price caps in .org and .info back in 2019.

The two parties have been battling it out for almost three years in an Independent Review Process case over ICANN’s decision to allow the .info and .org registries to increase their prices by as much as they want.

Namecheap now claims the decision has been delivered and “the IRP panel decided that ICANN had, indeed, violated its Bylaws and Articles of Incorporation and that ICANN’s decision to remove the price caps was invalid.”

The registrar also says it failed in its attempt to have a similar ruling with regrds the .biz TLD, but it’s not clear why.

Neither party has yet published the decision in full (ICANN is likely redacting it for publication as I type), and ICANN has yet to make a statement, so we only have Namecheap’s interpretation to go on.

It seems the IRP panel disagreed with ICANN that it was within its staff’s delegated powers to renegotiate the price provisions of the contracts without input from the board of directors.

Rather, there should be a open and transparent process, involving other stakeholders, for making such changes, the panel said according to Namecheap.

What the panel does not appear to have said is that the price caps can be unilaterally restored to the contracts. Rather, it seems to suggest a combination of voluntary reinstatements, expert competition reviews, and bilateral renegotiations.

The decision also seems to say that price controls are more important in .org than .info, due to its not-for-profit nature, which flies in the face of ICANN’s long-term push to standardize its contracts to the greatest extent possible.

The row over .org pricing emerged shortly before the ultimately unsuccessful takeover attempt of Public Interest Registry by for-profit private equity firm Ethos Capital was announced. Ethos had planned to raise prices, but PIR, still a non-profit owned by the Internet Society, to date has not.

Namecheap’s IRP claims related to ICANN’s handling of that acquisition attempt were thrown out in 2021.

.info was an Afilias TLD when the IRP was filed but is now Ethos-owned Identity Digital’s biggest gTLD following consolidation.

I’ll have more on this story after the full decision is made public.

Comment Tagged: .biz, .info, .org, ethos, ICANN, identity digital, irp, namecheap, pir, price caps

Identity Digital sees abuse up a bit in Q3

Identity Digital has published its second quarterly abuse review, showing abuse reports up slightly overall.

The report, which covers the third quarter 2022, also shows that the registry only released the private Whois information for a single domain during the period.

ID said it closed 3,225 abuse cases in Q3, up from 3,007 in Q2, covering 4,615 domains, up from 3,816. The vast majority — almost 93% — related to phishing. That’s in line with the previous quarter.

In about 1,500 cases, the domains in question where suspended by the registry or registrar in the first 24 hours, the report says. In 630 cases, the registry took action after the registrar failed to act within 72 hours.

The company received five complaints about child sexual abuse material from the Internet Watch Foundation during the period, up a couple on Q2, but all were remediated by the registrars in question.

It received four takedown notices from the Motion Picture Association under the registry’s Trusted Notifier Program, all of which resulted in suspended domains.

There were requests for private Whois information for 20 domains, three of which were intellectual property related, but only one resulted in disclosure. In 12 cases ID took the decision not to disclose.

The company has over 260 gTLDs in its stable and over 5.5 million registered domains.

The full slide deck can be viewed here (pdf).

Comment Tagged: abuse, identity digital, new gTLDs

UDRPs up in 2022, firm says

The World Intellectual Property Organization saw an increase in cybersquatting disputes this year, according to WIPO data compiled by VPN maker AtlasVPN.

There were 5,616 UDRP complaints filed with WIPO, up almost 10% from 2021, the company said.

The report does not appear to include data from the several other UDRP providers, so may not reflect the state of the system as a whole.

WIPO has processed 61,284 UDRP cases since the system was founded over two decades ago, the company said.

3 Comments Tagged: atlasvpn, cybersquatting, trademarks, udrp, wipo

More details on ICANN’s CEO handover

ICANN has published more information on its change of CEO, which saw Göran Marby’s shock resignation last week.

Interim CEO Sally Costerton has been employed on an automatically renewing six-month contract that will only end if she quits, is fired, or a permanent replacement is found.

The ICANN board of directors has approved a “monthly stipend”, a bonus payment while she holds the interim position, but the amount, based on advice from compensation consultancy Willis Towers Watson, was not disclosed.

In fact, Costerton’s salary has never been disclosed in the decade she has worked for the Org. It is assumed that she is paid via the UK-based company she set up with her husband around the same time she was hired by ICANN.

That company, Sally Costerton Advisory Ltd, had about £1.3 million ($1.6 million) in net assets as of March, company records, which include no income statement, show. ICANN’s tax returns, which report executive salaries, do not reflect any payments to the company.

The board’s resolutions also confirm that Marby, who will stay as a consultant until May 2024, has will have his contract renegotiated, but the terms were redacted.

3 Comments Tagged: ICANN, sally costerton advisory

Merry Christmas! Marby finally out as ICANN CEO

Göran Marby has “resigned” as the CEO of ICANN.

Chair Tripti Sinha informed staff of his departure last night, saying Marby had been working with the board “over the past few days” to ensure a “smooth transition” that will see him stay on the payroll as a consultant until May 23, 2024.

That’s the date his employment contract was due to expire anyway. There’s no word yet on whether his eye-watering salary will be reduced.

Sinha herself is a new installation, taking over after the board ousted Maarten Botterman a few months ago.

Sally Costerton, senior vice president of global stakeholder engagement, has taken over on an interim basis, while ICANN recruits a successor, but she has an added bonus of being likable and one assumes she’s a leading candidate to take over on a permanent basis.

Costerton, a British former PR professional, has been itching for the gig for over a decade, first applying after Rod Beckstrom quit in 2012 and immediately brought into the senior ranks by Fadi Chehadé, who hired both of his unsuccessful fellow short-listers.

A CEO with a background in public relations in theory is good news for ICANN transparency. The Org has been criticized for ignoring the media and other transparency obligations under its current leadership.

Marby’s achievements in his six and a half years as CEO include being the first person to persuade the board to pay him over a million dollars a year and

12 Comments Tagged: ICANN

ICANN loses another dot-brand, this one in use

Linde, a German chemicals company, has asked ICANN to terminate its gTLD registry contract.

Unusually, the dot-brand was actually in use, with many .linde domains still in its zone file, many of which were indexed by search engines.

It seems the company was using two-letter country-specific domains such as cz.linde and feature-oriented names such as socialmedia.linde to redirect to pages on linde.com or even the godawful the-linde-group.com.

But whatever Linde was trying, it didn’t live up to expectations, so .linde is set to be added to the funeral pyre of 100+ dead dot-brands.

Comment Tagged: dot-brands, ICANN, linde, termination