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Battle for .web “far from over”, says Afilias lawyer

Kevin Murphy, January 19, 2022, Domain Registries

Altanovo Domains’ fight with Verisign and ICANN for the .web gTLD is not over, despite an adverse ruling late last month, according to a top lawyer for the company.

Altanovo, the company previously known as Afilias Domains No 3, has not thrown in the towel and left the path clear for Verisign to launch .web, Arif Ali of the law firm Dechert told DI last night.

“Bottom line: this matter is far from over and no, Verisign doesn’t ‘get to run .web after all;’ certainly if the Board does its job objectively and fairly,” he said in an email.

He said this just hours before ICANN published its latest, but by no means final, board resolution on the .web case.

Ali represented Afilias in its Independent Review Process complaint against ICANN’s decision to award .web to Verisign following a 2016 auction, which was won by a company called Nu Dot Co, secretly backed by $135 million of Verisign’s money.

Afilias technically won its IRP, with the panel ruling last May that ICANN broke its bylaws by shirking its duty to address Afilias’ claim that NDC broke new gTLD program rules. Afilias said ICANN should have forced NDC to disclose itself a Verisign pawn before the auction went ahead.

ICANN got close to signing a registry agreement for .web with NDC, despite it being an open question as to whether the auction was legit, the panel ruled. It ordered ICANN to pay Afilias its $450,000 in legal fees and $479,458 of IRP costs.

What the IRP did not do was void the Verisign/NDC bid, nor give Afilias rights to .web.

Instead, it instructed ICANN to stay the .web contract-signing until its board has formally “considered and pronounced upon the question of whether the [Verisign-NDC Domain Acquisition Agreement] complied with the New gTLD Program Rules”.

The board had held a secret, undocumented discussion about the case in November 2016 and decided to keep its mouth shut and just let the IRP play out, according to the IRP ruling, which essentially told the board to stop avoiding difficult questions and to actually make a call on the legitimacy of the Verisign play.

Before the board could do so, Afilias/Altanovo filed an unprecedented appeal with the IRP panel. Technically an “application for an additional decision and interpretation”, Afilias asked the IRP panel to definitively answer the question of whether Verisign broke the rules rather than merely passing the hot potato back to ICANN’s board.

But in a December 21 decision (pdf), the IRP panel denied Afilias’ request as “frivolous” in its entirely, writing:

The Panel has dismissed the [Afilias] Application in its entirety. In the opinion of the Panel, under the guise of seeking an additional decision, the Application is seeking reconsideration of core elements of the Final Decision. Likewise, under the guise of seeking interpretation, the Application is requesting additional declarations and advisory opinions on a number of questions, some of which had not been discussed in the proceedings leading to the Final Decision.

In such circumstances, the Panel cannot escape the conclusion that the Application is “frivolous” in the sense of it “having no sound basis (as in fact or law)”. This finding suffices to entitle the Respondent [ICANN] to the cost shifting decision it is seeking and obviates the necessity of determining whether the Application is also “abusive”.

The panel told Afilias to pay ICANN’s $236,884 legal fees and the panel’s costs of $140,335, leaving Afilias out of pocket and back to square one in terms of getting clarity on whether Verisign’s actions were kosher.

Afilias had basically accused the panel of shirking its duties and punting its decision on Verisign’s auction bid in much the same way as the panel decided that ICANN had shirked its duties and punted its decision on Verisign’s auction bid.

Nobody seems to want to make a call on whether the successful Verisign-NDC ploy to win the .web auction with a secretly bankrolled bid was legit.

On Sunday, the full ICANN board met to discuss the outcome of the IRP and — surprise surprise — it punted again, instructing a subcommittee to look more closely at the matter:

the Board asks the Board Accountability Mechanisms Committee (BAMC) to review, consider, and evaluate the IRP Panel’s Final Declaration and recommendation, and to provide the Board with its findings to consider and act upon before the organization takes any further action toward the processing of the .WEB application(s).

There’s not yet a publicly announced date for the next BAMC meeting. It tends to meet as and when needed, so we might not have too long to wait.

Once the committee has made a decision, it would be referred back to the full board for a final rubber stamp, and it seems that only after that would Afilias make its next move.

Ali, in an email sent to DI just a few hours before ICANN published its Sunday board resolution last night, said:

The [IRP] Panel also made it clear that the Board can’t just punt on the matter as it did previously, but must decide it, and that its decision is subject to review by a future IRP panel.

There’s nothing preventing Afilias filing another IRP to challenge the board’s ultimate decision, should it favor Verisign. Likewise, if it favors Afilias, Verisign could use IRP to appeal.

Verisign has been pursuing a counter-claim against Afilias, albeit so far only in the court of public opinion, accusing the company of breaking ICANN’s rules by trying to secretly “rig” the .web auction during a communications blackout period.

Ali calls this a “red herring”, among other things.

In my view, whichever way ICANN’s board goes, it’s going to wind up back in an IRP.

With IRP proceedings typically measured in years, and no indication that Afilias or Verisign are ready to back down, it seems the .web saga may still have some considerable time left on the clock.

If you’re desperate to register a .web domain, don’t hold your breath.

Note: most of Afilias was acquired by Donuts a year ago, but the .web application was not part of the deal. The IRP proceedings have continued to refer to “Afilias” interchangeably with “Altanovo”, and I’m doing the same in my coverage.

Afilias hints at more legal action over .web

As Verisign does everything but declare outright victory in last week’s Independent Review Process result, .web rival Afilias is now strongly hinting that its lawyers are not quite ready to retire.

John Kane, VP of Afilias (now Altanovo) said in a statement that Afilias is prepared to “take all actions necessary to protect our rights in this matter”.

This matter is of course the contested 2015 auction for the new gTLD .web, which was won by Nu Dot Co with $135 million of Verisign’s money.

Afilias thinks the winning bid should be voided because Verisign’s involvement had been kept a secret. The IRP panel stopped short of doing that, instead forcing ICANN’s board of directors to make a decision.

The earliest they’re likely to do this is at ICANN 71 later this month.

But with one IRP down, Afilias is now reminding ICANN that the board’s ultimate decision will also be “subject to review by an IRP Panel.”

So if ICANN decides to award .web to Verisign, Afilias could challenge it with another IRP, adding another two years to the go-live runway and another couple million dollars to the lawyers’ petty cash jar.

None of which should overly bother Verisign, of course, if one subscribes to the notion that its interest in .web is not in owning it but rather in preventing its competitors from owning it and aggressively marketing it against .com.

But Verisign also put out a statement reviewing the IRP panel’s decision last week, reiterating that it believes Afilias should be banned from the .web contest and banned from making any further complaints about Verisign’s bid.

While Afilias spent its press release focusing on trashing ICANN, Verisign instead focused its blog post on trashing Afilias.

According to Verisign, Afilias is no longer competent to run a registry (having sold those assets to Donuts) and is just looking for a payday by losing a private auction.

“Afilias no longer operates a registry business, and has neither the platform, organization, nor necessary consents from ICANN, to support one,” Verisign claims.

Afilias could of course outsource its would-be .web registry, as is fairly standard industry practice, either to Donuts or any other back-end operator.

Afilias leftovers rebrand as Altanovo

The non-registry bits of Afilias that were not acquired by Donuts in the acquisition deal announced last December have been rebranded as Altanovo Inc.

The new Delaware company owns the registrar 101domain, the mobile device software company DeviceAtlas, and the Irish new gTLD application vehicle Afilias Domains No. 3 Ltd, now renamed Altanovo Domains Ltd.

Altanovo Domains is the entity currently fighting ICANN and Verisign for the right to run the .web gTLD.

Afilias’ registry business, including .info, its portfolio of new gTLDs and its .org-running registry back-end business, joined Donuts earlier this year.

Altanovo means “new height”, the company says on its new web site.