auDA car crash continues as director quits over foreign members

auDA director Tim Connell has quit the board over its decision to admit almost a thousand new members from the industry side of the house.
Connell, the only remaining elected “Demand class” director, said he believes auDA will now be controlled by registrars and the new back-end registry, Afilias.
In his resignation letter (pdf), Connell said: “I fear this potentially hands control of auDA over to industry and could ultimately create the situation where the independent governing body is no longer independent.”
The new member influx, which saw the ranks swell from about 320 to over 1,300 in the space of a few weeks, was largely due to three large registrars and the back-end encouraging their staff to sign up for membership.
One registrar, CrazyDomains owner Dreamscape Networks, now apparently employs almost 40% of auDA’s members.
auDA, which seems to have nudged the companies towards this membership drive, is under pressure from the Australian government to grow and diversify its membership.
Chief critic Josh Rowe, himself a former director, has calculated, based on a non-public member list, that most of the new members are based outside of Australia, a fact alluded to by Connell in his letter.
Rowe and his fellow “Grumpies” used last month’s extraordinary auDA meeting to demand that the new membership applications be rejected on the grounds that the new members are not a part of the Australian internet community that auDA is constitutionally bound to serve.
But auDA chair Chris Leptos responded that they are members of the community by virtue of their employment.
Connell’s primary concern appears to be that the swollen member base is now heavily tilted in favor of the supply-side of the community.
He noted that an AUD 12 million marketing fund distributed to registrars in the wake of the migration to cheaper back-end Afilias could be seen as an attempt to bribe the industry to side with the auDA party line.
Grumpies have accused auDA of “cartel-like” behavior in this regard.
At the special meeting two weeks ago, motions to fire three directors including Leptos (over unrelated disagreements) were rejected due to near-unanimous opposition from the Supply-class members, despite an overall majority of voters supporting their removal.
The new members were not eligible to vote at that meeting, so the Supply-class was considerably smaller.
At the same meeting, Connell revealed that his Demand-class directorship had recently come into question due to the fact that he acted as an affiliate of a registrar.
He said he’d rectified that situation, and Leptos seemed happy with that the situation had been resolved.
Despite this, Connell says in his letter that he no longer feels that information he receives as a director is “accurate or complete”, suggesting continued tensions on the board.
For all these reasons, he said he was resigning immediately.
In a statement, auDA thanked Connell for his service and said a replacement will be sought within three months.
I’ve actually lost count of how many auDA directors have quit recently. I’ve reported on at least five, including the last chair, since I started covering the unrest there a little over a year ago.

Chaotic scenes as ‘Grumpies’ lose auDA board fight

Three directors of .au registry auDA managed to keep their seats on the board despite losing the “popular vote” of members late last week.
The vote happened at the conclusion of an occasionally chaotic three-hour meeting that saw former AusRegistry chief Adrian Kinderis kicked out of the room barely a minute into proceedings.
The results in each of the three votes to fire directors Suzanne Ewart, Sandra Hook and chair Chris Leptos were 57 or 58 in favor and 51 or 52 against, which would have been a narrow win for the so-called “Grumpies” who originally called for the sackings.
However, auDA rules require, Leptos said, a simple majority of both “Supply” and “Demand” classes of members, and the Supply class (ie, registrars) voted against the motions by 30 to 2 or 31 to 1.
Therefore, all three directors get to keep their jobs.
auDA noted in a statement that a greater proportion of Supply class members (the substantially smaller constituency) turned out to vote compared to Demand class, adding:

It is time now for all members to get behind the reform of auDA as demanded by the federal government.
auDA is not the plaything of a small group of self-interested parties.
It can no longer be run as a club type organisation with a small membership who wield undue influence.

A “club type organization” was pretty much what came across during the meeting, which was audio-only webcast Friday morning. ICANN, auDA ain’t.
I was left with the impression of something a bit like Nominet circa 2010 or my first ICANN meeting back in 1999. Not so much herding cats, as [RACIST JOKE ALERT] herding wallabies.
At times it felt like an ICANN Public Forum, with an infinite number of Paul Foodys lining up at the mic.
At the same time, the meeting was chaired by somebody who, despite never losing his cool, seemed set on limiting criticism from members to the greatest extent possible.
There was controversy from the very outset, with the former CEO of former .au back-end provider AusRegistry (now part of Neustar) getting kicked out in the opening minute.
Kinderis, who no longer works for Neustar and has vowed publicly to be a thorn in auDA’s side, said he was “unlawfully removed” from the meeting by venue security, at the instruction of Leptos.
Leptos disputed Kinderis’ claim that he was there as a proxy for a legit member and said he believed he had acted “entirely appropriately” in ordering his removal.
There was no suggestion of physical force being used. His exit was recorded by chief Grumpy Josh Rowe, who then posted a brief video to Twitter.

pic.twitter.com/zvfJhuqUm9

— Josh Rowe (@joshrowe) July 27, 2018

Leptos then threatened to throw out fellow Grumpy Jim Stewart, who was protesting Kinderis’ removal, before warning non-member attendees that they would not be permitted to ask questions.
Forty-five minutes later, he repeatedly threatened to kick out Stewart for live-streaming video of the meeting from his phone, having apparently received complaints from other members.
Fifteen minutes later, the threats returned after Stewart and another member attempted to engage Leptos in an argument about auDA’s member recruitment policy.
The words “take a seat Mr…” were a recurring meme throughout the meeting.
The original reasons for the call for the directors to be fired were myriad, ranging from lack of transparency to projects such as the Neustar-Afilias registry transition and auDA’s desire to start selling direct second-level .au domains.
But the bulk of the meeting was taken up with discussions, and attempted discussions, about auDA’s recent membership spike.
The Grumpies have audited the new member list — which has grown from 300-odd to 1,345 in just a few weeks — and found that the vast majority of new members are employees of just three registrars and one registry (Afilias, the new back-end).
They reckon these new members, many of whom do not live in Australia, represent an attempt by auDA leadership to capture the voting community, and that foreigners are not technically members of the “Australian internet community” that auDA is supposed to represent.
Leptos responded to such criticisms by saying that employees of Australia-focused registrars are indeed members of the Australian internet community, regardless of their country of residence.
He added that auDA is under the instruction of the Australian government to diversify its membership — he said that registrars have no board representation currently — and that the recently added members are a first step on that path.
The Grumpies had shortly before the meeting started making accusations that the membership influx amounts to “potential cartel behaviour”.
Leptos addressed this directly during the meeting, saying they had “accused the CEO of criminal conduct” and categorically denying any wrongdoing.
auDA later issued a statement saying:

This is a very serious allegation to have been made and auDA strongly disagrees that by encouraging others to join the auDA membership, or by approving membership applications which satisfy its constitutional requirements, auDA or its officers have engaged in cartel behaviour or otherwise acted improperly.

Two companies “capture” auDA

Membership votes of the Australian ccTLD registry auDA could now essentially be captured by just two companies, potentially including new back-end provider Afilias, according to data from a disgruntled former director.
According to Josh Rowe’s analysis of auDA’s newly swollen members list, 39.2% of auDA’s members are now employees of CrazyDomains owner Dreamscape Networks, after Dreamscape signed up a whopping 527 staffers.
Assuming bloc-voting, Dreamscape would need support from only one of either Afilias (with 12.4% of members) or the registrar Arq Group (formerly Melbourne IT, with 15%) to obtain a simple majority in any member vote, judging by Rowe’s figures.
His analysis, sent out to supporters and forwarded to DI this week, was based on auDA’s official member list, which includes full contact information for each member. He had to crowdfund a couple hundred bucks to obtain the list from auDA.
Rowe told ITWire that in most cases the new members listed their employer’s address as their own.
The names-only list published on auDA’s web site currently stands at 1,345 people by my count, about a thousand more than it contained just a few days ago.
Rowe’s tally chimes roughly with my previous estimate that about 150 Afilias employees had joined auDA. Rowe makes it 166.
auDA had previously publicly thanked the three aforementioned companies, along with the registrar Ventra IP, for helping with the membership drive, which auDA says will help it diversify its membership as per the instructions of the Australian government.
The new members will not have the ability to vote in the auDA extraordinary general meeting, which is due to take place at midnight UTC tonight (1000 Friday morning in Melbourne). Their memberships should be active by the time the annual general meeting rolls around in a few months, however.
Tonight’s meeting will see the 300-odd older members vote on whether to fire auDA’s three independent directors. A fourth motion, to express no confidence in CEO Cameron Boardman, was removed from the agenda by the auDA board.
auDA was forced to called the meeting after Rowe and his allies, dismayed by what they see as policy and transparency missteps, managed to rally the support of more than the threshold 5% of the member base.
That was fewer than 20 people under the smaller membership (though Rowe’s petition obtained 22 signatures). Now it would be around 67 people.
This presumably means that Rowe’s allies — the so-called “Grumpies” — have lost their ability to shake things up in the auDA boardroom in future.
However, it presumably also means that if DreamScape, Afilias or Arq wanted to cause trouble, they could strong-arm their employees into supporting whatever flag they wanted to wave.

auDA chair defends $9 million windfall as no-confidence vote looms

The chair of .au registry auDA has appealed to its membership for calm ahead of a vote of no confidence in himself, the CEO, and two of his fellow directors.
Chris Leptos yesterday defended the AUD 12 million ($9 million) windfall the organization has received as a result of its transition from long-term registry back-end Neustar to rival Afilias.
By opening the back-end contract to competition, and going with a bid far cheaper than the incumbent’s historical pricing, auDA saved itself a tonne of cash.
Some members reckon the money, which has been placed in a “marketing and innovation fund”, should have instead be returned to registrants via far lower prices for .au domains.
Leptos said the money was better used to promote .au rather than disappearing to the coffers of the back-end provider, writing;

What is most surprising to me is that a small number of members are criticising the new $12 million Marketing and Innovation Fund that will be used to grow the .au namespace. The fact is that auDA now has more funds, and those funds are being ploughed back into lower wholesale prices, and programs that will benefit participants in the .au namespace, rather than benefiting the private owners of the former registry operator. On any reasoned analysis, this is a good thing.

He assured disgruntled members that their concerns about this and other matters are being listened to, but noted the diversity of views among the membership.

Some members say auDA is not listening to their concerns. I can assure you that auDA is listening to its members and stakeholders at both management level and board level. The reality, however, is that auDA needs to balance the requirements of many members and stakeholders who disagree among themselves.

Leptos and two other directors are facing a vote to fire them from the board on July 27. CEO Cameron Boardman faces a no-confidence vote the same day,
The meeting was scheduled following a petition of members orchestrated at Grumpier.com.au, which managed to get signatures from over 5% of auDA’s then 320-odd members.
The Grumpies are currently trying to crowd-fund AUD 4,650 to pay for legal and other fees associated with this meeting. At time of writing, they’re about half-way there.
They’re also unhappy with auDA’s transparency, and with moves such as the currently delayed plan to sell direct second-level .au domains.
Leptos yesterday urged members to vote against the four resolutions, saying that the organization should not be “distracted” from implementing reforms recently mandated by the Australian government following a review.
auDA recently received 955 new membership applications — a four-fold increase in its member base — largely as a result of hundreds of sign-ups from staff at Afilias and the largest .au registrars. These people will not be approved in time to vote at the July 27 meeting.

Fight breaks out as Afilias eats Neustar’s Aussie baby

The transition of .au to Afilias’ registry platform over the weekend seems to have gone quite smoothly, but that hasn’t stopped Neustar and a former key executive from lashing back at what it says are the gaining company’s “misinformed” statements.
The war of words, which has got quite nasty, came as Afilias transferred all 3.1 million .au domains to its control, after 16 years with the former incumbent.
Neustar, which hadn’t said much about losing one of its most-lucrative TLD contracts, on Friday published a lengthy blog post in which it said it wanted to “set the record straight” about Afilias’ statements leading up to the switch.
Afilias, in a series of blog posts and press releases since it won the .au contract, has been bigging up its technical capabilities.
While it’s not directly criticized Neustar and predecessor AusRegistry (which Neustar acquired for $87 million), the implication of many of these statements is that Neustar was, by comparison, a bit shit.
In Neustar’s latest post, Aussie VP George Pongas takes issue with several of these claims.
Any implications that the company did not offer 24/7 registrar support were incorrect, he wrote. Likewise, the idea that it did not have a DNS node in Western Australia was not true, he wrote.
He also took issue with claims that Afilias would offer improved security and a broader feature set for registrars, writing:

We’ve raised a number of concerns directly with auDA about what we considered to be inaccurate remarks comparing Neustar’s systems with the new Registry and implying that the new Registry will include “all previous functionality plus enhanced security and authentication measures”, as stated in recent auDA Member communications. We questioned auDA about this and were informed that the statement is comparing the various testing phases of Afilias’ Registry – so the latest version has “all previous functionality” of the earlier versions. It doesn’t mean the Registry will have “all previous functionality” of Neustar’s platform – which we believe the statement implies. It is a fact that a number of the proprietary features and services that Neustar currently provides to Registrars will no longer be available under the new Registry system, and thus Registrars will likely notice a difference.

“We stand by our statements,” an Afilias spokesperson told DI today.
While Neustar’s corporate stance was fairly reserved, former AusRegistry boss Adrian Kinderis, never a shrinking violet, has been reacting in an almost presidential fashion, using Twitter to describe auDA CEO Cameron Boardman as “incompetent”, criticizing a reporter, and using the hashtag #crookedcameron.

#crookedcameron actually asked me to come work for @auda so I would be silent on all the bullshit he is peddling thinking I could be #paidoff. Happy to tell you all I gave him a polite #gofuckyourself does the @auda Board know he offered me the gig?

— Adrian Kinderis (@AdrianKinderis) July 1, 2018

Kinderis, who headed up AusRegistry for the whole of its 16-year run with .au, left Neustar in April, three years after the acquisition. He’s now running something called MadBarry Enterprises and is still associated with the new gTLD .film.
He reckons Neustar lost the .au contract purely for financial reasons.
While Neustar is believed to have lowered its registry fee expectations when pitching to continue as the back end, auDA will save itself about AUD 9 million a year ($7 million) under Afilias, compared to the old regime.
auDA is not expected to hand this saving on to registrars and registrants, though I hear registrars have been offered marketing rebates recently.
auDA has previously told us that Afilias scored highest on the technical evaluation of the nine bidders, and that it was not the bidder with the lowest fee.
Kinderis is also of the opinion that Afilias is among those helping auDA stack its membership with compliant stooges.
Last month, auDA announced a dramatic four-fold increase in its membership — getting 955 new membership applications in just a month.
auDA thanked Afilias for this growth in membership, alongside three of the largest .au registrars: Ventra IP, Arq Group (formerly Melbourne IT), and CrazyDomains owner Dreamscape Networks.
An Afilias spokesperson said that the company had offered its staff the option to become auDA members and about half — I estimate at roughly 150 people based on Afilias’ previously published headcounts — had taken it up on the offer.
It sounds rather like Afilias footed the AUD 22 per-person “Demand-class” membership application fees.
The rapid increase in membership at auDA has raised eyebrows in the .au community, with some accusing the registry of “branch stacking”.
That’s an Australian term used to describe the practice of signing up large numbers of members of a local branch of a political party in order to swing important votes.
The 955-plus new members will not be approved in time to influence the outcome of the vote to oust the auDA chair and others later this month.
But they will have voting rights by the time auDA’s annual general meeting comes around later this year. The AGM is when auDA will attempt to reform itself in light of a harsh government review of its practices.
As for the migration to Afilias itself, it seems to have gone relatively smoothly. I’m not aware of any reports of any serious technical issues, despite the fact that it was the largest TLD migration ever.
Some members have pointed out that most of .au’s ops are now off-shore, and old auDA Whois service is now hosted on a .ltd domain (hey, somebody’s got to use it) which is itself protected by Whois privacy.
I also noticed that the auDA web site, which used to have a hook into the registry that published an updated domain count every day, is no longer working.

Biggest TLD handover in history happens this weekend

Australia’s ccTLD registry will be down for 36 hours this weekend as it executes the biggest back-end transition in the history of the DNS.
Starting 0800 AEST on Saturday (2200 UTC on Friday), Afilias will take over the running of .au from Neustar-owned AusRegistry, after about 16 years in the saddle.
DNS will not be affected — meaning all .au domains should continue to resolve — but there won’t be any new creates, renews, transfers or changes during the downtime.
There are over 3.1 million domains in .au, more than the 2.7 million names in the .org registry when Afilias took over that contract from Verisign in 2003.
Afilias was picked from a pool of nine candidate back-end operators last December.
auDA, the registry, will save itself AUD 9 million ($7 million) per year at least, due to the lower per-domain fee Afilias is charging.
But hardly any of that saving is going to be passed on to registrars and ultimately registrants.
Bruce Tonkin, who chaired the selection committee for auDA, told us a few months back that much of the cash will be invested in marketing.

Domainers could lose their names as .au loophole closes

Domain investors dabbling in the .au space could face losing their names under new policies set to be proposed.
The .au Policy Review Panel, which helps set policy for Australian ccTLD registry auDA, said this week it is thinking about closing a loophole related to domain monetization that has allowed “speculation and warehousing” in violation of longstanding rules.
Monetized domains are “largely detrimental” to .au and rules permitting the practice should be scrapped, the panel is expected to formally conclude.
Anyone currently monetizing domains could be given as little as a day to comply with the new rules or face losing their names.
The expected recommendations were outlined in a memo (pdf) penned by panel chair John Swinson, an intellectual property lawyer, who wrote:

the Panel received a lot of feedback and information from the public that Domain Monetisation is largely detrimental to the name space. Feedback, including from sophisticated businesses, domain brokers and portfolio owners, was one could register almost any domain name under the Domain Monetisation rule, and that the current rules were unclear, and that domain names were being registered under the cover of Monetisation primarily for the purposes of resale or warehousing (which is contrary to the current policy).

Current auDA policy on domaining, dating from 2012, is pretty clear when it comes to domainers: “A registrant may not register a domain name for the sole purpose of resale or transfer to another entity.”
However, there’s a loophole when it comes to domains that are monetized with ad links. If a domain is monetized, reselling no longer becomes its “sole purpose”.
Another auDA policy also from 2012 specifically permits monetization as a valid reason for owning a .com.au or .net.au name.
It says that monetized domains must carry ad content relevant to the topic of the domain, and that there should be no brand infringement in the domain itself.
Swinson’s panel agreed in a May 1 meeting (pdf) that this rule should be scrapped.
It’s not entirely clear what would come to replace it, as the panel doesn’t seem likely to actually ban monetization as such. Swinson wrote:

Because the current rules are outdated, inconsistent and unclear, it is difficult to enforce the current rules that prevent the registration of domain names for domain speculation and warehousing.
The Panel’ s current view is that Domain Monetisation will not be banned, but of itself will not be a basis to meet the allocation criteria.

The “allocation criteria” refers to the eligibility requirements for .au domains, which currently require a “close and substantial” link between the registrant and the name.
The panel’s memo states that there would be a “grandfathering” period during which domainers whose sites do not comply with the new policy would have time to update them:

The Panel’s current view is to recommend that any new eligibility and allocation rules should apply on the next renewal of a domain name license. This will give domain name licensees who meet the current rules, but who will not meet any new rules, time to deal with the non-compliance.

The problem here of course is that the “next renewal” could be anywhere from a day to two years away, depending on the domain. That’s probably an area the panel needs to look at.
The monetization issue is one of several addressed in the panel’s interim report (pdf), which also looks at the possibility of direct, second-level domain registration.
Any new policy on either issue is still many months away.

auDA wins brief reprieve from boardroom battle

Australian ccTLD registry auDA has managed get a small delay, smaller than it wanted, to the deadline for a special member meeting at which the fate of its chair, CEO and two directors will be decided.
After more than 5% of its membership signed a petition calling for the vote, it had until June 7 to open the polls.
But then it was stung by the findings of a governmental review of its structure, which concluded it was “no longer fit for purpose” and ordering a board shake-up of its own.
Deciding that it had to prioritize the government review, auDA last week sued the main organizer of the petition and former board member Josh Rowe, asking a court to allow it to delay the meeting from June 7 until mid-September, to coincide with its annual general meeting.
But the court told the organization it instead has until July 27 to hold the meeting.
auDA said it was “pleased” with the ruling, but Rowe wrote that auDA had “in effect lost” the case.
Rowe called the brief litigation a “disgraceful waste of tens of thousands of dollars of .au domain name registrant’s money”.

auDA may sue to delay boardroom bloodbath

auDA is thinking about taking its membership to court in order to delay a vote on the jobs of four of its directors.
The Australian ccTLD registry has also delayed further consideration of its policy to introduce direct, second-level registrations in .au until late 2019.
Both announcements came in the wake of a government review of the organization, which found it “no longer fit-for-purpose”.
auDA last week asked its members to agree to a postponement of the special general meeting, called for by a petition of more than 5% of its members, at which there would be votes on whether to fire the CEO, its chair, and two independent directors.
Under the law, auDA has to hold the SGM by June 7 at the latest, according to a letter (pdf) sent to members on Friday.
But auDA wants to delay the meeting until mid-September, at the earliest, to coincide with its regular Annual General Meeting.
If its members do not consent to the delay — it gave them a deadline of 4pm local time today, meaning responses would have to be drafted over the weekend — auDA said it “intends to apply for a court order… extending the time for calling the requested SGM”.
The delay is needed, auDA said, in order to give the organization the breathing space to start to implement the reforms called for by the government review.
The government wants the makeup of the auDA board substantially overhauled within a year to better reflect the stakeholder community and to ensure directors have the necessary skills and experience.
In response, auDA has told the government (pdf) that it agrees with the need for reform, but that it will not be able to hit its deadlines unlesss the SGM is delayed.
It also said calling the SGM on time would cost it somewhere in the region of AUD 70,000, based on the cost of a similar meeting last year.
auDA announced separately last week that it is delaying any more discussion on second-level registrations — something the reform campaigners largely are opposed to — “until the second half of 2019 at the earliest”.
Josh Rowe, coordinator of the Grumpier.com.au petitioners, said in his response that he found the request for the SGM delay “extremely disappointing”, adding:

auDA is at an important juncture following the Australian Government’s review. However, it is critical that people with the right skills and experience lead auDA through its reform.
Members have lost confidence in the auDA CEO, and the three auDA independent directors. They do not have the right skills and experience to lead auDA through its reform.

He noted that members do not have the resources to fight auDA in court.

Government gives auDA reform-or-die ultimatum

auDA has just months to either implement sweeping reforms or risk being dissolved and replaced.
That’s the outcome of a review of the Australian ccTLD administrator by the Department of Communications and Arts, published today, that found the organization as it stands today is “no longer fit-for-purpose”.
Among its 29 recommendations, the government is demanding that auDA refresh its board of directors within a year and scrap its “outdated” membership structure.
Minister Mitch Fifield said in a statement:

The central finding of the review is that auDA’s current management framework is no longer fit-for-purpose and reform is necessary if the company is to perform effectively and meet the needs of Australia’s internet community.

He added in a letter to auDA chair Chris Leptos:

In the event that auDA fails to demonstrate progress in achieving the necessary reforms, I will instruct my Department to undertake a public expression of interest process in the future to identify other entities that could administer .au

A failure to reform could even lead to the government itself taking over .au, the report says.
The review did not look at the claims of lavish spending by staff and directors, reported on earlier this week.
Nor does it express any views on the controversial decision to start selling direct second-level .au domains, or to transition the back-end from Neustar to Afilias.
What it does say is that the board of directors needs to be be replaced within a year, using a new membership structure that gets rid of the current “supply” and “demand” classes of member, which differentiate between those who sell domains and those who buy them.
The current system is open to capture or “stacking”, the review says, with it being too easy for individuals to move seamlessly between classes and a lack of clarity on whether domainers should be supply or demand-class members.
Today, the 12-person board comprises the non-voting CEO, three independent directors and four directors elected by each class.
The review states that the board should not get any bigger, but that the majority of directors should be independent, selected by a new six-person Nomination Committee modeled slightly on ICANN’s Nominating Committee.
Directors should be picked on the basis on their experience and skills, limited to two three-year terms, and subject to background screening, the review states.
The government also says that auDA should either replace its current membership classes with either a single membership class open to all or a “functional constituency model” reflecting groups such as consumers, registrars, government, etc.
Fifield said he expects to see “significant” progress on implementing these reforms in the next three to six months.
In a statement, auDA said it welcomed the report and has already begun work on an implementation plan.
Former CEO Chris Disspain, who was fired by the board in 2016, after running the company for 16 years, a move that arguably catalyzed the last two years of chaos at auDA, told DI:

I am pleased that the review has called out a number of important structural issues especially the matter of membership stacking, something that I had raised with the board on a number of occasions towards the end of my tenure and that may have led, at least in part, to my departure.