New .com contract revealed: Verisign gets to raise prices, ICANN makes millions more

ICANN and Verisign both stand to make oodles of cash from their renewed .com registry contract.
A proposed draft of the next .com Registry Agreement was published by ICANN late this evening.
It would enable Verisign to carry on raising its .com registry fee by 7%, in four of the next six years. This provision, which was in the 2006 agreement also, was not unexpected.
But the deal will also see Verisign pay ICANN millions of dollars more in transaction fees.
Instead of a quarterly lump sum, which is capped at $4.5 million in the current contract, ICANN will instead get a $0.25 fee for every year of a .com registered, renewed or transferred.
According to my quick-and-dirty calculations, that would have brought ICANN approximately $6 million in extra revenue — roughly $24 million in total — from .com domains last year.
(The most recent .com registry reports show billable transactions per month worth about $2 million to ICANN, using the new agreement’s calculation. However, under the current agreement ICANN can only collect $18 million per year, according to its last approved budget.)
The revised contract contains several other changes also. I’ll have more coverage of those tomorrow.
The deal, which is not expected to come into effect until the end of November, is now open for public comment until April 26.
It needs to be approved by the ICANN board of directors, the Verisign board and the US Department of Commerce before it is finally signed.

Thick .com Whois policy delayed

ICANN’s GNSO Council has deferred a decision on whether Verisign should have to thicken up the Whois database for .com and its other gTLDs.
A motion to begin an official Policy Development Process on thick Whois was kicked down the road by councilors this afternoon at the request of the Non-Commercial Users Constituency.
It will now be discussed at the Council’s face-to-face meeting in Costa Rica in March. But there were also calls from registries to delay a decision for up to a year, calling the PDP a “distraction”.
Verisign’s .com registry contract and the standard Registrar Accreditation Agreement are currently being renegotiated by ICANN, both of which could address Whois in some way.
Today, all contracted gTLD registries have to operate a thick Whois, except Verisign with its .com, .net, .jobs, etc, where the registrars manage the bulk of the Whois data.

Verisign: our DNS was not hacked

Verisign today reiterated that the recently revealed 2010 security breaches on its corporate network did not affect its production domain name system services.
In a statement, Verisign said:

After a thorough analysis of the attacks, Verisign stated in 2011, and reaffirms, that we do not believe that the operational integrity of the Domain Name System (DNS) was compromised.
We have a number of security mechanisms deployed in our network to ensure the integrity of the zone files we publish. In 2005, Verisign engineered real-time validation systems that were designed to detect and mitigate both internal and external attacks that might attempt to compromise the integrity of the DNS.

The statement followed several news reports that covered the hacks and speculated about the mayhem that could ensue if Verisign’s root or .com zone systems were ever breached.
The information the company has released so far suggests that the attacks were probably against back-office targets, such as user desktops, rather than its sensitive network operations centers.

.com passed 100 million mark in October

Verisign’s .com registry passed the 100 million domains under management milestone in October, the company’s monthly ICANN registry report revealed today.
The exact number of domains under management in .com on October 31 was 100,540,971, having increased by a net 690,243 registrations over the course of the month.
That’s a pretty big deal, but for some reason Verisign didn’t make any announcements about it at the time.
ICANN registry reports, which all contracted gTLDs must submit, are filed three months after the fact, for competitive reasons.
The number of domains in the .com zone file – which is what most people track to follow the fortunes of TLD operators — differs from the total number in the registry.
Domains which do not have name servers or are in special registry status codes such as Pending Delete do not show up in the zone file.
Today, RegistrarStats reports 100,052,046 domains in the .com zone, while HosterStats’ count yesterday was 100,045,666. The registry is likely to have about 1.5 million more, however.

Verisign to apply for a dozen new gTLDs

Verisign plans to apply to ICANN for about 12 new generic top-level domains, according to the executive in charge of registry services.
“We intend to do about 12. Most of those will be transliterations of .com,” senior vice president Pat Kane said on the company’s fourth-quarter earnings call yesterday.
This does not mark a significant change of strategy – the company has been open about its intention to apply for internationalized domain name variants of .com for over a year – but I believe it’s the first time it’s put a number on it.
It will be interesting to see which gTLDs – if any – Verisign will go for which are not .com IDNs.
My view is that it would make more sense for the company to apply for potentially high-volume .com competitors, such as .web or .blog. It has the capacity, the channel and the cash.
Smaller niche gTLDs may not be worth the distraction and risk, and would be better suited to dedicated registries that can concentrate on more focused marketing.
In any event, we’re going to see some major consolidation in the new gTLD space four or five years from now, and Verisign could well vacuum up cash-making registries at that time.
CEO Jim Bidzos also said on the call that Verisign has been retained to provide the registry for “several” dot-brand applications, but that it will not see any material revenue until 2013.
The major event for 2012, he noted, is the renewal of the .com Registry Agreement with ICANN, which expires at the end of November.
Verisign is already “engaging” with ICANN on this, Bidzos said.
This contract will be posted for public comment and sent to the US Department of Commerce for approval.
I’m expecting controversy, particularly if the contract continues to allow Verisign to increase prices.
It’s going to be harder for Verisign to argue that it needs the extra cash to invest in its infrastructure if it’s also leveraging that infrastructure to win lucrative dot-brand contracts.

Fight brewing over thick .com Whois

This year is likely to see a new fight over whether Verisign should be forced to create a “thick” Whois database for .com and its other generic top-level domains.
While Verisign has taken a deliberately ambivalent position on whether ICANN policy talks should kick off, the community is otherwise split on whether a mandatory thick Whois is a good idea.
Currently, only .com, .net, .name and .jobs – which are all managed on Verisign’s registry back-end – use a thin Whois model, in which domain name registrars store their customers’ data.
Other gTLDs all store registrant data centrally. Some “sponsored” gTLD registries have an even closer relationship with Whois data — ICM Registry for example verifies .xxx registrants’ identities.
But in a Preliminary Issue Report published in November, ICANN asked whether it should kick off a formal Policy Development Process that could make thick Whois a requirement in all gTLDs.
In comments filed with ICANN last week, Verisign said:

As the only existing registry services provider impacted by any future PDP on Thick Whois, Verisign will neither advocate for nor against the initiation of a PDP.
…
Verisign believes the current Whois model for .com, .net, .name and .jobs is effective and that the proper repository of registrant data is with registrars — the entities with direct connection to their customers. However, if the community, including our customers, determines through a PDP that “going thick” is now the best approach, we will respect and implement the policy decision.

Thick Whois services make it easier to find out who owns domain names. Currently, a Whois look-up for a .com domain can require multiple queries at different web sites.
While Whois aggregation services such as DomainTools can simplify searches today, they still face the risk of being blocked by dominant registrars.
The thin Whois model can also make domain transfers trickier, as we witnessed just last week when NameCheap ran into problems processing inbound transfers from Go Daddy.
ICANN’s Intellectual Property Constituency supports the transition to a thick Whois. It said in its comments:

Simplifying access to this information through thick Whois will help prevent abuses of intellectual property, and will protect the public in many ways, including by reducing the level of consumer confusion and consumer fraud in the Internet marketplace. Thick Whois enables quicker response and resolution when domain names are used for illegal, fraudulent or malicious purposes.

However, Verisign noted that a thicker Whois does not mean a more accurate Whois database – registrars will still be responsible for collecting and filing customer contact records.
There are also concerns that a thick Whois could have implications for registrant privacy. Wendy Seltzer of the Non-Commercial Users Constituency told ICANN:

Moving all data to the registry could facilitate invasion of privacy and decrease the jurisdictional control registrants have through their choice of registrar. Individual registrants in particular may be concerned that the aggregation of data in a thick WHOIS makes it more attractive to data miners and harder to confirm compliance with their local privacy laws.

This concern was echoed to an extent by Verisign, which noted that transitioning to a thick Whois would mean the transfer of large amounts of data between legal jurisdictions.
European registrars, for example, could face a problem under EU data protection laws if they transfer their customer data in bulk to US-based Verisign.
Verisign also noted that a transition to a thick Whois would dilute the longstanding notion that registrars “own” their customer relationships. It said in its comments:

As recently as the June 2011 ICANN meeting in Singapore, Verisign heard from several registrars that they are still not comfortable with Verisign holding their customers’ data. Other registrars have noted no concern with such a transition

ICANN staff will now incorporate these and other comments into its final Issue Report, which will then be sent to the GNSO Council to decide whether a PDP is required.
If the Council votes in favor of a PDP, it would be many months, if at all, before a policy binding on Verisign was created.

VeriSign yanks domain seizure power request

That was quick.
VeriSign has withdrawn its request for new powers to delete domain names being used for abusive purposes, just a few days after filing it with ICANN.
The company had proposed a policy that would give law enforcement the ability to seize .com and .net names apparently without a court order, and a new malware scanning service.
The former came in for immediate criticism from groups including the American Civil Liberties Union and the Electronic Frontier Foundation, while the latter appeared to have unnerved some registrars.
But now both proposals have been yanked from ICANN’s Registry Services Evaluation Process queue.
This is not without precedent. Last year, VeriSign filed for and then withdrew requests to auction off one-letter .net names and a “Domain Name Exchange” service that looked a bit like domain tasting.
Both came in for criticism, and have not reappeared.
Whether the latest abuse proposals will make a reappearance after VeriSign has had time to work out some of the more controversial kinks remains to be seen.

Should .com get a thick Whois?

The ICANN community has taken another baby step towards pushing VeriSign into implementing a “thick” Whois database for .com and .net domain names.
The GNSO Council yesterday voted to ask ICANN to prepare an Issue Report exploring whether to require “all incumbent gTLDs” to operate a thick Whois. Basically, that means VeriSign.
The .com and .net registries currently run on a “thin” model, whereby each accredited registrar manages their own Whois databases.
Most other gTLDs today run thick registries, as will all registries approved by ICANN under its forthcoming new gTLDs program.
The thinness of .com can cause problems during inter-registrar transfers, when gaining and losing registrars have no central authoritative database of registrant contact details to rely upon.
In fact, yesterday’s GNSO vote followed the recommendations of a working group that decided after much deliberation that a thick .com registry may help reduce bogus or contested transfers.
Trusting registrars to manage their own Whois is also a frequent source of frustration for law enforcement, trademark interests and anti-spam firms.
Failure to maintain a functional web-based or port 43 Whois interface is an often-cited problem when ICANN’s compliance department terminates rogue registrars.
Now that an Issue Report has been requested by the GNSO, the idea of a thick .com moves closer to a possible Policy Development Process, which in turn can create binding ICANN consensus policies.
There’s already a clause in VeriSign’s .com registry agreement that gives ICANN the right to demand that it creates a centralized Whois database.
Switching to a thick model would presumably not only transfer responsibility to VeriSign, but also cost and liability, which is presumably why the company seems to be resisting the move.
Don’t expect the changes to come any time soon.
Writing the Issue Report is not expected to be a priority for ICANN staff, due to their ongoing chronic resource problems, and any subsequent PDP could take years.
The alternative – for ICANN and VeriSign to come to a bilateral agreement when the .com contract comes up for renewal next year – seems unlikely given that ICANN did not make a similar requirement when .net was renegotiated earlier this year.

VeriSign to raise .com and .net prices again

VeriSign has announced price increases for .com and .net domain name registrations.
From January 15, 2012, .com registry prices will increase from $7.34 to $7.85 and .net fees will go up from $4.65 to $5.11.
That’s a 10% increase for .net and a 7% increase for .com, the maximum allowable under its registry agreements with ICANN.
As ever, registrants have six months to lock down their domains at current pricing by renewing for periods of up to 10 years.
The last time VeriSign raised prices, also by 7% and 10%, the higher prices became effective a year ago, July 2010.
VeriSign’s contract for .net was renewed last month after it was approved by the ICANN board of directors.
Its .com contract comes up for renewal next year.

Feds seize billion-dollar poker domains

Five domain names associated with online poker sites have been seized by the FBI as part of an investigation that has also seen 11 people indicted.
The principals of PokerStars, Absolute Poker and Full Tilt Poker, along with third-party “payment processors”, stand accused of engaging in a massive money laundering scheme in order to accept billions of dollars of payments from American gamblers in violation of US laws.
The charges carry possible maximum sentences of between five and 30 years in prison, along with substantial monetary fines. Two men have been arrested, a third is due to be arraigned, and the remainder are currently outside of the US, according to a press release (pdf).
The US Attorney for the Southern District of New York said five domain names have been seized by the FBI in connection with the prosecutions.
It’s not yet clear which domains have been seized.
From where I’m sitting in London, absolutepoker.com already shows an FBI warning banner, but pokerstars.com and fulltiltpoker.com both resolve normally. I may be receiving cached DNS data.
Blogger Elliot Silver, sitting behind a resolver on the other side of the pond, reports that ub.com is among the seized domains.
Unlike previous recent seizures, which were carried out by the US Immigration and Customs Enforcement agency, this time the FBI appears to be the responsible agency.
And this time, these aren’t two-bit file-sharing forums or Chinese knock-off merchandise sites, we’re talking about businesses that are perfectly legal in many jurisdictions, clearing billions in revenue.
But according to US Attorney’s charges, the companies carried out an elaborate plan to cover up the sources of their revenue through third parties and phoney bank accounts.
The companies are even alleged to have made multi-million dollar investments in failing banks in order to get them to turn a blind eye to the illicit gambling activities.
It appears that the FBI went straight to the .com registry, VeriSign, as some of the affected domains appear to be registered through UK-based corporate registrar Com Laude.
If you’re wondering whether this is yet another confirmation that all .com domains are subject to US jurisdiction, this is your takeaway sentence, from Manhattan US Attorney Preet Bharara:

Foreign firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits.

The suits seek $3 billion in allegedly ill-gotten gains to be returned.