Battles for .chat, .style, .tennis, bingo and .sas over

Seven new gTLD contention sets have been formally resolved with application withdrawals this morning, five of which we haven’t previously reported on.
Most appear to have been settled by private auctions, with Donuts often the victor.
The standout, however, is .sas, an unusual case of a contention set of two would-be dot-brand registries being resolved.
The business software maker SAS Institute, which applied as Research IP, has prevailed over the Scandinavian airline holding company SAS AB for the .sas gTLD.
Both applicants had applied for closed, single-registrant namespaces.
On the regular, open gTLD front, .chat has gone to Donuts after withdrawals from Top Level Spectrum, Radix and Famous Four Media.
.style has also gone to Donuts, after Uniregistry, Top Level Design, Evolving Style Registry and Minds + Machines withdrew their applications.
.tennis is another Donuts win. Applications from Famous Four, Washington Team Tennis and Tennis Australia have been withdrawn, after a failed Community bid from Tennis Australia.
Donuts, finally, beat Famous Four to .bingo.
Afilias and Top Level Spectrum have officially withdrawn their .wine applications. As we reported earlier this week, this leaves Donuts as the sole remaining applicant.
Top Level Spectrum’s bid for .sucks has also been withdrawn, confirming DI’s report from earlier this week that the controversial gTLD has been won by Vox Populi Registry.
But Donuts failed to win .online, withdrawing its application today. Only two applicants — Radix and I-Registry — remain in this once six-way contention set.
We’ll know the winner (my money’s on Radix) in a matter of days, I expect.

.now and .realestate will be restricted, but Donuts keeps .tires open

It was a battle between open and restricted registration rules this week, as three more new gTLD contention sets were resolved between applicants with opposing policies.
Donuts won .tires (open), Amazon won .now (closed) and the National Association of Realtors won .realestate (restricted).
Donuts beat Goodyear and Bridgestone — two of the biggest tire companies in the world — to .tires. Both withdrew their respective applications over the last week.
If it was an auction it was not conducted via the usual new gTLD auction houses. It seems like Donuts settled the contention privately (or maybe just got lucky).
Both tire companies had proposed single-registrant closed generic spaces. Donuts, of course, has not.
Goodyear has active dot-brand applications for .goodyear and .dunlop remaining. Bridgestone has active applications for .bridgestone and .firestone, also dot-brands.
Amazon, meanwhile, won the .now contention set over five other applicants — Starbucks HK, XYZ.com, One.com, Global Top Level and Donuts, which have all withdrawn their bids.
Amazon’s application for .now envisages a closed registry in which all the second-level domains belong to the company’s intellectual property department.
Also this week, the NAR, which already has the dot-brand .realtor under its belt, beat Donuts, Minds + Machines and Uniregistry to the complementary generic .realestate.
Unfortunately for estate agents worldwide, the NAR plans a tightly restricted .realestate zone, in which only its own members will at first be able to register, according to its application.
The application does seem to envisage a time when others will be permitted to register, however.
The organization said in a press release this week that .realestate will be more open than .realtor, but that full policies will not be released until next year.

Donuts beats trademark owner to .coach

Donuts has won the right to the new gTLD .coach, after an exact-match trademark owner withdrew its bid.
Coach Inc is a chain of clothing and accessories outlets, best known for its handbags, founded in New York in 1941.
The company owns coach.com, but withdrew its application for .coach this week, leaving Donuts unchallenged.
Coach had filed a Legal Rights Objection against Donuts, claiming .coach would infringe its trademark, but the objection panelist disagreed (pdf).
The panelist agreed instead with Donuts that “coach” has multiple meanings, and that that was “a risk that the Objector assumed when it adopted as its trademark a common dictionary word.”

Straat-backed bidder beats Donuts and Afilias to .health

DotHealth has won the four-way contention set for the controversial new gTLD .health.
Afilias and Donuts both withdrew their competing applications this week. Famous Four withdrew its application over a month ago.
DotHealth is backed by Straat Investments, the investment vehicle chaired by .CO Internet’s Juan Calle.
The new gTLD will run on a Neustar (which now owns .CO) back-end.
.health is likely to be restricted, or at least policed, to ensure fake pharmacies are scrubbed from the zone.
DotHealth is supported by, among other health groups, the National Association of Boards of Pharmacy (NABP) which often targets registries and registrars in its campaigns against bogus online pharmacies in the US.
The company plans to use LegitScript to monitor its namespace.
.health will compete against the unrestricted .healthcare, which has been delegated to Donuts.
All four applicants for .health faced adverse Governmental Advisory Committee advice and unsuccessful public interest objections from the Independent Objector.

Amazon and Google deal on .talk, .play, .drive and others

Google and Amazon have started making deals to settle their new gTLD contention sets.
Google won three contention sets against Amazon this week, judging by the latest withdrawals, while Amazon won two.
Amazon won .talk and .you after Google, the only other applicant, withdrew.
Neither company appears to have a “You” brand, unless you count YouTube, but the .talk settlement strongly suggests that Google Talk, the company’s instant messaging client, is on the way out.
When Google applied for .talk in 2012 it intended to give Talk users custom domains to act as a contact point, but in 2013 Google started to indicate that it will be replaced as a brand by Google Hangouts.
The withdrawal seems to suggest that the existence of a gTLD application, a relatively small investment, is not an overwhelming factor when companies consider product rebranding.
I wonder what effect a live, active TLD will have on similar decisions in future.
But Google won the two-horse races for .dev and .drive and after Amazon withdrew its applications.
Google has a product called Google Drive, while Amazon runs Amazon Cloud Drive. Both companies have developer programs, though Google’s is arguably the more substantial of the two.
Google has also won .play — Google Play is its app store — after Amazon, Radix and Star Registry’s withdrawals. Amazon does not have a Play brand.
Google has also withdrawn its application for .book, leaving six remaining applicants, including Amazon, in the contention set.
I don’t currently know whether these contention sets were settled privately or via a third-party auction.

Famous Four wins .party gTLD contest

Famous Four Media has won the .party new gTLD contention set after coming to a private agreement with the only other applicant for the string, Oriental Trading Company.
Financial details of the arrangement were not disclosed.
Oriental Trading is a supplier of party goods that intended to run the gTLD as closed, single-registrant namespace.
But Famous Four expects the open .party registry to be used for parties in the social gathering and political senses of the word.
It now has 13 uncontested applications and 44 more outstanding.
In related news, Minds + Machines today announced that it intends to take at least three of its applications — .garden, .property, and .yoga — at a private auction April 22 managed by Applicant Auction.

Donuts buys out rival .place gTLD applicant

Donuts has won the .place new gTLD contention set after paying off rival applicant 1589757 Alberta Ltd.
The deal, for an undisclosed sum, was another “cut and choose” affair, similar to deals made with Tucows last August, in which the Canadian company named its price to withdraw and Donuts chose to pay it rather than taking the money itself.
1589757 Alberta has withdrawn its application for .place already.
The deal means Donuts now has 165 new gTLDs that are either live, contracted or uncontested.

Right Of The Dot gets legal opinion: new gTLD auctions not illegal

Right Of The Dot, one of the companies hoping to offer contention set resolution services to new gTLD applicants, has published a legal opinion arguing that auctions are not inherently illegal.
The document was issued in response to Uniregistry’s claim that the US Department of Justice has refused to give auctions a green light under antitrust law.
ROTD hired the law firm Lewis Brisbois Bisgaard & Smith, including a partner with DoJ experience, to draft the statement.
It’s aimed at lawyers, primarily, but the gist of it is that simply participating in an auction is not illegal in and of itself — participants would have to collude in some other way too.
It states:

The finding of an antitrust violation necessarily would depend on a showing that the private auction unreasonably restrained interstate trade or commerce.
The question comes down to the conduct of the parties to an auction, be it a private auction or an ICANN Last Resort Auction.
If the parties to an auction, engage in collusion such as price fixing and/or bid rigging, it constitute per se violations of Section 1 of the Sherman Act.
It’s not the auction provider that creates a violation it’s the action of the parties to an auction and those actions can take place in an ICANN Last Resort auction.

In other words, there’s no difference between an ICANN-run auction, in which ICANN gets paid, and a private auction in which the participants and the auctioneer get paid, according to these lawyers.
Uniregistry’s argument as I understand it, on the other hand, is that simply participating in an action that could constitute illegal collusion, because ICANN ends up out of pocket.
Who’s right? Who’s wrong?
I think the only person who could answer that, in light of the DoJ’s refusal to intervene, would be a judge. We’re unlikely to get an answer unless somebody sues somebody.

Mystery web site proposes new gTLD “string change” system

Somebody out there is bummed that they can’t afford to win their new gTLD contention set.
A new web site, StringChange.org, is planning to petition ICANN to allow new gTLD applicants to change the string they’ve applied for, for an extra $100,000 fee.
It’s not clear who’s behind the proposal, which was sent to every new gTLD applicant via email today. The page is unsigned and the domain is registered behind Whois privacy.
The site states:

We are proposing that ICANN allow the option of a “String Change” to applicants in contention, allowing these applicants, if they so choose, to change their string to another string and rewrite the appropriate parts of their applications. In doing so, these applicants would relinquish the right to their original string that is in contention, and be assessed a reevaluation fee of $100,000.
Many applicants would choose this over going to auction, being outbid, and never having the opportunity to launch a TLD and implement their business models. This also creates fairness for smaller groups to have the opportunity to launch and operate a TLD, especially when they are currently up against corporate giants such as Amazon or Google.

It goes on to say that a special “String Change round” of applications would begin in 2014, restricted to applicants who don’t fancy their chances punching it out with Google at auction in 2013.
The system would enable applicants that do not want to change their strings to get to market earlier, the site reckons.
It’s soliciting email addresses for its ICANN petition.
Good idea? Bad idea? Mediocre satire? Cheap attempt to see which applicants have gotten cold feet?

Did Uniregistry over-sell the auction antitrust risk?

Uniregistry’s revelation that it believes private auctions to resolve new gTLD contention sets may be illegal — based on its talks with the US Department of Justice — has caused widespread angst.
Following yesterday’s news, some commentators — some interested — questioned the company’s motive for revealing that Justice had declined to give private auctions a clean bill of health under antitrust law.
Others wondered whether Justice had been given the full facts, whether it had understood the new gTLD program, and whether Uniregistry had accurately reported Justice’s advice.
Given that yesterday’s piece was straight news, I figured it might be good to delve a little deeper into the situation and, yes, indulge in some quite shameless speculation.
What is it that Uniregistry is saying?
Here’s the argument, as I understand it.
“Bid-rigging” is illegal in many countries, including ICANN’s native US, where the Department of Justice prosecutes it fairly often, securing billions of dollars in damages and sometimes criminal sentences.
More often than not, it seems, the prosecutions are related to government contracts, where agencies are looking for a company to carry out a job of work for the lowest possible price.
Bid-rigging emerges when contractors decide among themselves who is going to win the contract. If two contracts are up for grabs, two companies may agree to submit separate high-ball bids so that they can guarantee getting one contract each.
This, of course, inflates the price the government agency pays for the work. There’s no true competition, so prices are artificially high, harming the tax-payer. That’s why it’s illegal.
The ICANN new gTLD program is a bit different, of course.
First, ICANN isn’t a government agency. While it has quasi-governmental powers, it’s a private corporation. Second, it’s looking for high bids, not low bids. Third, it doesn’t care if it doesn’t see any money.
There can be little doubt that private auctions technically harm ICANN, because the winning bidder’s money would be divided up between applicants rather than flowing into ICANN’s coffers.
Uniregistry seems to believe that a new gTLD applicant signing a private auction agreement — basically, competitors agreeing to pay or be paid to decide who wins a contract — that takes money out of ICANN’s pocket could be considered illegal collusion.
But ICANN has stated regularly that it prefers applicants to work out their contention sets privately, explicitly endorsing private auctions and/or applicant buy-outs.
ICANN, it seems, doesn’t care if it is harmed.
According to Uniregistry, however, that doesn’t matter. Its view, following its conversations with Justice, is that what ICANN says is completely irrelevant: the law’s the law.
As the company said yesterday:

the Department emphasized that no private party, including ICANN, has the authority to grant to any other party exemptions to, or immunity from, the antitrust laws. The decision means that the Department of Justice reserves its right to prosecute and/or seek civil penalties from persons or companies that participate in anti-competitive schemes in violation of applicable antitrust laws.

In other words, just because it’s very unlikely that ICANN would start filing antitrust suits against new gTLD applicants, the DoJ could feasibly decide to do so anyway.
Why would it do so? Well, consider that the thing ICANN is auctioning is a spot in the DNS root server, and the root server is ultimately controlled by the US Department of Commerce…
ICANN may not care about the money, but the thing it is selling off “belongs” to the United States government.
That’s the argument as I understand it, anyway.
Isn’t this all a bit self-serving?
Uniregistry’s press release and DI’s blog post yesterday were met with disappointment (to put it mildly) among some new gTLD applicants, auction providers and others.
They noted that Uniregistry had no documentary evidence to back up information it attributed to Justice. Some accused DI of reporting Uniregistry’s statement without sufficient skepticism.
It seems to be true that the company has not been a big fan of private auctions since the concept was first floated.
Uniregistry has applied for 54 new gTLDs, the majority of which are contested. Its main competitors are Donuts, with 37 contention sets, and Top Level Domain Holdings, with 21.
Who wins these contention sets depends on who has the most money and how much they’re prepared to pay.
Unlike Donuts, Uniregistry hasn’t gone to deep-pocketed venture capital firms. It’s reportedly funded to the tune of $60 million out of CEO Frank Schilling’s own pocket.
And unlike TLDH, which is listed on London’s Alternative Investment Market, Uniregistry doesn’t have access to the public markets to raise money. It seems to be better-funded, however.
Donuts raised $100 million to fund its new gTLD ambitions. It’s more than Schilling claims to have put into Uniregistry, but Donuts has spent much more on application fees.
Donuts is involved in 307 applications, many more than Uniregistry’s 54.
The money remaining for auctions is also spread much thinner with Donuts. It’s also in 158 contention sets, more than three times as many as than Uniregistry’s 45.
Private auctions arguably benefit Donuts because, depending on the auction model, it could reinvest the money it raises by losing an auction into a future auction. Its VC money would last longer.
The same logic applies to all applicants, but it becomes more of a pressing issue if you’re on a tight budget or have a large number of applications.
Uniregistry may have calculated that it stands a better chance of winning more contention sets against Donuts and TLDH if its competitors don’t get the chance to stuff their war chests.
Of course, Uniregistry could have simply refused to participate in private auctions in order to force an ICANN auction in its own contention sets. All new gTLD applicants have that power.
But by publicizing its antitrust concerns too, it may have also torpedoed private auctions for some contention sets that it’s not involved in.
That could limit the amount of money flowing from losing auctions to its competitors.
Another theory that has been put forwards is that Uniregistry went public with its Justice conversations — over-selling the risk, perhaps — in order to give its competitors’ investors jitters.
That might potentially reduce the capital available to them at auction, keeping auction prices down.
So did Uniregistry stand to benefit from playing up the risk of antitrust actions against new gTLD applicants? Probably.
Does it mean that its interpretation of its Department of Justice conversations is not completely accurate? Ask a lawyer.