New gTLDs not an illegal conspiracy, court rules

ICANN has beaten off a lawsuit from alternate root provider name.space for a second time, with a US appeals court ruling that the new gTLD program was not an illegal conspiracy.
name.space sued ICANN in 2012, claiming that the program broke competition laws and that “conflicted” ICANN directors conspired with the industry in an “attack” on its business model.
The company runs an alternate DNS root containing hundreds of TLDs that hardly anyone knows about, cares about, or has access to.
Almost 200 of the strings in its system had matching applications in the 2012 new gTLD round; many have since been delegated.
The company’s complaint asked for an injunction against all 189 matching TLDs.
But a court ruled against it in 2013, saying that name.space had failed to make a case for breaches of antitrust law.
Last week, an appeals court upheld that ruling, saying that the company had basically failed to cross the legal threshold from simply making wild allegations to showing evidence of an illegal conspiracy.
“We cannot… infer an anticompetitive agreement when factual allegations ‘just as easily suggest rational, legal business behavior.’,” the court ruled, citing precedent.
“Here, ICANN’s decision-making was fully consistent with its agreement with the DOC [US Department of Commerce] to operate the DNS and the Root,” it wrote. “In transferring control to ICANN, the DOC specifically required it to coordinate the introduction of new TLDs onto the Root. This is exactly what ICANN did in the 2012 Application Round”.
“The 2012 rules and procedures were facially neutral, and there are no allegations that the selection process was rigged,” the panel ruled.
The court further ruled that ICANN is not a competitor in the markets for domain names as registry, registrar or defensive registration services, therefore it could not be subject to antitrust claims for those markets.
A few other claims against ICANN were also dismissed.
In short, it’s a pretty decisive victory for ICANN. General counsel John Jeffrey said in a statement that ICANN is “pleased” to have won.
All the major documents in the case, including the latest opinion, can be downloaded here.
While the lawsuit has been making its way through the courts, the .space gTLD has actually been delegated and the domain name.space is owned by its new registry, Radix.
There’s some salt in the wounds.

Most governments keep restrictions on country names in new gTLDs

Just one out of every 10 governments in the ICANN Governmental Advisory Committee is happy for people to register its country name in new gTLDs.
That’s according to a new GAC database detailing which countries want to keep tabs on how their names are being used.
Out of 80 GAC members contributing to the database, just eight have said registries can sell their country names with no restrictions.
The eight countries and territories are the UK, the USA, Denmark, Finland, Netherlands, Sweden, Guernsey and Pitcairn.
New gTLD registries will therefore be able to auction off, for example, finland.guru or pitcairn.news, to whoever wants them.
Another 10 governments — Belgium, Brazil, Bulgaria, Czech Republic, Georgia, Montenegro, New Zealand, Romania, Spain and Switzerland — have relinquished oversight in the case of dot-brand registries that have signed Specification 13 of the ICANN Registry Agreement.
So if Sony wants to register brazil.sony to itself, it can without restrictions.
Under the new gTLD Registry Agreement, all country and territory names in the six official UN languages have to be reserved by all registries unless they can reach agreement with the applicable government.
The 18 governments mentioned above have basically waived this right to be notified in whole or in part.
The remaining 62 governments say they still wish to be notified when a registry wants to release its name.
GAC chair Thomas Schneider told ICANN (pdf) that countries not yet listed in the database should be treated as if they’re still restricted, so the actual number is closer to 200.
In short, this database is not a lot of help to dot-brands and other registries that want to start using or selling country names.
Critics have pointed out that many governments wanting to regulate their names in new gTLDs have not done so in their own ccTLDs.
Of the 62, ownership of country names is mixed. Italy owns italy.it and italia.it, for example, while germany.de and deutschland.de appear to be in private hands.

Sharp wants dot-brand Whois requirement relaxed

Electronics firm Sharp wants to remove part of its new gTLD registry contract relating to Whois.
The company has filed a Registry Services Evaluation Process request to get its requirement to offer “searchable Whois” dropped. RSEP is the mechanism registries use to amend their contracts.
ICANN’s initial review has not found any security, stability or competition problems and has now opened the request up for public comment.
Because .sharp will be a dot-brand, all the domains would belong to Sharp and its affiliates, reducing the value of searchable Whois.
Searchable Whois is an enhanced Whois service that allows users to search on all fields (such as registrant, email address, etc) rather than just the domain name.
Such services are not mandatory under ICANN’s new gTLD rules, but applicants that said they would offer them could score an extra point in their Initial Evaluation.
In Sharp’s case, a one-point difference would not have affected the outcome of its IE. In any event, it did not score the extra point.
Sharp said it was requesting the change because it’s switching back-ends from GMO Internet to JPRS, which apparently does not or does not want to support searchable Whois.

As deadline looms, over 100 dot-brands still in contract limbo

With the minutes ticking down to the deadline for scores of dot-brands to sign registry agreements with ICANN, over 100 have not, according to ICANN’s web site.
New gTLD applicants had until July 29 to sign their contracts or risk losing their deposits.
I reported a week ago that roughly 170 would-be dot-brands had yet to sign on the dotted line, and my records show that only 35 have done so in the meantime.
Another four applications have been withdrawn.
One of the newly contracted parties is Go Daddy, which signed an RA for .godaddy last week. Others include .nike, .comcast and .mitsubishi.
Unless we see a flood of new contracts published over the next day or two, it seems likely well over 100 strings will soon be flagged as “Will Not Proceed” — the end of the road for new gTLD applications.
That may not be the final nail in their coffins, however.
Last week, ICANN VP Cyrus Namazi said that applicants that miss today’s deadline will receive a “final notice” in about a week. They’ll then have 60 days to come back to the process using the recently announced Application Eligibility Reinstatement process.

IDN .com hits the root

Eleven variants of .com and .net in non-Latin scripts joined the internet today.
Verisign’s whole portfolio of internationalized domain name new gTLDs were added to the DNS root at some point in the last 24 hours, and the company is planning to start launching them before the end of the year.
But the company has been forced to backtrack on its plans to guarantee grandfathering to thousands of existing [idn].com domains in the new domains, thereby guaranteeing a backlash from IDN domainers.
The eleven gTLDs are: .कॉम, .ком, .点看, .คอม, .नेट, .닷컴, .大拿, .닷넷, .コム, .كوم and .קוֹם. Scripts include Arabic, Cyrillic and Hebrew.
Verisign signed registry agreements with ICANN back in January, but has been trying to negotiate a way to allow it to give the owners of [idn].com domains first rights to the matching domain in the “.com” in the appropriate script.
The company laid out its plans in 2013. The idea was to reduce the risk of confusion and minimize the need for defensive registrations.
So what happened? Trademark lawyers.
Verisign CEO Jim Bidzos told financial analysts last week that due to conversations with the “community” (read: the intellectual property lobby) and ICANN, it won’t be able grandfather all existing [idn].com registrants.
All of the new IDN gTLDs will be subject to a standard ICANN Sunrise period, which means trademarks owners will have first dibs on every string.
If you own водка.com, and somebody else owns a trademark on “водка”, the trademark owner will get the first chance to buy водка.ком.
According to SeekingAlpha’s transcript, Bidzos said:

Based primarily on feedback from domain name community stakeholders, we have revised our IDN launch strategy. We will offer these new IDN top-level domains as standalone domain names, subject to normal introductory availability and rights protection mechanisms, available to all new gTLDs. This revised approach will not require ICANN approval and is designed to provide end users and businesses with the greatest flexibility and, for registrars, a simple and straightforward framework to serve the market.
Finally, we believe this approach should provide the best opportunity for increased universal acceptance of IDNs. We expect to begin a phased rollout of the IDNs towards the end of this year, and we’ll provide more information on our launch plans when appropriate.

Senior VP Pat Kane added on the call that the grandfathering provisions, which would have required ICANN approval, have been “taken out”.
The question now is whether Verisign will introduce a post-sunrise mechanism to give rights to [idn].com.
That would not be unprecedented. ICM Registry ran into similar problems getting its grandfathering program for .porn approved by ICANN. It wound up offering a limited, secondary sunrise period for existing .xxx registrants instead.

OpenTLD suspension stayed in unprecedented arbitration case

“Cybersquatting” registrar OpenTLD, part of the Freenom group, has had its accreditation un-suspended by ICANN while the two parties slug it out in arbitration.
Filed three weeks ago by OpenTLD, it’s the first complaint to head to arbitration about under the 2013 Registrar Accreditation Agreement.
ICANN suspended the registrar for 90 days in late June, claiming that it “engaged in a pattern and practice of trafficking in or use of domain names identical or confusingly similar to a trademark or service mark of a third party”.
But OpenTLD filed its arbitration claim day before the suspension was due to come in to effect, demanding a stay.
ICANN — voluntarily, it seems — put the suspension on hold pending the outcome of the case.
The suspension came about due to OpenTLD being found guilty of cybersquatting its competitors in two UDRP cases.
In both cases, the UDRP panel found that the company had cybersquatted the trademarks of rival registrars in an attempt to entice their resellers over to its platform.
But OpenTLD claims that ICANN rushed to suspend it without giving it a chance to put forward its side of the story and without informing it of the breach.
It further claims that the suspension is “disproportionate and unprecedented” and that the public interest would not be served for the suspension to be upheld.
This is not an Independent Review Process proceeding, so things are expected to move forward relatively quickly.
The arbitration panel expects to hear arguments by phone August 14 and rule one way or the other by August 24.
Read the OpenTLD complaint here.

Flood of wait-and-see dot-brands expected this week

ICANN expects to sign as many as 170 new gTLD contracts with dot-brand applicants over the coming week.
Dot-brands that have been treading water in the program to date are up against a hard(ish) July 29 deadline to finally sign a Registry Agreement with ICANN.
VP of domain name services Cyrus Namazi told DI today that ICANN expects most of the backlog to be cleared in the next couple of weeks.
“The end of the July is a bit of a milestone for the program as a whole,” Namazi said. “A substantial number of contracts will be signed off and move towards delegation.”
“I think within a short period after the end of July most of these will be signed off,” he said.
There are currently 188 applications listed as “In Contracting” in the program. Namazi and myself estimate that roughly 170 are dot-brands, almost all of which have July 29 deadlines.
Namazi said that ICANN has planned for a last-minute rush of “hundreds” of applicants trying to sign contracts in the last month.
The July 29 deadline for dot-brands was put in place because of delays creating Specification 13 of the RA — that’s the part that allows dot-brands to function as dot-brands, by eschewing sunrise periods for example.
For most dot-brand wannabes, it was already an extension of nine months or more from their original deadline.
But it seems inevitable that some will miss the deadline.
Namazi said that those applicants that do miss the deadline will receive a “final notice” about a week later, which gives the applicant 60 days to come back to the process using the recently announced Application Eligibility Reinstatement process.
That creates a new deadline in early October. Applicants that miss that deadline might be shit outta luck.
“They’ll essentially just sit in a bucket that will not be proceeding,” Namazi said. “We don’t have a process to reactivate beyond that.”
So why are so many dot-brand applicants leaving it so late to sign their contracts?
The answer seems to be, essentially: lots of them are playing wait-and-see, and they still haven’t seen.
They wanted to see how other dot-brands would be used, and there’s not a lot of evidence to draw on yet. The number of dot-brands that have fully shown their cards could be counted on your fingers. Maybe even on just one hand.
“Some of them have a different level of enthusiasm for having their own TLD,” Namazi said. “Some of them don’t have their systems or process in place to accept or absorb a new TLD. Some of them don’t even know what to do with it. There may have been some defensive registrations in there. There were probably expectations in terms of market development for new TLDs that have gone a bit slower than some people’s business plans called for.”
“That has probably made some of the large brands more hesitant in terms of rushing to market with their new TLDs,” he said.

Booking.com uses .africa precedent to challenge .hotels ruling

Booking.com has become the first new gTLD applicant to publicly cite the recent .africa Independent Review Process ruling in an attempt to overturn an adverse ICANN decision.
The challenge relates to the decision by ICANN, under the rules of the new gTLD program, to place applications for .hotels and .hoteis into a contention set due to their potential for visual confusion.
The two strings are heading to auction, where the winner will likely have to fork out millions.
In a missive to ICANN (pdf) last week, Booking.com outside attorney Flip Petillion said that the .africa IRP ruling shows that ICANN has to revisit its decision-making over .hotels.
The letter highlights a wider issue — how can ICANN follow community-established rules whilst sticking to its rather less well-defined Bylaws commitment to be “fair”?
Petillion wrote:

ICANN — and the BGC — has maintained the position 1) that the fact the process established by ICANN was followed is sufficient reason to reject that challenge and 2) that the fact that the process allowed neither for Booking.com to be heard nor for a review of the decision by the ICANN Board is of no relevance.
In the interim, IRP panels have confirmed that this process-focussed position is unsustainable. The ICANN Board has an overriding responsibility for making fair, reasoned and non-discriminatory decisions under conditions of full transparency.

He cites the .africa IRP decision to support this assertion.
Booking.com is the applicant for .hotels, while a different company, Travel Reservations (formerly Despegar Online), has applied for .hoteis, the Portuguese translation.
While both applicants are happy for the two gTLDs to co-exist on the internet, ICANN’s third-party String Similarity Review panel, part of the new gTLD evaluation process, ruled that they cannot.
They’re just too similar — in standard browser sans-serif fonts they can be indistinguishable — and would likely lead to user confusion, the panel decided in February 2013.
Booking.com challenged this decision with a Request for Reconsideration, which was dismissed.
It then filed an IRP, but that concluded this March with the panel awarding a grudging win to ICANN, which it orders should split the costs of the case.
In April, the ICANN board adopted the IRP panel’s findings, saying that the two applicants should remain in the contention set.
Booking.com, along with Travel Reservations, filed a second RfR, challenging the board’s decision, but this was rejected by ICANN’s Board Governance Committee in June.
The ICANN board has not yet formally adopted the BGC’s recommendations — I expect it to consider them at its next scheduled meeting, July 28 — hence Booking.com’s last-ditch attempt to get ICANN to change its mind.
Petillion wrote:

Simply following the processes and procedures developed by ICANN cannot alone be sufficient grounds for declining to review a decision. If the requirements of fairness, reasoned decision making, non-discrimination and transparency have not been met in the implementation of the process and procedures, the ICANN Board must, when invited to, conduct a meaningful review.

In the .africa case, the IRP panel ruled that ICANN should have asked the Governmental Advisory Committee for its rationale for objecting to DotConnectAfrica’s .africa bid, even though there’s nothing in the new gTLD rules or ICANN Bylaws specifically requiring it to do so.
However, in the Booking.com case, the IRP panel raised serious questions about whether the String Similarity Review rules were consistent with the Bylaws, but said that the time to challenge such rules had “long since passed”.
In both cases, ICANN followed the rules. Where the two panels’ declarations diverge is on whether you can win an IRP challenging the implementation of those rules — for DotConnectAfrica the answer was yes, for Booking.com the answer was no.
In a new gTLD program that has produced long lists of inconsistencies; IRP panel decisions appear to be but the latest example.
The question now is how the ICANN board will deal with the BGC recommendation to reject Booking.com’s latest RfR.
If it summarily approves the BGC’s resolution, without doing some extra due diligence, will it be breaking its Bylaws?

Read that controversial .africa letter

Did the African Union Commission really use a letter written by ICANN to express its support for ZA Central Registry’s .africa bid?
Having now obtained and read it, I have my doubts.
I’m publishing it, so you can make your own mind up. Here it is (pdf).
That’s the letter that The Register’s Kieren McCarthy reported yesterday was “ICANN-drafted” and “duly signed by the AUC”
“Essentially, ICANN drafted a letter in support of ZACR, gave it to the AUC, and the AUC submitted the letter back to ICANN as evidence that ZACR should run dot-africa,” The Reg reported.
I don’t think that’s what happened.
What I see is a two-page letter that has one paragraph indisputably written by ICANN and whole bunch of other stuff that looks incredibly remarkably like it was written by the AUC and ZACR.
And that one ICANN paragraph was drawn from the new gTLD program’s Applicant Guidebook, where it was available to all governments.
The Reg reported that ICANN, in the unredacted ruling of the Independent Review Panel, admitted it drafted the letter.
What The Reg didn’t report is that ICANN merely admitted to sending the AUC a letter based on the aforementioned AGB template, and that it was subsequently heavily revised by the AUC.
It was not, I believe, a simple case of the AUC putting its letterhead and John Hancock on an ICANN missive.
I believe that ZACR had quite a big hand in the redrafting too. The stylized “.africa (dotAfrica)” is not how ICANN refers to gTLDs, but it is how ZACR refers to its own brand.
The letter was written in order to satisfy the requirements of the Geographic Names Panel, which reviews new gTLD applications for the required government support.
The original AUC letter (read it here) was simply one paragraph confirming that ZACR had been appointed .africa registry, as the winner of an African Union RFP process.
It didn’t have enough information, or was not specific and formal enough, for the GNP, which issued a “Clarifying Question”.
In response to the CQ, it seems AUC reached out to ICANN, ICANN sent over something not dissimilar to its AGB template, the AUC and ZACR redrafted, edited and embellished it and sent it to ICANN to support their .africa application.
Did ICANN act inappropriately? Maybe. But I’m losing my enthusiasm for thinking about this as a massive scandal.

DCA’s .africa bid officially unrejected by ICANN

ICANN’s board of directors has un-rejected DotConnectAfrica’s application for the new gTLD .africa.
The board held an emergency meeting this morning to consider last Friday’s Independent Review Process decision, which said ICANN’s handling of DCA’s bid was not consistent with its bylaws.
Speaking at the Internet Governance Forum USA in Washington DC in the last half hour, ICANN chair Steve Crocker revealed the following:

We passed a resolution acknowledging the panel’s report — decision — accepting it and taking action. The primary action is to put the the DotConnectAfrica Trust application back in to the evaluation process. And there are other aspects of the panel’s decision that we will have to deal with later. This does not represent a final decision about anything. It just moves that process forward. There will be posting of the resolution and press release probably as we are sitting here.

If you want to catch it yourself, rewind the live stream here to roughly 59 minutes.
This story will be updated just as soon as the press release and resolution are published.
UPDATE:
The resolution has been published.
In it, the board agrees to continue to delay the delegation of .africa to ZA Central Registry, which is the contracted party for the gTLD, to pay the IRP costs as ordered by the panel, and to return DCA’s application to the evaluation process.
It also addresses the fact that the Governmental Advisory Committee has given formal advice that the DCA bid should not be approved.
The ICANN board says that because it has not decided to approve or delegate .africa to DCA, it’s technically not going against GAC advice at this time.
It will also ask GAC to respond to the IRP panel’s criticism of it for providing advice against DCA without transparent justification. The resolution says:

the Board will ask the GAC if it wishes to refine that advice and/or provide the Board with further information regarding that advice and/or otherwise address the concerns raised in the Declaration.

It was essentially the GAC’s lack of explanation, and ICANN’s lack of curiosity about that lack of explanation, that cost ICANN the case and hundreds of thousands of dollars in fees.
How the GAC responds will be interesting. There’s now a solid case to be made that it’s going to have to start putting its rationales in its advice, rather like the ICANN board does with its resolutions.