Mystery buyer rescues Epik at end of crazy week

Limping registrar Epik isn’t out of the woods yet by a long shot, but its life became considerably easier late last week when a mystery buyer snapped up its assets for almost $5 million, enabling it to pay off many of its creditors.

The company said on Twitter that it had closed a deal that allowed it to pay off ICANN, which had filed a public breach notice just two days earlier, as well as various registries and loan providers.

It also allowed it to pay off Matthew Adkisson, the customer who was owed over $300,000 following a botched secondary market domain deal last year, who has now dropped his fraud and racketeering lawsuit.

Adkisson appears to have come away poorer, however, as the payoff seems to have only covered the money owed and not the probably substantial legal fees he has incurred since then.

The events of last week were pretty wild, including claims about literal assassination attempts, judging by court documents from Adkisson’s case.

Epik had told his lawyers that an “asset purchase agreement” for the Epik registrar was imminent, which would allow the company to settle its debts.

Disappointed with the offer, Adkisson filed for a temporary restraining order to prevent the sale, believing the money would wind up being squirreled away by the registrar’s current or former management.

That TRO disappeared when he withdrew his complaint and got paid at the weekend. ICANN, Identity Digital and Verisign all appear to have been paid at the same time, along with creditors called TVT and JJE.

The ICANN breach notice provides some poor optics for ICANN, which now looks like it only initiated Compliance proceedings in March, when its own registrar fees went unpaid, despite being aware of the many customer complaints against Epik.

However, now that the Compliance process has started, getting paid may not be enough to end it. The breach notice also refers to “several hundred” domains that were affected by Epik’s cash flow problems — it seems the company was unable to renew or transfer domains while in was in hock to the registries.

Adkisson’s docket contains several sworn declarations from customers saying they have lost important domains to others or been forced to spend thousands of dollars to move their domains elsewhere lest risk losing them.

While Epik cannot provide satisfactory answers to ICANN’s questions about these domains, its accreditation is still at risk.

Complicating matters, the new buyer will need to have the old registrar accreditation transferred to it, a process that takes time and subjects the registrar to a certain amount of ICANN scrutiny.

And the identity of the buyer is pretty mysterious.

On paper, the buyer is Epik LLC, a Wyoming corporation that formed about a week before the deal was finalized. Former Epik CEO Rob Monster has had to agree to change the names of operating company Epik Inc and parent Epik Holdings Inc to remove the “Epik” brand.

But the new LLC was created by a company called Registered Agents Inc, and the acquisition deal signed by its president, Jon Spear.

Registered Agents is a company that enables people to set up shell companies pretty much anonymously, and is often used by “[o]ligarchs, criminals and online scammers”, according to the Washington Post.

This is exactly the kind of association Epik does not need right now.

Making the new owners look even worse, an anonymous individual claiming to be a representative of the new Epik introduced himself or herself on the domainers forum Namepros at the weekend in probably the dumbest way imaginable if the company wants to claw back any credibility at all among what was once a core customer base.

The post does contain an apology to those “financially hurt” by Epik’s actions, and a commitment to “make things right for as many people as possible”, but it also contains several sideswipes at Namepros users, many of them victims of Epik’s mismanagement, calling their commentary “worthless”. It looks like the work of a troll.

In short, Epik still has a hell of a tough time ahead of it if it wants to shake off its bad reputation.

But before this article ends, I promised you some stuff about assassination attempts.

The material disclosed in the Adkisson case includes what appears to be a dense, multi-layered, rambling, paranoid conspiracy theory from Rob Monster, which draws in everyone from disgraced shock jock Alex Jones to Domain Name Wire editor Andrew Allemann (who hilariously Monster accuses of writing “hit pieces” about him).

I have to confess to being slightly disappointed that I didn’t get a shout-out.

He accuses people I’m not going to name here as secretly convening in late 2021 to discuss removing Monster from Epik by any means possible, with “lethal options” possibly on the table. He goes on to say:

For the record, I do have reason to believe that there have been attempts on my life including recently. This was the main reason why I stayed in Asia from January 20 through April 4 and maintained a heightened degree of privacy. I am in excellent health and not suicidal.

Monster, who I believe UK defamation law allows me to describe as “a bit of a character”, is known to frequently indulge in conspiracy theories, particularly with regards mass shootings (which feature in the theory outlined in his email to Adkisson’s lawyers).

Everyone hates Verisign’s new .net deal

The public has commented: Verisign’s .net registry contract should not be renewed in its currently proposed form.

ICANN’s public comment period for the renewal closed yesterday and attracted 57 submissions, most of which either complained about Verisign being allowed to raise its prices or expressed fears about domains being seized by governments.

The proposed contract retains the current pricing structure, in which Verisign is allowed to raise the price of a .net domain by 10% a year. They currently cost $9.92, meaning they could reach $17.57 by the time the contract ends.

The Internet Commerce Association, some of its supporters, Namecheap, the Registrars Stakeholder Group, the Cross-Community Working Party on ICANN and Human Rights (CCWP-HR), and TurnCommerce all oppose the price increases.

The RrSG said the price provisions “are without sufficient justification or an analysis of its potentially substantial impact on the DNS”.

These commenters and others who did not directly oppose the increases, including the At-Large Advisory Committee and consultant Michael Palage, called for ICANN to conduct an economic analysis of the domain name market.

The Business Constituency was the only commenter to openly support the increases, though its comment noted that it is opposed in principle to ICANN capping prices at all.

The Intellectual Property Constituency did not express a view on pricing, but called for greater transparency into the side-deal that sees ICANN get an extra $4 million a year for unspecified security-related work. ICANN has never revealed publicly how this money is spent.

In terms of the number of submissions, the biggest concern people seem to have is that the proposed contract contains language obliging Verisign to take down domains to comply with “applicable law, government rules or regulations, or pursuant to any legal order or subpoena of any government, administrative or governmental authority, or court of competent jurisdiction”.

This language is already in the .com contract, but before ICANN clarified this on April 26 several concerned registrants had made comments opposing its inclusion.

Notably, the founder of the controversial troll forum kiwifarms.net, which has been kicked out of registrars after being linked to suicides, submitted his own “ICANN should be destroyed” comment.

Several commenters also noted that the definition of “security and stability” in the .net contract differs to the Base Registry Agreement that almost all other registries have signed in such a way that it is feared that Verisign would not have to abide by future ICANN Consensus Policies under certain circumstances.

As several commenters note, the usual protocol following an ICANN public comment period is for ICANN to issue a summary report, pay lip service to having “considered” the input, and then make absolutely no changes at all.

This time, some commenters held out some hope that ICANN’s new, surprisingly sprightly and accommodating leadership may have a different approach.

The comments can be read here.

ICANN just put a date on the next new gTLD round

ICANN has just penciled in a date for the next round of new gTLD applications for the first time, but it’s already upsetting some people who think it’s not aggressive enough.

Org has released its draft Implementation Plan for the next round, which would see it launch in May 2026, three years from now.

The date seems to have been set from the top. The plan refers to “the Board’s desire to launch the next round by May 2026”.

The plan sets out the timeline by which community members will work with staff to turn the community’s policy recommendations into the rules and procedures for accepting and processing gTLD applications.

This cross-community Implementation Review Team will write the next Applicant Guidebook — the new gTLD’s program’s Holy Quran.

The plan covers the 98 policy recommendations already approved by the ICANN board of directors, it will be updated when or if the board approves the 38 recommendations currently considered “pending”.

The work would be split into eight “modules”, corresponding to the sections of the AGB, and the IRT would tackle each in turn, meeting mostly via Zoom for a couple hours once a week.

The modules would be split into about 40 topics, each covering a group of related recommendations, and each topic would be discussed for two meetings, with Org-drafted text undergoing first and second “readings” by the IRT.

The first module would take seven months to complete, timed from this month, and each subsequent module would take three to four months after the completion of the preceding module, according to the draft plan.

Above and beyond that timetable, the IRT has certain external dependencies, such as the work being done with governments on the “closed generics” issue, the plan notes.

After the AGB is published, ICANN would need to carry out other work, such as subjecting the AGB to public comment, then marketing the program for four months, before an application window would open.

The timeline has been received negatively by pretty much everyone on the IRT expressing a view on mailing list or Zoom chatter so far, with some asking why the modules have to be tackled sequentially rather than in parallel work tracks.

Some have also pointed out that an IRT lasting over two years risks participant attrition, a frequent problem with ICANN’s interminable policy-making work.

The IRT comprises dozens of volunteers from all sections of the community, though the most-engaged tend to be the lawyers and consultants who stand to make money advising large enterprises on their dot-brand applications.

Three more dot-brands realize the futility of existence

A big bank and a big retailer have ditched their dot-brand gTLDs.

Northwestern Mutual has told ICANN it no longer wishes to operate .mutual and .northwesternmutual, while iconic jewelry store operator Tiffany said it doesn’t want .tiffany any more.

Neither gTLD has been used. The Northwestern registry pages contain a notice, apparently from 2017, about how it expected to publish launch plans “over the coming months”.

Northwestern’s gTLDs are on GoDaddy’s back-end. Tiffany is on Verisign. All three were managed by Fairwinds Partners.

.web delay likely after Verisign rival files ICANN appeal

The .web gTLD appears unlikely to see the light of day any time soon, after the Afilias spin-off that came second to Verisign in the $135 million auction in 2016 kicked off another appeals process.

Altanovo, which is made up of bits of Afilias left over when Identity Digital acquired the company, has asked ICANN to enter a Cooperative Engagement Process, according to ICANN’s records.

The CEP is a form of mediation companies can force ICANN into when they have beef. It’s designed to avoid the relative expense of a full-on Independent Review Process. They usually result in an IRP anyway.

Altanovo made its request the same day ICANN announced that its board of directors had decided to take .web off hold and resume registry contract negotiations with Verisign, following Altanovo’s original, unsuccessful IRP.

Verisign yesterday said the move amounted to an “abuse of process” and “baseless procedural maneuvering”, likely to lead to “delay for delay’s sake”.

IRPs typically last years and cost many hundreds of thousands of dollars in panel fees, not counting each party’s lawyer fees.

Altanovo believes that Verisign broke ICANN’s new gTLD program rules when it bid for .web via a secret intermediary. Verisign has countered that its rival, then Afilias, broke the rules by trying to negotiate a private deal during the auction’s “black out” period.

Progress made on next new gTLD round rules

Pace towards finalizing the details of the next new gTLD application round is picking up, with a group of policy-makers close to overcoming some of the ICANN board’s concerns about the program.

A so-called “small team” of GNSO members, aided by a couple of ICANN directors, have drafted a set of recommendations aimed at helping the board approve the 38 community recommendations it has not yet adopted.

The board approved 98 new gTLD “Subsequent Procedures” policy recommendations in March, but was hesitant on issues such as the proposed registry back-end evaluation program, round-based applications, and content policing.

The board had raised the specter of a first-come, first-served model for new gTLD applications, something the community roundly rejected during the Policy Development Process for the next rounds.

Directors in the small group have since clarified that they’re really looking for a “steady state” application process, that may or may not involve FCFS, in order to make planning, hiring and software development more predictable.

There seems to be no question of the next application opportunity being anything other than a round-based process.

Nevertheless, it’s now possible that the GNSO may throw the board a bone by suggesting a PDP that would look into how the new gTLD program could operate in a “steady state” over the long term.

Content policing is another issue that has caused the board pause.

SubPro and the GNSO have recommended that registries be able to add Registry Voluntary Commitments — promises to ban certain types of content from their zone, for example — to their ICANN contracts.

But the board is worried that this may break its 2016 bylaws, which demand ICANN not get involved in content policing, even though the similar Public Interest Commitments from the 2012 round are enforceable.

The GNSO and board currently seem to be leaning towards a bylaws amendment to address RVCs, but it will be a bit of a tightrope, language-wise, to keep ICANN on its ostensibly technical mandate.

The small group has met nine times since late March to try and resolve these and other board concerns ahead of the mid-year ICANN 77 meeting in Washington DC, which starts June 12.

There’s a pretty aggressive schedule of meetings between now and then, with a bilateral between GNSO and board May 22. The board should have the GNSO’s response to its roadblocks by DC, which should allow it to start chipping away at some of the 38 unadopted recommendations.

Brands ask for cheaper ICANN fees

The group representing dot-brand gTLD registries has asked ICANN to relieve its members of millions of dollars of annual fees.

The Brand Registry Group has written to ICANN to complain that the current $25,000 a year fixed registry fee is too high, given that most dot-brands have next to no domains in their zones and pretty much no abuse.

A dot-brand is a gTLD matching a trademark in which only the brand holder may register domains. Most are unused, and those that are used don’t face many of the contractual compliance-related issues as regular gTLDs.

The BRG wants its members’ fees reduced to $5,000 a year, when the registry has fewer than 5,000 names and basically no abuse.
The group notes that 20-year-old gTLDs such as .museum, .coop, and .aero have a base fixed fee of just $500.

Given that there are about 400 contracted dot-brands, it’s basically asking ICANN to throw away about $8 million of annual revenue, paid for by some of the largest and wealthiest multinationals out there.

ICANN salary porn: 2022 edition

ICANN has published its fiscal 2022 US tax returns, revealing as usual the big bucks its top brass and contractors are paid for boldly keeping the internet stable and secure.

It was a good year for former CEO Göran Marby, who held the top job until the end of calendar 2022 and saw his total compensation top a million dollars for a second time, having dipped in fiscal 2021.

Marby’s total package was $1,050,755 in salary, bonus and benefits for the year ended June 30, up from $977,540 in the previous year. The performance-related portion was $218,315, up from $202,038. His base salary was $734,579, up from $673,462.

The tax filing lists 17 highly compensated employees, down by two from 2021, who are making $390,000 and up. Seven made over half a million dollars a year, up from five in the previous year.

One of the missing employees this year was CTO David Conrad, who left the Org at the end of 2021. The filing reveals he was paid $115,874 in severance, despite ICANN characterizing his departure as a decision he made himself.

Current interim CEO Sally Costerton’s compensation is not revealed. It’s paid to her consulting company and the sum, whatever it is, presumably does not meet the threshold for disclosure as a top contractor.

(I hope this number is disclosed in future, because I’ve just come up with a funny nickname for her if it’s a very large amount.)

Top contractors are as usual law firm Jones Day ($5,164,603, down from $8,769,608) and software developers Architech, Zensar and OSTechnical, which received $2,857,500, $1,488,077 and $1,169,210 respectively.

ICANN’s total revenue was $167,893,854, up from $163,942,482. Its surplus after expenses was $22,755,179, down from $32,564,762. It had net assets of $539,863,742 at the end of June, down from $555,804,201.

The filing reveals that non-accreditation fees from registries and registrars topped $100 million.

Another registrar seemingly vanishes

An accredited registrar appears to have gone bust after its parent company failed.

ICANN has sent a breach notice to Nimzo 98, which while registered as an LLC in the US appears to be Indian-operated, saying the company has not paid its fees and the Compliance folk haven’t been able to reach management since December.

The notice also complains that the company isn’t providing a Whois service as required, which may be a polite way of saying that the entire web site is down — it’s not resolving properly for me.

Digging into the data a little, it seems Nimzo was the in-house registrar of a company called Houm that, according to its press releases, was operating some kind of privacy-oriented social network slash cloud storage service.

Part of Houm’s offering was a personal domain name, which came bundled as part of the monthly service fee.

When Houm seriously started promoting its service last year, it appears to have led to a spike in registrations via Nimzo. Most of its domains were concentrated in new gTLDs such as .live, .xyz, .earth, .world and .space.

Having consistently registered no more than a couple hundred gTLD names per month for years, there was a sudden spike to over 5,000 in July and 12,000 in August, peaking Nimzo’s total domains at 21,000 that month.

But then, in October, the registrar deleted almost all of its names. It went from 21,000 domains under management in August to 190 at the end of October. These were not grace-period deletes, so fees would have been applicable.

Houm’s web site at houm.me also appears inoperable today, showing a server error when I access it, and its Twitter account has been silent since last August.

ICANN has given Nimzo until May 22 to pay up or lose its accrediation.

Verisign “pleased” at ICANN’s .web call

Verisign said it is “pleased” that ICANN has decided it should be awarded the .web gTLD, but hinted that it might not launch this year.

“We now look forward to NDC’s execution of the .web Registry Agreement and submission to ICANN of the request for assignment of the .web Registry Agreement to Verisign,” the company said in a statement this afternoon.

It follows the news this morning that ICANN’s board of directors decided that the company did not break any rules when it won the auction for .web via a secret intermediary company, Nu Dot Co.

Verisign reiterated that its current financial guidance for the year does not include any impact from .web.