ICANN terminates billion-dollar gTLD applicant over unpaid $3,000 bill

Telefonica Brasil, part of the massive Telefonica group of telecoms companies, has lost its registrar accreditation after failing to pay its ICANN fees.
The company, which had revenue last year of $14.6 billion, is facing termination of its Registrar Accreditation Agreement over the pitiful sum of $3,082.12.
It’s also embarrassing because Telefonica is applying for the new gTLD .vivo, its consumer brand in Brasil, which will require it to sign a Registry Agreement with ICANN.
I don’t think the loss of the RAA affects the company’s ability to get its gTLD contracted and delegated.
According to ICANN (pdf), Telefonica also failed to comply with the Registrar Information Specification, a pretty basic rule in the 2013 Registrar Accreditation Agreement requiring registrars to provide their address and names of officers and any parent companies.
The company has no gTLD names under management, so registrants will not be affected by the termination, which will take effect September 25.
ICANN sent its initial breach notice in July, but Telefonica did not comply before the August deadline. It also received a breach notice over an unpaid $10,000 bill a year ago.

GAC kills .indians and two more dot-brands die

Reliance Industries, owner of the Mumbai Indians cricket team, has withdrawn its application for the new gTLD .indians after an objection from the Indian government.
ICANN’s Governmental Advisory Committee has said in formal advice several times, most recently in March, that India was not cool with the idea of a .indians TLD, but noted that the country stood alone.
Following the Singapore meeting this year, the GAC said: “the Government of India has requested that the application for .indians not proceed.”
As a piece of non-consensus advice, ICANN would have been able to more easily reject India’s objection, but the withdrawal means it will not have to make that decision.
India has a similarly dim view of .ram, which Chrysler has applied for to protect a car brand but which also matches an important deity in the Hindu pantheon. That bid is still active.
But recently we’ve seen two other dot-brand applicants get out of the new gTLD program.
Dun & Bradstreet has just withdrawn its bid for .dnb. Last week, Myriad International Holdings yanked its application for .mih.

After slamming the ccNSO, India joins it

India has become the newest member of ICANN’s country-code Supporting Organization, the ccNSO, just one month after the local registry slammed the group for not representing its interests.
The National Internet Exchange (NIXI), which runs .in, became the 152nd ccNSO member yesterday, according to a note on its website.
I haven’t reported on the first 151 ccTLDs to join, but this one’s interesting because NIXI’s mononymed CEO, Dr Govind, led a charge of criticism against the ccNSO for excluding non-members from the IANA transition review.
In July, Govind complained that a “significant section of the ccTLD Registry operator community do not share the objectives of the ccNSO membership are now excluded from the process.”
By joining the ccNSO, registries agree to follow the policies it creates for ccTLDs (though I understand they may opt out), which has led 103 ccTLDs to stay out of it completely.
Some ccTLDs are primarily concerned that the ccNSO does nothing to dilute or overturn RFC 1591, the 20-year-old standards document that states ccTLDs can only be redelegated with the consent of the incumbent.

Panel slaps ICANN in .africa case

A panel of arbitrators had some stern words for ICANN as it handed controversial .africa gTLD applicant DotConnectAfrica another win in its Independent Review Process case.
In a 33-page procedural ruling (pdf) published by ICANN late Friday, the IRP panel disagreed with ICANN’s lawyers on almost every argument they made, siding with DCA instead.
The panel strongly indicated that it believes ICANN has attempted to render the IRP toothless, after losing the first such case against ICM Registry a few years ago.
The ruling means that ICANN’s top executives and board may have to face hostile cross-examination by DCA lawyers, rather than simply filing written statements with the panel.
It also means that whatever the IRP panel ultimately decides will in all likelihood be binding on ICANN.
DCA filed the IRP with the International Center for Dispute resolution after ICANN, accepting Governmental Advisory Committee advice, rejected the company’s application for .africa.
The ICDR panel has not yet ruled on the merits of the case — personally, I don’t think DCA has a leg to stand on — but last week’s ruling is certainly embarrassing for ICANN.
On a number of counts, ICANN tried to wriggle out of its accountability responsibilities, the ruling suggests.
Primarily, ICANN lawyers had argued that the eventual outcome of the IRP case should be advisory, rather than binding, but the panel disagreed.
The panel noted that new gTLD applicants sign away their rights to sue when they apply for a gTLD, meaning IRP is their last form of appeal against rejection.
It also called into question ICANN’s ability to police itself without a binding decision from an independent third party, pointing to previously reported accountability problems (my emphasis):

The need for a compulsory remedy is concretely shown by ICANN’s longstanding failure to implement the provision of the Bylaws and Supplementary Procedures requiring the creation of a standing panel. ICANN has offered no explanation for this failure, which evidences that a self-policing regime at ICANN is insufficient. The failure to create a standing panel has consequences, as this case shows, delaying the processing of DCA Trust’s claim, and also prejudicing the interest of a competing .AFRICA applicant.
Moreover, assuming for the sake of argument that it is acceptable for ICANN to adopt a remedial scheme with no teeth, the Panel is of the opinion that, at a minimum, the IRP should forthrightly explain and acknowledge that the process is merely advisory. This would at least let parties know before embarking on a potentially expensive process that a victory before the IRP panel may be ignored by ICANN.

The decision is the opposite of what the IRP panel found in the ICM Registry case, which was ruled to be “non-binding” in nature.
While deciding that its own eventual ruling will be precedential, the panel said it did not have to follow the precedent from the ICM case, due to changes made to the IRP procedure in the meantime.
ICANN had also argued against the idea of witnesses being cross-examined, but the panel again disagreed, saying that both parties will have the opportunity “to challenge and test the veracity of statements made by witnesses”.
The hearing will be conducted by video ink, which could reduce costs somewhat, but it’s not quite as streamlined as ICANN was looking for.
Not only will ICANN’s top people face a grilling by DCA’s lawyers, but ICANN’s lawyers will, it seems, get a chance to put DCA boss Sophia Bekele on the stand.
I’d pay good money for a ticket to that hearing.

Governments to get more power at ICANN

Governments are to get more power to influence ICANN’s board of directors.
Under a proposal launched late Friday, ICANN plans to make it harder for the board to reject the often-controversial advice of the Governmental Advisory Committee.
Today, the board is able to reject GAC advice with a simple majority vote, which triggers a consultation and reconciliation process.
Following the proposed changes to the ICANN bylaws, the threshold would be increased to a two-thirds majority.
The change is to be made following the recommendations of the Board-GAC Recommendations Implementation Working Group, made up of members of the board and the GAC.
The new rule would bring the GAC into line with the multistakeholder Generic Names Supporting Organization. The ICANN board also needs a two-thirds vote to reject a formal GNSO recommendation.
The differences between the GAC and the GNSO include the lack of detailed industry awareness GAC members regularly demonstrate during their public meetings, and the fact that GAC advice regularly comprises deliberately vague negotiated language that ICANN’s board has a hard time interpreting.
That disconnect may improve in future due to the recent creation of a GAC-GNSO liaison position, designed to keep the GAC up to date with policy goings-on between the thrice-yearly ICANN meetings.
The proposed bylaws change is open for public comment, but appears to be a fait accompli; the board has already said it will use the higher voting threshold if called to make a decision on GAC advice prior to its formal adoption.

EasyDNS changes take-down policy after man dies

Canadian registrar EasyDNS has amended its take-down policy after a customer of one of its registrants died of an overdose.
In a frank blog post today, CEO Mark Jeftovic said that the man had died using a “controlled substance” ordered online. The web site in question used a domain registered via EasyDNS.
As a result of the death, and conversations with ICANN and the US Food and Drug Administration, EasyDNS has changed its policy.
It will now turn off any domain used for a pharmacy web site unless the registrant can produce a license permitting it to sell pharmaceuticals in the territories it sells to.
Previously, the company would only turn off a pharmacy-related domain with a court order.
It’s a notable U-turn for the company because Jeftovic is an outspoken critic of unilateral take-down notices.
In January, he referred to the National Association of Boards of Pharmacy as a “batch of clowns” for demanding that EasyDNS and other registrars take down unlicensed pharmacies without court orders.
He also has an ongoing beef with the UK police over its repeated requests for file-sharing and counterfeiting-related domains to be taken down without judicial review.
Jeftovic blogged today:

[I]n one case we have people allegedly pirating Honey Boo Boo reruns and on the other we have people dying. We don’t know where exactly, but the line goes somewhere in between there.
We have always done summary takedowns on net abuse issues, spam, botnets, malware etc. It seems reasonable that a threat to public health or safety that has been credibly vetted fits in the same bucket.
As a private company we feel within our rights to set limits and boundaries on what kinds of business risk we are willing to take on and under what circumstances. Would we tell the US State Department to go to hell if they wanted us to take down ZeroHedge? Absolutely. Do we want to risk criminally indicted by the FDA because of unregulated vicodin imports? Not so much.

You can read his full blog post here.

Dublin picked for ICANN 54

ICANN had selected Dublin to play host to its 54th public meeting, which will be held in October next year.
According to a blog post from Michele Neylon, CEO of Irish registrar Blacknight, the venue will be the imaginatively named The Convention Centre, Dublin.
The primary sponsor will be INEX, the local internet exchange, he reports.
It will be interesting to see if the Irish government bothers to show up. It’s not a member of the GAC and Neylon has frequently criticized it for taking no interest in ICANN affairs.
The meeting will be held from 18 to 22 October, 2015.
Despite Ireland having only one accredited registrar, Dublin houses the nominal headquarters for a big chunk of the registry side of the industry, largely for tax purposes.
Afilias has been there for over a decade and recently Rightside, the Demand Media spin-off, also relocated its HQ there. A number of smaller new gTLD applicants founded in other countries are also “based” in Dublin.
ICANN still hasn’t named the city for ICANN 53, 2015’s mid-year meeting. I assume it will be in either Asia or Latin America. ICANN 51 is in Los Angeles this October, 52 is in Marrakech next February.
Personally, I’m looking forward to visiting Dublin. Despite what a startling number of you (even people who’ve known me for years!) seem to think, I’m not Irish and I’ve never been to Ireland.

Two more years! Chehade stays at ICANN with $100,000 pay raise

ICANN CEO Fadi Chehade has had his contract renewed for an extra two years with a new pay package worth up to $100,000 more than he was previously getting.
The ICANN board of directors last week approved an extension of his contract, which had not been due to expire until July next year, to June 30, 2017.
Effectively immediately, he’ll receive a new salary of $630,000 a year, with a performance-related bonus of up to $270,000 per year. That’s up 12.5% from his original salary of $560,000 and $240,000 bonus.
ICANN described the compensation as “comparable to similar positions”.
Despite the hefty bump, Chehade is still on a smaller package than his immediate predecessor, Rod Beckstrom, who was on a base salary of $750,000 with $195,000 in bonuses.
By renewing his contract a year early, ICANN avoids the kind of leadership speculation that dogged Beckstrom’s final year in the corner office.
“As we noted in the Board resolution, taking this action will help ensure the stability in leadership that is important for ICANN. It also shows the support and confidence that the Board has in Fadi,” ICANN chair Steve Crocker said in a statement.

Terror victims try to seize five ccTLDs

ICANN is fighting a US court action that could see the ccTLDs of Iran, Syria and Korea being seized by victims of terrorism.
While ICANN has not been sued as such, it’s been named in three “writs of attachment”, which seek to force the organization to hand over control of .ir, .sy, .kp, سور, and ايران.
This audacious attempt to take over three nations’ domains is being attempted by lawyers representing victims of state-sponsored terrorism, reportedly led by Nitsana Darshan-Leitner.
Darshan-Leitner has secured billions of dollars worth of judgments against these states in US courts over the last decade.
But because the states won’t pay up, she’s been getting US courts to seize state-owned US-based assets, such as valuable real estate, instead.
Now her attention has turned to domain names.
The writs against ICANN, issued by a District of Columbia court a month ago, would force ICANN to hand over any assets belonging to Iran, Syria and Korea.
But ICANN says it cannot and should not be made to do so, filing hundreds of pages of court documents yesterday explaining why ccTLDs are not property that can be “attached”.
“Attachment” is a legal term used in the process of transferring assets from debtors to creditors.
In its defense, ICANN argues that allowing the seizure would do nothing less than jeopardize the globally interoperable internet:

First, a ccTLD simply is not “property” subject to attachment. Second, although operating for the benefit of the people of Iran, Syria and North Korea, respectively, the relevant ccTLDs are not “owned” by the defendants or anyone else, for that matter. Third, the .IR, .SY and .KP ccTLDs are not “located” in the District of Columbia or even the United States, and therefore are beyond the reach of Plaintiffs’ Writs of Attachment. Fourth, even if these ccTLDs could be characterized as “property in the United States of the defendants,” this Court would lack jurisdiction over these proceedings, according to the Foreign Sovereign Immunities Act. Fifth, ICANN does not unilaterally have the capability or authority to transfer the .IR, .SY or .KP ccTLDs to Plaintiffs. Finally, a forced transfer of the .IR, .SY and .KP ccTLDs would destroy whatever value may exist in these ccTLDs, would wipe out the hundreds of thousands of second-level domain names registered therein by various individuals, businesses and charitable organizations, and could jeopardize the single, global, interoperable structure the Internet.

“While we sympathize with what plaintiffs may have endured, ICANN’s role in the domain name system has nothing to do with any property of the countries involved,” ICANN general counsel John Jeffrey said in a statement.
In its motions to quash the writs, ICANN describes how it has no contractual relationship and few dealings with the three ccTLD managers in question and how it has received no money from them.
It goes on to describe its relationship to the DNS root zone and the US Department of Commerce
The motion then compares domain names to street addresses and not “property”:

a ccTLD can be thought of as a zip code. That zip code may encompass many different addresses, and those addresses in turn may correspond to certain places on the Internet that people can access, such as websites. But the street address itself is not property, nor is the zip code in which the street address exists…To the extent a ccTLD is capable of a legal definition, it is a collection of technical and administrative services, rather than property

There’s a bunch of US case law that states second-level domain names are not property, which ICANN draws on heavily in its motion.
I’m not going to dwell on the legal issues at stake here too much, but the case is politically, to use an inappropriate word, explosive.
If ICANN were to receive a court order, instructing it to transfer ownership of .ir to Darshan-Leitner’s group, and had no option but to comply, we’re looking at a major international political incident.
Under ICANN’s current IANA arrangement, ICANN-recommended changes to ccTLD management are handled by Verisign, but only with the consent of the US National Telecommunications and Information Administration.
The US Department of Commerce, of which NTIA is a part, would have to give its approval to the transfer of Iran’s ccTLD from an Iranian institution to an Israeli entity.
That, at a time when US-Iranian relations are softening, in light of the new ISIS crisis in Iraq.
It’s a recipe for putting the IANA contract at the center of what can mildly be described as a “political incident” unlike anything the internet has seen to date.
While the US government has a role in ccTLD redelegations today, due to its membership of the DNS root zone triumvirate, it has announced its intent to step away from IANA stewardship.
The NTIA will be replaced, possibly as early as September 2015, by a mechanism that the ICANN community has started to develop.
If we can assume that the US government’s current role may prove to be a buffer between the US courts and potentially devastating forced ccTLD redelegations, it’s not at all clear that the NTIA-replacement mechanism would hold the same kind of political clout.
Would an IANA without US stewardship be more susceptible to crazy US court rulings?
If the US court asserts its authority over the DNS root zone, by ordering the transfer of a ccTLD to a private entity, all ccTLD registries would have a right to be very nervous indeed.
The case also highlights the fact that ICANN is subject to US court jurisdiction — something likely to remain after the IANA stewardship transition — which also makes some nations very nervous.
Rumors have been floating around for a while that ICANN would like to move its headquarters and primary legal structure to Switzerland — it already has an office and a legal presence there — and this case will certainly provide ammunition for those who would like to see such a move happen.

ICM buys .sex for up to $3 million

ICM Registry, the .xxx domain name registry, may have paid as much as $3 million for the .sex gTLD.
Internet Marketing Solutions Limited, the only other applicant for .sex, withdrew its application this week.
Word is that ICM forked out somewhere between $2 million and $3 million for exclusive rights to the string.
I hear it was a private deal, not an auction organized by a third party.
I wonder whether the price was affected by the revelation by ICANN earlier this month that it considers porn-related gTLD strings “sensitive” for no particular reason.
It’s quite low, considering that sex.com sold for $13 million and sex.xxx sold for $3 million just a couple of months ago.
ICM now is the only applicant for .sex, .porn and .adult. It plans to grandfather existing .xxx registrants into the new namespaces, assuming ICANN doesn’t throw a spanner in the works.