ICANN to terminate five new gTLDs

ICANN is set to terminate the registry contracts for five new gTLDs run by an apparent deadbeat registry.

Asia Green IT System’s agreements for .pars, .shia, .tci, .nowruz and .همراه (.xn--mgbt3dhd) have all been “Escalated to Termination Process” following a July breach notice, according to ICANN’s web site.

The first stage of the termination is mediation, which can be followed by arbitration before the contracts, which were all due to expire next month anyway, finally get torn up.

The escalation was not unexpected. All five gTLDs were migrated to the Emergency Back-End Registry Operator program last month after critical systems failed to function within the contractual requirements.

It is believed that the TLDs stopped functioning properly after AGIT failed to pay its back-end provider. It also allegedly failed to pay its ICANN fees.

The gTLDs in question for the most part were not used. The Iranian new-year-themed .nowruz had a handful of third-party registrations but the others never launched in the decade AGIT was contracted to run them.

.tci is an interesting case, a planned dot-brand that AGIT had intended to operate on behalf of the Telecommunication Company of Iran, the country’s incumbent telco.

US could change .com pricing terms

The US government and Verisign are to enter talks about possible changes to .com pricing.

The National Telecommunications and Information Administration has told the company that it “intends to renew its Agreement with Verisign” but said it welcomed Verisign agreeing to talks that “may include an amendment to the pricing terms”.

The news came in an exchange of letters between NTIA assistant secretary Alan Davidson and Verisign chief Jim Bidzos over the weekend, published last night. Davidson wrote:

NTIA has questions related to pricing in the .com market. We are therefore pleased that Verisign has agreed to discussions regarding .com pricing and the health of the .com ecosystem, including retail and secondary markets. The parties will discuss possible solutions that benefit end-users, both businesses and consumers, and serve the public interest

The Cooperative Agreement between NTIA and Verisign gives the company the right to raise prices by 7% in four of the six years of its term, all of which Verisign exercised in the current run, which ends in a couple months.

The price-rising powers were frozen under Obama administration but reinstated under Trump, giving Verisign masses of extra revenue and huge profit margins, even as .com volume numbers took a prolonged dive.

NTIA’s intervention follows letters from three campaign groups calling .com a “cartel” and inquiries from three Congresspeople.

In response to NTIA’s letter, Bidzos wrote:

We have observed that our capped .com price increases have not always been passed through to benefit end-users and therefore we welcome an opportunity to have this important discussion. We are prepared to consider structures to address this and other issues, including ways to make .com pricing more predictable for the channel as part of it.

It’s clear from this rather tense exchange that the two parties might not exactly see eye-to-eye on their desired outcomes.

Verisign’s position recently has been that .com volumes have been falling in large part because of what Bidzos called the “unregulated retail channel” pumping up prices to increase profit-per-domain over domains under management.

He also pointed out in the company’s most-recent quarterly earnings call that the average price of .coms on the secondary market is $1,600, or 166x the wholesale price.

As some have pointed out, Verisign complaining about profiteering in the channel is the height of chutzpah, given its own mouth-watering margins, which appear to be what it seeks to protect more than anything else.

If Verisign reckons the registrar business is so great, why hasn’t it launched a registrar of its own yet? The company has been legally permitted by the Cooperative Agreement and its ICANN contract to do so for years.

Two out, two in as NomCom picks new ICANN directors

Two ICANN directors will lose their seats on the board and be replaced by newcomers at the Org’s annual general meeting later this year.

Vice chair Danko Jevtović and Edmon Chung, who have served two and one of the maximum three three-year terms respectively, will depart, according to the announcement of this year’s Nominating Committee picks.

They will be replaced by Amitabh Singhal, from the Asia-Pacific region, who I believe is an Indian internet policy expert who founded .in registry NIXI and also sits on the board of .org manager Public Interest Registry.

Also named, Miriam Sapiro, who I can only assume is Ambassador Miriam Sapiro, a US Trade Representative under the Obama administration who also held a senior policy role at Verisign for a couple of years two decades ago before leaving on acrimonious terms.

Chair Tripti Sinha of North America has also been reappointed for a final term.

The noobs, who both seem incredibly well-qualified for their new roles, will take their seats for the first time at the end of ICANN 81 in Istanbul in October.

It’s official, .internal is blocked forever

ICANN has formally confirmed that the gTLD .internal will never be delegated.

Its board of directors resolved earlier this week that it “reserves .INTERNAL from delegation in the DNS root zone permanently to provide for its use in private-use applications.”

It went on to recommend “that efforts be undertaken to raise awareness of its reservation for this purpose through the organization’s technical outreach.”

The idea is to give organizations a gTLD that they can use behind their firewalls that they can be sure will never become a public-DNS gTLD in future, which would carry the risk of name collisions and data leakage.

The string “internal” was picked in January over .private and put out for public comment to murmurs of approval.

The move means nobody will be able to apply for .internal in future new gTLD application rounds.

Revealed: who’s really running Epik

Scandal-rocked registrar Epik promised to turn over a new leaf when it got acquired last year, and now the guy in charge of the domains business — a familiar face to many– has broken cover and talked to DI about the company’s recent woes and turnaround plans.

That guy is director of domains Christopher Ambler, a thirty-year veteran of the industry, who came out of stealth mode today to talk about how he wants to kill Epik’s reputation as a refuge for far-right hate and regain the trust of its customers.

Ambler is perhaps best-known as the founder and CEO of Image Online Design, the company that offered a .web gTLD in an alt-root in the 1990s. More recently, until 2021 he also spent seven years as principal software architect at GoDaddy.

Ambler says he joined Epik’s new owner, Registered Agents Inc, which specializes in company formation services, in November 2022, with a remit to scratch-build a registrar to offer the company’s clients online presence services.

“The basic story is boring as hell,” Ambler said. “Registered Agents does business formations… the company just decided it made sense to be a registrar. They brought me on a year and a half ago with the idea to just build this thing from scratch.”

About six or seven months into this project, in June 2023, Registered Agents decided it could cut a couple of years of development time by simply acquiring the assets of an existing registrar, Ambler said, and Epik’s were up for grabs.

At the time, Epik was on the ropes, rocked by a financial mismanagement scandal under then-CEO Rob Monster that had led to registries disconnecting it for non-payment and an ICANN probe that put it at risk of losing its accreditation and going out of business.

Registered Agents paid $5 million for the registrar and set about paying off the registries and getting the ICANN accreditation transferred to the new owners, from Monster’s Epik Inc to the new Epik LLC.

Due to the nature of Registered Agents’ business — it sets up companies for people, often anonymously and not always to nice people — theories abounded, notably on the Namepros discussion forum, that the new owner was just a front for Monster.

“I totally get the whole ‘We think this is Rob Monster pulling another shady deal’ thing, and I don’t know this for a fact but if I were ICANN I would have thought that was entirely a possibility,” Ambler said. “But they went over it with a fine toothed comb and a microscope.”

Quite apart from the business mismanagement, Epik came with a tonne of reputational baggage. It had long been known as a safe haven for far-right bullies, with the likes of Gab.com, The Daily Stormer, InfoWars and Kiwi Farms among its customer base.

Ambler, who describes himself as “kind of a hippy”, culturally Jewish with spiritual leanings toward Buddhism, was not comfortable with this legacy.

While the new Epik did not publicly disassociate itself from these customers until early 2024, Ambler said the decision was made much sooner.

“When the deal was signed to buy Epik we knew on that day we were no longer the ‘free speech registrar’, we were not the right-wing registrar,” he said. “That’s what the old Epik did, I personally don’t agree with that.”

He compared the gear-shift to the day he interviewed at GoDaddy over a decade ago and made it clear he wasn’t happy working for the company if it was still running the “sexist” TV ads it was famed for in the noughties, which by then it had discontinued.

“When I was told we’re looking at buying [Epik’s] assets, the first thing I said was ‘Okay, but there is some dumpster fire involved here, we’re not going to keep that, right?’ and everybody said ‘No’,” Ambler said. “Absolutely everybody was completely on-board.”

The company then set about “politely inviting” its more controversial customers to take their business elsewhere and shutting down any customers involved in outright illegality, such as unlicensed pharmacies, publishing child sexual abuse material or hate speech that crossed the line into incitement to violence.

“I wouldn’t say it was a significant portion of the business, but it was certainly non-zero,” Ambler said. Hundreds of customers were “shown the door”, he said.

“One of things that angsts me is when you look at the online talk about Epik a lot of people still to this day think Epik is the right-wing registrar, because there’s so much stuff out there from years and years ago,” he said.

“People think Epik is the refuge of the white supremacists,” he said. “I really want to combat that message.”

Ambler said he also oversaw a security review of Epik’s code, following a major breach in 2021.

“We went nuts on security for the first couple months, just making sure everything was safe,” he said.

Was it?

“It is now,” he said.

Since the takeover, Epik has lost hundreds of thousands of domains as customers, fed up with its earlier antics and/or suspicious of the new owners, transferred to other registrars.

At its peak in August 2022, the company had 808,160 gTLD domains under management. By March 2024, the most recent month for which we have records, that number had dropped to 265,845, a loss of over half a million names.

“I daresay we’ve bottomed out at this point and actually have net positives on a number of metrics, but we kind of expected that,” Ambler said.

“Keep in mind that the peak of Epik was mostly accomplished by Rob Monster selling domains at a huge loss to create more appearance of growth,” he added. “That was his goal. He wanted to show that Epik was growing by leaps and bounds, but the company was taking losses left and right.”

Looking forward, Epik is focusing less on being the “be-all and end-all” to domain investors and more on being a solid “world class” retail registrar and selling to Registered Agents’ million-plus existing customers.

Ambler’s final messages to DI readers?

“First, we’re not the right-wing registrar, so please don’t confuse us with the old Epik,” he said, “Second, I’m terribly sorry it’s more boring than a lot of people seemed to think.”

“I’d love to get out there and tell people we’re the good guys now,” he said.

ICANN swaps out Asia VP

Jia-Rong Low, VP of stakeholder engagement and managing director for the Asia Pacific region, has quit ICANN and will leave next month.

An 11-year veteran of the Org, Low was the second hire in the Singapore office where he was based, ICANN interim CEO Sally Costerton said in a statement.

He will be replaced by an internal appointment, Samiran Gupta, who is currently VP for the South Asia region. Gupta has been employed off-and-on by ICANN since 2014.

July 30 update: Low is to join APNIC as its new director general in October.

Verisign predicts more gloom as registrars shun .com growth

Verisign has yet again massively downgraded its expectations for .com growth, after it lost almost two million domains in the second quarter.

The company said it had 170.6 million .com and .net domains at the end of June, down 1.8 million compared to Q1 and a 2.2% decrease compared to a year earlier.

CEO Jim Bidzos said Verisign now expects the domain name base for the full year to be between -2% and -3%. That compares to a range of between +0.25% and -1.75% predicted in April and +1% to -1% predicted in February.

The Q2 renewal rate is expected to be 72.6% compared to 73.4% a year ago and 74.1% in Q1.

Bidzos said he does not expect the base to return to positive growth until the second half of 2025.

Bidzos, talking to analysts, acknowledged that Verisign’s wholesale .com price increases “may have had an impact” but put the blame for the growth shortfall squarely on what he called the “unregulated retail channel” in the US.

American registrars have been cranking up their prices in order to prioritize average revenue per user over volume, he said, meaning retail prices for .com have gone up “more than twice” Verisign’s own price hikes, leading to fewer sales as a result.

“Our research shows that the benefit from our capped wholesale prices is not always passed on to consumers,” he said.

He faced a barrage of questions from analysts about recent calls for the US government to sever its ties with Verisign over .com and put the TLD out for competitive rebidding, but reiterated the company’s position that if the government cuts it off, it still gets to run .com under its contract with ICANN.

Despite the volume woes, Verisign continues to be a high-margin cash-generating machine.

The company reported Q2 net income of $199 million, up from $186 million a year ago, on revenue up 4.1% at $387 million. Operating income was up to $266 million from $249 million and operating cash flow up to $160 million from $145 million.

Republicans quiz NTIA on Verisign .com renewal

Three Republican members of the US House of Representatives have raised the specter of Verisign having to compete to renew its .com deal with the US government.

In a letter to the National Telecommunications and Information Administration, the Congresspeople ask whether NTIA has made any efforts to renegotiate or obtain public feedback on its contract with Verisign.

They also ask whether NTIA has looked at the “effect of the recent price increases implemented by Verisign on the .com domain name marketplace” and “the impact of potential registration price increases on the .com domain name market”.

The Cooperative Agreement between NTIA and Verisign is what allows the company to raise .com wholesale fees. That power was frozen for years under the Obama administration but returned under Trump.

The letter follows missives from three campaign groups a month ago, which called Verisign, NTIA and ICANN a “cartel” that enables Verisign’s monopoly and called for the .com contract to be put out to bid.

The Congresspeople’s letter doesn’t come anywhere close to asking for the same, but it does cite previous instances where legislators and the Department of Justice have called for a competitive bidding process.

Verisign has responded to earlier letters by pointing out that even if NTIA were to cancel the agreement, the .com Registry Agreement with ICANN would still stand.

The letter (pdf) is signed by House Energy and Commerce Committee chair Cathy McMorris Rodgers, Subcommittee on Communications and Technology chair Bob Latta, and Subcommittee on Oversight and Investigations chair Morgan Griffith.

The Cooperative Agreement is set to auto-renew in November. The Congresspeople want answers from NTIA before August 8.

Smaller, more intense ICANN meetings with no free cocktails?

ICANN has floated the idea of hosting smaller, more focused meetings that eschew tedious PowerPoint presentations and do away with the free cocktail receptions.

Seeking to eliminate $10 million from its annual budget, management recently reached out to community leaders to see if they can put their heads together to make ICANN’s public meetings less expensive.

Ideas include scrapping one of the thrice-yearly in-person meetings entirely and replacing it with a virtual-only event, along the lines of the seven that were held over Zoom during the recent coronavirus pandemic.

The suggestions appear in a “How We Meet” discussion paper (pdf), presented as a jumping-off point for community discussions rather than a top-down edict.

Straight to the important stuff: ICANN is proposing to “reduce or eliminate ICANN-hosted or ICANN-sponsored social and outreach events” such as receptions, group dinners and other social networking events.

ICANN could seek third-party sponsors for these kind of events or, horror of horrors, operate a “cash bar”, the document states.

No more free booze!

If cost-conscious alcoholics have a reason to be concerned, it’s arguably worse news for community time vampires who enjoy nothing more than sucking up 45 minutes of their hour plodding through a PowerPoint explaining what their group has been up to since the last meeting.

The document suggests focusing meetings on “timely topics”, such as those with upcoming deadlines, that require “interactive dialogue in a hybrid format”, and cutting some of the extraneous nonsense.

Therefore, “extensive slide presentations, updates, and meetings (including between ICANN staff and community groups) that do not clearly require in-person or hybrid interactions will not be scheduled”, the document suggests.

Speaking as a remote participant in recent years, I’ve often chose to wait for session recordings to become available, rather than listening live, precisely so I can fast-forward through that kind of thing. That’s obviously not an option for an in-person attendee, many of whom are there on ICANN’s dime.

The document also suggests getting rid of “informational and training” events, such as the “How It Works” sessions, which it says “incur significant costs” but have “limited participation”.

ICANN is also floating the idea of reducing the number of sessions overall, and grouping constituency-specific sessions into a tighter schedule over fewer days (presumably in order to slash the hotel bill).

But the biggest shake-up of them all is arguably the idea of reducing the number of full in-person community meetings from three to two, with the cut meeting replaced with a virtual one.

Given the shared experiences from seven, consecutive Virtual Public Meetings during the pandemic and the costs of a hybrid ICANN Public Meeting, it may be timely to discuss whether there is, in fact, a current need to have three in-person/hybrid ICANN Public Meetings each year, or whether the community can work just as effectively if at least one of these meetings is conducted virtually.

It does not say which meeting could be cut, but points out that reducing the number of public meetings may increase the need for smaller, intersessional events that focus on individual constituencies or topics.

The discussion document will inform a series of calls interim CEO Sally Costerton will hold with community leaders over the next month or so. Any consensus reached could be acted up as early as September.

Private auctions to be banned in next new gTLD round

ICANN plans to ban private auctions in the next new gTLD application round, chair Tripti Sinha has told governments.

The board of directors plans to accept the Governmental Advisory Committee’s recent advice to “prohibit the use of private auctions in resolving contention sets in the next round of New gTLDs”, Sinha told her GAC counterpart in a letter published this week.

This is a significant departure from the 2012 round, where many contention sets were resolved privately, with tens of millions of dollars changing hands. Simply applying for a gTLD, in order to lose an auction rather than actually running a registry, will quite possibly no longer be a business model.

What replaces private auctions is yet to be determined. ICANN plans to publish a paper and hold two community webinars in August to discuss alternatives, and reach a decision at its meeting in early September.

Sinha warned that if it cannot reach a conclusion by the September meeting, it might delay the publication of the Applicant Guidebook and thus the opening of the next application window.

It’s quite an aggressive deadline, given the complexity of the problem. ICANN is essentially trying to figure out a way to prevent unscrupulous actors from attempting to game the system for financial gain.

Ideas such as allowing good-faith joint ventures to be formed between competing applicants have been floated in recent months, but have faced scrutiny as they might permit side-deals to be inked that have the same effect as private auctions.

What seems certain is that “last resort” auctions — where ICANN gets all the money for its already $200 million war chest — will still be an option in the next round, which is current penciled in for the first half of 2026.

ICANN’s board plans to pass resolutions on the matter next Monday, so we should have a little more clarity by the start of August at the latest.