Donuts “almost doubles” $100m funding for new gTLD auctions

Somebody thinks new gTLDs will be a money-spinner.
Portfolio applicant Donuts, which is involved in 307 applications, has just announced a second funding round, greatly increasing its new gTLD contention set war-chest.
(UPDATE: This article originally stated, erroneously, that the funding was to the tune of $100 million. The exact amount has not actually been disclosed. Apologies for the error.)
It follows a $100 million funding round last year.
While the new amount was not disclosed, the deal “almost doubled” its funding, according to a press release, strongly suggesting it’s of a similar amount.
Existing investor Generation Partners and new investor Columbia Partners Private Capital were both involved in the round.
The company announced its first $100 million investment last year.
CEO Paul Stahura said the money was earmarked for new gTLD contention sets, many of which will be resolved at auction, and that “Donuts has further access to additional capital should the need arise”.
In a press release, he said:

We intended from the beginning to secure the gTLDs for which we applied. We enjoy tremendous support from our stockholders and lenders. This was an oversubscribed round that nearly doubles our capacity to compete. Our investors believe as strongly as we do that new gTLDs will bring relevance and specificity to registrants who have few usable choices today for Internet identities. This additional capital supports that belief, and we intend to deploy it to bring new gTLDs to market.

Registries still angry despite ICANN concessions on new gTLD contract

Domain name companies are coming close to agreement with ICANN on two critical new contracts, but there was still substantial skepticism and anger on display in Beijing yesterday.
It was revealed during a session at ICANN 46 that the long-running negotiations on the 2013 Registrar Accreditation Agreement are now pretty much done, with apparent compromise from both sides.
In addition, the proposed Registry Agreement for new gTLDs has been toned down to make it more acceptable to applicants, with ICANN apparently confident that agreement can be reached soon.
But while registrars seemed relatively content with their outcome, registries appear to still be very upset indeed, largely due to the new “special amendments” process that continues to be on the table.
This unilateral-right-to-amend proposal, which ICANN sprung on the industry in February, has been watered down along the lines that we reported last week.
The scope of the amendment process has been narrowed to items outside the “picket fence” that surrounds ICANN’s regulatory jurisdiction, and there are a few more ways companies can head off ICANN intervention.
“It’s not quite a unilateral amendment process any more, we’ve built in a lot of safeguards,” ICANN senior counsel Samantha Eisner told the meeting.
What’s new in the RAA?
These are some of the other things that have been agreed since the last draft of the RAA was posted a month ago.

• Privacy opt-out on Whois. Registrars based in places such as Europe, which has stronger data protection laws than the US, will be able to opt out of the Whois data retention and verification rules if they can show that they’d be breaking the law otherwise. They won’t have to wait to to get sued first, either.
• Account holder verification. As well as validating the email address or phone number used in the public Whois, registrars will do the same checks on their private account-holder records.
• Proxy and privacy services. If ICANN doesn’t come up with an accreditation program for proxy/privacy services by a certain deadline, the temporary specs in the 2013 RAA will expire.
• Port 43 obligations scrapped. Registrars will no longer have to provide Whois service over port 43 for gTLDs with “thick” registries. They’ll still have to provide it on their web sites though.

The registrars have also agreed to measures that address all 12 of the recommendations proposed by law enforcement agencies a few years ago, which is what kicked off the RAA renegotiation in the first place.
However, as we reported yesterday, law enforcement in the US and Europe are not impressed with the RAA, saying it doesn’t go far enough to verify domain registrants’ identities.
The Governmental Advisory Committee is due to speak to the ICANN board later today, and this is a topic it is likely to bring up. The RAA story may not be over yet.
Generally, the mood from registrars seemed to be mixed but relatively upbeat.
Rob Hall of Pool.com said he’s going to sign the new RAA as soon as possible. He said that the fact that the 2013 RAA is needed in order to sell new gTLD domains is an impetus to sign it.
Elliot Noss of Tucows said he was less eager to sign. He said that the new gTLDs likely to launch in the short term (uncontested ones, in other words) are unlikely to be the most lucrative ones.
Registries and new gTLD applicants, on the other hand, were not so happy with their lot.
Anger over the Registry Agreement
Yesterday’s session in Beijing was notable for a jarring moment in which normally mild-mannered Verisign policy veep Chuck Gomes threw an uncharacteristic wobbler, politely but brutally attacking ICANN for acting in bad faith and treating registries like “second-class citizens”.
He took issue with the fact that the special amendments process in the Registry Agreement was first introduced by ICANN, and then rejected by the community, a few years back.
ICANN can’t describe its eleventh-hour return as an act of “good faith”, he said.
“You’re dealing with organizations on the registry and registrar side that fund 95%, through our registrants, of your budget, and yet we’re treated like second class citizens by throwing something at us that totally reverses a community, multi-stakeholder, bottom-up decision that was made three years ago,” he said.
“Convince me that that was in good faith. I don’t think you can,” he said, receiving a round of applause.
New gTLD applicants such as Verisign have had less time to assemble their collective thoughts and come to a unified negotiating position on the RA, which was thought to be settled until recently.
The amendment provisions were introduced by ICANN in February, and applicants don’t yet have a the same kind of negotiating team the registrars have had for the past 18 months.
What’s more, they’re worried that ICANN is trying to push the changes through without giving them enough time for talks.
Rumors have been circulating in Beijing that the ICANN board is preparing to approve the RAA and RA at a meeting April 20, in time for the first registries to sign up at its April 23 new gTLDs media event.
Under persistent questioning, ICANN vice president of industry engagement Cyrus Namazi said in various different ways that ICANN has no intention to rush-approve an RA to an arbitrarily chosen date.
ICANN says it needs its special amendment rights in order to address unknown future situations in which the voting dynamics of the ICANN policy-making bodies are dominated by special interests that want to block contract changes that would be in the public interest.
Noss from Tucows, an applicant as well as a registrar, said he’s been asking for specific examples of possible reasons the special amendment process would be invoked, but has had no response from ICANN.
He further suggested that if ICANN is so worried about future uncertainties that it feels it needs these rights, then registries and registrars should get the same rights to force amendments.

GAC threat looms over ICANN Beijing

How the Governmental Advisory Committee handles its advice on new gTLD applications seems to be a big worry at the ICANN public meeting in Beijing this week.
During a session yesterday, new gTLD program vice president Christine Willett was peppered with questions about the approval process going forward, many of which related to the GAC.
There’s also a lot of gossiping about which applications the GAC is thinking about delivering the kiss of death to, and what its advice will mean to the overall program timetable.
DI is not attending the Beijing meeting in person, but here’s what I’ve learned from remote participation and talking to attendees:
Confusion over the GAC Advice standard
Judging by interactions during Willett’s session, there may be a little bit of confusion about whether GAC Advice needs to be “consensus” GAC Advice in order to halt a new gTLD application.
I think the confusion is mainly due to the way some people (Willett and myself included) use phrases such as “non-consensus GAC Advice” as shorthand for a particular paragraph of the Applicant Guidebook.
Here’s the way I understand it:
All GAC Advice — including Advice sent on issues completely unrelated to the new gTLD program — is consensus GAC Advice.
If the GAC sends written Advice to the ICANN board, it means the GAC has reached consensus to send that Advice, even if the Advice itself reflects a lack of consensus on the specifics.
Confusion in the community is arising now because the Applicant Guidebook also talks about three types of “GAC Advice on New gTLDs”, the first of which is:

The GAC advises ICANN that it is the consensus of the GAC that a particular application should not proceed. This will create a strong presumption for the ICANN Board that the application should not be approved.

That’s describing a situation where the GAC has reached a consensus that an application should be rejected. It’s going to sound the death knell for several applications, without doubt.
The second type of GAC Advice on New gTLDs in the Guidebook is:

The GAC advises ICANN that there are concerns about a particular application “dot-example.” The ICANN Board is expected to enter into dialogue with the GAC to understand the scope of concerns. The ICANN Board is also expected to provide a rationale for its decision.

The language was written by the GAC, using its consensus model, which is why it’s so badly worded.
What it means is that the GAC could not find consensus to kill off an application — some governments want it killed off, some don’t — but that the GAC as a whole reached consensus to tell ICANN that some governments do want it killed off.
So when people talk about “non-consensus” Advice, we’re referring to this second form of GAC Advice on New gTLDs, where the GAC could reached consensus to alert ICANN about “concerns” but could not reach consensus that the application should be taken outside and shot.
Which applications are going to get Advice?
The GAC stated last week that 20 applications had been put forward for specific review at the Beijing meeting.
From what I’ve been able to piece together from the GAC’s public hints, its Early Warnings, and sources in Beijing, I think I’ve identified many of these applications.
I’m pretty certain that DotConnectAfrica’s application for .africa is going to get killer Advice.
I’m not picking on DCA (disclosure: DCA accused me of being part of a racist conspiracy) but it is the only remaining applicant to comprehensively ignore ICANN’s rules on geographic names.
It’s also well-known that Amazon’s application for .amazon (and translations), and Patagonia Inc’s application for .patagonia, both of which were not captured by ICANN’s rules on geography, are unloved by Latin American governments.
The Montevideo Declaration, signed by government ministers from the continent last week, specifically condemns any new gTLDs related to Amazonia and Patagonia.
It’s difficult to see how the GAC could ignore the strength of this position, but it’s always possible that some members may have been lobbied into submission by applicants, therefore spoiling consensus.
Other geographic strings that ICANN’s rules did not identify as geographic may also face Advice.
It’s known that .persiangulf, for example, is racially/culturally divisive because the same body of water is also known as the Arabian Gulf by Arab states in the region.
The Japanese government’s Early Warning against .date (issued because there are two cities in Japan that, when translated into Latin characters, are called Date) is also believed to have been put forward for formal GAC Advice.
Outside of geographic names, I hear that .basketball and .rugby are also on the GAC’s shortlist.
These are interesting cases because the governments with the beef (Greece and the UK) are not concerned about the strings themselves. Rather, they want to make sure their preferred applicant wins.
Both gTLDs are contested, and each contention set has one applicant backed by the official world authority for the sport concerned.
If the GAC issues Advice on either, it’s putting itself in the position of picking winners and losers, which could make for some frenetic lobbying in future application rounds.
The application for .uno is believed to be under discussion in the GAC because it clashes with the acronym of an intergovernmental organization.
It also seems pretty certain that Demand Media’s applications for .navy, .army and .airforce are going to get Advice in one form or another. The US, I gather, is adamant that these bids should be rejected at all costs.
How GAC Advice affects the timetable
Willett said yesterday that ICANN expects to receive the GAC’s Advice this week, which should come as some relief to applicants given that the timing has always been a bit vague.
But it’s still not clear what form the Advice will take.
Sure, there’s bound to be some bits of Advice that call out specific applications for death-by-board, but there may also be Advice that addresses certain “categories” of application.
If that happens, and the GAC does not explicitly state which applications fall into which category, there’s the potential for mass confusion following the Beijing meeting.
I raised this specter last week, and it cropped up again during Willett’s session in Beijing yesterday.
What I forgot about last week, and what Willett was quizzed about yesterday, is that the Guidebook gives applicants with GAC Advice 21 days to respond to it before the ICANN board acts.
“I’m concerned that whereby the GAC Advice is such that it is all-encompassing and non-exhaustive that therefore all applicants must respond and all applicants are waiting another 21 days,” ARI Registry Services CEO Adrian Kinderis asked. “No applicant can proceed, because they’re all impacted.”
“If that hypothetical situation occurs, I think that’s possible,” Willett responded.
I other words, if the GAC delivers broad advice this week that does not name specific applications, it’s possible that every applicant would have 21 days to tell ICANN’s board why they’re not affected.
That would completely balls up ICANN’s plan to sign its first registry agreements on April 23.

Cops say new gTLDs shouldn’t launch without a Big Brother RAA

Law enforcement agencies are not happy with the proposed 2013 Registrar Accreditation Agreement, saying it doesn’t go far enough to help them catch online bad guys.
Europol and the FBI told ICANN’s Governmental Advisory Committee yesterday that people need to have their full identities verified before they’re allowed to register domain names.
They added that new gTLDs shouldn’t be allowed to launch until a tougher RAA is agreed to and signed by registrars.
The draft 2013 RAA would force registrars to validate their customers’ email addresses or phone numbers after selling them a domain, but law enforcement thinks this is not enough.
“We need a bit more in this area,” Troels Oerting, head of Europol’s European Cybercrime Centre, told the GAC during a Sunday session. “We need a bit more to be verified in addition to the phone or email.”
“It’s very, very important that we are able to identify perpetrators able, to identify the originators, and it’s not enough that you just put in the email or phone,” he said.
He added that there should also be re-verification procedures and ongoing compliance monitoring from ICANN, and said that only registrars signing the 2013 RAA should be allowed to sell new gTLD domains.
Europol has sent a letter to ICANN (not yet published, it seems) outlining four areas it wants to see the RAA “improved”, Oerting said.
Given that many GAC members, including the US, seem to support this position, it’s yet another threat to ICANN’s new gTLD launch timetable, not to mention privacy and anonymous speech in general.
The law enforcement recommendations are not new, of course. They’ve been in play and GAC-endorsed for many years, but were watered down during ICANN’s RAA talks with registrars.

Verisign’s security angst no reason to delay new gTLDs, says expert

Potential security vulnerabilities recently disclosed by Verisign and PayPal are well in hand and not a reason to delay the launch of new gTLDs, according to the chair of ICANN’s security committee.
Patrick Falstrom, chair of the Security and Stability Advisory Committee, said today that the risk of disastrous clashes between new gTLDs and corporate security certificates has been taken care of.
Talking to the GNSO Council at the ICANN public meeting in Beijing, he gave a definitive “no” when asked directly if the SSAC would advise ICANN to delay the delegation of new gTLDs for security reasons.
Falstrom had given a presentation on “internal name certificates”, one of the security risks raised by Verisign in a paper last week.
These are the same kinds of digital certificates given out by Certificate Authorities for use in SSL transactions on the web, but to companies for their own internal network use instead.
The SSAC, judging by Falstrom’s presentation, had a bit of an ‘oh-shit’ moment late last year when a member raised the possibility of new gTLDs clashing with the domain names on these certificates.
Consider the scenario:
A company has a private namespace on its LAN called .corp, for example, where it stores all of its sensitive corporate data. It uses a digital certificate, issued by a reputable CA, to encrypt this data in transit.
But today we have more than a few applicants for .corp that would use it as a gTLD accessible to the whole internet.
Should .corp get delegated by ICANN — which of course is by no means assured — then there could be the risk of CAs issuing certificates for public domains that clash with private domains.
That might enable, for example, a hacker on a Starbucks wifi network to present his evil laptop as a secured, green-padlocked, corporate server to an unlucky road warrior sitting in the same cafe.
According to Falstrom, at least 157 CAs have issued certificates that clash with applied-for new gTLDs. The actual number is probably much higher.
This risk was outlined in Verisign’s controversial security report to ICANN, which recommended delay to the new gTLD program until security problems were resolved, two weeks ago.
But Falstrom told the GNSO Council today that recent secretive work by the SSAC, along with ICANN security staff and the CA/Browser Forum, a certificate industry authority, has mitigated this risk to the point that delay is not needed.
Falstrom said that after the SSAC realized that there was a potential vulnerability, it got it touch with the CA/Browser Forum to share its concerns. But as it turned out, the Forum was already on the case.
The Forum decided in February, a couple of weeks after an SSAC briefing, that member CAs should stop issuing internal name certificates that clash with new gTLDs within 30 days of ICANN signing a registry contract for that gTLD.
It has also decided to revoke any already-issued internal domain certificate that clashes with a new gTLD within 120 days of contract signing.
This means that the vulnerability window will be much shorter, should the vulnerability start getting exploited in wild.
But only if all CAs conform to the CA/Browser Forum’s guidelines.
Much of this is detailed in a report issued by SSAC last month (pdf). The CA/Browser Forum’s guidance is here (pdf). Falstrom’s PowerPoint is available here (pdf)

Pritz resurfaces with consulting gigs for Donuts and Architelos

Former ICANN chief strategy officer and new gTLDs head honcho Kurt Pritz is doing a spot of industry work, following the expiration of his post-resignation consulting gig with ICANN.
Pritz, we understand, has developed consulting relationships with new gTLD portfolio applicant Donuts and consulting firm Architelos while he looks for a more permanent position.
As you may recall, he quit ICANN last November after disclosing a personal conflict of interest.
While there are no rules preventing ICANN staff going into the domain industry, Pritz’s is prohibited from sharing confidential information he learned while at ICANN, we’re told.
Given his background, we understand he’ll be focusing mainly on policy-related work at both companies.

Trademark Clearinghouse to get tested out on three existing TLDs

Three already-live TLDs are going to use the Trademark Clearinghouse to handle sunrise periods, possibly before the first new gTLDs launch.
BRS Media is set to use the TMCH, albeit indirectly, in its launch of third-level domains under .radio.am and .radio.fm, which it plans to launch soon as a budget alternative to .am and .fm.
The company has hired TM.Biz, the trademark validation firm affiliated with EnCirca, to handle its sunrise, and TM.biz says it will allow brand owners to leverage Clearinghouse records.
Trademark owners will be able to submit raw trademarks for validation as in previous sunrises, but TM.Biz will also allow them to submit Signed Mark Data (SMD) files, if they have them, instead.
Encrypted SMD files are created by the TMCH after validation, so the trademarks and the strings they represent are pre-validated.
There’ll presumably be some cost benefit of using SMD files, but pricing has not yet been disclosed.
Separately, Employ Media said today that it’s getting ready to enter the final stage of its .jobs liberalization, opening up the gTLD to essentially any string and essentially any registrant.
The company will also use the TMCH for its sunrise period, according to an ICANN press release, though the full details and timing have not yet been announced.
Unusually, .jobs is a gTLD that hasn’t already had a sunrise — its original business model only allowed vetted company-name registrations.
The TMCH is already accepting submissions from trademark owners, but it’s not yet integrated with registries and registrars.

Six big reasons we won’t see any new gTLD launches until Q3

ICANN’s announcement of a big media bash in New York on April 23, to announce the launch of new gTLDs, has gotten many people thinking the first launches are imminent.
Wrong.
We’re not going to see any new gTLD domains on sale until the third quarter at the earliest, in my view, and here are a few good reasons why.
April 23 is just a PR thing
ICANN has said that April 23 is primarily about awareness-raising.
Not only does it hope to garner plenty of column inches talking about new gTLDs — helping the marketing efforts of their registries — it also hopes to ceremonially sign the first Registry Agreements.
I think CEO Fadi Chehade’s push to make the industry look more respectable will also play a part, with the promotion of the Registrant Rights and Responsibilities document.
But there’s never been any suggestion that any strings will be delegated at that time, much less go live.
The contracts are still hugely controversial
If ICANN wants to sign a Registry Agreement on April 23, it’s going to need a Registry Agreement to sign.
Right now, applicants are up in arms about ICANN’s demand for greater powers to amend the contract in future.
While ICANN has toned down its proposals, they may still be unacceptable to many registries and gTLD applicants.
Applicants have some impetus to reach agreement quickly — because they want to launch and start making money as soon as possible.
But ICANN wants the same powers added to the 2013 Registrar Accreditation Agreement, and registrars are generally less worried about the speedy approval of new gTLDs.
ICANN has tied the approval of the RA and the RAA together — only registrars on the new RAA will be able to sell domains in new gTLDs.
Chehade has also made it clear that agreement on the new RAA is a gating issue for new gTLD launches.
If registries, registrars and ICANN can’t settle these issues in Beijing, it’s hard to see how any contracts could be signed April 23. The first launch would be delayed accordingly.
GAC Advice might not be what we’re expecting
GAC Advice on New gTLDs is, in my view, the biggest gating issue applicants are facing right now.
GAC Advice is an integral part of the approval process outlined in the Applicant Guidebook and ICANN has said many times that it cannot and will not sign any contracts until the GAC has spoken.
But what does that mean from a process and timing point of view?
According to the Applicant Guidebook, if an application receives GAC Advice, it gets shunted from the main evaluation track to the ICANN board of directors for consideration.
It’s the only time the ICANN board has to get directly involved with the approval process, according to the Guidebook’s rather complex flow-charts.
GAC Advice is not an automatic death sentence, but any application the GAC is unanimously opposed to stands a very slim chance of getting approved by the board.
Given that ICANN is has said it will not sign contracts until it has received GAC Advice, and given that it has said it wants to sign the first contract April 23, it’s clearly expecting to know which applications are problematic and which are not during the next three weeks.
But I don’t think that’s necessarily going to happen. The GAC moves slowly and it has a track record of missing ICANN-imposed deadlines, which it often seems to regard as irksome.
Neither ICANN nor the GAC have ever said GAC Advice on New gTLDs will be issued during next week’s public meeting in Beijing. If a time is given it’s usually “after” or “following” Beijing.
And I don’t think the GAC, which decided against holding an inter-sessional meeting between Toronto and Beijing, is remotely close to providing a full list of specific applications of concern.
I do think a small number of slam-dunk bad applications – such as DotConnectAfrica’s .africa bid – will get Advised against during or after the Beijing meeting.
But I also think the GAC is likely to issue Advice that is much broader, and which may not provide the detail ICANN needs to carry the process forward for many applicants.
The GAC, in its most recent (delayed) update, is still talking about “categories” of concern – such as “consumer protection” and “geographical names” – some of which are very broad indeed.
Given the limited amount of time available to it in Beijing, I think it’s quite likely that the GAC is going to produce advice about categories as well as about individual applications.
And, crucially, I don’t think it’s necessarily going to give ICANN a comprehensive list of which specific applications fall into which categories.
If the GAC decides to issue Advice under the banner of “consumer protection”, for example, somebody is going to have to decide which applications are captured by that advice.
Is that just strings that relate to regulated industries such as pharmaceuticals or banking? Or is it any string that relates to selling stuff? What about .shop and .car? Shops and cars are “regulated” by consumer protection and safety laws in most countries.
Deciding which Advice covered which applications would not be an easy task, nor would it be a quick one. I don’t think the GAC has done this work yet, nor do I think it will in Beijing.
For the GAC to reach consensus advice against specific applications will in some cases require GAC representatives to return to their capitals for guidance, which would add delay.
There is, in my view, a very real possibility of more discussions being needed following Beijing, just in order to make sense of what the GAC comes up with.
The new gTLD approval process needs the GAC to provide a list of specific applications or strings with which it has concerns, and we may not see that before April 23.
ICANN may get a short list of applications that definitely do have Advice by then, but it won’t necessarily know which applications do not, which may complicate the contract-signing process.
The Trademark Clearinghouse still needs testing
The Trademark Clearinghouse is already, in one sense, open for business. Trademark owners have been able to submit their marks for validation for a couple of weeks now.
But the hard integration work has not been done yet, because the technical specifications the registries and registrars need to interface with IBM’s TMCH database have not all been finalized.
When the specs are done (it seems likely this will happen in the next few weeks), registries and registrars will need to finish writing their software and start production testing.
ICANN’s working timetable has the TMCH going live July 1, but companies that know much more than me about the technical issues at play here say it’s unlikely that they’ll be ready to go live with Sunrise and Trademark Claims services before August.
It’s in everyone’s interests to get all the bugs ironed out before launch.
For new gTLD registries, a failure of the centralized TMCH database could mean embarrassing bugs and downtime during their critical launch periods.
Trademark owners and domain registrants may also be concerned about the potential for loopholes.
For example, it’s still not clear to some how Trademark Claims – which notifies registrants when there’s a clash between a trademark and a domain they want – will interact with landrush periods.
Does the registrant only get a warning when they apply for the domain, which could be some weeks before a landrush auction? If so, what happens if a mark is submitted to the TMCH between the application and the auction and ultimate registration?
Is that a loophole to bypass Trademark Claims? Could a registrant get hit by a Claim after they’ve just spent thousands to register a domain?
These are the kinds of things that will need to be ironed out before the TMCH goes fully live.
There’s a sunrise notice period
The sunrise period is the first stage of launch in which customers get to register domain names.
Lest we forget, ICANN recently decided to implement a mandatory 30-day notice period for every new gTLD sunrise period. This adds a month to every registry’s go-live runway.
Because gTLD sunrise periods from now on all have to use the TMCH, registries may have to wait until the Clearinghouse is operational before announcing their sunrise dates.
If the TMCH goes live in July, this would push the first launch dates out until August.
Super-eager registries may of course announce their sunrise period as soon as they are able, and then delay it as necessary to accommodate the TMCH, but this might carry public relations risks.
Verisign’s security scare
It’s still not clear how Verisign’s warning about the security risks of launching new gTLDs on the current timetable will be received in Beijing.
If the GAC reckons Verisign’s “concerns” are valid, particularly on the issue of root zone stability, ICANN will have to do a lot of reassuring to avoid being advised to delay its schedule.
Could ICANN offer to finish off its work of root zone automation, for example, before delegating new gTLDs? To do so would add months to the roll-out timetable.

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.

ANA calls for new gTLDs delay, again

The Association of National Advertisers has seized upon Verisign’s recent report into the security risks of ICANN’s new gTLD timetable to call for delays to the program.
In a blog post yesterday, ANA vice president Dan Jaffe said ICANN’s dismissal of the surprising Verisign letter is “like the Captain of the Titanic before the crash saying that the dangers of icebergs had been discussed for years.”
The post highlights the lack of finalized Trademark Clearinghouse specs as “one of the greatest concerns”, saying “millions of customers are the ones who will face harm”.
That’s not strictly true, of course. New gTLD registries are contractually unable to launch until the TMCH is ready, so the risk of registrants being harmed by the lack of specs today is a non-starter.
The ANA also points to ongoing concerns about proposed TLDs such as .corp and .home, which run the risk of clashing with existing private TLDs used on internal corporate and ISP networks.
It’s on much firmer ground here. If a user tries to access a LAN resource on a .corp domain while roaming, what’s to stop them sending sensitive data to a third-party web site instead?
I’ve yet to see a compelling reason why this is not a problem, but it’s not yet known whether the many applications for .corp, .home and similar strings have passed their ICANN technical evaluations.
The ICANN application form asked applicants to disclose potential operational problems such as these, but some applicants that were very familiar with the problem decided not to do so.
But the ANA’s main concern is its belief that new gTLDs will increase cybersquatting and increase the cost of defensive registrations, of course.
“Adequate steps have not been taken to protect Internet users, and we are headed toward uncharted waters with major danger to consumers, brandholders, and the Internet itself,” Jaffe wrote.
“The only prudent action for ICANN now is to delay this arbitrary domain name roll-out until it has fixed these very serious problems.”