ICANN asks the US to cut it loose

ICANN has officially requested the loosening of its contractual ties to the US government.
In a letter to the National Telecommunications and Information Administration (pdf), ICANN president Rod Beckstrom said the US should finally make good on its promise to privatize the management of the internet’s naming and addressing resources.
Currently, ICANN manages the so-called IANA functions, which give it powers over the domain name system’s root zone, under a no-fee procurement deal with the NTIA.
That contract is up for renewal in September, and the NTIA recently issued a Notice Of Inquiry, soliciting public comments on how the IANA functions should be handled in future.
In Beckstrom’s response to the NOI, he says that a US government procurement contract is not the most suitable way to oversee matters of global importance.
Its close links to the NTIA are often cited by other governments as proof that ICANN is an organization that operates primarily in the interest of the US.
Beckstrom said there is “no compelling reason for these functions to be performed exclusively pursuant to a U.S. Government procurement contract.”
He noted that the original plan, when ICANN was formed by the Clinton administration in 1998, was to transition these functions to the private sector no later than September 2000.
The privatization of the DNS is, in effect, 11 years late.
Beckstrom wrote:

The IANA functions are provided for the benefit of the global Internet: country code and generic top-level domain operators; Regional Internet Registries; the IETF; and ultimately, Internet users around the world. Applying U.S. federal procurement law and regulations, the IANA functions should be performed pursuant to a cooperative agreement.

His position was not unanticipated.
At the start of ICANN’s San Francisco meeting last week, Beckstrom and former chairman Vint Cerf both said that a “cooperative agreement” would be a better way for the US to manage IANA.
VeriSign’s role in root zone management is currently overseen by this kind of arrangement.
The NTIA has specifically asked whether IANA’s three core areas of responsibility – domain names, IP addresses and protocol parameters – should be split between three different entities.
Beckstrom also argued against that, saying that there are “many examples of cross-functional work”, and that ICANN already has the necessary expertise and relationships in place to handle all three.
The NOI (pdf) is open until end of play next Thursday, March 31. Half a dozen responses have already been filed here.
At least one respondent believes the IANA powers could be broken up.

.xxx reservations pass half a million

ICM Registry has now taken over 500,000 reservations for .xxx domain names.
The counter on its web site ticked up by about 150,000 overnight. This was apparently due to the bulk uploading of large requests from several dozen enthusiastic potential registrants.
ICM tells me that these are all requests for unique domains, not counting duplicates, and that over 100,000 requests were not added because they did not appear to come from legit sources.
The counter was around the 200,000 mark last Friday, before ICANN approved ICM’s .xxx registry contract. The deal generated substantial media interest.
Again, it’s worth noting that none of these reservations are guaranteed to convert into sales, they’re basically just requests to be notified when the domains become available.
The price of a .xxx domain is expected to be at least $70 a year, which could scare off some buyers.
Still, coupled with landrush and Founders Program sales, I’m fairly confident that ICM, which spent about $12 million fighting ICANN for .xxx, will recoup its investment before the end of the year.

Microsoft spends $7.5 million on IP addresses

It’s official, IP addresses are now more expensive than domain names.
Nortel Networks, the bankrupt networking hardware vendor, has sold 666,624 IPv4 addresses to Microsoft for $7.5 million, according to Delaware bankruptcy court documents (pdf).
That’s $11.25 per address, more than you’d expect to pay for a .com domain name. Remember, there’s no intellectual property or traffic associated with these addresses – they’re just routing numbers.
This, I believe, is the first publicly disclosed sale of an IP address block since ICANN officially announced the depletion of IANA’s free pool of IPv4 blocks last month.
The deal came as part of Nortel’s liquidation under US bankruptcy law, which has been going on since 2009. According to a court filing:

Because of the limited supply of IPv4 addresses, there is currently an opportunity to realize value from marketing the Internet Numbers, which opportunity will diminish over time as IPv6 addresses are more widely adopted.

Nortel contacted 80 companies about the sale a year ago, talked to 14 potential purchasers, and eventually received four bids for the full block and three bids for part of the portfolio.
Microsoft’s bid was the highest.
The Regional Internet Registries, which allocate IP addresses, do not typically view IP as an asset that can be bought and sold. There are processes being developed for assignees to return unused IPv4 to the free pool, for the good of the internet community.
But this kind of “black market” – or “gray market” – for IP addresses has been anticipated for some time. IPv4 is now scarce, there are costs and risks associated with upgrading to IPv6, and the two protocols are expected to co-exist for years or decades to come.
In fact, during ICANN’s press conference announcing the emptying of the IPv4 pool last month, the only question I asked was: “What is the likelihood of an IPv4 black market emerging?”.
In reply, Raul Echeberria, chair of ICANN’s Number Resource Organization, acknowledged the possibility, but played down its importance:

There is of course the possibility of IPv4 addresses being traded outside of the system, but I am very confident it will be a very small amount of IPv4 addresses compared to those transferred within the system. But it is of course a possibility this black market will exist, I’m not sure that it will be an important one. If the internet community moves to IPv6 adoption, the value of the IPv4 addresses will decrease in the future.

I doubt we’ll hear about many of these sales in future, unless they come about due to proceedings such as Nortel’s bankruptcy sale, but I’m also confident they will happen.
The total value of the entire IPv4 address space, if the price Microsoft is willing to pay is a good guide, is approximately $48.3 billion.

Canon’s sexy reason for .canon?

Canon made headlines and gave a small amount of momentum to the idea of “.brand” top-level domains when it announced, a year ago, that it would apply to ICANN to manage .canon.
There are plenty of good reasons why the company would want the TLD.
Beyond the more obvious search-oriented branding opportunities, some say Canon could try to boost customer loyalty and create new revenue streams by offering camera buyers services such as photo hosting at personalized .canon domains.
But here’s another reason that doesn’t seem to have received many column inches: as I recently discovered from a few continental friends, “canon” also means “sexy” in French slang.
I expect this coincidence was the very least of Canon’s concerns when its executives met to discuss their .brand TLD strategy, but it does highlight a major issue that some companies will have to deal with when the ICANN new gTLD program gets underway.
They may think their brand is unique, but unless they’ve done their homework they may find themselves competing with, or blocked by, equally legitimate applicants from other nations.
Companies planning to participate in the program – even only as a challenger – will need to have done a fairly daunting audit of their key brands if they want to avoid nasty surprises.
Ensuring a brand is a unique, registered trademark in one’s home territory is only the beginning.
Companies need to also ask themselves what, if anything, their mark means in other languages, what it looks like in non-Latin scripts such as Arabic and Chinese, and whether it has similarity of “appearance, phonetic sound, or meaning” to any other potential new TLD string.
We already have at least one double entendre in the DNS – the ccTLD for the tiny Pacific island of Niue, .nu, means “.naked” in French, as the registry discovered to its benefit many years ago.
If Canon had not decided to apply for .canon, could a French-speaking pornographer have applied for the TLD instead, on the quite reasonable basis that it is also a “generic” string?
ICANN’s trademark protection policies would make such a delegation highly unlikely, but Canon would have found itself forced into a defensive fight to protect its mark.
Of more immediate concern to the company is of course the question of who gets to register canon.xxx.
It seems likely that ICM Registry’s sunrise policy is strong enough to ensure that this particular .xxx domain is never used for pornography, but only if a) no existing pornographer has a trademark on the string and b) Canon remembers to defensively register.
In the unlikely event that Canon forgets to defend its mark, a pornographer who registered canon.xxx for a legitimate French porn site could well find himself with a UDRP-winning domain.
And don’t get me started on Virgin…

Afilias signs .bayern deal

PunktBayern has contracted with Afilias to provide its registry back-end and DNS resolution for the .bayern top-level domain, should its application succeed.
The applicant, also known as dotBayern, is one of at least two bidders for the TLD, which is the German word for Bavaria. The other, Bayern Connect, is working with Minds + Machines.
PunktBayern is led by managing director Lothar Kunz and is affiliated with United Domains and Dirk Krischenowski of the .berlin initiative.
As with all geographic TLDs, under ICANN rules the winning bidder will be required to show a letter of support or non-objection from the relevant government.

New TLDs have a timetable again

ICANN has approved a timeline for the introduction of new top-level domains again. Barring surprises, it looks like this could be the final one.
These are the key dates in the timetable passed by the ICANN board of directors at its meeting here in San Francisco on Friday:
March 25 – Governmental Advisory Committee feedback on the San Francisco consultation due to be provided to ICANN for consideration.
April 15 – ICANN will publish the relevant edited extracts of the final Applicant Guidebook for 30 days of public comment.
May 20 – ICANN’s final consultation with the GAC. This will be held via teleconference and it’s not clear yet if observers will be allowed on the call.
May 30 – ICANN publishes the final Applicant Guidebook.
June 20 – The ICANN board of directors will meet on the first day of the Singapore public meeting to (presumably) approve the Guidebook.
June 22 – Large quantities of free alcohol consumed at the Singapore meeting’s Gala event.
This timetable seems to give plenty of time for the Guidebook’s remaining kinks to be worked out, and there seems to be considerable resolve in ICANN’s leadership to get this thing put to bed by Singapore, which will be Peter Dengate Thrush’s last as ICANN chair.

There are still a couple of questions remaining, however. It’s not yet clear when the first-round application window will open and therefore when the first new TLDs will be available.
ICANN has always said that the 60 to 90-day window would open after ICANN has concluded four months of marketing and global outreach – it wants to be certain that nobody can complain that they lost their brand because didn’t know the new gTLD program existed.
It’s been stated that the plan was to kick the outreach program off shortly after the Guidebook is approved, but there was some speculation in the halls at the San Francisco meeting last week suggesting that it could actually coincide with its publication.
If that happens, that would knock just a few weeks off the wait before applications open, so it’s nothing to get particularly excited about.
It seems we’re looking at the application window opening in early November at the latest, which suggests to me ICANN may opt for a 90-day window, in order to avoid having the deadline for applying falling during or just after the holiday period.
With the least-controversial applications expected to take at least eight months to process, we’re looking at October 2012 before the first new TLDs are delegated to the root.
With sunrise periods, landrush periods, marketing and so on, I doubt any new TLDs will be generally available before the first quarter of 2013. Single-user “.brands” could go into use sooner.
And of course, if somebody takes ICANN to court and successfully enjoins it, this may all wind up looking woefully optimistic.

US upset with ICANN over .xxx

The US government has expressed disappointment with ICANN for approving the .xxx top-level domain, surprising nobody.
Fox News is reporting Lawrence Strickling, assistant secretary at the Department of Commerce and one of ICANN’s keynote speakers at the just-concluded San Francisco meeting:

We are disappointed that ICANN ignored the clear advice of governments worldwide, including the US. This decision goes against the global public interest, and it will open the door to more Internet blocking by governments and undermine the stability and security of the Internet.

As I reported Friday, ICANN used a literal interpretation of its Governmental Advisory Committee’s advice in order to make it appear that it was not disagreeing with it at all.
Essentially, because the GAC didn’t explicitly say “don’t delegate .xxx”, the ICANN board of directors was free to do so without technically being insubordinate.
Whether the GAC knew in advance that this was the board’s game plan is another question entirely.
Strickling is of course duty-bound to complain about .xxx – no government wanted to be seen to associate themselves with pornography – but he’s in a unique position to do something about it.
Strickling heads the National Telecommunications and Information Administration, the named “Administrator” of the DNS root and ergo ICANN’s overseer.
It’s within his power to refuse to instruct VeriSign to inject .xxx into the DNS root system, but it’s a power few observers expect him to exercise.
As Milton Mueller of the Internet Governance Project noted yesterday:

If the US goes crazy and interferes with XXX’s entry into the root it will completely kill ICANN and open a Pandora’s box for governmental control of the DNS, a box that will never be closed.

Dire consequences indeed. It’s unlikely that the NTIA would risk killing off the ICANN project after so many years over a bit of T&A.

ICM sees 30,000 .xxx reservations in a day

ICM Registry is rapidly approaching the 250,000 mark for “pre-reserved” .xxx domain names, after racking up an extra 30,000 expressions of interest in less than 24 hours.
The counter on the ICM web site currently shows 243,972 domains have been reserved, compared to 211,942 at this time yesterday.
The counter ticked up by 2,000 domains in the 20 minutes it took me to write this post.
(UPDATE: The number of pre-reservations just passed 250,000, 24 hours after .xxx was approved.)
ICANN approved the .xxx top-level domain shortly after noon Pacific time yesterday, generating blogosphere buzz, a ton of Twitter traffic, and dozens of media stories worldwide.
An extra 30,000 domains is the same ball park as .CO Internet received following its commercial on Super Bowl Sunday last month.
But these free .xxx reservations will not necessarily translate into paid-for registrations, of course. Many people will be scared away from the fee, which I estimate is likely to be $70 to $100 a year.
But even if just one fifth convert, we’re talking about $2.5 million annually into ICM’s pocket, and another $500,000 to fund IFFOR, its sponsoring body. ICM expects to have at least 300,000 registrations in this first year.

How ICANN overruled governments on .xxx

In approving the .xxx top-level domain, ICANN has for the first time explicitly overruled the wishes of international governments, as represented by its Governmental Advisory Committee.
In its rationale (pdf) for the decision, ICANN explains why it chose to disregard the GAC’s views.
There are two pieces of GAC advice that have been quite important. One was delivered in Wellington in 2007, the other was delivered yesterday
The Wellington GAC Communique noted that “several members of the GAC are emphatically opposed from a public policy perspective to the introduction of a .xxx sTLD.”
That was repeated during a terse, 10-minute “bylaws consultation” on .xxx yesterday, during which the the GAC also said “there is no active support of the GAC for the introduction of a .xxx TLD”.
ICANN chose to reject (kinda) both of those pieces of advice, on the basis of a quite literal interpretation — that GAC support was unnecessary and the advice was not specific enough:

There is no contradiction with GAC advice on this item. Active support of the GAC is not a required criteria in the 2004 sTLD round. Further, this is not advice from the GAC either to delegate .XXX or to not delegate .XXX, and therefore the decision to delegate .XXX is not inconsistent with this advice.

Unfortunately, this gives pretty much no clue to how the board will treat minority GAC positions in future, such as when some governments object to new gTLDs.
But companies planning to apply for potentially controversial TLDs can take heart from other parts of the rationale.
For example, the board did not buy the notion that .xxx should be rejected because some countries are likely to block it.
Saudi Arabia has already said it intends to filter out .xxx domains.
The GAC was worried that this kind of TLD blocking would lead to a fragmented root and competing national naming systems, but ICANN wasn’t so sure. The rationale reads:

The issue of governments (or any other entity) blocking or filtering access to a specific TLD is not unique to the issue of the .XXX sTLD. Such blocking and filtering exists today. While we agree that blocking of TLDs is generally undesirable, if some blocking of the .XXX sTLD does occur there’s no evidence the result will be different from the blocking that already occurs.

It’s been noted that some Muslim countries, for example, block access to Israel’s .il domain.
One director, George Sadowsky, dissented from the majority view, as is his wont. In a lengthy statement, he named stability as one reason he voted against .xxx.
He said “the future of the unified DNS could be at stake” and “could encourage moves to break the cohesiveness and uniqueness of the DNS”.
He drew a distinction between the filtering that goes on already and filtering that would come about as a direct result of an ICANN board action.
He was, however, in the minority, which makes proposed TLDs such a .gay seem likely to get less of a rough ride in future.

.xxx domains could arrive by June

ICANN’s board of directors today approved the .xxx top-level domain, over the objections of governments and pornographers.
The vote was 9 to 3 in favor, with three directors recusing themselves due to conflicts of interest and the CEO abstaining (pretty typical for votes on .xxx over the years, I think it’s a liability thing).
Assuming the US government, which controls the DNS, doesn’t try the nuclear option of overruling ICANN, .xxx could make it into the root about 10 days from now.
Now expect ICM Registry to ramp up the marketing quite quickly – it’s aiming to launch the first of its three sunrise periods in mid-June, just three months from now.
We’re looking at a landrush certainly before the end of the year.
While ICM, in a press release today, said .xxx domains “will only be available to the adult entertainment industry”, the industry is self-defining, and president Stuart Lawley has previously stated that flipping porn domain names counts as an industry service.
Domain investors are welcome, if not necessarily encouraged, in other words.
I hear ICM has already reached out to registrars, giving them a mid-April deadline to apply to be evaluated.
The TLD launching on schedule will of course also depend on whether any legal action is taken to stop it. Diane Duke, executive director of the Free Speech Coalition, a porn trade group, said at a press conference yesterday that the FSC is thinking about suing.
She also said that it may arrange some kind of boycott, which strikes me as a terrible idea – how many pornographers will refuse to defensively register their .xxx domains out of principle? Very few, I suspect.
The FSC said last week that it was also looking into a Reconsideration Request or an Independent Review Panel procedure, which are the only two real avenues of appeal through ICANN.
An IRP could be more expensive than a lawsuit, and if precedent is any guide even a successful Reconsideration would be moot – it would take at least a month, by which time ICM’s registry contract would be long since signed.
It seems likely that ICM’s long, strange, expensive journey into the DNS may finally be at an end.