Modest pay rises for ICANN top brass

ICANN’s six top executives have been given pay raises up to 3.5%, according to resolutions passed at ICANN 78 last week.

The increases are a little ahead of US inflation but a little below the market rate if these officers were to work elsewhere, according to the resolutions.

Interestingly, interim CEO Sally Costerton is named in a pay-rise resolution for the first time, perhaps indicating she’s no longer being paid through the UK-based consulting company she owns, which has allowed ICANN to hide her compensation in its annual tax filings.

The resolution raises her “salary” by up to 3.5% for her role as senior advisor to president and SVP, Global Stakeholder Engagement, but does not mention the fact that she’s also acting CEO.

Looks like the fight for .hotel gTLD is over

One of the longest-running fights over a new gTLD may be over, after three unsuccessful applicants for .hotel appeared to throw in the towel on their four-year-old legal fight with ICANN.

In a document quietly posted by ICANN last week, the Independent Review Process panel handling the .hotel case accepted a joint request from ICANN and applicants Fegistry, Radix and Domain Venture Partners to close the case.

The applicants lawyers had told ICANN they were “withdrawing all of their claims” and the panel terminated the case “with prejudice”.

They had been fighting to get ICANN to overturn its decision to award .hotel to HOTEL Top-Level-Domain (HTLD), formerly affiliated with Afilias, which had won a controversial Community Priority Evaluation.

CPE was a process under the 2012 new gTLD program rules that allowed applicants in contention sets to avoid an auction if they could show sufficient “community” support for their bids, which HTLD managed to do.

The Fegistry complaint was the second IRP to focus on this decision, which was perceived as unfair and inconsistent with other CPE cases. The first ran from 2015 to 2016 and led to an ICANN win.

Part of the complaints focused on allegations that an HTLD executive improperly accessed private information on competing applicants using a vulnerability in ICANN’s applications portal.

The IRP complainants had also sued in Los Angeles Superior Court, but that case was thrown out in July due to the covenant not to sue (CNTS) that all new gTLD applicants had to agree to when they applied.

The fight for .hotel had been going on for longer than that for .web, but unlike .web it appears that this fight may finally be over.

.web fight back in “court”

ICANN is heading back to the quasi-courtroom of its Independent Review Process, after .web auction runner-up Altanovo Domains filed its second IRP complaint about the controversy-ridden gTLD.

I first reported that the complaint had been filed back in July, but it was not until last Thursday that ICANN published the document, along with thousands of pages of exhibits and its own response, almost all thoroughly redacted to remove references to the one contract at the heart of the mess.

Now-independent Altanovo, which was part of Afilias before that company was acquired by Donuts, claims that ICANN broke its bylaws commitments to apply its policies equitably to everyone.

The company remains incredibly cheesed off that it lost the 2016 auction for .web, which saw a company called Nu Dot Co pay ICANN $135 million for the domain, at a time when it was secretly backed by Verisign.

Altanovo claims that NDC broke the terms of ICANN’s Applicant Guidebook and the rules of the auction by declining to disclose the existence of the Domain Acquisition Agreement it had signed with Verisign.

That deal saw Verisign bankroll and dictate the terms of NDC’s handling of the auction; in exchange, NDC would transfer .web to Verisign shortly after signing its ICANN registry agreement.

Altanovo has already won one IRP about this. The panel in the first case ruled in May 2021 that ICANN broke its bylaws because its board did not make a decision on whether NDC’s behavior was kosher.

As a result of that ruling, the board spent over a year mulling and eventually decided this April that, no, NDC didn’t break the rules. It’s that decision that Altanovo is challenging now. The complaint says:

NDC had no independent business plan for .WEB that it intended to implement. Its sole purpose in applying for .WEB was to obtain it for the oldest of the incumbent players, not to market .WEB itself in any way or to compete in the market… No one in the Internet Community, including the other .WEB Contention Set members, had any clue that, as of August 2015, they were competing with Verisign and not NDC.

ICANN’s response to the complaint states that its board was exercising its “business judgement”, which must be deferred to, and that Altanovo’s claims about bylaws breaches merely amount to differences of interpretation.

Speaking to analysts on Verisign’s third-quarter earnings call last week, company CEO Jim Bidzos quoted from the conclusion of ICANN’s IRP response and added: “Altanovo’s IRP request should be denied. We agree with ICANN.”

“We continue to believe that this IRP filed by Altanovo and its backers has been filed for the purpose of delay,” he said.

Altanovo reckons that Verisign and ICANN have been colluding on their legal responses to the .web and that certainly seems likely in terms of the redactions ICANN has made to the complaint and response published last week.

All quotations of the Verisign-NDC DAA are redacted in the Altanovo complaint are redacted as “third party confidential”, presumably at Verisign’s request; in the ICANN response the single DAA quote remains unredacted.

Freenom spanked for holding Olympics domain hostage

Freenom has been hit by its third ICANN contract-breach notice in under a month, this time because the organizers of the 2024 Paris Olympics could not transfer a domain out to another registrar.

The registrar, formally OpenTLD, failed to take off the ClientTransferProhibited status from the domain club2024.tickets, preventing the registrant from transferring it, ICANN claims.

Digging through my database and Whois records, it looks like the organizing committee of Paris 2024 used Freenom to defensively register 10 .tickets domain names related to its Le Club Paris 2024 marketing initiative in July 2020.

They were the only .tickets domains Freenon has ever sold.

When they came up for renewal last year, the Paris committee instead transferred nine of them out to local registrar Gandi, where they remain. The 10th domain was not transferred for some reason.

ICANN says Freenom is in violation of the Transfer Policy by failing to unlock the domain without a good reason. Additionally, the domain doesn’t show up in Whois queries on Freenom’s web site, despite still being in the zone file.

Compliance has given the registrar until November 7 to come back into compliance or risk losing its accreditation.

Freenom is already working under two active breach notices, which ICANN said it has not yet responded to. The deadline on the earlier, September 20 notice has already passed, so ICANN could escalate any day.

The first four new gTLDs have been unmitigated disasters

“Arabic ‘Dot Shabaka’ goes online, ‘Dot Com’ era nearing end”.

That was a headline from a Turkish news site in February 2014 when the first Arabic gTLD — شبكة. — went to general availability, having been delegated to the DNS root October 23, 2013, 10 years ago next week.

It was one of the first four gTLDs to go live from ICANN’s 2012 new gTLD application round. At the time, the registry very kindly documented its launch on the pages of this very blog.

A decade on, شبكة. — which transliterates as “dot shabaka” — has just 670 registered domains, a 2015 peak of 2,093 names, and barely any active web sites of note. The registrar arm of the registry that runs it, GoDaddy, doesn’t even support it.

شبكة. is the Arabic for “.web”. The dot goes to the right because Arabic is read right-to-left. A full domain looks like this فيمأمنمنالألغام.شبك in your address bar but in the DNS, the TLD is represented by the Punycode .xn--ngbc5azd.

Given the Latin-script version of .web auctioned off for $135 million, and that there are 274 million Arabic speakers in the world, you might expect there to be a thirsty market for dot shabaka domains.

Nope.

It added about 2,000 domains in its first three months, crept up to 2,093 over the next two years, and has been on the decline pretty much consistently ever since. It has 40 accredited registrars, but only 21 of those have any domains under management.

Notably, GoDaddy has zero dot shabaka names under management, despite GoDaddy Registry being the official registry due to a string of consolidation ending with its acquisition of Neustar’s registry business over three years ago.

Its largest registrar is Dynadot, which seems to have a pretty responsive, intuitive storefront for non-Latin domain names.

Doing a site search on Google reveals the registry’s NIC site as the top hit — never a good sign — and a first page dominated by broken, misconfigured, and junk sites. An anti-landmine organization and a reputation management service are among the legit sites that show up.

One of the first-page results is actually in Japanese, a page declaring “ドメイン「المهوس.شبكة」は、日本語では、「オタク.ネット」という意味です。” or “The domain ‘المهوس.شبكة’ means ‘otaku.net’ in Japanese.” (per Google Translate).

It’s hardly a ringing endorsement of the demand for Arabic script names. If a reasonably priced, .com-competitive, god-tier gTLD such as “.web” is a backwater neglected even by its own registry, what does that say about any long-tail internationalized domain name gTLDs that might be applied for in the next ICANN application round?

We don’t have to wait until then to get a sense, however. Dot shabaka was one of four gTLDs delegated on the same October 2013 day, and the others haven’t fared much better. The other three were:

• .xn--unup4y (.游戏) — means “.games” in Chinese. Operated by Identity Digital (formerly Donuts).
• .xn--80aswg (.сайт) — means “.site” in several Cyrillic languages, including Russian. Operated by CORE Association.
• .xn--80asehdb (.онлайн) — means “.online” in several Cyrillic languages, including Russian. Also operated by CORE Association.

You might expect .游戏 to do quite well. There are over a billion Chinese speakers in the world and gaming is a popular pastime in the country, but this TLD is doing even worse than dot shabaka.

While it was a day-one delegation, Identity Digital didn’t actually start selling .游戏 domains until early 2017, so it’s had a shorter amount of time to build up to the pitiful 318 domains recorded in the last registry transaction report. While its DUM number is lumpy over time, there’s an overall upward trend.

Compare to Latin-script .games (also Identity Digital) which had over 48,000 domains at the last count. Even comparing to premium-priced and XYZ-operated .game (Chinese isn’t big on plurals), which had 4,227 names, is unfavorable.

The two decade-old Cyrillic gTLDs aren’t doing much better, despite there being 255 million Russian-speakers in the world.

While .онлайн (“.online”) has a relatively decent 2,340 domains, the English version, run by Radix, has 2,732,653 domains. The Russian “.site” (.сайт) has just 829 domains, compared to Radix’s English version, which has 1,501,721.

The major Russia-based registrars, while they are understandably the biggest sellers of Cyrillic gTLD domains, are actually selling far more of their Latin-script, English-language equivalents.

Reg.ru, for example, has 99,716 .site domains under management, but just 249 in .сайт. It has 188,125 .online domains — where it is the fourth-largest registrar — but just 918 in .онлайн.

While there are certainly supply-side problems, such as the problem of Universal Acceptance, I suspect the abject failures of these four IDN gTLDs to gain traction over the last decade, despite their first-mover advantages, is based at least equally on a lack of demand.

ICANN has made UA — particularly with regards IDNs — one of its top priorities for the next new gTLD application round. Supporting a multilingual internet is one of the CEO’s goals for the current fiscal year.

But it had the same goals in the 2012 round too. The reason the first four to be delegated were IDNs was because IDN applicants, in act of what we’d probably call “virtue signalling” nowadays, were given priority in the lottery that decided the order in which they were processed.

Second time lucky?

Wood company scraps its dot-brand

A Swedish wood-products company has become the latest company to ask ICANN to terminate its dot-brand gTLD registry agreement.

Svenska Cellulosa AB, which Wikipedia tells me makes almost $2 billion a year selling paper and wood pulp, is dumping .sca, which it has never used.

While ICANN will not transition the gTLD to another operator, there are plenty of other organizations in the world using the same abbreviation, so the string itself could show up in the root again in future.

The TLD was managed by Valideus on a Verisign back-end. Verisign is getting out of the dot-brand back-end business.

Assuming SCA’s request is not withdrawn, it will become the 120th dot-brand to self-terminate.

Freenom gets yet another ICANN breach notice

ICANN Compliance is really up in Freenom’s face now, filing yet another contract-breach notice against its registrar arm barely a week after the last one.

The September 29 notice adds three new tickets to the 12 in the September 20 notice I wrote about last month. It’s the sixth notice OpenTLD has received since 2015.

The cases are similar to those in the previous missive. ICANN wants proof that the registrar has been complying with the Transfer Policy and the Expired Registration Recovery Policy.

It seems some Freenom customers have had difficulty transferring their names out of the company’s control, and have been unable to restore their domains after accidentally allowing them to expire.

It still also owes ICANN past-due fees, the notice reiterates.

The notice covers complaints from June and July. The company has until October 20 to comply or risk losing its accreditation. The claims in the earlier notice give it until October 11.

Freenom is the company that runs a dwindling collection of free-to-register ccTLDs, notably .tk. It has not allowed registrations on its site all year, blaming technical issues. It’s also being sued by Facebook owner Meta over alleged cybersquatting.

After Verisign’s sluggish year, ICANN misses funding goal by $2 million

ICANN’s fiscal 2023 revenue came in $2 million light when compared to its budget, the annual report published today shows.

The Org blamed lower-than-expected transaction fees for the shortfall, suggesting the domain industry wasn’t quite as buoyant as its accountants had hoped.

Funding for the year came in at $150 million against a budgeted target of $152 million.

The period covered is July 1, 2022 to June 30, 2023, a period in which Verisign — ICANN’s biggest contributor by some margin — repeatedly lowered its revenue estimates from .com and .net sales.

This is not a coincidence. The two outfits’ fates are intertwined. Verisign funded ICANN to the tune of $49.7 million from its legacy gTLD business in FY23, up only slightly from $49.5 million in FY22.

Overall, ICANN said that its revenue from registry transactions was $60 million versus its budget estimate of $62 million, and that registrar transactions revenue was $39 million versus its $41 million estimate.

Other registrar fees and registry fixed fees seem to have come in a bit ahead of budget, and rounding accounts for the fact that the numbers don’t make prima facie sense.

ICANN said its expenses for the year came in $10 million lower than expected, at $142 million, due to lower professional services and personnel costs. Its travel expenses were $2 million more than expected, it seems due to the Washington DC meeting being more expensive than planned.

Russia cuts off ICANN funding after pro-Ukraine stance

Russia did not pay its usual annual tribute to ICANN in the Org’s fiscal 2023, newly published funding data reveals.

Coordination Center for TLD RU usually funnels $50,000 a year into ICANN’s budget, but that was reduced to nothing in the year to June 30, 2023, according to ICANN’s FY23 annual report, published today.

While it could of course be a coincidence, I rather suspect it’s retaliation for ICANN’s overt support for Ukraine following Russia’s invasion last year.

ccTLD.ru counts the Russian Ministry of Communications and Mass Media as one of its “founding members”.

ICANN donated $1 million to the Emergency Telecommunications Cluster, a relief organization, to support Ukrainians affected by the war, and gave the Ukrainian government a platform to denounce the war at a public meeting.

Later last year, ICANN also lobbied against the Russian candidate for ITU secretary general.

The .ru registry was not the only ccTLD operator to slash funding in FY23.

Belgium already said it would cut its donation from $75,000 to $25,000 in protest at “mission creep” and perceived failures to deal with privacy regulations, and the annual report shows it made good on its threat.

But it seems to have been joined by the Netherlands and Denmark, which cut their contributions respectively by $45,000 to $180,000 and by $30,800 to $30,000. Slovenia halved its donation to $5,000.

Overall, ccTLD contributions were down $176,535 to $2,214,240.

ICANN’s bean-counters probably won’t be losing any sleep over the decline; the Org’s overall funding was $150 million in the year.

Palage’s epic rant as he asks ICANN to cancel Verisign’s .net contract

ICANN is devolving into a trade association hiding under a thinning veneer of multistakeholderism and the domain industry is becoming a cartel.

Those are two of the conclusions reached by consultant Michael Palage, who’s been involved with ICANN since pretty much the start, in an epic Request for Reconsideration in which he asks the Org to unsign Verisign’s recently renewed .net registry contract.

ICANN’s equally intriguing response — denying, of course, Palage’s request — also raises worrying questions about how much power ICANN’s lawyers have over its board of directors.

The RfR paints a picture of a relationship where Verisign receives special privileges — such as exemptions from certain fees and obligations — in exchange for paying higher fees — contributing $55 million of ICANN’s budget — some of which is accounted for quite opaquely.

Palage claims the domain industry of being “on the precipice of becoming a cartel” due to recent consolidation, and says that is being enabled by ICANN’s failure to conduct an economic study of the market.

Verisign’s .net and .com contracts are the only registry agreements that do not oblige the registry to participate in economic studies, Palage says, reducing ICANN’s ability, per its bylaws, “to promote and sustain a competitive environment in the DNS market.”

Palage writes:

The failure of ICANN to have the contractual authority to undertake a full economic study to ensure a “competitive environment in the DNS market” undermines one of its core values. This failure is resulting in a growing consolidation within the industry which is on the precipice of becoming a cartel. ne needs to look no further than four US-based companies, Verisign, PIR, GoDaddy, and Identity Digital which currently control almost the entirety of the gTLD registry market based on domain names under management. This unchecked consolidation within the industry directly and materially impacts the ability of individual consultants to make a livelihood unless working for one of the dominant market players.

While Palage says he and other registrants are being harmed by increasing .net prices, and that an economic study would help lower them, he also asks ICANN to get Verisign to migrate to the Base Registry Agreement, which would enable Verisign to raise prices at will, without the current 10%-a-year cap.

He’s also concerned that ICANN’s volunteer community is shrinking as the domain industry becomes an increasingly dominant percentage of public meeting attendance.

Figures published by ICANN show that, at the last count, 39% of attendees were from the domain industry. ICANN stopped breaking down attendee allegiance in 2020 during the pandemic and did not resume publication of this data afterwards.

“ICANN has started down the slippery slope of becoming a trade association,” Palage writes.

While his RfR was going through the process of being considered by ICANN and its Board Accountability Mechanisms Committee, Palage separately wrote to ICANN general counsel John Jeffrey to express concerns that ICANN policy-making might be risking falling foul of antitrust law.

It seems a recent meeting of the working group discussing updates to ICANN’s Transfers Policy debated whether to cap the amount registries are allowed to charge registrars for bulk transfers. Dollar amounts were discussed.

Palage suggested ICANN might want to develop a formal antitrust policy statement that could be referred to whenever ICANN policy-makers meet, in much the same way as its Expected Standards of Behavior are deployed.

If the RfR as published by ICANN lacks some coherence, it may be because ICANN’s lawyers have redacted huge chunks of text as “privileged and confidential”. That’s something that hardly ever happens in RfRs.

It seems Palage knows some things about the .net contract and Verisign’s relationship with ICANN from his term on the ICANN board, which ran from April 2003 to April 2006, a time when Verisign and ICANN were basically at war.

Because the information Palage is privy to is still considered privileged by ICANN, it was redacted not only from the published version of the RfR but also it seems from the version supplied to the BAMC for consideration.

ICANN cited this part of its bylaws to justify the redactions:

The Board Accountability Mechanisms Committee shall act on a Reconsideration Request on the basis of the public written record, including information submitted by the Requestor, by the ICANN Staff, and by any third party.

Reading between the lines, it seems most of the redactions likely refer to the Verisign v ICANN lawsuit of 2004-2005.

Fellow greybeards will recall that Verisign sued ICANN for blocking its Site Finder service, which put a wildcard in the .com zone and essentially parked and monetized all unregistered domains while destabilizing software that relied on NXDOMAIN replies.

The October 2005 settlement (pdf) forced Verisign to acknowledge ICANN as king of the internet. In exchange, it got to keep .com forever. The deal gave Verisign financial security and ICANN legitimacy and was probably the most important of ICANN’s foundational documents before the IANA transition.

So what did the board of 2005 know that’s apparently too sensitive for the board of 2023? Dunno. I asked Palage if he’d be willing to share and he politely declined.

In any event, his RfR (pdf), which among other things asked for ICANN to reopen .net contract negotiations, was dismissed summarily (pdf) by BAMC last week on the grounds that he had not sufficiently shown how he was injured by ICANN’s actions.