DotConnectAfrica slammed for two-faced strategy as it loses .africa appeal

Unsuccessful gTLD applicant DotConnectAfrica has been handed what may prove to be the final nail in the coffin for its failed .africa bid.

A California appeals court has upheld ICANN’s lower-court victory over DCA in its entirety, ruling that the .africa applicant had a two-faced legal strategy that saw it first argue that it did not have a right to sue, but then suing anyway.

After having its .africa application rejected by ICANN due to lack of African government support in 2012, the following year DCA filed an Independent Review Process complaint against ICANN.

One of its key arguments in that case was that it, along with every other new gTLD applicant, had been forced to sign a legal waiver, preventing them from taking ICANN to court.

When it was handed a partial victory in the IRP, sufficient to embarrass ICANN but not enough to have .africa reassigned, DCA was one of a few parties who ignored the legal waiver and sued anyway, in 2016.

Now, the California appeals court has confirmed a lower court ruling that this violated the rule of “judicial estoppel”, which prevents a party switching between two diametrically opposing arguments to suit their strategy at any given time.

“DotConnect took two contrary positions. It told the arbitrators on the Independent Review Panel it could not sue in court. DotConnect then sued in court,” the three judges wrote.

They added that the “text of that litigation waiver was unequivocal, unconditional, and unlimited.”

The ruling describes the .africa case in pretty much the same way as I have for the last decade — DCA didn’t have government support when it applied for the gTLD and ICANN was well within its rights to throw out the application under the program’s rules.

ICANN was handed a thoroughly comprehensive victory, in other words, and awarded costs.

Is this the end of the .africa case? Given DCA boss Sophia Bekele’s apparent fondness for the sunk cost fallacy, who knows?

While all these legal shenanigans have been ongoing, .africa has been delegated to and launched by ZA Central Registry, which had the support of the African Union following an RFP that DCA refused to participate in.

There are about 30,000 .africa domains under management today, which is not terrible for a new gTLD.

The 30-page appeals court ruling (pdf) was made September 20 and ICANN published it this week.

Marby finds his pandemic pessimism

CEO Göran Marby has spelled out his goals for ICANN’s current fiscal year, and they include a scaled-back ambition when it comes to face-to-face public meetings in the face of an ongoing pandemic.

His first enumerated goal for the year ending June 30, 2022 is:

Develop, with the community and with support from the Board, the ability to conduct hybrid meetings that are inclusive and enhance the opportunity for community interaction and decision-making.

Compare this with his equivalent goal from July 2020:

Work with Supporting Organization and Advisory Committee leaders, community members, and the Board to define and implement a phased plan to return to face-to-face meetings.

The goal of creating a “face-to-face” meetings plan has been replace with a “hybrid” meeting plan, where some section of the community can only participate online, depending on travel restrictions.

A lot has happened in the last 15 months when it comes to the coronavirus pandemic.

In June 2020, there was still some optimism in the ICANN board that the October meeting that year would go ahead in Hamburg as normal. That didn’t happen, and the face-to-face components of the three subsequent meetings have also been cancelled.

At that time, the world still hadn’t experienced the reality of Covid-19 variants, and the possibility of multiple lockdown scenarios was still largely theoretical.

So it’s probably no surprise that Marby has been forced to rein in his hopes for bumping elbows with the global community any time soon.

ICANN 72 later this month, originally planned for Seattle, will be the sixth consecutive online-only public meeting, but Marby has been tasked by the board with making the Puerto Rico meeting next March a “hybrid” affair.

Given his goals run to mid-2022, it seems possible ICANN 74, slated for The Hague next June, is also being considered most likely a hybrid meeting.

Marby has nine goals for the year in total. Seven he wrote himself, two were set by the board. Last year, he had 10 in total of which four were set by the board.

Other areas of interest coming from his own pen include greater focus on legislation around the world, emerging technologies such as blockchain naming, outreach in the developing world, DNS security and stability and prioritizing ICANN’s increasingly overwhelming workload.

Not all of them are stated as goals, at least in Marby’s blog post, and not all appear to have measurable outcomes.

The board has told him to “stimulate Universal Acceptance” and “work with Internet governance stakeholders”. Again, it’s all pretty amorphous stuff.

One 2021 goal that does not make an appearance this year is “Develop a plan for the potential economist function”, or hiring an “astrologer in chief” as I phrased it last year.

Reasonable people could disagree with whether this one was fulfilled — the economist job has been advertised on the ICANN web site all year, but does not yet appear to have been filled.

Price of Whois lookups could rise as ICANN delays reform work

ICANN has delayed the conclusion of work on Whois reform, potentially increasing the cost of requesting domain registration data in future.

Back in March, its board of directors gave the Org six months to complete the Operational Design Phase of the so-called SSAD, or System for Standardized Access and Disclosure, but that deadline passed this week.

It appears that ICANN is not even close to concluding its ODP work. No new deadline has been announced, but ICANN intends to talk to the community at ICANN 72 next month.

SSAD is a proposal created by the community and approved — not without controversy — by the GNSO Council. It would essentially create a centralized clearinghouse for law enforcement and intellectual property interests to request private registrant data from registries and registrars.

The ODP is a new process, never before used, whereby ICANN clarifies the community’s intentions and attempts to translate policy recommendations into a roadmap that is feasible and cost-effective to implement.

It seems this process suffered some teething troubles, which are partially responsible for the delays.

But it also appears that ICANN is having a hard time finding potential service provider partners capable of building and operating SSAD all by themselves, raising the prospect of a more complex and expensive piecemeal solution.

It had 17 responses to a recent RFI, but no respondent said it could cover all the bases.

The key sticking point, described by some as a “chicken and egg” problem, is figuring out how many people are likely to use SSAD and how often. If the system is too expensive or fails to deliver results, it will be used less. If it works like a charm and is cost-effective, query volumes would go up.

So ICANN is challenged to gaze into its crystal ball and find a sweet spot, balancing cost, functionality and usage, if SSAD is to be a success. So far, its estimates for usage range from 25,000 users making 100,000 requests a year to 3 million users making 12 million requests.

That’s how far away from concluding its work ICANN is.

Confounding matters, the longer ICANN drags its feet on the ODP phase, the more expensive SSAD is likely to be for the end users who will ultimately wind up paying for it.

In a webinar last week, CEO Göran Marby said that the SSAD project is meant to recover its own costs. Whatever ICANN is spending on the ODP right now is expected to be recouped from access fees when SSAD goes live.

“This should not cost ICANN Org anything,” he said. “The costs should be carried by the user.”

ICANN is working on the assumption that SSAD will eventually happen, but if the ODP decides not to implement SSAD, ICANN will have to eat the costs, he indicated.

When the ICANN board approved this ODP, it did not specify how much money was being allocated to the project.

A second and separate ODP, looking at the next round of new gTLDs, was earlier this month given $9 million to conduct an anticipated 10-month project.

Afilias appeals .web ruling, Verisign responds with “rigging” claims

Afilias has filed an unusual and unprecedented appeal against the May ruling that found ICANN broke its bylaws by awarding the .web gTLD to a Verisign affiliate.

The company is arguing that the Independent Review Process panel that decided the .web case shirked its duties, by not actually resolving the major disputes placed before it.

Verisign, in response, has accused Afilias of asking for a “do-over”, which it said is against the rules, and published information it said showed the company had tried to “rig” the .web auction.

The IRP followed the 2015 ICANN last-resort auction, which saw Verisign secretly fund a shell applicant called Nu Dot Co to win with a $135 million bid, on the basis .web would later be transferred to its custody.

Afilias was the runner-up, and argued that ICANN should have voided the NDC bid because Verisign’s involvement was not disclosed.

But the IRP panel merely found that ICANN had breached its bylaws by failing to have the courage to actually rule on the legitimacy of Verisign’s tactics, and threw it back to ICANN to make a decision.

ICANN has yet to make that decision. Instead, Afilias has filed an appeal (pdf) with the in the form of an “application for an additional decision and interpretation”.

IRP cases are handled by the International Center for Dispute Resolution, and Afilias is invoking the ICDR Arbitration Rules that allow a claimant to request an “interpretation” or “additional award” from the original decision:

By failing to resolve all of the claims and issues Afilias presented to the Panel for decision, the Panel has not only failed to satisfy its mandate; it has also undermined the very Purposes of the IRP (as set out in Section 4.3(a) of the Bylaws)—especially, but not exclusively, by its decision to refer Afilias# claim arising from Nu Dot Co’s (“NDC”) violation of the New gTLD Program Rules back to the ICANN Board and Staff to “pronounce” upon “in the first instance.”

The lengthy request is, I believe, an unprecedented attempt at an appeal of an IRP ruling. It’s also heavy on the legal arguments and does not really shed much light on the facts of the case.

The gist of it is that Afilias wants the panel to rule that ICANN breached its bylaws, new gTLD program rules and international law by failing to disqualify NDC and awarding .web to Afilias instead.

Verisign, in response, said in a blog post that Afilas’ application is “not permitted by the arbitration rules – which expressly prohibit such requests for ‘do overs.'”

It also published a letter (pdf) from NDC to ICANN in which it argues that Afilias tried to engage in a “collusive scheme” to “rig” the .web auction.

The letter contains many pages of private correspondence — emails and phone text messages — in which rival .web applicants, before Verisign’s involvement had been confirmed, fruitlessly attempted to persuade NDC to join them in a private auction in which the winning bid would have been shared among the losers rather than all going to ICANN.

While this kind of private settlement was envisaged, and indeed encouraged, by new gTLD program rules, Verisign reckons its smoking gun is messages sent by Afilias during the so-called “blackout period” before the last-resort auction, during which communications between applicants were forbidden.

As far as I can tell, all or almost all of the documents provided by NDC to ICANN had already been submitted to the public record during the IRP.

Note — the “Afilias” referred to throughout this post is the portion of the company, now known as Altanovo Domains, left behind after most of its operating businesses were acquired by Donuts late last year.

ICANN won’t vote on new gTLDs for another year

Those of you champing at the bit for an opportunity to apply for some more new gTLDs have a longer wait ahead of you than you might have hoped, following a vote of the ICANN board of directors last week.

The board has asked ICANN staff to kick off the latest — but not last — stage of the long-running runway to the next application window, but it will take around 10 months and cost millions.

On September 12, the board gave CEO Göran Marby $9 million from the 2012 round’s war chest and told him to kick off the so-called Operational Design Phase of the New Generic Top-Level Domain Subsequent Procedures Policy Development Process (SubPro).

What this means is that ICANN will take the community-created policy recommendations approved by the GNSO Council in January and try to figure how they specifically could be implemented, before the board decides whether they should be implemented.

The ODP will “assess the potential risks, anticipated costs, resource requirements, timelines, and other matters related to implementation” the board resolution states.

For example, while the SubPro final report calls for an outreach campaign prior to opening the application window, the ODP scoping document (pdf) asks what materials would be needed to be produced and how much they would cost.

The scoping paper comprises dozens and dozens of questions like this, over 15 pages. I started counting them but got bored.

ICANN chair Maarten Botterman said the ODP will provide the board “with relevant materials to facilitate the Board’s determination whether the recommendations are in the best interest of the ICANN community or ICANN”.

While the resolution says the ODP should be completed “within 10 months”, that clock starts ticking when the Marby “initiates” the process, and that does not appear to have happened.

Given that, and ICANN’s habitual tardiness, I’d guess we’re looking at closer to a year before the Org has a document ready to put before the board for consideration.

With all the other stuff that needs to happen following the board’s approval, we’re probably talking about a 2024 application window. That would be 12 years after the last round and 11 years later than the next round was originally promised.

ICANN now has half a billion bucks in the bank after huge pandemic profits

ICANN, the non-profit organization with the limited technical mandate, now has over half a billion dollars in the bank, after the affects of the coronavirus pandemic boosted funding and slashed costs.

The Org ended June 2021 with cash and investments of $521 million, up $40 million over the preceding 12 months.

While some of this gain can be attributed to investment gains, the majority chunk comes from ICANN largely misjudging the length and impact of pandemic-related restrictions.

Expenses were $10 million lower than budget, because all three ICANN meetings during the year were held online, where they cost about half a million bucks a pop, about $3 million lower than in-person gatherings.

ICANN had budgeted for its 2021 meetings to take place face-to-face in venues around the world, but governmental travel restrictions made this impossible.

The Org saved well over half a million dollars in director expenses alone.

On the top half of the financial statement, the numbers also show a failure to predict how much the pandemic would be generally a boon, rather than a burden, to the domain name industry.

ICANN received $142 million in funding during the year, which was $12 million ahead of budget and $1 million more than it received in fiscal 2020.

Dead dot-brands top 100. Here’s the list and breakdown

The list of dot-brand gTLDs that have had their ICANN registry contracts torn up has now topped 100.

SC Johnson, the big American cleaning products company, has informed the Org it no longer wishes to run .afamilycompany, .duck, .glade, .off, .raid, and .scjohnson.

Regular readers will know that I’ve been keeping a running tally of dot-brand terminations for the last several years, and according to that tally that number is now 101.

But it’s a bit more complex than that, so I thought I’d use the occasion of this milestone to provide a more substantial breakdown.

ICANN has records for 104 dot-brands either being terminated by ICANN or asking to be terminated of their own accord.

The number of registry-initiated termination requests is 90. These are typically gTLDs that were never used, or were experimented with and then abandoned. A smaller number relate to brands that were discontinued following mergers or product end-of-life, rendering the dot-brand pointless.

ICANN initiated the other 14 terminations, mostly because the registry operator got cold feet during the pre-delegation testing phase, before going live, but also in one instance for non-payment of fees and in two cases whatever the hell this is.

Six of the registry-initiated transfer requests were withdrawn before being fully processed. Of those, three (.boots, .mobily, and its Arabic translation) went on to be terminated anyway.

Two registries filed for self-termination then changed their minds and committed auto-genericide by selling their contracts — for .bond and .sbs — to discounting portfolio registry ShortDot instead.

One dot-brand, .case, withdrew its December 2020 termination request and appears to still be active.

Thirteen termination requests are currently in the system but have not yet been fully processed.

Five dot-brand gTLD contracts — .observer, .quest, .monster, .select, .compare — were sold to other registries to be repurposed as open generics. You could add .cyou to that list, depending on how you define a dot-brand.

One gTLD that was originally a generic — .moto — made the move in the other direction to become a dot-brand.

Here’s the list of dot-brands that have either requested a termination, or been terminated.

[table id=67 /]

Volkswagen drives IDN dot-brand off a cliff

Volkwagen has decided it no longer wishes to run its Chinese-script dot-brand gTLD.

The car-maker’s Chinese arm has asked ICANN to terminate its contract for .大众汽车 (.xn--3oq18vl8pn36a), which has been in the root for five years.

It’s the standard terminating dot-brand story — the gTLD was never used and VW evidently decided it wasn’t needed.

The company also runs .volkswagen, and that’s not used either, but ICANN has yet to publish termination papers for that particular string.

Fellow German car-maker Audi is one of the most prolific users of dot-brands. Its .audi gTLD has over 1,800 registered domains, most of which appear to be used by its licensed dealerships.

.volkwagen is the 95th terminated dot-brand and the seventh terminated internationalized domain name gTLD.

CTO Conrad quits ICANN

ICANN chief technology officer David Conrad will leave the Org at the end of the month, ICANN said Friday.

No reason was given for the departure, neither was Conrad’s destination, should there be one, disclosed.

He’s been CTO since 2014. Before that, he was a VP there from 2005 to 2010.

He’ll be temporarily replaced by long-time ICANN staffer John Crain, currently chief security, stability, and resiliency officer, while ICANN carries out a formal recruitment drive.

MMX to return GoDaddy cash to investors

Former new gTLD portfolio registry Minds + Machines (MMX) said Friday that it has started returning most of its recent GoDaddy windfall to shareholders.

It has launched a tender offer to buy back £58 million ($80 million) worth of shares, after selling off its wedge of 20-odd ICANN contracts to the registrar giant.

The offer price is 9.6p ($0.13) per share. MMX said that’s a premium of 12.9% on its September 8 closing price and 13.1% over the average between August 11 and September 8.

It’s roughly the same price shares were trading for at the start of 2012, when ICANN opened the last new gTLD application window, but substantially lower than its peak when it started making new gTLD money a couple years later.

The proposal does not cover all of its shares; over 31% will remain in shareholder hands after the tender offer expires October 1.

The company has about $110 million in cash right now, and expects to spend $24 million of that on the GoDaddy transition, taxes, employee payments, professional services and the like, as it winds down over the fourth quarter.

MMX will retain its listing on AIM in London after the wind-down of operations, making it a vessel for a potential reverse-takeover, in which another company (not necessarily in the domains business) could back into it for an easier way into the public markets.

The company sold its registry portfolio to GoDaddy for about $120 million, and has wound down its registrars.