ICANN made over $500k in secret lawyer payments over [REDACTED] legal dispute

ICANN has approved a payout of over half a million dollars to outside lawyers for work on a legal dispute it does not want you to know about.

The board of directors a week ago approved the disbursement of a “[Redacted – Privileged & Confidential]” sum to undisclosed parties in relation to “extensive activity in [Redacted – Privileged & Confidential]”.

Under ICANN policy, the fact that board approval was required means that the amount being paid is at least $500,000. The redacted resolution also authorizes additional payments up to $499,999.

ICANN isn’t providing any hints about what the payments concern, other than that it’s a legal dispute of some kind. The resolution states:

When required, ICANN must engage outside legal counsel to help prepare for and defend against all types of disputes that are brought against ICANN. When those disputes become highly contentious they often require significant involvement during a certain time period by outside counsel and that significant amount of time also results in significant fees and related expenses.

The words “related expenses” may be telling. We may not just be talking about lawyers’ fees here.

ICANN also does not state when the expenses were incurred, other than to note that the org’s budget for fiscal 2020, which ended June 30, “contemplated” the need for such payments.

So we’re talking about a legal issue that ICANN was aware of before May 2019, when the FY20 budget was approved, possibly as far back as December 2018, when earlier versions of that budget were published.

Known legal disputes that were active back then and have seen activity in the last few months include the Afilias Independent Review Process complaint about the .web auction and DotConnectAfrica’s court appeal over its .africa loss.

But both of those cases are matters of public record. ICANN even regularly publishes legal documentation on both. They’re not secret.

The only cases I’m aware of that ICANN has actively tried to keep secret involve allegations of sexual discrimination and harassment made against at least one former senior staffer. One such lawsuit was filed late February 2019.

But the hundreds of thousands doled out by ICANN last week could be related to just about anything.

ICANN’s bylaws give the board a broad brush when it comes to redacting information from published resolutions:

any actions relating to personnel or employment matters, legal matters (to the extent the Board determines it is necessary or appropriate to protect the interests of ICANN), matters that ICANN is prohibited by law or contract from disclosing publicly, and other matters that the Board determines, by a three-quarters (3/4) vote of Directors present at the meeting and voting, are not appropriate for public distribution

Usually, when ICANN redacts information, it’s related to personnel matters such as management bonuses.

Whatever it was ICANN just spent your money on, ICANN ain’t saying.

.trust finds a new home with UNR

UNR has acquired the contract to run the .trust new gTLD.

According to ICANN records, the registry agreement was transferred to UNR, the registry arm of the former Uniregistry, back in June.

It’s the second time the TLD has changed hands since it was delegated back in 2014.

It was originally awarded by ICANN to Deutsche Post, but was quickly sold to NCC Group, which launched it in early 2015.

While .trust is technically live, it has not actually sold any domain names yet and doesn’t appear to have any registrars. The only domains in use, a mere half-dozen, all appear to belong to NCC.

Expect that to change under its new ownership.

I first speculated that .trust was for sale back in 2016, after the then-CEO of NCC utterly slagged off the new gTLD program.

But when NCC sold off its domain name assets in 2017, .trust remained with the company.

The gTLD seems to be following UNR’s chief legal officer, Jean-Christophe Vignes, who ran it under NCC before joining UNR two years ago.

I believe it’s UNR’s 25th gTLD. The company has not yet announced its plans for .trust.

Tributes as “great mentor” Marilyn Cade dies

Social media was flooded with tributes today after it was sadly announced that one of ICANN’s elder statespeople, Marilyn Cade, has died.

Cade, who participated in ICANN and the wider internet governance community for decades, was widely admired not only for her dedication to fighting her corner, but also her habit of taking the time to bring newcomers, particularly women, the young, and those from under-served regions, into the community.

Reading through tributes on social media and elsewhere today, the word “mentor” appears over and over again.

“She was incredibly dedicated and always trying to bring new people into the multi-stakeholder Internet Governance world. Every time I saw her at an ICANN meeting she would be introducing me to someone new,” wrote one community member.

“What meeting have I been to where Marilyn have not been? She was a mentor, a fighter, lots of energy, but also with attitude,” wrote another.

I myself recall being schooled, and charmed, by Cade over drinks in Mar Del Plata, when I was still a little green, over 15 years ago.

In the ICANN context, Cade was long a member of the Business Constituency of the GNSO, which she chaired for three years from 2010.

She was such a fixture at ICANN, reliably showing up to the open mic during Public Forum sessions at almost every meeting, that the simple introductory sentence “My name is Marilyn Cade” became something of a catchphrase and a source of friendly ribbing.

The phrase regularly showed up on Public Forum Bingo cards, and I once caught an ICANN technician using it to test the audio on a public webcast before the meeting went live.

But she is also fondly remembered in the wider internet governance governance community for many of the same reasons. At the Internet Governance Forum USA, she held the role of “Chief Catalyst”, a job title that perhaps speaks volumes.

The Internet Governance Forum, which kicks off its 2020 meeting online today, announced that it will hold a special session in Cade’s remembrance tomorrow, via Zoom.

“She was a staunch supporter and advocate of the IGF and Internet governance in general,” IGF wrote. “Her energy, enthusiasm and dedication, in particular to the meaningful inclusion of communities from developing countries resulted in dozens of countries establishing their National, Regional and Youth initiatives (NRIs).”

“We were blessed by her passion, her will and her immense love for IGF and the NRI community. I know many of you will be as shocked as us tonight; your pain and anguish is shared,” IGF-USA wrote.

The IGF has opened a comment forum for tributes. Details of the remembrance session can be found at the same link.

Angry investor sues for 30% of new .spa gTLD

Barely had the new gTLD .spa made it into the DNS root than it got sued by a company that claims it was stiffed out of a 30% stake in the domain.

Malaysia-based Asia Spa and Wellness Promotion Council, the newly minted registry, is being sued in Hong Kong by DotPH, the company that runs the Philippines ccTLD, .ph, over an eight-year-old investment deal DotPH says is being ignored.

It’s also named as defendants .asia registry DotAsia, DotAsia subsidiary Namesphere, and several DotAsia directors.

DotPH claims in its lawsuit that its CEO, Joel Disini, got together with DotAsia CEO Edmon Chung in early 2012 to come up with a deal whereby ownership of .spa, should its application be successful, would be split three ways.

ASWPC would hold half the shares, Namesphere 20%, and DotPH the remaining 30%, according to the complaint. DotPH claims it paid $60,000 for its stake in April 2012.

Now it claims that these shares were never formally issued, and it wants the Hong Kong court to force Namesphere to hand them over and force the original three-way ownership structure originally agreed.

But it turns out that DotAsia seems to have abandoned .spa anyway. Its board of directors a year ago voted to give ASWPC “sole rights” to the gTLD, enabling it to concentrate on .asia.

Disini, who was a member of the board at the time, claims he was only emailed about the vote a day before the meeting and did not see the email until it was too late.

He told DI: “the board of dotAsia moved to give away DotPH’s 30% equity in SPA”. He’s not happy about it. He reckons .spa could easily be a $2 million-a-year business.

The suit was filed October 19. You can read it here (pdf).

I’ve yet to receive a response to my request for comment from Chung, and will of course provide an update should he get back to me.

Amazon sold rights to .box gTLD for $3 million

Amazon relinquished its rights to the .box gTLD five years ago for $3 million, according to court documents seen by DI.

Amazon was one of two applicants for .box, the other being a company called NS1 (that’s the numeral 1; this has nothing to do with Network Solutions).

According to a complaint filed a couple of years ago that I came across today, Amazon agreed to withdraw its application, giving its rival an unobstructed shot at the gTLD, for $3 million.

It was a private settlement of the contention set and the payout was not publicly revealed at the time.

A $3 million deal puts .box in the same ballpark as public auctions such as MMX’s .vip and Johnson & Johnson’s (now XYZ.com’s) .baby.

While the deal is years old, I thought the data point was worth publishing.

NS1’s application suggests that its business plan was to offer registrants cloud storage services, along the lines of DropBox.

But the ICANN contract was sold to Intercap, which also runs .inc and .dealer, earlier this year. The plan now appears to be to operate it as an open niche gTLD, but no launch dates have been announced.

It’s not known how much the gTLD sold for second time around.

Big pharma firm dumps its gTLD

Indian pharmaceuticals company Lupin has become the latest new gTLD registry to drop its dot-brand.

The firm told ICANN recently that it no longer wishes to continue running .lupin, which it has never actually used.

It’s the 82nd dot-brand to self-terminate, the 13th this year.

Lupin is one of the world’s largest manufacturer of generic medicines, with revenue in excess of $2 billion per year.

.web ruling might not come this year

A decision about who gets to run the .web gTLD may not arrive until early next year, according to Verisign CEO Jim Bidzos.

“A final decision from the [Independent Review Process[ panel may be issued later this year or early next year,” he told analysts late last week.

.web sold at auction for $135 million four years ago to a company being secretly bankrolled by Verisign, but the outcome is being challenged in the IRP by runner-up bidder Afilias.

Afilias argues that the auction should be voided because ICANN failed to sufficiently investigate links between Verisign and the winning bidder. ICANN denies any wrongdoing.

It’s widely believed that .web is the strongest potential competitor to Verisign’s .com, and its attempt to secure the string is largely defensive.

The IRP case heard several days of testimony in August and the panel retired to consider its decision.

ICANN may not meet again for a looong time

The grim reality of the ongoing coronavirus pandemic seems to be sinking in at ICANN.

Management and board all but confirmed yesterday that ICANN 70, currently still scheduled for Cancun, Mexico next March, will instead take place online via Zoom.

“We would all like to get back to face-to-face, but at this moment Cancun is not looking good for now,” chair Maarten Botterman said during a community discussion about meetings at ICANN 69, also online-only.

CEO Goran Marby said that there’s a “high probability” that Cancun will be virtual.

The session, “Board/Community Focus on ICANN Meetings” was notable for being extremely depressing rather than merely boring.

Several participants spoke in terms of ICANN meetings being virtual “for the foreseeable future”.

“With the world as it is right now, it’s very hard to say when we come back to full-fledged physical meetings,” CEO Göran Marby said.

He said there’s a possibility of “hybrid” meetings, where a face-to-face gathering could take place in a part of the world where the pandemic was under control, but he noted that this would put online participants at a disadvantage.

The overall vibe of the session was that things probably aren’t going to be back to “normal” for some time.

Even though coronavirus vaccines are already reportedly rolling off the presses right now and will be in the hands of governments by the start of 2021, many experts say the logistical problem of distributing vaccine widely enough to ensure herd immunity is tough enough that the “return to normal” is still a long way off.

Meeting participant Susan Anthony predicted that airline fares will be sky-high next year, limiting the ability of many would-be participants, particularly the smaller, less well-funded ones, to show up in person.

She said virtual or hybrid meetings could be around for “the indefinite future”.

Afilias director Jonathan Robinson concurred, saying “the world may have changed immeasurably and somewhat permanently”.

ICANN director Tripti Sinha later compared the post-pandemic world to the aftermath of the 9/11 terrorist attacks.

There was lots of talk about dumping 2020’s practice of holding the meetings during the time zone of the originally planned host country — the Hamburg time zone has been particularly tough on those in the Americas, who have to start their working day at about midnight — in favor of a utilitarian approach that is least inconvenient for the largest number of participants.

It seems to me that one reason that ICANN has yet to formally cancel Cancun — it’s not even on the board’s agenda this week — is that it’s toying with longer-term plan that may mean standard face-to-face ICANN meetings are a long way off indeed.

It’s difficult to believe that it was only June when some ICANN directors thought Hamburg would be sufficiently safe to return to face-to-face meetings this week.

ICANN denies Whois policy “failure” as Marby issues EU warning

ICANN directors have denied that recently delivered Whois policy recommendations represent a “failure” of the multistakeholder model.

You’ll recall that the GNSO Council last month approved a set of controversial recommendations, put forward by the community’s EPDP working group, to create a semi-centralized system for requesting access to private Whois data called SSAD.

The proposed policy still has to be ratified by the ICANN board of directors, but it’s not on the agenda for this week’s work-from-home ICANN 69 conference.

That has not stopped there being some robust discussion, of course, with the board talking for hours about the recommendations with its various stakeholder groups.

The EPDP’s policy has been criticized not only for failing to address the needs of law enforcement and intellectual property owners, but also as a failure of the multistakeholder model itself.

One of the sharpest public criticisms came in a CircleID article by Fabricio Vayra, IP lawyer are Perkins Coie, who tore into ICANN last month for defending a system that he says will be worse than the status quo.

But ICANN director Becky Burr told registries and registrars at a joint ICANN 69 session last week: “We don’t think that the EPDP represents a failure of the multistakeholder model, we actually think it’s a success.”

“The limits on what could be done in terms of policy development were established by law, by GDPR and other data protection laws in particular,” she added.

In other words, it’s not possible for an ICANN working group to create policy that supersedes the law, and the EPDP did what it could with what it was given.

ICANN CEO Göran Marby doubled down, not only agreeing with Burr but passing blame to EU bureaucrats who so far have failed to give a straight answer on important liability issues related to the GDPR privacy regulation.

“I think the EPDP came as far as it could,” he said during the same session. “Some of the people now criticizing it are rightly disappointed, but their disappointment is channeled in the wrong direction.”

He then referred to his recent outreach to three European Commission heads, in which he pleaded for clarity on whether a more centralized Whois model, with more liability shifted away from registrars to ICANN, would be legal.

A failure to provide such clarity would be to acknowledge that the EPDP’s policy proposals are all just fine and dandy, despite what law enforcement and some governments believe, he suggested.

“If the European Union, the European Commission, member states in Europe, or the data protection authorities don’t want to do anything, they’re happy with the situation,” he told registrars and registries.

“If they don’t take actions now, or answer our questions, they’re happy with the way people or organizations get access to the Whois data… it seems that if they don’t change or do anything, they’re happy, and then were are where we are,” he said.

He reiterated similar thoughts at sessions with other stakeholders last week.

But he faced some pushback from members of the pro-privacy Non-Commercial Stakeholders Group, particularly during an entertaing exchange with EPDP member Milton Mueller, who’s unhappy with how Marby has been characterizing the group’s output to the EU.

He specifically unhappy with Marby telling the commissioners: “Should the ICANN Board approve the SSAD recommendations and direct ICANN org to implement it, the community has recommended that the SSAD should become more centralized in response to increased legal clarity.”

Mueller reckons this has no basis in what the EPDP recommended and the GNSO Council approved. It is what the IP interests and governments want, however.

In response, Marby talked around the issue and seemed to characterize it as a matter of interpretation, adding that he’s only trying to provide the ICANN community with the legal clarity it needs to make decisions.

These eight companies account for more than half of ICANN’s revenue

While 3,207 companies contributed to ICANN’s $141 million of revenue in its last fiscal year, just eight of them were responsible for more than half of it, according to figures just released by ICANN.

The first two entries on the list will come as no surprise to anyone — they’re .com money-mill Verisign and runaway registrar market-leader GoDaddy, together accounting for more than $56 million of revenue.

Registries and registrars pay ICANN a mixture of fixed fees and transaction fees, so the greater the number of adds, renews and transfers, the more money gets funneled into ICANN’s coffers.

It’s perhaps interesting that this top-contributors list sees a few companies that are paying far more in fixed, per-gTLD fees than they are in transaction fees.

Binky Moon, the vehicle that holds 197 of Donuts’ 242 gTLD contracts, is the third-largest contributor at $5.2 million. But $4.9 million of that comes from the annual $25,000 fixed registry fee.

Only 14 of Binky’s gTLDs pass the 50,000-name threshold where transaction fees kick in.

It’s pretty much the same story at Google Registry, formally known as Charleston Road Registry.

Google has 46 gTLDs, so is paying about $1.1 million a year in fixed fees, but only three of them have enough regs (combined, about one million names) to pass the transaction fees threshold. Google’s total funding was almost $1.4 million.

Not quite on the list is Amazon, which has 55 mostly unlaunched gTLDs and almost zero registrations. It paid ICANN $1.3 million last year, just to sit on its portfolio of dormant strings.

The second and third-largest registrars, Namecheap and Tucows respectively, each paid about $1.7 million last year.

The only essentially single-TLD company on the list is Public Interest Registry, which runs .org. Despite having 10 million domains under management, it paid ICANN less than half of Binky’s total last year.

The anomaly, which may be temporary, is ShortDot, the company that runs .icu, .cyou and .bond. It paid ICANN $1.6 million, which would have been almost all transaction fees for .icu, which peaked at about 6.5 million names earlier this year.

Here’s the list:

[table id=62 /]

Combined, the total is over $70.5 million.

The full spreadsheet of all 3,000+ contributors can be found over here.