Pay up or sell up, ICANN tells failing new gTLD

ICANN has responded to a request for it to reduce the $25,000 annual fee it charges gTLD registries.
The answer is no.
That wholly unsurprising reply came in a letter from registry services director Russ Weinstein to John McCabe, CEO of failing new gTLD operator Who’s Who Registry.
McCabe, in November, had asked ICANN to reduce its fees for TLDs, such as its own .whoswho, that have zero levels of abuse. ICANN fees are the “single biggest item” in the company’s budget, he said.
His request coincided with ICANN commencing compliance proceedings against the company for failure to pay these fees
Weinstein wrote, in a letter (pdf) published today:

We sympathize with the financial challenges that some new gTLD registry operators may be facing in the early periods of these new businesses. New gTLD operators face a challenging task of building consumer awareness and this can and may take significant time and effort.

But he goes on to point out that the $25,000-a-year fee was known to all applicants before they applied, and had been subject to numerous rounds of public comment before the Applicant Guidebook was finalized.
Weinstein writes:

The AGB made clear that evaluation phase was to determine whether an applicant had the requisite technical, operation and financial capabilities to operate a registry, and was not a assessment nor an endorsement of a particular business plan.

It’s pretty clear that the .whoswho business plan has failed. It’s sold no more than a handful of non-defensive domains over the four years it has been available.
Weinstein concludes his letter by pointing out that all new gTLD registries are free to terminate their contracts for any reason, and that it’s perfectly permissible under ICANN rules to sell your contract to another registry.
ICANN told Who’s Who earlier this month that it has until February 10 to pay its overdue fees or risk having its contract terminated.

Nazis rejoice! A TLD for you could be coming soon

The domain name system could soon get its first new standard country-code domain for eight years.
This weekend, ICANN’s board of directors is set to vote on whether to allow the delegation of a ccTLD for the relatively new nation of South Sudan.
The string would be .ss.
It would be the first Latin-script ccTLD added to the root since 2010, when .cw and .sx were delegated for Curaçao and Sint Maarten, two of the countries formed by the breakup of the Netherlands Antilles.
Dozens of internationalized domain name ccTLDs — those in non-Latin scripts — have been delegated in the meantime.
But South Sudan is the world’s newest country. It formed in 2011 following an independence referendum that saw it break away from Sudan.
It was recognized by the UN as a sovereign nation in July that year and was given the SS delegation by the International Standards Organization on the ISO 3166-2 list a month later.
The country has been wracked by civil war for almost all of its existence, which may well be a reason why it’s taken so long for a delegation request to come up for an ICANN vote. The warring sides agreed to a peace treaty last year.
South Sudan is among the world’s poorest and least-developed nations, with shocking levels of infant and maternal mortality. Having an unfortunate ccTLD is the very least of its problems.
The choice of .ss was made in 2011 by the new South Sudan government in the full knowledge that it has an uncomfortable alternate meaning in the global north, where the string denotes the Schutzstaffel, the properly evil, black-uniformed bastards in every World War II movie you’ve ever seen.
The Anti-Defamation League classifies “SS” as a “hate symbol” that has been “adopted by white supremacists and neo-Nazis worldwide”.
When South Sudan went to ISO for the SS delegation, then-secretary of telecommunications Stephen Lugga told Reuters

We want our domain name to be ‘SS’ for ‘South Sudan’, but people are telling us ‘SS’ has an association in Europe with Nazis… Some might prefer us to have a different one. We have applied for it anyway, SS, and we are waiting for a reply.

To be fair, it would have been pretty dumb to have applied for a different string, when SS, clearly the obvious choice, was available.
There’s nothing ICANN can do about the string. It takes its lead from the ISO 3166 list. Nor does it have the authority to impose any content-regulation rules on the new registry.
Unless the new South Sudan registry takes a hard line voluntarily, I think it’s a near-certainty that .ss will be used by neo-Nazis who have been turfed out of their regular domains.
The vote of ICANN’s board is scheduled to be part of its main agenda, rather than its consent agenda, so it’s not yet 100% certain that the delegation will be approved.

ICANN creates female-heavy anti-harassment team

ICANN’s board of directors has created a new team to look at issues of harassment in the community.
The new Board Working Group on Anti-Harassment has eight members, six of whom are women.
In fact, all six female members of the board, including non-voting liaisons, have been appointed to the group.
The members are Becky Burr, Chris Disspain, Avri Doria, Lito Ibarra, Manal Ismail, Merike Kaeo and Tripti Sinha. It will be chaired by Sarah Deutsch.
The board said “a focused group of Board members can be part of a group that is trying to help create an environment where the ICANN community is free to focus on the mission and not on behaviors that should not be a part of the working environment.”
Harassment, particularly sexual harassment, has been a simmering topic in the community for a few years, ever since the infamous Cheesesandwichgate affair.
In response, ICANN created its first anti-harassment policy, to complement its longstanding Expected Rules of Behavior.
At ICANN 63 in Barcelona last October, I noticed several unavoidably prominent warnings — billboards the height of a man person — warning attendees against harassing their fellow participants, citing the policy.
In late 2017, an unscientific survey of ICANN community members found that one in three women had experienced or witnessed sexism while participating.
But ICANN’s Ombudsman told DI at the time that no complaints had been filed under the harassment policy in the first eight months it was in effect, even as the #MeToo movement took off.
Critics say that women are reluctant to report incidents to the Ombudsman because he is a man. I expect this is something the new board working group will look at.
In March last year, a group of female community members wrote to ICANN with a set of stories about how they had been harassed at ICANN meetings.
While stopping short of any serious criminal allegations, the stories depicted a working environment that can sometimes be very hostile to women, particularly when alcohol is involved.

ICANN chief gets $100k bonus

ICANN CEO Goran Marby has been awarded almost $100,000 of his annual bonus.
The ICANN board of directors last week voted to approve the first half of his fiscal year 2019 “at risk compensation”, what ICANN calls the discretionary, performance-driven part of its executive compensation packages.
Marby’s salary is $653,846.17 per annum, and the at-risk component is an additional 30% of that. Half of the bonus comes to just over $98,000.
His base pay is about $23,000 more than immediate predecessor Fadi Chehade, but considerably less than two-CEOs-ago Rod Beckstrom, who took home $750,000 and, if it was paid, $195,000 in bonuses.
While at-risk compensation is based on predetermined goals, these goals are not typically made public.
ICANN salaries are based on paying between the 50th and 75th percentile of average wages across the high-tech, non-profit and general industry.

ICANN puts deadline on .amazon talks

ICANN’s board of directors has voted to put a March deadline on talks over the future of the .amazon gTLD.
Late last week, the board formally resolved to “make a decision” on .amazon at ICANN 64, which runs in Kobe, Japan from March 9 to March 14.
It would only do so if Amazon the e-commerce giant and the eight governments of the Amazon Cooperation Treaty Organization fail to come to a “mutually agreed solution” on their differences before then.
CEO Goran Marby is instructed to facilitate these talks.
Here are the relevant resolved clauses from the resolution:

Resolved (2019.01.16.03), the Board hereby reiterates that Resolution 2018.10.25.18 was taken with the clear intention to grant the President and CEO the authority to progress the facilitation process between the ACTO member states and the Amazon corporation with the goal of helping the involved parties reach a mutually agreed solution, but in the event they are unable to do so, the Board will make a decision at ICANN 64 on the next steps regarding the potential delegation of .AMAZON and related top-level domains.
Resolved (2019.01.16.04), the Board encourages a high level of communication between the President and CEO and the relevant stakeholders, including the representatives of the Amazonian countries and the Amazon corporation, between now and ICANN 64, and directs the President and CEO to provide the Board with updates on the facilitation process in anticipation of revisiting the status of the .AMAZON applications at its meeting at ICANN64.

The vote came following ACTO’s demand that ICANN reverse its decision to take .amazon, and Chinese and Japanese translations, off their “Will Not Proceed” status, which heavily implied they will ultimately end up in the root.
ACTO, which claims its members have a greater right to the string due to its geographical and cultural significance, says it has not yet agreed to Amazon’s peace offering, which includes safeguards, financial support for future gTLD applications, and free Kindles.
The ICANN board has now formally rejected the demand — so .amazon is still officially on the path to delegation — but has published mountains of clarification explaining that ACTO misinterpreted what the status change implied.
The board now says that the status change was necessary in order for ICANN to negotiate the inclusion of Public Interest Commitments — PICs, which would give ACTO the right to challenge Amazon if it breaches any of its cultural safeguards — in the .amazon contracts.
With ACTO’s Request for Reconsideration now dealt with, the ball moves into ACTO’s court.
Will ACTO come back to the negotiating table, or will it retain the hard line it has been adopting for the last few months? We’ll find out before long.

Crunch Whois privacy talks kick off

ICANN volunteers are meeting this week to attempt to finalize their recommendations on the future of Whois privacy.
Most members of the Expedited Policy Development Process working group have gathered in Toronto for three days of talks on what will likely become, in May this year, new contractually binding ICANN policy.
Discussions are kicking off pretty much at the same time this article is published and will last until Friday afternoon local time.
The EPDP group is due to publish its final report by February 1, leaving enough time for GNSO consideration, public comments, and an ICANN board of directors vote.
Its initial report, which recommended some big changes to Whois output, was published in November. Public comments on this report will lead to largely modest changes to the policy this week.
The timing is tight because Whois policy is currently governed by a one-year Temporary Specification, created by the ICANN board, which expires May 25.
The bulk of the work today will focus on formalizing the “purposes” of Whois data, something that is needed if ICANN policy is to be compliant with the EU General Data Protection Regulation.
The more controversial stuff, where consensus will be extraordinarily difficult to find, comes tomorrow, when the group discusses policies relating to privileged access to private Whois data.
This is the area where intellectual property and security interests, which want a program that enables them to get access to private data, have been clashing with non-commercial stakeholders, which accuse their opponents of advocating “surveillance”.
It’s not expected that a system of standardized, unified access will be created this week or by February 1. Rather, talks will focus on language committing ICANN to work on (or not) such a system in the near future.
Currently, there’s not even a consensus on what the definition of “consensus” is. It could be slow going.
Gluttons for punishment Observers can tune in to the view/listen-only Adobe Connect room for the meetings here.

Another failing gTLD not paying its “onerous” dues

ICANN has sent out its first public contract breach notice of the year, and it’s going to another new gTLD registry that’s allegedly not paying its fees.
The dishonor goes to Who’s Who Registry, manager of the spectacularly failing gTLD .whoswho.
According to ICANN, the registry hasn’t paid its registry fees for several months and hasn’t been responding to private compliance outreach.
The company has a month to pay up or risk suspension or termination.
CEO John McCabe actually wrote to ICANN (pdf) the day after one of its requests for payment in November, complaining that its fees were too “onerous” and should be reduced for registries that are “good actors” with no abuse.
ICANN’s annual $25,000 fee is “the single largest item in .whoswho’s budget”, McCabe wrote, “the weight of which suppresses development of the gTLD”.
Whether ICANN fees are to blame is debatable, but all the data shows that .whoswho, which has been in general availability for almost four years, has failed hard.
It had 100 domains under management at the last count, once you ignore all the domains owned by the registry itself. This probably explains the lack of abuse.
Well over half of these names were registered through brand-protection registrars. ICANN statistics show 44 names were registered during its sunrise period.
A Google search suggests that only four people are currently using .whoswho for its intended purpose and one of those is McCabe himself.
The original intent of .whoswho was to mimic the once-popular Who’s Who? books, which contain brief biographies of notable public figures.
The gTLD was originally restricted to registrants who had actually appeared in one of these books, but the registry scrapped that rule and slashed prices from $70 to $20 a year in 2016 after poor uptake.
I’d venture the opinion that, in a world of LinkedIn and Wikipedia, Who’s Who? is an idea that might have had its day.

How new gTLD auctions could kill gaming for good

Ever heard of a Vickrey auction? Me neither, but there’s a good possibility that it could become the way most new gTLD fights get resolved in future.
It’s one of several methods being proposed to help eliminate gaming in the next new gTLD application round that have received some support in a recently closed round of public comments.
ICANN’s New gTLD Subsequent Procedures working group (SubPro) is the volunteer effort currently writing the high-level rules governing future new gTLD applications.
Two months ago, it published a preliminary report exploring possible ways that contention sets could be resolved.
The current system, from the 2012 round, actively encourages applicants to privately resolve their sets. Usually, this entails a private auction in which the winning bid is shared evenly between the losing applicants.
This has been happening for the last five years, and a lot of money has been made.
Losing auctions can be a big money-spinner. Publicly traded portfolio registry MMX, for example, has so far made a profit of over $50 million losing private auctions, judging by its annual reports. It spent $13.5 million on application fees in 2012.
MMX is actually in the registry business, of course. But there’s a concern that its numbers will encourage gaming in future.
Companies could submit applications for scores of gTLDs they have no intention of actually operating, banking on making many multiples of their investment by losing private auctions.
Pointing no fingers, it’s very probably already happened. But what to do about it?
Who’s this Vickrey chap?
One suggestion that seems to be getting some love from diverse sections of the community is a variation of the “Vickrey auction”.
Named after the Canadian Nobel Prize-winning economist William Vickrey, it’s also called a “second price sealed bid auction”.
Basically, each applicant would secretly submit the maximum price they’d be willing to pay for the contested gTLD, and the applicant with the highest bid would pay the amount of the second-highest bid.
This method has, I believe, been used more than once in private contention resolution during the 2012 round.
But under the system suggested by SubPro, each applicant would make their single, sealed, high bid at time of application, before they know who else is gunning for the same string.
That way, contention sets could be mostly eliminated right at the start of the process, leading to time and cost efficiencies.
There’d be no need for every application in a contention set to go through full evaluation. Only the high bidder would be evaluated. If it failed evaluation, the second-highest bidder would go into evaluation, etc, until a successful applicant was found.
For losing applicants, a possible benefit of this is that they’d get much more of their application fees refunded, because they’d be skipping much of the process.
Neither would they have to bear the ambient running costs of sitting on their hands for potentially years while the ICANN process plays itself out.
It could also substantially speed up the next round. If the round has five, 10, 20 or more times as many applications as the 1,930 received in 2012, resolving contention sets at the very outset could cut literally years off processing times.
The SubPro concept also envisages that the winning bid (which is to say, the second-highest bid) would go directly into ICANN’s coffers, eliminating the incentive to game the system by losing auctions.
I must admit, there’s a lot to love about it. But it has drawbacks, and critics.
Why Vickrey may suck
SubPro itself notes that the Vickrey model it outlines would have to take into account other aspects of the new gTLD program, such as community applications, applicants seeking financial support from ICANN, and objections.
It also highlights concerns that bids submitted at the time of application constitute private business-plan information that applicants may not necessarily want ICANN staff seeing (with the revolving door, this info could quite easily end up at a competitor).
Companies and constituencies responding to the recent public comment period also have concerns.
There’s hesitance among some potential applicants about being asked to submit blind bids. There are clearly cases where an applicant would be prepared to pay more to keep a gTLD out of the hands of a competitor.
One could imagine, for example, that Coca-Cola would be ready to spend a lot more money on .cola if it knew Pepsi was also bidding, and possibly less if it were only up against Wolf Cola.
The Intellectual Property Constituency raised this concern. It said that it was open to the idea of Vickrey auctions, but that it preferred that bids should be submitted after all the applications in the contention set have been revealed, rather than at time of application:

Although there is a potential downside to this in that the parties have not put a “value” on the string in advance, the reality is that many factors come into play in assessing that “value”, certainly for a brand owner applicant and possibly for all applicants, including who the other parties are and how they have indicated they intend to use the TLD.

The Brand Registry Group and Neustar were both also against the Vickrey model outlined by SubPro, but neither explained their thinking.
The Business Constituency, which is often of a mind with the IPC, in this case differed. The BC said it agreed that bids should be submitted alongside applications, only to be unsealed in the event that there is contention. The BC said:

This Vickrey auction would also resolve contention sets very early in the application evaluation process. That saves contending applicants from spending years and significant sums during the contention resolution process, which was very difficult for small applicants.

It’s hard to gauge where current registries, which are of course also likely applicants, stand on Vickrey. The Registries Stakeholder Group is a pretty diverse bunch nowadays and it submitted a set of comments that, unhelpfully, flatly contradict each other.
“Some” RySG members believe that the current evaluation and contention process should stay in place, though they’re open to a Vickrey-style auction replacing the current ascending-clock model at the last-resort stage after all evaluations are complete.
“Other” RySG members, contrarily, wholeheartedly support the idea that bids should be submitted at the time of application and the auction processed, Vickrey-style, before evaluation.
“An application process which requires a thorough evaluation of an applicant who will not later be operating the gTLD is not an efficient process,” these “other” RySG members wrote. They added:

if contention sets are resolved after the evaluation process and not at the beginning of it, like the Vickery model suggestion, it would enable applicants who applied for multiple strings to increase the size of their future bids each time they lost an auction. Each TLD needs to be treated on its own merits with no contingencies allowed for applicants with numerous applications.

It’s not at all clear which registries fall into the “some” category and which into “other”, nor is it clear the respective size of each group.
Given the lack of substantive objections to pre-evaluation Vickrey auctions from the “some” camp, I rather suspect they’re the registries hoping to make money from private settlements in the next round.
Other ideas
Other anti-gaming ideas put forward by SubPro, which did not attract a lot of support, included:

• A lottery. Contention sets would be settled by pulling an applicant’s name out of a hat.
• An RFP process. This would mean comparative, merit-based evaluation, which has never been a popular idea in ICANN circles.
• Graduated fees. Basically, applicants would pay more in application fees for each subsequent application they filed. This would disadvantage portfolio applicants, but could give smaller applicants a better shot at getting the string they want.

All of the comments filed on SubPro’s work has been fed back into the working group, where discussions about the next new gTLD round will soon enter their fourth year…

.amazon domain isn’t a slam dunk after all

Amazon’s application for the .amazon dot-brand may not be as secure as it was thought, following an ICANN decision over the Christmas period.
Directors threw out a South American government demand for it to un-approve the .amazon bid, but clarified that ICANN has not yet made a “final decision” to allow the gTLD to go live.
The Board Accountability Mechanisms Committee formally rejected (pdf) a Request for Reconsideration filed by the Amazon Cooperation Treaty Organization, which is made up of the governments of the eight countries near that big foresty, rivery, basiny thing, on December 21.
ACTO had asked the board to overturn its October resolution that took .amazon off its longstanding “Will Not Proceed” (ie, rejected) status and put it back on the path to delegation.
Secretary general Jacqueline Mendoza last month blasted ICANN for multiple “untrue, misleading, unfortunate and biased statements”, in connection with ACTO’s purported acquiescence to the .amazon bid.
Refusing ACTO’s request, the BAMC stated that ACTO had misinterpreted the resolution, and that ICANN did not intend to delegate .amazon until Amazon the company and ACTO had sat down to talk about how they can amicably share the name.
The October resolution “could have been clearer”, the BAMC said, adding:

the Resolution was passed with the intention that further discussions among the parties take place before the Board takes a final decision on the potential delegation of .AMAZON and related top-level domains. The language of the Resolution itself does not approve delegation of .AMAZON or support any particular solution. Rather, the Resolution simply “directs the President and CEO, or his designee(s), to remove the ‘Will Not Proceed’ status and resume processing of the .AMAZON applications.”

There are pages and pages of this kind of clarification. The committee clearly wants to help to smooth over relations between ICANN and the governments.
On the face of it, there’s a slight whiff of ret-conny spin about the BAMC recommendations.
There’s some ambiguity in the public record about what the ICANN board actually voted for in October.
Shortly before the ICANN board voted to resume processing .amazon, CEO Goran Marby stated, in front of an audience at ICANN 63 in Barcelona, both that a decision to delegate was being made and that ACTO was still at the table:

what we in practice has done is, through facilitation process, constructed a shared delegation of .AMAZON where the company has or will provide commitments to the ACTO countries how the .AMAZON will be used in the future. And the decision today is to delegate it, forward it to me to finalize those discussions between the company and those countries.
And I’m also formally saying yes to the invitation to go to Brazil from the ACTO countries to their — finish off the last round of discussions.

While the new clarifications seem to suggest that ACTO still has some power to keep .amazon out of the root, the BAMC decision also suggests that the full board could go ahead and approve .amazon at the ICANN 64 meeting in Japan this March, with or without governmental cooperation, saying:

the BAMC recommends that the Board reiterates that the Resolution was taken with the clear intention to grant the President and CEO the authority to progress the facilitation process between the ACTO member states and the Amazon corporation with the goal of helping the involved parties reach a mutually agreed solution, but in the event they are unable to do so the Board will make a decision on the next steps at ICANN 64 regarding the potential delegation of .AMAZON and related top-level domains. The BAMC encourages a high level of communication between the President and CEO and the relevant stakeholders, including the representatives of the Amazonian countries and the Amazon corporation, between now and ICANN 64.

If you’ve not been following the story, ACTO has concerns about .amazon due to its similarity to the name of the rain-forest region.
Amazon the company has promised to encode cultural safeguards in its ICANN contract and offered to donate a bunch of free stuff to the countries to sweeten the deal
The current Amazon offer has not been published.
The BAMC recommendation will now be considered by the full ICANN board, which is usually just a formality.

Chile opens .cl to all ICANN registrars

The Chilean ccTLD registry has opened its doors to all ICANN-accredited registrars, no matter where they are based.
NIC Chile, part of the University of Chile, this week announced its Registrar Agents Program, an effort to grow the TLD internationally.
Becoming .cl-accredited appears to be a relatively simple process, requiring a brief application, technical tests (it’s an EPP registry) and contract-signing.
A pilot program that kicked off in September 2016 has already attracted 11 ICANN-accredited registrars, mostly but not exclusively those in the corporate brand-protection space.
Chilean companies that want to act as registrars must go through a separate process and do not need ICANN accreditation.
There are no local presence requirements to register a .cl domain.
Today, the TLD has just shy of 575,000 registered domains, having broke through the half-million mark about three years ago.
It may be interesting to see if growth rates increase with a larger pool of registrars, but .cl is already quite broadly available at major retail registrars (presumably via gateway or reseller arrangements) so getting hold of one doesn’t appear to be problematic.