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ICANN says higher domain prices may be in the public interest

Kevin Murphy, March 24, 2022, Domain Policy

ICANN is trying to get an arbitration case covering the removal of price caps in .org, .biz and .info thrown out because it is registrants, not registrars, that are left shouldering the burden of higher prices.

The argument came in January filings, published this week, in the two-year-old Independent Review Process case being pursued by Namecheap, which is trying to get price caps reinstated on the three gTLDs.

ICANN’s lawyers are saying that the case should be thrown out because Namecheap lacks standing — IRP claimants have to show they are being harmed or are likely to be harmed by ICANN’s actions.

According to ICANN, Namecheap is not being harmed by uncapped domain prices, only its customers are, so the case should be dismissed.

Drawing heavily on an analysis commissioned by ICANN from economist Dennis Carlton, ICANN’s latest IRP submission (pdf) reads:

rational economic theory predicts that if wholesale registry prices increased, Namecheap would pass on any price increases to its customers. Namecheap is one of nearly 2,500 ICANN-accredited registrars that offer domain names to registrants, and one of hundreds of ICANN-accredited registrars that offer domain names specifically in .BIZ, .INFO, and .ORG. Namecheap thus competes against many other registrars that have exactly the same access to same registries, such as .BIZ, .INFO, and .ORG,as does Namecheap, which all pay the same wholesale price for these registry input…

Given the hundreds of registrar competitors (each facing the same registry prices from the .BIZ, .INFO, and .ORG registry operators), economic theory predicts that Namecheap and other such registrars do not have significant market power. Without market power, registrars like Namecheap do not earn supra-competitive margins and cannot absorb higher input costs. As a result, economic theory, as well as common sense, predicts that Namecheap and other competing registrars must pass on higher registry wholesale prices by raising prices to registrants, with little or no resulting harm to Namecheap.

The filing goes on the suggest that higher prices might actually be in the public interest, because ICANN lacks the expertise to set price caps at an appropriate level.

the likely harms of price regulation in these three gTLDs outweigh the likely benefits of price controls. ICANN lacks the expertise to set optimal prices. Without such expertise, the danger is that ICANN could set the wrong price — one that impairs efficient market outcomes — which would ultimately harm registrants rather than protect them…

In short, Namecheap cannot demonstrate that the public interest required ICANN to maintain price control provisions in the .BIZ, .INFO, and .ORG Registry Agreements, especially given that the majority of evidence they cite either pertains to a drastically different DNS or pertains to potential harm to registrants, not registrars.

Interestingly, in almost the same breath, the filing argues that the price of .com domains, which is capped per Verisign’s agreements with ICANN and the US government, acts as an effective deterrent to runaway price increases in other gTLDs.

With its popularity, and relatively-low, regulated price, .COM acts as a check on any registry, including .BIZ, .INFO, and .ORG, that seeks to increase prices above competitive levels.

So, regulating .com prices is good because it indirectly acts as a restraint on other registries’ prices, but regulating those other registries’ prices is bad because ICANN lacks the expertise to regulate prices.

And anyway, it’s only the registrants who get harmed if prices go up.

Got it?

.org price caps: ICANN chair denies “secret” meetings

Kevin Murphy, March 24, 2022, Domain Policy

ICANN chair Maarten Botterman has denied that the board of directors approved the removal of price caps in .org, .biz and .info in “secret” meetings in 2019.

In written testimony (pdf) recently filed as part of Namecheap’s two-year-old Independent Review Process proceeding, Botterman scoffed at the idea that ICANN secretly gave the nod to the removal of price caps in 2019:

I understand that Namecheap is claiming that the Board acted in secret when deciding to go forward with the 2019 Registry Agreements. Nothing about the Board’s conduct occurred in secret. The Board did not convene a “secret” annual, regular, or special Board meeting and did not make any “secret” formal decisions or “secret” resolutions. Instead, the Board was briefed by ICANN staff regarding contract renewals that were well within their delegated authority to negotiate and execute.

Namecheap is claiming in its IRP that ICANN broke its bylaws when it renewed the .org, .info and .biz contracts without the historical price caps that all three had in place for the better part of 20 years.

It wants those decisions annulled, potentially enabling the reinstatement of the caps.

Part of its case is that ICANN failed in its transparency obligations, with Namecheap saying that the decision to remove caps was “entirely opaque” and made with “no analysis whatsoever”.

The .info, .org and .biz contracts were renewed without the ICANN board making a formal resolution or discussing them during a session that was being recorded and minuted.

Botterman, along with declarations from with fellow director Becky Burr and VP Russ Weinstein and outside lawyers’ filings, says that the extent of the board’s involvement was two briefings that occurred at workshops in January and June 2019.

ICANN staff explained to the board why it intended to go ahead with signing the cap-free contracts, and the board “saw no reason to intervene”, Botterman wrote. Staff have delegated authority to deal with contract stuff, he said.

Now, it could be argued that these meetings were not “secret” as such — ICANN board workshops are a standard event, happening in the few days leading up to each of ICANN’s thrice-yearly public meetings.

ICANN’s chair (then Cherine Chalaby) even blogs about them, posting a rough agenda beforehand and a summary of discussions a few weeks later.

In the case of the January 2019 pre-workshop post, there’s no mention whatsoever of any contract renewals. Nor is there in the post-workshop summary.

The June 2019 post-workshop post fails to mention the fact that the board had essentially given the nod to the lifting of caps at that meeting.

The pre-workshop post makes a passing, blink-and-you’ll-miss-it reference to “Göran will update the Board on the renewal of some registry agreements”, which substantially played down what was actually going on.

At that time, ICANN was well-aware that there was huge public interest in at least the .org renewal, where over 3,300 comments had been submitted, mostly objecting to the removal of price caps.

It’s possible that the first time ICANN disclosed that the discussions had even taken place was when a spokesperson told me how the .org decision was made, in July that year.

You don’t have to be a conspiracy theorist to wonder why ICANN pretty much skimmed over the whole issue in its public disclosures, even though it was the hottest topic in town at the time.

Even now, Botterman and Burr are both invoking attorney-client privilege to limit their testimony about what happened at these two workshops.

You don’t have to think anything untoward was going on to ask whether this is all paints a picture of ICANN acting “to the maximum extent feasible in an open and transparent manner”, as its bylaws requires.

Botterman says in his declaration:

The Bylaws are clear that ICANN must “operate to the maximum extent feasible in an open and transparent manner.” But I have never understood this Bylaws provision to require that every time the Board needs to get work done, or every time the Board receives a briefing from ICANN staff on a specific topic, it must do so in public or at a annual, regular or special Board meeting. Nor would such a requirement be feasible.

Price caps on .org could return, panel rules

Kevin Murphy, April 27, 2021, Domain Policy

ICANN could be forced to reimpose price caps on .org, .biz and .info domains, an Independent Review Process panel has ruled.

The panel handling the IRP case filed by Namecheap against ICANN in February 2020 has decided to allow the registrar to continue to pursue its claims that ICANN broke its own bylaws by removing price controls from the three gTLD contracts.

Conversely, in a win for ICANN, the panel also threw out Namecheap’s demand that the IRP scrutinize ICANN’s conduct during the attempted takeover of .org’s Public Interest Registry by Ethos Capital in 2019.

The split ruling (pdf) on ICANN’s motion to dismiss Namecheap’s case came March 10 and was revealed in documents recently published by ICANN. The case will now proceed on the pricing issue alone.

The three-person panel decided that the fact that ICANN ultimately decided to block Ethos’ acquisition of PIR meant that Namecheap lacked sufficient standing to pursue that element of its case.

Namecheap had argued that ICANN’s opaque processing of PIR’s change of control request created uncertainty that harmed its business, because ICANN may approve such a request in future.

But the panel said it would not prejudge such an eventuality, saying that if another change of control is approved by ICANN in future, Namecheap is welcome to file another IRP complaint at that time.

“Harm or injury flowing from possible future violations by the ICANN Board regarding change of control requests that are not presently pending and that may never occur does not confer standing,” the panel wrote.

On the pricing issue, the panel disagreed with ICANN’s argument that Namecheap has not yet been harmed by a lack of .org price caps because PIR has not yet raised its .org prices.

It said that increased prices in future are a “natural and expected consequence” of the lack of price controls, and that to force Namecheap to wait for such increases to occur before filing an IRP would leave it open to falling foul of the 12-month statute of limitations following ICANN decision-making baked into the IRP rules.

As such, it’s letting those claims go ahead. The panel wrote:

This matter will proceed to consideration of Namecheap’s request for a declaration that ICANN must annul the decision that removed price caps in the .org, .info and .biz registry agreements. The Panel will also consider Namecheap’s request for a declaration that ICANN must ensure that price caps from legacy gTLDs can only be removed following policy development process that takes due account of the interests of the Internet user and with the involvement of different stakeholders. The Panel will consider Namecheap’s request for a declaration that “registry fees… remain as low as feasible consistet with the maintenance of good quality service” within the context of removal of price caps (not in the context of regulating changes of control).

In other words, if Namecheap prevails, future price caps for pre-2012 gTLDs could be decided by the ICANN community, with an assumption that they should remain as low as possible.

That would be bad news for PIR, as well as .info registry Donuts and .biz registry GoDaddy.

But it’s important to note that the IRP panel has not ruled that ICANN has done anything wrong, nor that Namecheap is likely to win its case — the March 10 ruling purely assesses Namecheap’s standing to pursue the IRP.

The panel has also significantly extended the proposed timeline for the case being resolved. There now won’t be a final decision until 2022 at the earliest.

The panel last week delayed its final hearing in the case from August this year to January next year, according to a document published this week.

Other deadlines in the case have also been pushed backed weeks or months.

ICANN could block Donuts from buying Afilias

Kevin Murphy, December 14, 2020, Domain Registries

In what appears to be an almost unprecedented move, ICANN is to review Donuts’ proposed acquisition of rival Afilias at the highest level, raising a question mark over the industry mega-merger.

The org’s board of directors will meet Thursday to consider, among other things, “Afilias Change of Control Approval Request”.

It’s highly unusual for a change of control to be discussed at such a high level.

Every registry contract contains clauses requiring ICANN’s consent before a registry switches owners, and it has approved hundreds over the last decade. But the process is usually handled by legal staff, without board involvement.

The only time, to my memory, that the board has got involved was when it withheld consent from .org manager Public Interest Registry earlier this year.

It’s not entirely clear why Afilias has been singled out for special treatment.

It’s probably not due to its status as a legacy gTLD registry operator because of .info — when GoDaddy bought .biz operator Neustar’s registry business earlier this year, there was no such board review.

In addition, the .info contract’s change of control provisions are very similar to those in the standard new gTLD contract.

Could it be due to Donuts executives former ties to ICANN and the perception of a conflict of interest? Again, it seems unlikely.

While Donuts CEO Akram Atallah is former president of ICANN’s Global Domains Division, former ICANN CEO Fadi Chehadé is no longer involved with Donuts owner Abry Partners, having jumped to erstwhile PIR bidder Ethos Capital this July.

Are there competition concerns? It’s a possibility.

Afilias holds the contracts for 24 gTLDs new and legacy, but supports a couple hundred more, while Donuts is contracted for over 240.

But between them, they have barely 10 million domains under management. Donuts isn’t even the market leader in terms of new gTLD registrations.

And ICANN avoids making competition pronouncements like the plague, preferring instead to refer to national competition regulators.

Could ICANN’s interest have been perked by the fact that Afilias is the back-end provider for .org’s 10 million domains, and the proposed Donuts deal comes hot on the heels of the failed PIR acquisition? Again, it’s a possibility.

But none of the dangers ICANN identified in the .org deal — such as pricing, freedom of speech, and the change from a non-profit to for-profit corporate structure — appear to apply here.

There could be technical concerns. Atallah told DI a couple weeks ago that the plan was to ultimately migrate its managed TLDs to its Amazon cloud-based registry.

But moving its clients’ TLDs to a new back-end infrastructure would require their consent — it would be up to PIR and its overlords at the Internet Society to agree to moving .org to the cloud.

I think it’s likely that a combination of all the above factors, and maybe others, are what’s driving the Afilias acquisition to the ICANN boardroom. It will be interesting to see what the board decrees.

Verisign and Afilias testing Whois killer

Kevin Murphy, October 25, 2017, Domain Tech

Verisign and Afilias have become the first two gTLD registries to start publicly testing a replacement for Whois.
Both companies have this week started piloting implementations of RDAP, the Registration Data Access Protocol, which is expected to usurp the decades-old Whois protocol before long.
Both pilots are in their very early stages and designed for a technical audience, so don’t expect your socks to be blown off.
The Verisign pilot offers a web-based, URL-based or command-line interface for querying registration records.
The output, by design, is in JSON format. This makes it easier for software to parse but it’s not currently very easy on the human eye.
To make it slightly more legible, you can install a JSON formatter browser extension, which are freely available for Chrome.
Afilias’ pilot is similar but does not currently have a friendly web interface.
Both pilots have rudimentary support for searching using wildcards, albeit with truncated result sets.
The two new pilots only currently cover Verisign’s .com and .net registries and Afilias’ .info.
While two other companies have notified ICANN that they intend to run RDAP pilots, these are the first two to go live.
It’s pretty much inevitable at this point that RDAP is going to replace Whois relatively soon.
Not only has ICANN has been practically champing at the bit to get RDAP compliance into its registry/registrar contracts, but it seems like the protocol could simplify the process of complying with incoming European Union privacy legislation.
RDAP helps standardize access control, meaning certain data fields might be restricted to certain classes of user. Cops and IP enforcers could get access to more Whois data than the average blogger or domainer, in other words.
As it happens, it’s highly possible that this kind of stratified Whois is something that will be legally mandated by the EU General Data Protection Regulation, which comes into effect next May.

Huge registrar shake-up coming to .biz and .info

Afilias and Neustar will be soon able to sell .biz and .info domains direct, and may have to shut down registrars that refuse to sign up to the new 2013 Registrar Accreditation Agreement.
Those are two of the biggest changes proposed to the companies’ ICANN contracts, drafts of which were published this morning six months after their last registry agreements expired.
The new .biz and .info deals would allow both companies to vertically integrate — that is, own a controlling position in a registrar that sells domains in their respective gTLDs.
This would remove unwanted friction from their sales and marketing efforts, but would mean both registries would start competing with their own registrar channel in the retail market.
That’s currently not allowed in almost all gTLD contracts, but is expected to become commonplace in the era of new gTLDs, which have no such ownership restrictions.
These new vertical integration clauses were not unexpected; it’s been envisaged for a couple of years that the restrictions would be dropped in legacy gTLDs.
What is surprising are newly proposed clauses that would oblige Neustar and Afilias to terminate accredited registrars’ access to their TLDs if they don’t sign up to the 2013 RAA.
Under the process set out in the contracts, when registrars representing 67% of the domains in each given TLD have signed up to the 2013 RAA, all the other registrars would have between 270 and 330 days to also sign up to it or lose their ability to access the .biz/.info registries.
That would mean no selling new names and no accepting inbound transfers — a growth death sentence in the affected TLDs.
In the case of .info, in which Go Daddy has a 45% market share, it would only take the top four registrars to sign up to the 2013 RAA before the clock started ticking for the others.
However, this 67% rule would only kick in for Afilias and Neustar if Public Interest Registry and Verisign also voluntarily agree to the same rules for their .org, .com and .net gTLDs.
It’s a pretty aggressive move by ICANN to push the 2013 RAA onto registrars via its contracts with registries, but not the first.
In the separately proposed base New gTLD Registry Agreement, expected to be finalized in the next few weeks, registrars can only sell new gTLD domains if they’re on the 2013 RAA.
Other changes to the .biz and .info contracts include giving the registries the ability to block certain domains from registration to deal with security threats. Registries have been doing this since Conficker, but now they’ll be explicitly allowed to under their contracts.
They’ll also now be subject to the same emergency back-end transition provisions as new gTLDs, in the event of a catastrophic failure.
Both companies will also get to keep their ability to raise registry fees by 10% a year.
Presumably, given that the US Department of Commerce is not party to the .biz and .info deals, neither registry will get the same nasty surprise that Verisign got last year when Commerce froze its prices.
Both proposed contracts are now open for public comment at ICANN, here and here.
The previous contracts actually expired last December but were extended for six months due to ICANN’s focus on new gTLDs and the fact that it wanted to bring both agreements closer to the new gTLD contract.

Afilias blames security crackdown for massive drop in .info domains

Kevin Murphy, April 23, 2013, Domain Registries

Afilias says a new anti-abuse policy is responsible for .info losing almost a million domains in 2012.
The .info space ended the year down 914,310 domains, an 11% decline on 2011, the biggest gTLD shrinkage in actual domain terms and second only to .tel in percentage terms, according to DI’s TLD Health Check.
The TLD ended the year with 7,402,557 domains under management, still the runaway leader of “new” gTLDs in terms of total domains.
An Afilias spokesperson blamed the DUM decline on a crackdown on abusive domain use, which impacted sales. He said in a statement:

To fight the growing scourges of spam, phishing and other Internet problems, .INFO established an industry-leading anti-abuse policy and began aggressively working with its registrar partners to take down any and all sites that violated the policy, regardless of the sales impact. This approach reinforces .INFOs strong foundation of great sites and enhances the reputation of .INFO as the ‘home of information on the Web’.

Historically, .info was favored by bad actors due to the low cost of registrations. At some points over the last ten years, it’s even been possible to register a .info domain for free.
Afilias’ crackdown affected .pro too, as then-president Karim Jiwani told us in January, but .pro managed to double in size anyway, due to new registrar partners and lower prices.
Of the 18 gTLDs tracked by TLD Health Check, only .name, .tel and .travel also suffered significant declines in domains under management in 2012.

.info and .biz prices to go up

Kevin Murphy, February 28, 2013, Domain Registries

Afilias and Neustar have separately announced increased to the registry fees for .info and .biz domain names.
Afilias yesterday said the maximum wholesale price for a .info domain would increase to $8.16 effective September 1, a 10% increase on the current rate of $7.42 per year.
The last 10% hike, which the company is allowed to take under its ICANN registry agreement, came in July 2011.
Neustar last week also said it was taking its permitted 10% increase.
The maximum registry fee for .biz will go up to $8.63, also starting September 1. It last increased its prices in February 2012.

.info and .biz contracts extended after expiring

Kevin Murphy, January 9, 2013, Domain Registries

Afilias and Neustar have had their key gTLD registry contracts temporarily extended after they expired on New Year’s Eve.
The .info and .biz agreements, which were both signed with ICANN in 2006, both ended on December 31 2012.
Both deals, of course, have a presumption of renewal. They’ve been extended for six months while renewal terms are finalized.
I understand that the delay in getting new contracts negotiated and approved is due largely to all the other stuff going on at ICANN right now.
(New gTLD applicants planning to negotiate a non-standard contract with ICANN, take note.)
According to ICANN, drafts of the the next versions of the .info and .biz contracts will be posted for public comment this month.
I’d expect to see some of the same minor technical and legal changes made as those that were made to Verisign’s .net contract, which was renegotiated in 2011.
It’s going to be interesting to see whether .info and .biz will keep the same rights to increase registry fees, in light of the US Department of Commerce’s move to freeze .com prices.
However, .com is a special case and Commerce does not have a built-in right to examine .biz and .info contracts.

Second premium .info auction goes live on Go Daddy

Kevin Murphy, January 8, 2013, Domain Registries

Go Daddy and Afilias are auctioning off a second batch of premium dictionary-word .info domain names.
The registrar has just gone live with a list of 138 domains, including stuff like home.info, autos.info, boat.info, fashion.info and computer.info.
The domains were all claimed in Afilias’ .info sunrise period back in 2001 but were subsequently found to be ineligible under the sunrise rules and reclaimed by the registry.
Bidding starts on January 15, with starting bids at about $100.
A first batch of domains from the same pool were auctioned in December, with some fetching five-figure sums — cancer.info led, selling for $16,005, with loans.info going for $12,205.