Namecheap scores win in .org price-cap lawsuit

Namecheap’s lawsuit over ICANN’s decision to lift price caps in .org and .info will be allowed to proceed, a California judge has ruled.

The Superior Court in Los Angeles recently threw out ICANN’s attempt to get the case dismissed, according to court documents released by ICANN. There will now be a hearing in January.

Namecheap’s lawsuit concerns ICANN’s decision in 2019 to lift price caps in Public Interest Registry’s .org contract and the .info contract then with Afilias (now Identity Digital).

Both registries had previously been limited to a 10% price increase every year.

The registrar filed an Independent Review Process case against ICANN, which is mostly won. In 2022, the IRP panel slammed ICANN for its secrecy and lack of adherence to its bylaws and issued seven recommended actions the Org could take to rectify its transgressions.

In the current lawsuit, filed this January, Namecheap claims that ICANN “largely ignored” most of these recommendations. It wants the court to force the Org to abide by the IRP ruling, which among other things calls for ICANN to look into reinstituting price caps.

But ICANN objected, saying Namecheap “is asking this Court to convert recommendations into requirements”, adding that it “does not have an obligation to act in accordance with the ‘recommendations’ of an IRP Panel”.

It demurred, asking the court to throw out Namecheap’s complaint, but the court declined to do so on legal grounds, meaning the claims will be heard on the merits.

In the five years since the .org and .info price caps were lifted, non-profit PIR has not raised .org prices once.

For-profit Identity Digital has raised .info prices every year, by between 9.38% and 11.03%, raising the cost from $10.84 in 2019 to $17.50 today. The price will go up again by 8.57% to $19.00 in January.

ICANN names its Supreme Court judges

ICANN has finally named the members of the quasi-judicial body that will oversee its highest accountability mechanism.

The names of the 12 members of the Independent Review Process Standing Panel were published by ICANN this afternoon and the International Centre for Dispute Resolution, which manages the IRP, published their resumes.

They’re mainly lawyers and law professors with extensive arbitration experience. There’s one African, and the rest are either North American or European; none are from Asia or Latin America.

The Standing Panel has been a long time coming. It’s been over a decade since ICANN first said it would create one. The jurists were picked by a community committee in January, but ICANN wanted to get them all contracted and up to speed before naming them.

The idea is to streamline IRP, which currently is barely distinguishable from the judicial system when it comes to duration of cases, by allowing ICANN and complainants to select their panel from a known pool of trained, experienced, vetted experts.

The IRP is the final formal appeals mechanism within the ICANN process before lawsuits start flying. There’s been over 20 filed in the last 16 years, and ICANN’s win-to-loss ratio is not great.

ICANN U-turns on appeals loophole after community revolt

ICANN has backtracked and substantially pared down a proposal that could have weakened its accountability mechanisms after most of the community said they didn’t like it.

The Org has published for public comment a proposed amendment to its bylaws that will exclude its new Grant Program from the Request for Reconsideration and Independent Review Process mechanisms.

The amendment would specifically exclude claims “relating to decisions to approve or not approve an application to the ICANN Grant Program” from both procedures.

An earlier proposal would have created a new procedure to enable ICANN to also exclude other programs from accountability in future, if certain conditions were met.

But the community largely reacted with revulsion to that proposal, saying they could not support something so overly broad, forcing ICANN to narrow it down to the Grant Program only. ICANN needs the support of its sovereign Empowered Community if it wants to amend its fundamental bylaws.

The $220 million Grant Program is seeking to distribute ICANN’s new gTLD auction funds to worthy causes, but there was a fear the cash could be siphoned off by lawyers if unsuccessful grant applicants were allowed to trigger the accountability mechanisms.

The revised language is likely to be much more palatable to the community, based on previous comments.

The public comment period is open until September 16.

ICANN to kill auction fund bylaws change

A controversial proposed amendment to ICANN’s bylaws is set to be killed off after the community flexed its muscles over the board of directors.

The amendment, which sought to give ICANN a switch to turn off its accountability mechanisms under certain circumstances, is now likely to be replaced by one that limits accountability only when it comes to ICANN’s $220 million Grant Program.

News of the board’s change of heart came during a Monday call between the GNSO Council and the two GNSO appointees on the board.

“I think it’s pretty clear that the bylaw that was put together and circulated is not going to pass the Empowered Community,” board member Becky Burr told the Council “So we need to go back and and revisit that.”

The community had wanted an amendment that makes the Independent Review Process and Request for Reconsideration mechanisms unavailable to organizations applying for grants and those that oppose them, to avoid splurging money on lawyers rather than good causes, but the board had floated text that would have made it easier to turn these mechanisms off in future scenarios too.

ICANN’s amendment was supported by the At-Large Advisory Committee, but every other community group, in a rare example of across-the-aisles agreement, reckoned it was overly broad and risked weakening ICANN’s accountability.

The board’s decision to revert to what the community originally wanted appears to be a reluctant one. Burr said that the IRP needs to be looked at in future because the way the bylaws are written now invites over-use.

“As they are currently written, a disappointed bidder, an engineering firm in response to an RFP, could use those, could bring an IRP,” she said. “At some point we’re going to have to look at this more holistically.”

The were also calls from the Council to take a look at the RfR process, or at least how RfRs are handled by ICANN’s legal team. RfRs are too often seen as an adversarial exercise where ICANN lawyers are simply try to “win” against the requester rather than solve the problem at hand, they said. This has led to a situation where dozens of RfRs have been filed over the year, almost all of which are dismissed.

GNSO mulls lawyering up over auction fund dispute

The GNSO Council has started discussing bringing in the lawyers over ICANN’s recent handling of issues related to its $200+ million auction fund and Grant Program.

The Council today raised the possibility of deploying the never-before-used Community Independent Review Process, which would involve every major community group ganging up on ICANN’s board in a protracted quasi-judicial bunfight.

Ironically, the beef concerns the way ICANN is trying to stop people invoking its accountability mechanisms, including the IRP, to challenge decisions it makes under its Grant Program, which hopes to distribute $10 million to worthy causes this year.

ICANN policy is that nobody should be able to challenge grant decisions, because that would mean funneling the available funds into the pockets of worthless lawyers, rather than worthy causes. But how it proposes to achieve that goal is in dispute.

The original community recommendation was for a bylaws amendment that specified that the Grant Program was out-of-bounds for IRP and Request for Reconsideration claims, and the board initially agreed, before changing its mind and instead plumping for a clause in the program’s terms that prevents grant applicants appealing adverse decisions.

After community pushback, the board said it would also propose a bylaws amendment, but many believe the amendment it came up with goes way too far and risks making it far too easy for ICANN to wriggle out of its accountability obligations in future.

Leading the fight against the board is the GNSO’s Intellectual Property Constituency, which filed a Request for Reconsideration in November, asking ICANN to reverse its decision to “contract around” its accountability promises and scale back its over-broad bylaws amendment.

But the RfR was thrown out, with the Board Accountability Mechanisms Committee ruling that the IPC had failed to say how it had been specifically harmed by the board’s actions, accusing the constituency of merely “speculating” about possible future harms.

GNSO Councillor Susan Payne, today expressed the IPC’s disappointment with BAMC’s decision on the Council’s monthly conference call.

“We think that’s wrong,” she said. “If you purport to change a fundamental bylaw by using a process that cuts out the GNSO and effectively therefore also its constituencies and stakeholder groups then clearly there’s a harm there.”

She also noted the financial expense of challenging the board’s decisions.

“Constituencies or stakeholder groups will have real difficulty in withstanding the ICANN machine,” Payne said. “It’s a really expensive process to to challenge these kind of decisions. We asked if other constituencies and stakeholder groups would be able to join the IPC in bringing that RfR and no one had the finances to do it.”

The IPC has joined ICANN in a Cooperative Engagement Process — a kind of informal discussion that is often a precursor to an IRP filing — but Payne raised the possibility of ICANN’s Empowered Community filing its own IRP.

Under ICANN’s bylaws, the EC has the special ability to bring a Community IRP and ICANN has to pay for it. It’s never been used before, and it doesn’t look to me like the complex conditions required to trigger it are close to having been met.

The IPC had broad support in principle from the other Councillors speaking in today’s meeting, but some urged caution due to ICANN’s past behavior when the lawyers are called in.

“Once you get into the IRP process, ICANN buckles down, hands it off to their outside counsel, and you really get a nasty litigation fight,” said Jeff Neuman, a liaison on the Council. “You’re talking about years of litigation, outside counsel, and no progress”.

Fellow council member Thomas Rickert of the ISPs constituency suggested looking for a law firm that would handle the IRP on a no-win-no-fee basis before committing further.

While it seems a Community IRP may be unrealistic for now, the fact that it’s even being discussed shows how seriously the GNSO is taking this apparent power grab by ICANN’s board and lawyers.

Namecheap sues ICANN over .org price caps

Namecheap has sued ICANN in California, asking a court to force the Org to revisit its decision to lift price caps on .org and .info domain names five years ago.

Registrar CEO Richard Kirkendall announced the suit on Twitter this afternoon:

Today we filed suit against @ICANN. After a previous ruling via a mediation process they have taken little action towards the recommendations of that ruling and so our hand has been forced to take this action. We feel that ICANN is in direct violation of their mandate and…

— Richard Kirkendall (@NamecheapCEO) February 5, 2024

The lawsuit follows an Independent Review Process case that Namecheap partially won in December 2022, where the panel said ICANN should hire an economist to look at whether price caps are a good idea before revisiting its decision to scrap them.

The panel found that the ICANN board of directors had shirked its duties to make the decision itself and had failed to act as transparently as its bylaws mandate.

Namecheap says that over a year after that decision was delivered, ICANN has not implemented the IRP panel’s recommendations, so now it wants the Superior Court in Los Angeles to hand down an injunction forcing ICANN to do so.

Before 2019, .org was limited to 10% price increases every year, but the cap was lifted, along with caps in .info and .biz, when ICANN renewed, standardized and updated the respective registries’ Registry Agreements.

After the decision was made to scrap .org price caps, despite huge public outrage, Namecheap rounded up its lawyers almost immediately.

The caps decision led to the ulimtately unsuccessful attempt by Ethos Capital to acquire Public Interest Registry, which runs .org.

Namecheap’s new lawsuit wants the judge to issue “an order directing ICANN to comply with the recommendations of the IRP Panel”.

That means ICANN’s board would be told to consider approaching PIR and .info registry Identity Digital to talk about reintroducing price caps, to hire the economist, and to modify its procedures to avoid any future transparency missteps.

ICANN picks its first ever Supreme Court

After foot-dragging for a decade, ICANN has finally approved a slate of a dozen jurists to act as its de facto Supreme Court.

Its board of directors voted at the weekend to create the first-ever Independent Review Process Standing Panel, a pool of legal experts from which panels in future IRP proceedings — the final appeals process for ICANN decisions under its bylaws — will be drawn.

ICANN has not named the 12 people yet. The names are redacted from the published resolution, presumably because they haven’t signed contracts yet. ICANN said they are “well-qualified” and “represent a diverse breadth of experience and geography”.

The names were put forward by a cross-community working group called the IRP Community Representatives Group, which looked after the application and interview process. A thirteenth CRG pick was deemed “ineligible” by ICANN for undisclosed reasons.

The Standing Panel is intended to make IRPs faster and cheaper by drawing the three-person panel in each case from an established pool of experienced professionals. The panelists will be contracted for staggered terms of service.

The ICANN bylaws have called for the establishment of such a panel for over a decade, but its timely creation was another victim of the lethargy that consumed ICANN for years. The lack of a Standing Panel has been raised by claimants in multiple IRPs, some of which are ongoing.

Elsewhere in IRP policy-making, a separate staff/community working group called the IRP Implementation Oversight Team expects to shortly publish certain revisions to the IRP rules for public comment, but the fact that the legal language of the rules is to be written by the law firm Jones Day, which represents defendant ICANN in IRP cases, has raised some eyebrows.

Looks like the fight for .hotel gTLD is over

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

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

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

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

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

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

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

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

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

.web fight back in “court”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

.web hit by second ICANN complaint

Altanovo Domains, the Afilias spin-off that is fighting Verisign for control of the .web gTLD, has filed a second Independent Review Process complaint with ICANN.

The filing could add years to Verisign’s launch runway for .web, which it won via secret proxy Nu Dot Co at auction in 2016.

ICANN has not yet published the IRP complaint — presumably it’s being redacted to remove commercially confidential information — but documentation shows Altanovo has “filed” an IRP.

Altanovo and ICANN has been in a Cooperative Engagement Process — a form of negotiation designed to avoid an IRP — since May 3, but a document published July 19 shows that the CEP is now over.

It was quite a brisk process. Other CEPs have been known to last many months.

When the CEP first emerged in May, Verisign was pretty brutal in its reaction, accusing Altanovo of “delay for delay’s sake”.

As the second-place bidder, Altanovo could stand to take control of .web if Verisign’s bid was found to be outside the rules. That was the focus of the first IRP case, which lasted almost four years.

The first IRP panel ruled that ICANN broke its bylaws by failing to consider whether Verisign secretly bidding via NDC broke the new gTLD program rules. But ICANN a couple months ago finally bit the bullet and ruled that Verisign did no wrong.

ICANN decided not to rule on whether Altanovo, then Afilias, broke the auction rules by communicating with NDC during a comms blackout period.

The specific allegations in the new IRP are not yet known. The IRP is only for complaints about ICANN’s actions or inaction breaking its own bylaws and other foundational documents.