NetSol hit by DNS downtime

Network Solutions is having some DNS glitches right now that seem to be affecting a lot of its hosting customers.
The registrar, part of Web.com, posted on Twitter an hour ago:

Service Alert: We are aware that some Customers are experiencing issues with websites. Our Team is working on the issue. Please stand by.

— Network Solutions (@netsolcares) October 22, 2013

Tweets from irate NetSol customers are currently coming in at several per second. It looks like a great many users are having difficulty accessing their NetSol-hosted web sites.
The company’s own web site, networksolutions.com, also appears to be down.
All of its customer support lines are reportedly busy.
More info when we get it.
UTC 1841 UPDATE: NetSol just posted the following update to Twitter. Meanwhile, many users are reporting their sites a slowly and intermittently returning online. It appears the problem is being sorted.

Service Update: We’ve experienced an incident on Network Solutions DNS, and we’re in the process of restoring services. Thx 4 your patience.

— Network Solutions (@netsolcares) October 22, 2013

Web.com CEO talks “defensive” .web strategy

Number-three registrar Web.com applied for the new gTLD .web in order to protect a trademark, but it’s open to partnerships to secure and manage the string, according to its CEO.
But the .web contention set will take a “considerable amount of time to be resolved”, David Brown told analysts during the company’s first-quarter earnings conference call last night.
“The way we’ve always thought about .web is that given that we have a trademark on the name Web.com, we really needed to apply for .web in order to protect our trademark,” he said.
“In order to protect our trademark globally, we needed to basically defend ourselves by applying for .web, and we’re certainly interested in getting it, but it’s not our core business,” he added.
Web.com, which also owns Network Solutions and Register.com, is one of seven applicants for .web.
But the company did not file any Legal Rights Objections against its competitors, as its trademark may have permitted, reflecting a slightly relaxed attitude to the string that also came across in the yesterday’s call.
Brown said, according to the Seeking Alpha transcript:

We’ll be perfectly content if anyone gets .web because they’re going to distribute it through us, and it’s our name, and we’re advertising and building a brand in the marketplace, and we’re going to be a great deliverer of .web extensions, whoever gets it, whether it’s us or someone else.

He indicated that the ultimate winner of .web is likely to be some kind of cooperative arrangement between applicants. He said:

Our strategy has always been to cooperate. And so we’ve looked at the people who have applied, and we certainly are talking to all of them about who would benefit from this and which team would be the best team to provide services, and so that would be our strategy… We won’t bear the full load of the economics of acquisition ourselves likely. It’ll likely be shared.

To me, this screams “joint venture”, which has always been the way I’ve seen .web pan out. If you recall, when Afilias was formed to apply for .web in 2000, it was a joint venture of many leading registrars of the time.
Brown also said on the call that he expects to see the first new gTLDs get approved in the fourth quarter, but they’ll be the uncontested ones and therefore not particularly lucrative.
Web.com could also be the beneficiary of marketing dollars spent by new gTLDs to secure shelf space, he said.

Whacky lawsuit targets ICANN, eNom, CentralNic, NetSol, Verisign

ICANN and several domain name companies have been slapped with a bizarre, virtually incomprehensible anti-cybersquattng lawsuit in Virginia.
Canadian Graham Schreiber, registrant of landcruise.com, has beef primarily with CentralNic — the UK-based company that sells third-levels domains under us.com, uk.com and the like — and one of its customers.
As far as I can tell, the complainant, who’s representing himself pro se, has issues with CentralNic’s entire business model. Here’s his complaint (pdf).
He discovered that a British individual named Lorraine Dunabin — who has a UK trademark on the word Landcruise — had registered both landcruise.co.uk and landcruise.uk.com.
Having failed to take the .co.uk using Nominet’s Dispute Resolution Service (repeatedly referred to in the complaint as UDRP), Schreiber has instead filed this lawsuit to accuse Dunabin of “Dilution, Infringement [and] Passing off” by registering the .uk.com.
CentralNic is named because it owns .uk.com and various other geographic pseudo-gTLDs, which Schreiber says “dilute the integrity of .com” and amount to a “shakedown”.
Verisign is named as a contributory infringer because it runs .com. Network Solutions and eNom are named because they manage uk.com and landcruise.uk.com respectively as registrars.
ICANN is named because… I don’t know. I think it’s because all of the other companies are ICANN contractors.
ICANN, which has a web page for the litigation here, has already filed a motion to dismiss (pdf).
Schreiber is seeking monetary damages from all of the defendants, most of which he wants donated to the Rotary Club.

Massive firewall vendor lets domain expire

Check Point Software, one of the world’s leading firewall vendors, forgot to renew its main domain name and it wound up parked by its registrar over the weekend.
The domain checkpoint.com had an expiry date of March 30.
According a screenshot over on The Register, it was resolving to a Network Solutions placeholder page until this afternoon.
The Whois record at DomainTools still shows NetSol’s pending renewal or deletion details, but the domain – a 1994 registration – appears to be resolving normally now.
The company has a market cap of $13.37 billion.

More layoffs planned at NetSol

Web.com plans to lay off more people than previously expected at recently acquired domain name registrar Network Solutions, according to a report.
“There is significantly more overlap than we originally estimated, and so it’s likely going to be more headcount reduction,” CEO David Brown said in a Reuters interview.
He named marketing, development, and engineering as areas where the merged company plans to cut more than $30 million in costs.
If there was any doubt about it, he confirmed that NetSol’s incumbent CEO faces the chop. Lower-level staff appear to have safer positions.
At least two senior NetSol executives have already jumped shipped since the acquisition was announced.
Senior director of policy Statton Hammock left to form his own consulting business a month ago, and last week senior policy manager Paul Diaz joined the Public Interest Registry.
Web.com announced its $561 million acquisition of NetSol in early August. It had already acquired the company’s old rival, Register.com.

NBT agrees to $236m buy-out

Following in the footsteps of larger rival Go Daddy, the UK-based registrar Group NBT has agreed to be bought out by private investors for £153 million ($236m).
NBT owns registrars including NetNames, Ascio and Indom.
The all-cash offer comes from investors led by HgCapital and represents a 22.5% premium on the company’s closing share price yesterday.
At 550p a share, the offer stands to make a profit for anybody who has bought NBT shares in the last ten years, according to the company.
The news came as NBT reported an annual profit, excluding certain items, up organically 9% at £8.9 million ($13.8m) on revenue that was up 4% at £45.7 million ($70.6m).
Including the results from French registrar Indom, which the company acquired last December, profit was up 18% at £9.6 million ($14.8m) on revenue up 13% to £49.5 million ($76.5m)
The NBT deal is merely the latest in a series of buyouts and mergers to hit the registrar market this year.
As well as Go Daddy’s $2 billion+ change of control, Network Solutions recently sold out to Web.com for $561 million in cash and stock, and Tucows acquired EPAG Domainservices for $2.5 million.
At least one city analyst thinks the buyout timing relates to ICANN’s forthcoming new generic top-level domains program, and is bullish on Top Level Domain Holdings shares as a result.
Will the wave of consolidation continue? Who’s next?

Together at last: NetSol merges with Register.com

The first-ever .com domain name registrar and its first-ever competitor are to merge as part of Web.com’s strategy to scale up and better compete with Go Daddy.
Web.com, which bought Register.com a little over a year ago, has now turned its attention to bigger fish. It’s agreed to buy Network Solutions for $561 million in cash and stock.
The combined company will have three million customers, revenue of over $450 million, and over nine million domains under management.
By my reckoning, this means Web.com becomes the fourth-largest registrar by domain count, a position already held by NetSol, a couple of million domains behind Tucows.
NetSol was of course the original .com registrar/registry and Register.com was the first competitor to start selling domains after ICANN introduced competition to the market.
Both registrars were briefly public companies in their own right, before being re-privatized around the same time it became apparent Go Daddy and the other discount registrars were eating their lunch.
This shared history is still evident today – both companies still sell domain names for 1999 prices, and they’re both still losing customers as a result.
CEO David Brown said on a conference call announcing the deal that Register.com is currently losing 13,000 subscribers, net, per quarter.
This is not as bad as the 20,000 per quarter at the time of the acquisition, but it’s still over 140 customers jumping ship, on average, every day.
Brown said that NetSol’s churn is similar; its customer base is “declining very slowly”, albeit from a stronger starting position.
When VeriSign sold NetSol in 2003, it said the unit had about four million customers. Today, according to Web.com’s announcement, it’s closer to two million.
The NetSol deal will enable Web.com to expand its focus from small businesses, Register.com’s core market, to medium-sized businesses too, Brown said.
“This is a unique chance for Web.com to quickly gain major scale in our sweet spot – the small and mid-size business market,” he told analysts.
The larger scale will also enable the company to ramp up its marketing efforts, he said, helping it to gain mindshare from “another company” (cough–Go Daddy–cough).
Both the NetSol and Register.com brands will stay, but the primary brand in its advertising campaigns will be Web.com
Both NetSol and Register.com still operate at very much the high-end of the pricing spectrum, having stubbornly resisted pricing pressures for the last decade.
Register.com currently sells .com domain names for $38 a year, NetSol sells them for $35.
However, on the analysts’ call, Brown discussed the success of a recent marketing campaign at Register.com, which offered domains at cheaper prices than usual.
“We discovered marketing a lower-price domain name was driving a total order value that was more than ten times higher due to additional offerings,” he said.
I wonder where they got that idea from.

ICANN beefs up new TLD fraudster checks

ICANN has broadened the background checks in its new top-level domains program to ban companies with a history of consumer fraud from applying for a new gTLD.
The new check in the Applicant Guidebook reads as follows:

a final and legally binding decision obtained by a national law enforcement or consumer protection authority finding that the applicant was engaged in fraudulent and deceptive commercial practices as defined in the Organization for Economic Co-operation and Development (OECD) Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders may cause an application to be rejected. ICANN may also contact the applicant with additional questions based on information obtained in the background screening process.

The OECD guidelines, which define deceptive practices, were suggested by ICANN’s Governmental Advisory Committee as a way to keep out the fraudsters.
I speculated last week that implementation of such rules could capture Network Solutions and/or VeriSign, due to their dodgy dealings almost a decade ago.
But it appears that the two companies are safe – the wording is such that it likely does not apply to the settlement NetSol made with the Federal Trade Commission which, while legally binding, was explicitly not a “finding” of fact or law.
The Guidebook also now asks applicants to disclose if they have been “disciplined by any government or industry regulatory body for conduct involving dishonesty or misuse of funds of others”. The “industry regulatory body” text is a new insertion.

Could VeriSign be banned from new TLDs?

Governments have proposed stricter background checks on new top-level domain operators that could capture some of the industry’s biggest players.
Top-five registrar Network Solutions and .com manager VeriSign may have reason to be concerned by the latest batch of Governmental Advisory Committee recommendations.
The GAC wants checks on new gTLD applicants expanded to include not only criminal convictions and intellectual property violations but also government orders related to consumer fraud.
The GAC advised ICANN, with my emphasis:

The GAC believes that the categories of law violations that will be considered in the background screening process must be broadened to include court or administrative orders for consumer protection law violations. If an applicant has been subject to a civil court or administrative order for defrauding consumers, it should not be permitted to operate a new gTLD.

This is not new – the GAC has proposed similar provisions before – but it seems to be the only GAC advice on applicant screening that ICANN has not yet adopted, and the GAC is still pushing for it.
Why could VeriSign and NetSol be worried by this?
One reason that springs to mind is that, back in 2003, NetSol was officially barred by the US Federal Trade Commission from the practice known as “domain slamming”.
Domain slamming, you may recall, was one of the dirtiest “marketing” tactics employed by the registrar sector during the early days of competition.
Registrars would send fake invoices with titles such as “Renewal and Transfer Notice” to the addresses of their rivals’ customers, mined from Whois data.
The letters were basically tricks designed to persuade customers ignorant of the domain name lifecycle to transfer their business to the slamming registrar.
Respectable registrars have nothing to do with such practices nowadays, but a decade ago companies including NetSol and Register.com, the two largest registrars at the time, were all over it.
At the time NetSol was carrying out its slamming campaign, it was part of VeriSign. It was spun off into a separate company earlier in 2003, before the FTC entered its order.
The order (pdf) was approved by a DC judge as part of a deal that settled an FTC civil lawsuit, alleging deceptive practices, against the company.
NetSol was not fined and did not admit liability, but it did agree to be permanently enjoined from any further slamming, and had to file compliance notices for some time afterward.
It seems plausible that this could fall into the definition of a “civil court or administrative order for defrauding consumers” that the GAC wants added to the Applicant Guidebook’s background checks.
Whether the GAC’s advice, if implemented by ICANN, would capture NetSol and/or VeriSign is of course a matter of pure speculation at the moment.
I think it’s highly unlikely that ICANN would put something in the Guidebook that banned VeriSign, its single largest source of funding (over a quarter of its revenue) from the new gTLD program.
Sadly, I think I may also be unfairly singling out these two firms here – I’d be surprised if they’re the only companies in the domain name industry with this kind of black mark against their names.
Existing background checks in the Applicant Guidebook governing cybersquatting are already thought to pose potential problems for registrars including eNom and Go Daddy.
UPDATE: It looks like NSI and VeriSign are probably safe.

ICE domain seizures enter second phase

The US Immigration & Customs Enforcement agency seems to be consolidating its portfolio of seized domain names by transferring them to its own registrar account.
Many domains ICE recently seized at the registry level under Operation “In Our Sites” have, as of yesterday, started naming the agency as the official registrant in the Whois database.
ICE, part of the Department of Homeland Security, has collected over 100 domains, most of them .coms, as part of the anti-counterfeiting operation it kicked off with gusto last November.
The domains all allegedly either promoted counterfeit physical goods or offered links to bootleg digital content.
At a technical level, ICE originally assumed control of the domains by instructing registries such as VeriSign, the .com operator, to change the authoritative name servers for each domain to seizedservers.com.
All the domains pointed to that server, which is controlled by ICE, resolve to a web server displaying the same image:

(The banner, incidentally, appears to have been updated this month. If clicked, it now sends visitors to this anti-piracy public service announcement hosted at YouTube.)
Until this week, the Whois record associated with each domain continued to list the original registrant – a great many of them apparently Chinese – but ICE now seems to be consolidating its portfolio.
As of yesterday, a sizable chunk — but by no means all — of the seized domains have been transferred to Network Solutions and now name ICE as the registrant in their Whois database records.
Rather than simply commandeering the domains, it appears that ICE now “owns” them too.
But ICE has already allowed one of its seizures to expire. The registration for silkscarf-shop.com expired in March, and it no longer points to seizedservers.com or displays the ICE piracy warning.
The domain is now listed in Redemption Period status, meaning it is starting along the road to ultimately dropping and becoming available for registration again.
Interestingly, most of the newly moved domains appear to have been transferred into NetSol from original registrars based in China, such as HiChina, Xin Net and dns.com.cn.
After consulting with a few people more intimately familiar with the grubby innards of the inter-registrar transfer process than I am, I understand that the names could have been moved without the explicit intervention of either registrar, but that it would not be entirely unprecedented if the transfers had been handled manually under the authority of a court order.
If I find out for sure, I’ll provide an update.