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Governments call for new gTLD auctions ban

Kevin Murphy, June 17, 2024, Domain Policy

Governments have upped the stakes in their opposition to new gTLDs being auctioned off privately, now calling for an outright prohibition on the practice.

ICANN’s Governmental Advisory Committee today published its formal advice coming out of last week’s public meeting in Kigali, calling for ICANN to “prohibit the use of private auctions in resolving contention sets in the next round of New gTLDs”.

It’s a strengthening of previous language from last year’s Washington DC meeting which called for ICANN to “ban or strongly disincentivize private monetary means of resolution of contention sets, including private auctions”.

Private auctions were the most-common way that contests between new gTLD applicants with matching strings were resolved in the 2012 application round. Many tens of millions of dollars changed hands, with the losing bidders pocketing the winning bids.

But the practice came in for criticism from groups such as the GAC and the At-Large Advisory Committee, partly because it made it harder for non-commercial or less well-financed developing-world applicants to get a foothold in the gTLD space.

“The 2012 round was basically a game for millionaires,” ALAC chair Johnathon Zuck told the GAC at a meeting between the two groups last week. “There were many things that made the last round kind of a joke… but this was the very big thing that made the community look bad.”

Discussions with the ALAC, which wanted to issue joint advice with the GAC, seems to be at least partly responsible for the GAC aligning around advising a full-on ban on private auctions.

ICANN’s board of directors is broadly in favor of “discincentivizing” private auctions, but has stopped short of advocating for a full prohibition, according to directors’ public statements and board resolutions.

The Org commissioned a study from a New York company called NERA Economic Consulting, published shortly before the Kigali meeting, to look into ways to dissuade applicants from private auctions and encourage them towards ICANN’s “last resort” auctions — where ICANN gets all the money — or into joint ventures.

While it did not come up with any recommendations as such, the study did lay out some possible mechanisms — such as forcing applicants into last-resort auctions, or making them pay an extra fee if they want to resolve their contention sets privately.

Separately, ICANN has told the GAC it intends to reject another piece of its advice related to contention sets. The GAC had told ICANN last year:

To take steps to avoid the use of auctions of last resort in contentions between commercial and non-commercial applications; alternative means for the resolution of such contention sets, such as drawing lots, may be explored

But ICANN reckons a lottery might be illegal under California law. That’s pretty much what it said before it came up with “Digital Archery” during the last application round, and it turned out to not be completely correct.

It also disagrees with the GAC that non-commercial applicants in contention sets should be treated preferentially, with the board wary about having to pick winners and losers in the next round.

The board has therefore triggered the part of its bylaws that require it to hold formal negotiations with the GAC to see if they can come to a compromise before the advice is rejected.

ICANN: We will NOT police content

Kevin Murphy, June 10, 2024, Domain Policy

ICANN seems to have killed off the idea of content-restricting Registry Voluntary Commitments being included in registry contracts, judging by a conversation today between its board of directors and Governmental Advisory Committee.

Speaking moments ago at a session at ICANN 80 in Rwanda, director Becky Burr said the board took legal advice and decided that the Org’s bylaws do not allow it to enforce contractual commitments that involve content regulation.

“The board was looking at the legal issues there to determine whether under our bylaws we were permitted to accept and enforce Registry Voluntary Commitments related to the restriction of content… on Saturday at our board meeting the board has resolved that we can’t,” Burr said.

“We will not accept into the contracts the new registry commitments that involve the restriction of content,” she said.

The RVC-like Public Interest Commitments found in 2012-round gTLDs are grandfathered in the current bylaws and will not be affected by the RVCs decision, she said.

Registries will be free to make RVC-like commitments outside of their ICANN contracts, but ICANN will not enforce them, she said. She also said the board has ruled out hiring a third party enforcer, citing US case law and the First Amendment to the US constitution.

Burr said that if an Independent Review Process panel struck down a single RVC it would risk invalidating all of the RVCs in all registry contracts.

The board’s resolution will be published later this week, but its legal advice will remain confidential, she said.

The decision is a win for registries and registrars, which earlier this year responded to an ICANN consultation by saying it should not permit RVCs that regulate content. The Non-Commercial Stakeholders Group had even raised the possibility of legal action if ICANN went ahead with RVCs.

The opposing view was put forth by the Business Constituency, the Intellectual Property Constituency, and the At-Large Advisory Committee, all of which are now presumably feeling bummed out by the board’s latest decision.

More sticker shock as new gTLD fees could top $300,000

Kevin Murphy, June 10, 2024, Domain Policy

The base new gTLD application fee could top $300,000, according to an analysis released by ICANN at its meeting in Kigali, Rwanda, this morning.

The per-gTLD fee will likely range between $208,000 and $293,000, according to the latest estimate, but this does not include mandatory fees that have yet to be figured out that as a whole could amount to “tens of millions”.

ICANN is blaming inflation for most of the increase from the 2012 round, where the fee was $185,000. Staff said that if you take into account a 44% rise due to 14 years of inflation, the 2026 application fee could actually be lower in real-money terms.

The reason for the broad range provided is that ICANN still doesn’t have a good guess as to how many applications it will receive. The program is being run on a cost-recovery basis and ICANN has already budgeted for a spend of $70 million before the application window even opens.

If it only receives 500 applications, it could lose tens of millions of dollars even with a high application fee. With a fee of $242,000, ICANN would need 1,000 applications to make its money back, staff said during an ICANN 80 session today.

There were 1,930 applications in 2012, but demand in 2026 will depend a lot on how many desirable strings remain undelegated, particularly in non-English languages and non-Latin scripts, and how enthusiastic brand owners are about the dot-brand concept (or defensively registering their dot-brands).

The main unknown not included in the latest estimate is the cost of implementing the recommendations of the second Name Collision Analysis Project, which in May called for all gTLDs to be tested live in the DNS before being awarded to the applying registry.

Each of the NCAP2 recommendations could cost between “thousands” and “tens of millions” in total, which would be divided between all the applicants, staffers said. Scrawling on the back of an envelope, it looks to me like this could easily push the top end of the range well over $300,000.

The good news is that if ICANN gets a lot of applications and recovers its costs, it already anticipates giving applicants some of their money back. As an example, it said that if the fee is $220,000 and there are 2,000 applications, applicants could each get $35,000 back.

But that ray of sunlight was not enough to temper the concerns of community members in the room in Kigali today, several of whom sparred with CFO Xavier Calvez and new gTLD program lead Marika Konings over their calculations.

Registry services providers are already angry about the large increase in evaluation fees for the RSP program announced last month.

One thing that doesn’t seem to be under any dispute is that high fees will scare off some applicants, meaning the cost burden will be borne by fewer shoulders, meaning the fees did in fact need to be high; a self-fulfilling prophecy.

Secret new gTLD application revealed

Unstoppable Domains has revealed the next partner with which it intends to apply to ICANN for a new gTLD two years from now.

It’s linked up with Secret Network Foundation to apply for .secret and in the meantime to flog .secret names that only work on its Polygon blockchain naming system.

Secret is a startup that develops privacy-oriented, blockchain based applications.

It’s the sixth likely new gTLD application Unstoppable has announced this year.

WhatsApp now linkifying new gTLDs, but…

Kevin Murphy, May 30, 2024, Domain Tech

All URLs using new gTLD domains are now being automatically linkified by WhatsApp, according to the registry manager who’s been pushing for greater support from the major social networks.

Rami Schwartz of Latin American Telecom, the .tube registry, says that WhatsApp on Android devices is now making all new gTLD domains clickable even without the http:// prefix, but that the app on Apple devices has not yet caught up.

Schwartz discovered last year that WhatsApp did not support any gTLD delegated after November 2015, apparently due to the app relying an outdated hard-coded list of gTLDs in Android.

While the list was quickly updated, it’s taken a while for support to trickle down to devices.

Schwartz credited the WhatsApp team at Meta in the UK and ICANN technology specialist Arnt Gulbrandsen with getting the linkification support accomplished. He said he hopes iOS support will come soon.

Outrage over ICANN’s new gTLD fees

Kevin Murphy, May 29, 2024, Domain Policy

Is ICANN stifling competition and pricing out the Global South by setting its new gTLD evaluation fees too high? A great many community volunteers seem to think so, judging by recent conversations.

The Org last week revealed that it plans to charge registry service providers that want to participate in the next application round $92,000 for their technical evaluation, on top of the estimated $250,000 fee that it will charge for each applied-for string.

Critics have pointed out that a roughly equivalent evaluation, used when a 2012-round gTLD switches to an unknown back-end, currently costs about $14,300, and they’re baffled as to why ICANN plans to up its fees so much.

The Registry Service Provider Evaluation Program was intended to cut a lot of waste and duplication from the new gTLD program. Instead of doing a technical evaluation on an RSP for each gTLD application, the RSP is evaluated once and each applicant simply selects an RSP from a list of approved companies.

ICANN says the program will cost $4.1 million overall, with $2 million of that already mostly spent on the design and implementation phase. It’s expecting all of the existing 40-ish back-end providers to submit to evaluation, along with an unknown number of newcomers.

Assuming fewer than 50 participating RSPs, ICANN will charge $92,000 per RSP. The program is designed to be run on a cost-recovery basis. ICANN says it will lower the price and issue refunds if there are significantly more participants.

Despite that caveat, ICANN staffers running the new gTLD program have faced a barrage of criticism over the last week from members of the SubPro Implementation Review Team, the community volunteers tasked with making sure staff implementation sticks to community policy.

The high-end of the fee scale is high enough that it will essentially “kill off” the RSP market in the Global South, according to Rubens Kuhl of Brazilian ccTLD registry Nic.br, which currently runs the back-end for a handful of 2012-round strings.

The term “Global South” refers to less-wealthy countries largely in the southern hemisphere, mainly in Africa, Asia and Latin America, where $92,000 goes a lot further than it does in North America or Europe.

“What ICANN is suggesting right now simply kills off all Global South RSPs,” Kuhl said during a call yesterday. “Those RSPs could have the technical capability to run gTLDs, and they run very large ccTLDs… It simply seems like a system designed to keep the Global South out.”

Gustavo Lozano Ibarra, director of technical services projects at ICANN and former NIC Mexico employee, responded first by saying that gTLD applicants in the next round from the Global South do necessarily have to chose an RSP from their own region.

“I completely understand that there could be some RSPs in the Global South with capabilities for which the fee could be an issue,” he said. “I think that we get that, and I think that maybe the lack of an Applicant Support Program for the RSPs is something that we need to take into consideration for the next round.”

“So, this round, no Global South. Okay, thank you,” said Kuhl.

“I don’t think this proposed US$92,000 RSP pre-evaluation fee is going to encourage diverse participation in the next nTLD round, especially from developing regions,” Neil Dundas of South African RSP DNS Africa said on the IRT’s mailing list.

“It’s a new financial barrier to entry that previously was not there and it will almost certainly hamper participation from developing regions,” he said.

Mailing list chatter suggests that this potential barrier to entry is something that ICANN’s Governmental Advisory Committee may take a dim view of when the community convenes in Rwanda for ICANN 80 next month.

ICANN is also taking flak for how it is calculating the total cost of the RSP program. Consultant and registry operator Jeff Neuman accused the Org of “double-dipping” by charging for staffers’ work on the program, which he said should already be covered by the fees registries, registrars and ultimately registrants pay into ICANN’s budget.

Responding to criticism that ICANN has over-spent, Ibarra pointed out on yesterday’s call that $4.1 million is a fraction of the $22 million he said ICANN spent on technical evaluations in the 2012 application round.

In addition, RSPs that are attached to potentially dozens of gTLD applications will save a lot of money by only paying to be evaluated once, he said.

Bitcoin gTLD gets launch dates

Orange Domains has announced the launch schedule for .locker, a real gTLD that nevertheless has support for the Bitcoin protocol built in.

Sunrise is set to kick off next month, running from June 19 to August 20, shortly followed by a “Pioneer Program” in which the registry will seek out anchor tenants for marketing purposes.

General availability is set for September 26, following a week-long Early Access Period. Prices have not yet been published.

.locker is a proper DNS gTLD, but Orange Domains intends it to be compatible with apps, such as cryptocurrency wallets, that run on the Bitcoin Name System protocol.

The registry is a joint venture of Trust Machines, Tucows, and Hiro Systems.

.locker was originally owned by the satellite TV company Dish DBS, which it had intended to use as a dot-brand, but it was never used and sold off to Orange last year.

First metaverse gTLD is announced

Unstoppable Domains has announced plans to apply for the first gTLD devoted to a metaverse.

The company has partnered with Metropolis, a “a 360° curated universe that blends commerce, gaming, and experiences that span both digital & physical worlds” to launch .metropolis names on Unstoppable’s blockchain.

“Metropolis plans to explore future ICANN gTLD applications in order for .Metropolis to become even more integrated in the digital landscape,” Unstoppable said.

In the meantime, Metropolis expects its users to use the blockchain version of the names to address “virtual real estate within the metaverse”.

I checked out the Metropolis web site, clicked on everything, and have to confess I don’t understand any of it. I feel about a thousand years old.

Jury still out on ICANN’s content policing powers

Kevin Murphy, May 16, 2024, Domain Policy

Key ICANN community groups have refused to come down on one side or the other in the debate about proposed content policing powers, leaving the question up in the air as ICANN considers a major bylaws amendment.

As I reported last month, ICANN is thinking about changing its governing bylaws to permit it to enforce Registry Voluntary Commitments — contract clauses that could include rules on the content of web sites — on registries in future new gTLD application rounds.

ICANN’s board is convinced that it needs to amend the Org’s bylaws, which explicitly prevent it policing content, in order to do this. It is concerned that “there are political, practical, and reputational risks associated with ICANN negotiating and entering into contract provisions that have the effect of restricting content in gTLDs”.

Such an amendment would require the consent of the five-member Empowered Community, to which ICANN answers, and so far there’s little indication that it would be able to secure the three votes needed.

The EC is made up of the ASO, the ccNSO, the GNSO, the ALAC and the GAC, and so far only the ALAC has said that it supports a bylaws amendment. The GNSO is split, with contracted parties dead against the amendment, and would be unlikely to vote in favor. The GAC seems to be on the fence.

The ASO and ccNSO both declined to express an opinion, saying matters related to gTLDs are outside of their remit, but ICANN chair Tripti Sinha pressed the groups to reconsider in letters this March.

Now, both groups have responded by digging their heels in — nope, it’s none of our business, they say.

“The topics addressed in the consultation are outside the scope of the ASO, so we respectfully decline the invitation to provide input at this time,” the ASO said.

“After careful consideration, we still do not see conditions which warrant our participation in the implementation of the next round of new gTLDs,” the ccNSO said.

The ccNSO added that it could only comment on a proposed bylaws amendment if it could see the draft text of the amendment, and that is not yet available.

If ICANN leadership was hoping for clarity on whether a content policing bylaws change is even feasible, it looks like it doesn’t have it yet.

ICANN preparing for ONE HUNDRED registry back-ends

The number of gTLD registry back-end providers could more than double during the next new gTLD application round, ICANN’s board of directors has been told.

There are currently about 40 registry services providers serving the gTLD industry, but ICANN is preparing for this to leap to as many as 100 when it launches its Registry Service Provider Evaluation Program for the 2026 application round.

“We’re preparing, I think, for roughly a hundred or so applications which will include the 40 existing providers that we’re aware of, and another 60 or so is sort of our rough market sizing,” Russ Weinstein, a VP at ICANN’s Global Domains Division, told the board during a meeting in Paris last week.

The number is based on what ICANN is preparing to be able to handle, rather than confirmed applicants to the RSP program, it seems.

“We are hoping to see some diversification and new entrants into the space,” Weinstein said.

Board member Edmon Chung elaborated that he expects most of the new entrants to be ccTLD registries hoping to break into the gTLD market.

“We can expect a few more ccTLD registries that might be be interested,” he said. “We’re probably not expecting a completely new startup that just comes in and becomes a registry, but beyond the 40, probably a few more ccTLDs.”

ccTLD registries already active in the gTLD market following the 2012 application round include Nominet, Nic.at and AFNIC, which tend to serve clients that are based in the same timezone and use the same native language.