Afilias appeals .web ruling, Verisign responds with “rigging” claims

Afilias has filed an unusual and unprecedented appeal against the May ruling that found ICANN broke its bylaws by awarding the .web gTLD to a Verisign affiliate.

The company is arguing that the Independent Review Process panel that decided the .web case shirked its duties, by not actually resolving the major disputes placed before it.

Verisign, in response, has accused Afilias of asking for a “do-over”, which it said is against the rules, and published information it said showed the company had tried to “rig” the .web auction.

The IRP followed the 2015 ICANN last-resort auction, which saw Verisign secretly fund a shell applicant called Nu Dot Co to win with a $135 million bid, on the basis .web would later be transferred to its custody.

Afilias was the runner-up, and argued that ICANN should have voided the NDC bid because Verisign’s involvement was not disclosed.

But the IRP panel merely found that ICANN had breached its bylaws by failing to have the courage to actually rule on the legitimacy of Verisign’s tactics, and threw it back to ICANN to make a decision.

ICANN has yet to make that decision. Instead, Afilias has filed an appeal (pdf) with the in the form of an “application for an additional decision and interpretation”.

IRP cases are handled by the International Center for Dispute Resolution, and Afilias is invoking the ICDR Arbitration Rules that allow a claimant to request an “interpretation” or “additional award” from the original decision:

By failing to resolve all of the claims and issues Afilias presented to the Panel for decision, the Panel has not only failed to satisfy its mandate; it has also undermined the very Purposes of the IRP (as set out in Section 4.3(a) of the Bylaws)—especially, but not exclusively, by its decision to refer Afilias# claim arising from Nu Dot Co’s (“NDC”) violation of the New gTLD Program Rules back to the ICANN Board and Staff to “pronounce” upon “in the first instance.”

The lengthy request is, I believe, an unprecedented attempt at an appeal of an IRP ruling. It’s also heavy on the legal arguments and does not really shed much light on the facts of the case.

The gist of it is that Afilias wants the panel to rule that ICANN breached its bylaws, new gTLD program rules and international law by failing to disqualify NDC and awarding .web to Afilias instead.

Verisign, in response, said in a blog post that Afilas’ application is “not permitted by the arbitration rules – which expressly prohibit such requests for ‘do overs.'”

It also published a letter (pdf) from NDC to ICANN in which it argues that Afilias tried to engage in a “collusive scheme” to “rig” the .web auction.

The letter contains many pages of private correspondence — emails and phone text messages — in which rival .web applicants, before Verisign’s involvement had been confirmed, fruitlessly attempted to persuade NDC to join them in a private auction in which the winning bid would have been shared among the losers rather than all going to ICANN.

While this kind of private settlement was envisaged, and indeed encouraged, by new gTLD program rules, Verisign reckons its smoking gun is messages sent by Afilias during the so-called “blackout period” before the last-resort auction, during which communications between applicants were forbidden.

As far as I can tell, all or almost all of the documents provided by NDC to ICANN had already been submitted to the public record during the IRP.

Note — the “Afilias” referred to throughout this post is the portion of the company, now known as Altanovo Domains, left behind after most of its operating businesses were acquired by Donuts late last year.

ICANN won’t vote on new gTLDs for another year

Those of you champing at the bit for an opportunity to apply for some more new gTLDs have a longer wait ahead of you than you might have hoped, following a vote of the ICANN board of directors last week.

The board has asked ICANN staff to kick off the latest — but not last — stage of the long-running runway to the next application window, but it will take around 10 months and cost millions.

On September 12, the board gave CEO Göran Marby $9 million from the 2012 round’s war chest and told him to kick off the so-called Operational Design Phase of the New Generic Top-Level Domain Subsequent Procedures Policy Development Process (SubPro).

What this means is that ICANN will take the community-created policy recommendations approved by the GNSO Council in January and try to figure how they specifically could be implemented, before the board decides whether they should be implemented.

The ODP will “assess the potential risks, anticipated costs, resource requirements, timelines, and other matters related to implementation” the board resolution states.

For example, while the SubPro final report calls for an outreach campaign prior to opening the application window, the ODP scoping document (pdf) asks what materials would be needed to be produced and how much they would cost.

The scoping paper comprises dozens and dozens of questions like this, over 15 pages. I started counting them but got bored.

ICANN chair Maarten Botterman said the ODP will provide the board “with relevant materials to facilitate the Board’s determination whether the recommendations are in the best interest of the ICANN community or ICANN”.

While the resolution says the ODP should be completed “within 10 months”, that clock starts ticking when the Marby “initiates” the process, and that does not appear to have happened.

Given that, and ICANN’s habitual tardiness, I’d guess we’re looking at closer to a year before the Org has a document ready to put before the board for consideration.

With all the other stuff that needs to happen following the board’s approval, we’re probably talking about a 2024 application window. That would be 12 years after the last round and 11 years later than the next round was originally promised.

Dead dot-brands top 100. Here’s the list and breakdown

The list of dot-brand gTLDs that have had their ICANN registry contracts torn up has now topped 100.

SC Johnson, the big American cleaning products company, has informed the Org it no longer wishes to run .afamilycompany, .duck, .glade, .off, .raid, and .scjohnson.

Regular readers will know that I’ve been keeping a running tally of dot-brand terminations for the last several years, and according to that tally that number is now 101.

But it’s a bit more complex than that, so I thought I’d use the occasion of this milestone to provide a more substantial breakdown.

ICANN has records for 104 dot-brands either being terminated by ICANN or asking to be terminated of their own accord.

The number of registry-initiated termination requests is 90. These are typically gTLDs that were never used, or were experimented with and then abandoned. A smaller number relate to brands that were discontinued following mergers or product end-of-life, rendering the dot-brand pointless.

ICANN initiated the other 14 terminations, mostly because the registry operator got cold feet during the pre-delegation testing phase, before going live, but also in one instance for non-payment of fees and in two cases whatever the hell this is.

Six of the registry-initiated transfer requests were withdrawn before being fully processed. Of those, three (.boots, .mobily, and its Arabic translation) went on to be terminated anyway.

Two registries filed for self-termination then changed their minds and committed auto-genericide by selling their contracts — for .bond and .sbs — to discounting portfolio registry ShortDot instead.

One dot-brand, .case, withdrew its December 2020 termination request and appears to still be active.

Thirteen termination requests are currently in the system but have not yet been fully processed.

Five dot-brand gTLD contracts — .observer, .quest, .monster, .select, .compare — were sold to other registries to be repurposed as open generics. You could add .cyou to that list, depending on how you define a dot-brand.

One gTLD that was originally a generic — .moto — made the move in the other direction to become a dot-brand.

Here’s the list of dot-brands that have either requested a termination, or been terminated.

[table id=67 /]

Volkswagen drives IDN dot-brand off a cliff

Volkwagen has decided it no longer wishes to run its Chinese-script dot-brand gTLD.

The car-maker’s Chinese arm has asked ICANN to terminate its contract for .大众汽车 (.xn--3oq18vl8pn36a), which has been in the root for five years.

It’s the standard terminating dot-brand story — the gTLD was never used and VW evidently decided it wasn’t needed.

The company also runs .volkswagen, and that’s not used either, but ICANN has yet to publish termination papers for that particular string.

Fellow German car-maker Audi is one of the most prolific users of dot-brands. Its .audi gTLD has over 1,800 registered domains, most of which appear to be used by its licensed dealerships.

.volkwagen is the 95th terminated dot-brand and the seventh terminated internationalized domain name gTLD.

MMX to return GoDaddy cash to investors

Former new gTLD portfolio registry Minds + Machines (MMX) said Friday that it has started returning most of its recent GoDaddy windfall to shareholders.

It has launched a tender offer to buy back £58 million ($80 million) worth of shares, after selling off its wedge of 20-odd ICANN contracts to the registrar giant.

The offer price is 9.6p ($0.13) per share. MMX said that’s a premium of 12.9% on its September 8 closing price and 13.1% over the average between August 11 and September 8.

It’s roughly the same price shares were trading for at the start of 2012, when ICANN opened the last new gTLD application window, but substantially lower than its peak when it started making new gTLD money a couple years later.

The proposal does not cover all of its shares; over 31% will remain in shareholder hands after the tender offer expires October 1.

The company has about $110 million in cash right now, and expects to spend $24 million of that on the GoDaddy transition, taxes, employee payments, professional services and the like, as it winds down over the fourth quarter.

MMX will retain its listing on AIM in London after the wind-down of operations, making it a vessel for a potential reverse-takeover, in which another company (not necessarily in the domains business) could back into it for an easier way into the public markets.

The company sold its registry portfolio to GoDaddy for about $120 million, and has wound down its registrars.

ICANN could get the ball rolling on next new gTLD round this weekend

ICANN may be about to take the next step towards the next round of new gTLD applications at a meeting this Sunday.

On the agenda for the full board of directors is “New gTLD Subsequent Procedures Operational Design Phase (ODP): Scoping Document, Board Resolution, Funding and Next steps”.

But don’t quite hand over all your money to an application consultant just yet — if ICANN approves anything this weekend, it’s just the “Operational Design Phase”.

The ODP is a new piece of procedural red tape for ICANN, coming between approval of a policy by the GNSO Council and approval by the board.

It is does NOT mean the board will approve a subsequent round. It merely means it will ask staff to consider the feasibility of eventually implementing the policy, considering stuff like cost and legality.

CEO Göran Marby recently said the ODP will take more than six months to complete, so we’re not looking at board approval of the next round until second-quarter 2022 at the earliest.

Latest geo-gTLD goes to sunrise

After a protracted limited registration process, the latest geographic gTLD is due to shortly go live.

.zuerich, representing the canton and city of Zürich in Switzerland, went into sunrise yesterday. Registrations come with residency restrictions.

The sunrise runs the whole month of September, to be followed by a month-long limited registration period. General availability comes November 22.

In DNS terms, Zürich has the misfortune of having a diacritic in its name. While it could have applied for an internationalized domain name variant, it chose to deumlautize the string with the addition of a “E” instead.

The gTLD has been in the root for almost seven years, believe it or not, but it only now getting around to its formal launch phases.

ICANN records show its first restricted registration phase started in 2017.

Zone files show 25 live domains, but a web search reveals only one active non-registry web site — an addiction treatment center.

.zuerich is government-run, using CentralNic for registry services.

The canton has around 1.5 million inhabitants, around 440,000 of whom live in the city.

DotKids signs very weird new gTLD contract

New gTLD registry hopeful DotKids Foundation has become the latest to sign its ICANN Registry Agreement, and it’s a bit odd.

The signing means that DotKids only needs to have its registry back-end, managed by Donuts/Afilias, pass the formality of its pre-delegation testing before .kids finds its way into the DNS root.

It’s going to be a regulated TLD, with strict rules about what kind of content can be posted there. It’s designed for under-18s, so there’ll be no permitted violence, sex, drugs, gambling etc.

DotKids plans to enforce this with a complaint-response mechanism. There won’t be any pre-vetting of registrants or content.

There are a few notable things about .kids worth bringing up.

First, the contract was signed August 13 by DotKids director Edmon Chung, best known as CEO of DotAsia. A few days later, he was selected for the ICANN board of directors by the Nominating Committee.

Second, it’s the first and only new gTLD to have been acquired on the cheap — DotKids got over $130,000 of support from ICANN as the only outfit to successfully apply under the Applicant Support program.

Third, DotKids’ Public Interest Commitments are mental.

PICs are the voluntary, but binding, rules that new gTLD registries opt to abide by, but the DotKids PICs read more like the opening salvo in a future lawsuit than clauses in a registry contract.

Three PICs in particular caught my eye, such as this one that seems to suggest DotKids wants to restrict its channel to only a subset of accredited registrars, and then doesn’t:

Notwithstanding Section 1 above, the Registry Operator makes a commitment to support ICANN’s overarching goals of the new gTLD program to enhance competition and consumer choice, and enabling the benefits of innovation via the introduction of new gTLDs. The Registry Operator further acknowledges that at the time of this writing, it is uncertain whether or not the limiting of distribution of new gTLDs to only a subset of ICANN Accredited Registrars would undermine ICANN’s own public interest commitments to enhance competition and consumer choice. In the absence of the confirmation from ICANN and the ICANN community that such undertaking would not run counter to ICANN’s overarching goals of the new gTLD program, or in the case that ICANN and/or the ICANN community confirms that indeed such arrangement (as described in 1. above) runs counter to ICANN’s public interest commitments and overarching goals, the Registry Operator shall refrain from limiting to such subset as described in 1. above.

I’ve read this half a dozen times and I’m still not sure I know what DotKids is getting at. Does it want to have a restricted registrar base, or not?

This paragraph is immediately followed by the equally baffling commitment to establish the PICs Dispute Resolution Procedure as a formal Consensus Policy:

Notwithstanding Section 2 and 4 above, the Registry Operator makes a commitment to support, participate in and uphold, as a stakeholder, the multi-stakeholder, bottom-up policy development process at ICANN, including but not limited to the development of Consensus Policies. For the avoidance of doubt, the Registry Operator anticipates that the PICDRP be developed as a Consensus Policy, or through comparably open, transparent and accountable processes, and commits to participating in the development of the PICDRP as a Consensus Policy in accordance to Specification 1 of this Agreement for Consensus Policies and Temporary Policies. Furthermore, that any remedies ICANN imposes shall adhere to the remedies specified in the PICDRP as a Consensus Policy.

The problem with this is that PICDRP is not a Consensus Policy, it’s just something ICANN came up with in 2013 to address Governmental Advisory Committee concerns about “sensitive” TLDs.

It was subject to public comments, and new gTLD registries are contractually obliged to abide by it, but it didn’t go through the years-long process needed to create a Consensus Policy.

So what the heck is this PIC doing in a contract signed in 2021?

The next paragraph is even more of a head-scratcher, invoking a long-dead ICANN agreement and seemingly mounting a preemptive legal defense against future complaints.

Notwithstanding Section 2 above, the Registry Operator makes a commitment to support ICANN in its fulfillment of the Affirmation of Commitments, including to promote competition, consumer trust, and consumer choice in the DNS marketplace. The Registry Operator further makes an observation that the premise of this Specification 11 is predicated on addressing the GAC advice that “statements of commitment and objectives to be transformed into binding contractual commitments, subject to compliance oversight by ICANN”, which is focused on statements of commitment and objectives and not business plans. As such, and as reasonably understood that business plans for any prudent operation which preserves security, stability and resiliency of the DNS must evolve over time, the Registry Operator will operate the registry for the TLD in compliance with all commitments and statements of intent while specific business plans evolve. For the avoidance of doubt, where such business plan evolution involves changes that are consistent with the said commitments and objectives of Registry Operator’s application to ICANN for the TLD, such changes shall not be a breach by the Registry Operator in its obligations pursuant to 2. above.

If you’re struggling to recall what the Affirmation of Commitments is, that’s because it was scrapped four years ago following ICANN’s transition out from under US government oversight. It literally has no force or meaning any more.

So, again, why is it showing up in a 2021 Registry Agreement?

The answer seems to be that the PICs were written in March 2013, when references to the AoC and the PICDRP as a potential Consensus Policy made a whole lot more sense.

While a lot of this looks like the kind of labyrinthine legalese that could only have been written by an ICANN lawyer, nope — these PICs are all DotKids’ handiwork.

ICANN seems to have been quite happy to dump a bunch of irrelevant nonsense into DotKids’s legally binding contract, and sign off on it.

But given that ICANN doesn’t seem convinced it even has the power to enforce PICs in contracts signed after 2016, does it even matter?

MMX drops two registrars

MMX has dumped two registrar contracts with ICANN, as the company’s asset-sale to GoDaddy nears completion.

ICANN records show that Minds and Machines LLC and Minds and Machines Registrar UK Limited both entered “terminated” status over the last few days, meaning they’re no longer accredited to sell gTLD domains.

But they weren’t doing any selling of domains anyway. The UK company had 108 domains under management and the US on had none at the last count.

The US accreditation was the one used primarily by the company under its original business model of a “triple-play” registry/registrar/back-end, when it was still going by Minds + Machines, which was abandoned five years ago.

The registrar peaked at about 50,000 names, which were then transferred over to Uniregistry. The back-end business was also abandoned, with Nominet taking over technical management of most of its gTLDs.

MMX is currently in the process of getting out of its sole remaining third business, that of gTLD registry.

GoDaddy has already taken over most of its 27 gTLDs under a $120 million deal announced earlier this year. Four TLDs remain, and will be transferred subject to approval from government partners.

Dead dot-brands #92 and #93

Two more companies have withdrawn from the new gTLD space, asking ICANN to rip up their dot-brand contracts.

The Royal Melbourne Institute of Technology, an Australian university, has terminated its contract for .rmit, and SwiftCover, an American insurance company, has withdrawn .swiftcover.

SwiftCover next used its gTLD, according to zone file records. Not once.

RMIT had registered a small handful of domains under .rmit, and had been using at least one of them — which wasn’t even a redirect to the uni’s main .au site — as recently as February this year.

But by May the experiment was over, with RMIT filing its ICANN papers.

These are the 92nd and 93rd dot-brand termination notices to be published by ICANN.