Dyson confirmed for new gTLDs Senate hearing

The US Senate Committee on Commerce, Science and Transportation has published the witness list for this Thursday’s hearing into ICANN’s new gTLD program.
Esther Dyson, the founding chair of ICANN’s board of directors and now a fierce critic of the organization, may turn out to cause the most fireworks.
While Dyson was pro-expansion a decade ago, voting in favor of .info, .biz and others, she recently came out against the program in a widely syndicated op-ed and at a CADNA conference.
Kurt Pritz, ICANN’s senior vice president of stakeholder relations and regular new gTLDs go-to guy, will return to Capitol Hill to defend the program.
(We’re likely to see some criticism of CEO Rod Beckstrom as a result of his absence, as we did following the House of Representatives hearing earlier this year, I imagine.)
Fiona Alexander of the National Telecommunications and Information Administration, ICANN’s governmental overseer, has also been named as a witness.
Predictably, the Association of National Advertisers has a seat on the panel in the form of Dan Jaffe, its vice president of government relations.
The ANA and its newly formed Coalition for Responsible Internet Domain Oversight is believed to have brought about the hearing due to its anti-ICANN lobbying activities.
The witness with the wildcard credentials is Angela Williams, general counsel of the Young Men’s Christian Association of the United States of America.
The YMCA does not appear to have spent a great deal of time contributing to ICANN or the new gTLDs program.
It is however a member of ICANN’s new Not-for-Profit Organizations Constituency (NPOC), which is viewed by some (largely other non-commercial stakeholders) as a shill for intellectual property interests.

Former ICANN CFO sues Sedari over €100k deal

Kevin Wilson, who joined new gTLD consultancy Sedari as chief financial officer earlier this year, was fired in October and is now suing the company over a €100,000 investment deal gone bad.
Wilson, who spent four years as ICANN’s CFO, was one of a number of familiar domain name industry faces to join UK-based Sedari when it came out of stealth mode this summer.
But he was let go in October after falling out with CEO Liz Williams over financial matters.
Wilson claims that even as CFO he had to fight for access to Sedari’s financial records, and that when he finally questioned the company’s accounting he was terminated.
His termination letter said that Sedari had “very serious concerns” about his performance.
He had agreed to invest €100,000, in two €50,000 installments, and was fired shortly after deciding not to make the second payment, according to his legal complaint.
Wilson claims that he agreed to become an investor after being told about paying clients, including Cloud Registry, that he came to believe may not have existed.
He also alleges that “substantial sums” were taken from the company coffers by Williams for spa treatments and other personal expenditures.
The lawsuit alleges “fraud” on this basis, and seeks the return of Wilson’s initial €50,000 stake.
Wilson also wants the court to declare that, as a resident of California, he is not bound by the post-employment non-compete clauses of his contract.
He’s currently an independent new gTLDs consultant.
Sedari, through its solicitor Faegre & Benson, said in a statement:

Mr. Wilson has reneged on his legally binding obligations to Sedari both in relation to the payment by him of certain sums and his agreement not to act contrary to the best interest of the company. As a result, the Board has forfeited Mr. Wilson’s shares and taken further action to enforce its rights against him.

The statement notes that Sedari has not yet been formally served the complaint – which was filed in the Superior Court in Los Angeles on October 25 – adding:

In the event that Mr. Wilson proceeds with his complaint, it will be defended comprehensively.
The claim is devoid of merit, wrong in fact and all material allegations are rejected. Mr. Wilson will also be pursued for any further loss his actions may cause the alleged defendants.

Wilson said in a statement that he wants to “resolve matters amicably”.
According to exhibits filed with the lawsuit, Sedari’s other investors include Williams, with a majority 53.7% stake, as well as director Dennis Jennings and policy chief Philip Sheppard.
Registry services provider Afilias paid $375,000 for a 27.4% stake in the company, according to these documents. Its chairman, Philipp Grabensee, sits on the Sedari board.
Here’s the complaint.

Clash over new gTLD risk fund

The ICANN community is split along predictable lines – domain registries versus intellectual property interests – in the latest controversy to hit the new top-level domains policy-making.
ICANN’s board of directors will meet this week to decide the fate of its new gTLD failure risk fund, an expensive buffer designed to protect registrants if new gTLD registries go bust.
The current plan is to ask each new gTLD applicant to front the entire cost of three years’ operation with a Continuing Operations Instrument – either a letter of credit or cash in escrow.
The idea is that if they go out of business, funds will be available to pay an emergency registry operator to, in the worst case scenario, gracefully wind down the gTLD.
Registries and some potential applicants are not happy about this idea. They say that the COI imposes too great a cost on start-up registries, which could lead to more failed businesses.
Since smaller businesses may not be able to secure letters of credit, they’ll have to escrow hundreds of thousands of dollars, rather than using the money to make sure they don’t fail in the first place.
Registries have proposed an alternative – a Continued Operations Fund – which would see all applicants deposit a flat fee of $50,000 into a central risk pool that ICANN would manage.
An ICANN public comment period on the COF that closed on Friday revealed the anticipated level of opposition from business and IP interests.
The main concern is that the COF represents a transfer of wealth from rich companies, which would easily and cheaply qualify for a letter of credit, to less well-funded applicants.
The COF “seeks to subsidize certain registry operators instead of allowing the market itself (via letter of credit based upon applicant viability) to determine the level of risk for each applicant”, Claudio DiGangi of the International Trademark Association wrote.
Steve Metalitz, president of ICANN’s Intellectual Property Constituency, echoed INTA’s concerns, adding the IPC’s suspicions about why the COF has been proposed:

[The COF] allows more underfunded applicants into the application pool which will in turn lead to more registry failures, cost to ICANN, and poor outcomes for registrants. While this may be good in the short term for members of the Registry Stakeholder Group (RySG) who desire to provide backend services to such underfunded applicants, the short term economic gain of members of one SG should not be prioritized over the risks to registrants and ICANN that the COF represents

One member of the IPC has suggested that if ICANN were to introduce a COF now, it would give opponents of the new gTLD program grounds to sue, under California insurance law, to put it to a halt.
On the pro-COF side, .org manger the Public Interest Registry said that the current COI plan discourages companies for applying for new gTLDs, which is at odds with ICANN’s goals of increasing competition in the registry space.
PIR’s director of policy Paul Diaz also points out that letters of credit will be hard to come by for companies in certain countries, which may lead to less geographically diverse applicants.
Somewhat surprisingly, Minds + Machines CEO Antony Van Couvering, perhaps sensing which way the wind is blowing at ICANN, has reluctantly backed the original COI model, but suggests a “simple short-term fix” to reduce the cost to applicants.
When determining the amount of the COI, applicants should be free to base it on their own “worst case scenario” registration volume projections, rather than their “most likely” models, on the basis that registries are unlikely to go out of business if they meet their revenue targets:

Presumably if you’re hitting your numbers you’re in good shape financially. It’s the low numbers you have to worry about. Setting the amount of the COI at this more reasonable and likely threshold will take care of the vast majority of failures.

ICANN only received comments from eight people on the COF proposal, and unsurprisingly they’re all (with one possible exception) looking out for their own financial interests.
Without a crystal ball, deciding which model will be “best” for the new gTLD program is a very tough call, but ICANN’s board of directors is expected to do so on Thursday.

US Senate to hold new gTLDs hearing

A US Senate committee is to hold a hearing into ICANN’s new generic top-level domains program next Thursday.
The Committee on Commerce, Science, and Transportation will “examine the merits and implications of this new program and ICANN’s continuing efforts to address concerns raised by the Internet community.”
It will be webcast on the Committee’s web site.
It is believed to have been scheduled due to lobbying by the Association of National Advertisers, which has an ongoing campaign to put a stop to the new gTLD program.
It will follow a similar hearing by the House Subcommittee on Intellectual Property, Competition and the Internet in May, which was used to vent outrage about the program but ultimately delivered nothing.
(Note: this story has been updated from the originally posted version to reflect information contained in the official announcement.)

DotGreen hires former Neustar exec

New gTLD applicant DotGreen has tapped former Neustar vice president Tim Switzer to be its new chief operating officer and chief financial officer.
Switzer was vice president of registry services at Neustar. It’s the first example I can recall of a senior exec from a registry services provider joining a single-gTLD applicant.
DotGreen, naturally enough, plans to apply to ICANN for the .green top-level domain next year. It’s a not-for-profit company that hopes to channel funds into environment projects.

Sedari hires Fay Howard as COO

New gTLDs start-up Sedari has recruited Fay Howard, formerly general manager of CENTR, the Council for European National Top Level Domain Registries, as its new chief operating officer.
Howard has also previously worked at Nominet and Eurid, where she wrote the winning application for the .eu registry contract, according to Sedari.
It’s one of a number of recent senior hires for the company, which came out of stealth mode this summer to provide new gTLD applicants with application and registry management services.
Last month, the company hired Philip Shepard as director of policy.

Bulgaria told to forget about .бг

ICANN CEO Rod Beckstrom has advised Bulgarians to admit defeat in their ongoing campaign to have .бг approved as a local-script top-level domain to match .bg.
The country’s application for the Cyrillic label was rejected by ICANN’s IDN ccTLD Fast Track program last year because it was found to look too similar to Brazil’s .br.
Nevertheless, the local government and domain name groups have continued to press for the right of appeal, and have indicated they may apply again.
But in an interview with Novinite published today, Beckstrom says:

I would advise the Bulgarians to go for something else. The initial application for .бг was unsuccessful.
The job of ICANN, the organization, is to implement the policies that are developed by the global communities. Those communities did not allow the initial application to go through because of potential visual confusion. So I think the Bulgarians can go back and they can choose what they want to apply for.
The Bulgarians can apply for a three-character name, they can apply for .българия in Cyrillic, it’s really up to the local community.

He goes on to say that Bulgarians could wait for a change in policies then apply again, they could change their desired string, or they could abandon their plans altogether.
However, surveys have found little appetite among the Bulgarian public for alternative strings such as .бгр, .българия, .бя or .бъл.
It’s a tricky problem for ICANN, which is first and foremost tasked with ensuring DNS stability and security.
Confusingly similar TLDs lend themselves to security risks such as phishing, and my understanding is that if .бг were to be approved it would face opposition from interests in Brazil.
The Novinite interview also touches on the possibilities of .софия and .Пловдив, to represent the Bulgarian cities of Sofia and Plovdiv.
The .бг issue was the subject of some apparently heated discussion during the recent Domain Forum new gTLDs conference in Sofia, but I understand Beckstrom had left before that part of the agenda.
You can now watch the entire Domain Forum, including Beckstrom’s introductory keynote, for free on YouTube.

Wanted: somebody to object to new gTLDs

ICANN is looking for somebody to object to new top-level domain applications.
It’s put out a call for an Independent Objector, whose job it will be to file formal objections to new gTLDs that he or she determines may not be in the public interest.
ICANN is looking for somebody with an in-depth knowledge of the new gTLD program and extensive experience in multinational organizations.
The IO has been a planned component of the new gTLD program for a couple of years.
The role is designed to provide a way to kill off “highly objectionable” applications in cases where the affected community may lack the resources or organization to pay for an objection.
Essentially, the IO looks at public comments filed with ICANN and decides whether opposition to a gTLD is substantial enough to warrant a formal objection.
The IO may only use two of the Applicant Guidebook’s objection mechanisms – the Community Objection and the Limited Public Interest (formerly “morality and public order”) Objection and not trademark or string confusion grounds.
My view is that we’re likely to see very few “highly objectionable” applications. And now that ICANN has agreed to fund some government objections, the IO is likely to wind up being a bit of an easy ride for whoever successfully applies for the job.
Interested parties have until December 22 to apply. The job description can be found here.

GMO wins .tokyo deal

GMO Registry says it has won local government backing to apply to ICANN for the city top-level domain .tokyo.
The company revealed the news on its Twitter feed today, linking to this Tokyo metropolitan government announcement confirming the story.
While perhaps best-known for its planned .shop application, GMO is probably the registry services company with the most announced new gTLD back-end contract wins to date.
It is also on board to provide the registry for the Japanese regional gTLDs .okinawa and .ryukyu, as well as the brand gTLDs .hitachi and .canon. It already runs Somalia’s .so and Indonesia’s .id ccTLDs.
GMO Registry parent GMO Internet is a pretty big deal in its native Japan. Publicly listed on the Tokyo Stock Exchange, it has annual revenue of well over half a billion dollars.

CADNA asks for new gTLDs second round

The Coalition Against Domain Name Abuse, having spent quite a lot of time and effort opposing ICANN’s new top-level domains program, wants ICANN to name the date for a second round.
In a letter to president Rod Beckstrom today, which was inspired by discussions at the recent What’s At Stake conference, CADNA president Josh Bourne writes:

We ask that the ICANN Board request an Issues Report to formally initiate a policy development process to determine when the next round of new gTLD applications will occur, thereby affirming its commitment to opening a second round in a timely manner.

As I’ve noted previously, ICANN has not named the date for the second round so far because it’s promised the Governmental Advisory Committee that it will review the first round first.
But businesses from outside the domain name industry are feeling like they’re being pressured into making a decision whether to apply for a gTLD they don’t necessarily want, Bourne says.

By not disclosing when it will open future rounds of new gTLD applications, ICANN is creating a condition of scarcity that will inevitably result in a massive land rush, where entities will scramble to apply for new gTLDs for the sole purpose of hypothetically “future-proofing” their identities in the new domain name space, without any immediate intentions to use their new gTLDs for innovative means.
Disclosing when it will open a second application round will not only alleviate the anxiety that businesses are feeling, it will give ICANN the chance to quell the animosity that has developed toward it among the business community.

The whole letter is worth a read. No matter what you think of CADNA, it’s difficult to argue with Bourne’s points (though please do so in the comments if you disagree).
Scare sales tactics are already a key source of mainstream hatred for the domain name industry at the second level. Now would be a good time to prevent the same thing happening at the top level too.
It will look very bad for ICANN in a few years’ time if the root is cluttered with useless, unused gTLDs created just because companies felt pressured into defensive applications.