Will ICANN punt on .amazon again?

Amazon is piling pressure onto ICANN to finally approve its five-year-old gTLD applications for .amazon, but it seems to me the e-commerce giant will have a while to wait yet.
The company sent a letter to ICANN leadership this week calling on it to act quickly on the July ruling of an Independent Review Process panel that found ICANN had breached its own bylaws when it rejected the .amazon and and Chinese and Japanese transliterations.
Amazon’s letter said:

Such action is necessary because there is no sovereign right under international or national law to the name “Amazon,” because there are no well-founded and substantiated public policy reasons to block our Applications, because we are committed to using the TLDs in a respectful manner, and because the Board should respect the IRP accountability mechanism.

ICANN had denied the three applications based on nothing more than the consensus advice of its Governmental Advisory Committee, which had been swayed by the arguments of primarily Brazil and Peru that there were public policy reasons to keep the gTLD available for possible future use by its own peoples.
The string “Amazon”, among its many uses, is of course the name of a river and a rain forest that covers much of the South American continent.
But the IRP panel decided that the ICANN board should have at least required the GAC to explain its public policy arguments, rather than just accepting its advice as a mandate from on-high.
Global Domains Division chief Akram Atallah had testified before the panel that consensus GAC advice sets a bar “too high for the Board to say no.”
But the governmental objections “do not appear to be based on well-founded public policy concerns that justify the denial of the applications” the IRP panelists wrote.
The panel, in a 2-to-1 ruling, instructed ICANN to reopen Amazon’s applications.
Since the July ruling, ICANN’s board has not discussed how to proceed, but it seems likely that the matter will come up at its Montevideo, Uruguay retreat later this month.
No agenda for this meeting has yet been published, but there will be an unprecedented public webcast of the full formal board meeting, September 23.
The Amazon letter specifically asks the ICANN board of directors to not refer the .amazon matter back to the GAC for further advice, but I think that’s probably the most likely outcome.
I say this largely because while ICANN’s bylaws specifically allow it to reject GAC advice, it has cravenly avoided such a confrontation for most of its history.
It has on occasion even willfully misinterpreted GAC advice in order to appear that it has accepted it when it has not.
The GAC, compliantly, regularly provides pieces of advice that its leaders have acknowledged are deliberately vague and open to interpretation (for a reason best known to the politicians themselves).
It seems to me the most likely next step in the .amazon case is for the board to ask the GAC to reaffirm or reconsider its objection, giving the committee the chance to save face — and avoid a lengthy mediation process — by providing the board with something less than a consensus objection.
If ICANN were to do this, my feeling is that the GAC at large would probably be minded to stick to its guns.
But it only takes one government to voice opposition to advice for it to lose its “consensus” status, making it politically much easier for ICANN to ignore.
Hypothetically, the US government could return to its somewhat protectionist pre-2014 position of blocking consensus on .amazon, but that might risk fanning the flames of anti-US sentiment.
While the US no longer has its unique role in overseeing ICANN’s IANA function, it still acts as the jurisdictional overlord for the legal organization, which some other governments still hate.
A less confrontational approach might be to abstain and to allow friendly third-party governments to roadblock consensus, perhaps by emphasizing the importance of ICANN being seen to accountable in the post-transition world.
Anyway, this is just my gut premonition on how this could play out, based on the track records of ICANN and the GAC.
If ICANN can be relied on for anything, it’s to never make a decision on something today if it can be put off until tomorrow.

XYZ slashes $10 million a year from premium stash

XYZ.com has slashed the asking price of a few thousand “premium” .xyz domain names, in some cases by many thousands of dollars.
Overall, it looks like the company has dropped prices by a total of $10.8 million.
At the top end of its reserved list, several single and double-character domains previously priced a $55,000 per year have been reduced to $13,000 per year.
At the lower end, domains previously priced at around $1,300 are now around $300.
Those are the recommended retail prices. Some registrars are offering them with a substantial mark-up.
The reductions affect 2,700 of the domains on XYZ’s premium list, which runs to about 3,075 names in total.
Whereas the previous hypothetical value of the full list was $15.3 million a year, it’s now at $4.4 million a year.
Of course, they’re not worth anything unless somebody is willing to pay the price, and the domains still seem to have end-user price tags on them.
Premium renewal fees have so far proved unpopular in the domain investing community due to the large carrying cost.
XYZ’s full list can be obtained here.

.CLUB nears profitability, talks renewals and “trial” domains

.CLUB Domains is nearing profitability and poised to become a “growth engine”, despite the view that most of its current domains are not expected to renew, according to its CEO.
Colin Campbell told DI today that the company made $6.7 million in revenue last year, and is “very close” to breaking even.
The company reached one million domains under management milestone in June, but Campbell freely admits that the majority of its current domains are unlikely to renew.
Almost 700,000 of these domains are what .CLUB considers “trial accounts”, he said. These are domains that typically sold for under a dollar — .club has been seen for sale as low as $0.88 — to speculators.
The registry usually sees a 10% to 15% renewal rate on these domains, he said.
Of the remaining 300,000 “solid, regular registrations”, Campbell said he sees first-year renewals in the 68% to 70% range and subsequent years at 80% to 90%.
The company typically only discounts on its first-year registrations, so renewal rates are a much better indicator of performance.
He said .club has around 120,000 web sites (not including parked domains), some of which are showcased on its web site.
With this in mind, renewals are at the forefront of Campbell’s mind. He said a key performance indicator .CLUB uses is “average cost of acquisition per renewed domain”, which the company tracks on a per-registrar basis.
The company invested $3.3 million in marketing in 2016, he said. That does not include rebates to registrars participating in volume programs, but it does take into account acquiring prominent shelf space on key registrars, he said.
“We’re very close to break-even and we’re still going to be able to invest multi-million dollars in ad campaigns and marketing,” he said.
“We’re going to have a company that’s breaking even and is still going to be a growth engine,” he said. “We’re going to be able to sustain a path of growth. I don’t know too many TLDs who could say that. Of course, if you reduce your expenses down to nothing you can make a profit, but can you also be a growth engine?”
“That’s where I feel like a TLD needs to get to, to be a sustainable long-term presence in the market, like a .org or .net or .co,” he said.
Despite the narrowing losses and starkly higher volumes, the $6.7 million in 2016 revenue is a lower than the $7 million in 2015 revenue Campbell told Domain Name Wire about a year ago.
Campbell said today that the reason for the dip is that late 2015 saw many gTLDs (old and new, even including .com) benefit from a bump from the Chinese market. .CLUB’s top line was particularly exposed by some premium sales it made to Chinese investors during that growth spike.
Premium sales have also been performing well in 2017, Campbell said, driven by the financing options and broker program introduced in January.
.CLUB announced first-quarter premium sales totaling $505,000 and $2.5 million in Q2.

No $17 million rebate for struggling new gTLDs

ICANN has turned down a request for about $17 million to be refunded to under-performing new gTLD registries.
The organization cannot spare the cash from its $96 million new gTLD program war chest because it does not yet know how much it will need to spend in future, Global Domains Division president Akram Atallah told registries this week.
The Registries Stakeholder Group made the request for fee relief back in March, arguing that the $25,000 per-TLD fixed annual fee each registry must pay amounts to an unfair “burden” that has “hampered their success and put them at a competitive disadvantage”.
The RySG proposed that this $6,250 per quarter fee should be reduced by $4,687.50 per quarter for a year, a 75% reduction, at a cost to ICANN of $16.87 million.
The money, they said, should be drawn from the $96.1 million in new gTLD application fees that were still unspent at the time.
The new gTLD program charged each applicant $185,000 per application. About third of the fee was to cover unforeseen events, and is often sniggeringly referred to as its legal defense fund.
Because the program was meant to work only on a cost-recovery basis, there are question marks hanging over what ICANN should ultimately do with whatever cash is left over.
(It should be noted that this cash is separate from and does not include the quarter-billion dollars ICANN has squirreled away from its new gTLD last-resort auctions).
Now that the vast majority of the 2012 round’s 1,930 applications have been fully processed, it must have seemed like a good time for the RySG to ask for some cashback, but ICANN has declined.
Atallah said in a August 29 letter (pdf) to the group that ICANN has had to spent lots of its program reserve on unanticipated projects such as name collisions, universal acceptance, the EBERO program and the Trademark Clearinghouse. He wrote:

We do not yet know how much of the New gTLD Program remaining funds will be required to address future unanticipated expenses, and by when. As such, at this time, ICANN is not in a position to commit to the dispensation of any potential remaining funds from the New gTLD Program applications fees.

It seems for now the hundreds of new gTLDs with far fewer than 10,000 registrations in their zones are going to keep having to fork over $25,000 a year for the privilege.

GoDaddy’s reason for dumping Uniregistry doesn’t make a lot of sense

GoDaddy, as you may have read, has again decided to dump Uniregistry’s portfolio of TLDs, following wholesale price increases.
But its explanation for the move — trying to provide its customers with a “great product experience” — doesn’t seem to tally with the way it has gone about implementing the change.
The company confirmed this week that it will no longer offer new registrations in Uniregistry’s stable of new gTLDs, but will continue to support existing customers.
The registrar’s EVP of domains, Mike McLaughlin, reportedly explained the move like this:

GoDaddy strives to provide its customers with great product experiences wherever possible. After careful consideration, we decided to stop offering new Uniregistry domain names for sale because their pricing changes caused frustration and uncertainty with our customers.

But the way GoDaddy has gone about this looks like it is set to provide anything other than a great product experience.
For starters, existing registrants of Uniregistry names will find their registrations migrated over to the wholesale registrar Hexonet, for which GoDaddy will act as reseller.
They’ll still be able to manage their names via their GoDaddy control panels, but technically GoDaddy will no longer be the registrar.
This could well add friction to the customer support process, as well as meaning Hexonet will now show up in Whois as the sponsoring registrar.
Accompanying this move is the unexplained removal of Whois privacy services for all affected domains. Registrants will get a refund for their privacy service and will have the opportunity to switch registrars to one that will support privacy.
For those that remain, suddenly their personally identifiable information will become publicly available. This could lead to an increase in complaints and support calls as registrants realize what has happened.
In terms of price, existing registrants will presumably still be affected by Uniregistry’s increases to the same extent as they were previously. Again, their customer experience has not changed.
Overall, the explanation doesn’t make a heck of a lot of sense to me. I put the above points to GoDaddy and VP of domains Rich Merdinger responded, via a company spokesperson:

After we made the decision to stop supporting Uniregistry domain names, we worked to provide the best possible experience we could to our customers. We wanted them to have a transparent experience. They will log in to the same GoDaddy account and service the domain names the same way they always have. Because of the transfer of the name to a different registrar, privacy had to be removed. While this impacts a small subset of these customers, we have done everything to make this transition as smooth as possible.

It’s true that GoDaddy isn’t a big seller of Uniregistry names. It’s one of Uniregistry’s smaller channel partners and the number of Uniregistry names it’s sold — measured in the thousands — is a drop in the ocean of the over 55 million gTLD names it currently has under management.
The two companies are also competitors, it probably should be noted.
But while Uniregistry’s registrar seems to be have been well-received by customers, and its domain volume has grown rapidly in the last three years, it still only had about 1.5 million domains under management at the last count; hardly an existential threat to the Scottsdale behemoth.
It should also be noted that GoDaddy is not the only registrar to distance itself from Uniregistry.
NameCheap also recently discontinued support for the TLDs that are experiencing the biggest price increases. Tucows announced a similar move in May.
GoDaddy had already said it would drop Uniregistry once before, but changed its mind, before changing it back again.

Google shifts 400,000 .site domains

Google has given away what is believed to be roughly 400,000 subdomains in Radix’s .site gTLD as part of a small business web site service.
Since its launch a couple of months ago, the Google My Business web site builder offering has been offering small businesses a free one-page site with a free third-level domain under business.site.
Google My Business also offers users the ability to upgrade to a paid-for second-level domain via its Google Domains in-house registrar.
Google the search engine indexes 403,000 business.site pages currently. Because each subdomain is limited to a single page, it is possible that the number of subdomains is not too far behind that number, Radix believes.
This means that business.site is likely almost as large as the .site gTLD itself, which currently has about 450,000 names in its zone file.
Given the rapid growth rate, it seems likely the subdomain will overtake the TLD in a matter of weeks.
According to Radix, business.site was purchased off of its registry reserved premium list. The sale price has not been disclosed.
It’s good publicity for the TLD, and merely the latest endorsement by Google of the new gTLD concept.
As well as being the registry for many new gTLDs, Google parent Alphabet uses a .xyz domain and its registrar uses a .google domain.

HTC dumps its dot-brand

Mobile phone manufacturer HTC has become the latest dot-brand operator to get out of the new gTLD game.
The $4.3 billion-a-year Taiwanese firm has told ICANN that it no longer wishes to run .htc as a dot-brand registry and ICANN has signaled its intent to terminate the contract.
It becomes the 27th dot-brand, from the hundreds that have entered contracts over the last few years, to change its mind about owning a vanity gTLD.
Most recently, fast food chain McDonalds and kitchen utensils company Pampered Chef both dumped their respective dot-brands.
Like the previous terminations, HTC never actually did anything with .htc; it only had the contractually mandated nic.htc in its zone file.

EFF recommends against new gTLDs

The Electronic Frontier Foundation has recommended that domain registrants concerned about intellectual property “bullies” steer clear of new gTLDs.
The view is expressed in a new EFF report today that is particularly critical of policies in place at new gTLD portfolio registries Donuts and Radix.
The report (pdf) also expresses strong support for .onion, the pseudo-TLD available only to users of the Tor browser and routing network, which the EFF is a long-term supporter of.
The report makes TLD recommendations for “security against trademark bullies”, “security against identity theft and marketing”, “security against overseas speech regulators” and “security against copyright bullies”.
It notes that no one TLD is “best” on all counts, so presents a table explaining which TLD registries — a broad mix of the most popular gTLD and ccTLD registries — have which relevant policies.
For those afraid of trademark “bullies”, the EFF recommends against 2012-round new gTLDs on the basis that they all have the Uniform Rapid Suspension service. It singles out Donuts for special concern due to its Domain Protected Marks List, which adds an extra layer of protection for trademark owners.
On copyright, the report singles out Donuts and Radix for their respective “trusted notifier” schemes, which give the movie and music industries a hotline to report large-scale piracy web sites.
These are both well-known EFF positions that the organization has expressed in previous publications.
On the other two issues, the report recommends examining ccTLDs for those which don’t have to kowtow to local government speech regulations or publicly accessible Whois policies.
In each of the four areas of concern, the report suggests taking a look at .onion, while acknowledging that the pseudo-gTLD would be a poor choice if you actually want people to be able to easily access your web site.
While the opinions expressed in the report may not be surprising, the research that has gone into comparing the policies of 40-odd TLD registries covering hundreds of TLDs appears on the face of it to be solid and possibly the report’s biggest draw.
You can read it here (pdf).

Crocker: no date on next new gTLD round

ICANN will NOT set a date for the next round of new gTLD applications, despite recent pleas from registry operators.
That’s according to a letter (pdf) from ICANN chair Steve Crocker to the Registries Stakeholder Group published today.
The RySG had asked (pdf) last month for ICANN’s leadership to set a fourth-quarter 2018 deadline for the next application window.
It said that that drawing a line in the sand would allow potential applicants to plan and would prevent current policy-development processes from being abused to delay the next round.
But Crocker says in his letter that it is up to the ICANN community, not its board of directors, to determine if and when a new round should commence. He wrote:

Once the community completes its work, the Board will consider the community’s recommendations to introduce additional new gTLDs. Without the final findings and recommendations from the review and PDP, the Board won’t be able to determine what needs to be done prior to the opening of another application process…
The Registry Stakeholder Group’s letter suggests that by setting a date for the opening of another application process, the Board will provide the community with a target date to work toward. Although the Board setting a date would achieve this, doing so might contravene the multi-stakeholder process that allows for the community to have the necessary discussions to arrive at consensus, and to determine the timing of their own work

It seems this is an instance in which the board does not like the idea of setting policy in a top-down manner.
Crocker said the two remaining gating factors for a next round are the consumer choice and competition review of the first round, which is ongoing, and the GNSO’s New gTLD Subsequent Procedures Policy Development Process (PDP).
The PDP has now been going on for 18 months and yet discussions remain at a very early stage, with hardly any preliminary recommendations being agreed upon.
There’s not even agreement on foundational issues such as whether to carry on dividing the program into discreet application rounds or to start a first-come, first-served process.
The RySG had suggested in its letter that the next window could open after certain threshold issues had been resolved but before all policy work was complete, and that at the very least ICANN staff should get to work on a new version of the Applicant Guidebook while the PDP is still ongoing.
But Crocker again responded that the staff cannot get to work on implementation until the board has considered the community’s final recommendations.
ICANN’s most recent estimates for the opening of the next round would see applications accepted in 2020, eight years after the last round.

MMX says .vip renewals running at 75%

MMX has revealed that its renewal rate for first-month .vip registrations in China were over 75%.
The portfolio gTLD registry, also known as Minds + Machines, said that 317,000 domains that were registered during .vip’s first month of availability have now been renewed.
The news follows a June announcement that the renewal rate would be over 70%.
The large majority of .vip names registered are registered via Chinese registrars, where prices can be around the $3 to $4 mark.
MMX CEO Toby Hall said in a statement that the company now plans to release some of its reserved “premium” .vip names.
He added that the company is confident that its recurring revenue from renewals will soon be high enough to cover its fixed overhead costs, one of its key performance benchmarks.