.trust gTLD might be for sale as NCC closes domain business

NCC Group has stroppily departed from the domain name business but is evading questions about whether its .trust gTLD is for sale.
The company last month told the markets that it is to “cut its losses” and get rid of its Open Registry registry/registrar business, which it acquired for up to £14.9 million ($22.6 million) just 19 months ago.
But it left open the question of whether it would also divest .trust, the gTLD it acquired from Deutsche Post for an undisclosed sum a year earlier.
Talking to The Telegraph earlier this week, NCC CEO Rob Cotton had some harsh words for the new gTLD industry:

People thought there’d be a need for lots of generic domains, but there’s no need for them at all, it’s only good news for bad guys who can get them for free and pretend to be anyone.

It’s not exactly a volte face from NCC, which has repeatedly published research showing consumers don’t trust new gTLDs.
The company had been banking on .trust (a back-up plan after it failed to obtain .secure, which it had originally applied for) to showcase its potentially higher-margin domain security services.
In its full-year 2016 financial results last month, the company said it was closing down its domain services division, taking a charge of over £13 million as result.
Forty-five people lost their jobs as a result of change in strategy.
The closure does not appear to apply to its data escrow business, which has proven popular among new gTLD registries. That business sits within a separate Escrow Division.
The company said:

It is clear that the open generic domains and city codes have not been taken up by businesses and consumers as well as expected with all of these falling well short of their initial registration targets. Coupled with the fact that the branded domains are still either undelegated or those that are, are unused, it is clear that the market is not ready for the very necessary changes that need to happen to strengthen security on the Internet.

The domains division brought in just shy of £5 million ($6.6 million) in the year to May 31, but most of that was due to its withdrawal of its application for .secure. The division was making a loss.
On .trust, which the company reckons is worth £4.2 million, NCC was less than clear about its plans.
It said in its results that it “will continue to use .trust as the Group’s domain”, but that could merely mean it will continue to use nccgroup.trust as its primary web site.
I asked the company whether .trust was for sale this week and received the following PR statement:

NCC Group said in their FY results statement that certain parts of the Domain Services Division will be divested in due course, although the capability to provide a secure domain environment will be retained. They also stated that this will involve the diminution and realisation of assets. They said that Open Registry is to be realised and other assets written down.
They also made the point that they are still committed to the concept behind domain services and have retained the ability to provide a secure, managed environment when the marketplace changes.

Given the language, I would err towards .trust not being for sale, but the fact that the firm declined to give a straight answer it seems possible that it actually is.

.hotel losers gang up to threaten ICANN with legal bills

The six losing applicants for the .hotel new gTLD are collectively threatening ICANN with a second Independent Review Process action.
Together, they this week filed a Request for Reconsideration with ICANN, challenging its decision earlier this month to allow the Afilias-owned Hotel Top Level Domain Sarl application to go ahead to contracting.
HTLD won a controversial Community Priority Evaluation in 2014, effectively eliminating all rival applicants, but that decision was challenged in an IRP that ICANN ultimately won.
The other applicants think HTLD basically cobbled together a bogus “community” in order to “game” the CPE process and avoid an expensive auction.
Since the IRP decision, the six other applicants — Travel Reservations, Famous Four Media, Radix, Minds + Machines, Donuts and Fegistry — have been arguing that the HTLD application should be thrown out due to the actions of Dirk Krischenowski, a former key executive.
Krischenowski was found by ICANN to have exploited a misconfiguration in its own applicants’ portal to download documents belonging to its competitors that should have been confidential.
But at its August 9 meeting, the ICANN board noted that the timing of the downloads showed that HTLD could not have benefited from the data exposure, and that in any event Krischenowski is no longer involved in the company, and allowed the bid to proceed.
That meant the six other applicants lost the chance to win .hotel at auction and/or make a bunch of cash by losing the auction. They’re not happy about that.
It doesn’t matter that the data breach could not have aided HTLD’s application or its CPE case, they argue, the information revealed could prove a competitive advantage once .hotel goes on sale:

What matters is that the information was accessed with the obvious intent to obtain an unfair advantage over direct competitors. The future registry operator of the .hotel gTLD will compete with other registry operators. In the unlikely event that HTLD were allowed to operate the .hotel gTLD, HTLD would have an unfair advantage over competing registry operators, because of its access to sensitive business information

They also think that HTLD being given .hotel despite having been found “cheating” goes against the spirit of application rules and ICANN’s bylaws.
The RfR (pdf) also draws heavily on the findings of the IRP panel in the unrelated Dot Registry (.llc, .inc, etc) case, which were accepted by the ICANN board also on August 9.
In that case, the panel suggested that the board should conduct more thorough, meaningful reviews of CPE decisions.
It also found that ICANN staff had been “intimately involved” in the preparation of the Dot Registry CPE decision (though not, it should be noted, in the actual scoring) as drafted by the Economist Intelligence Unit.
The .hotel applicants argue that this decision is incompatible with their own IRP, which they lost in February, where the judges found a greater degree of separation between ICANN and the EIU.
Their own IRP panel was given “incomplete and misleading information” about how closely ICANN and the EIU work together, they argue, bringing the decision into doubt.
The RfR strongly hints that another IRP could be in the offing if ICANN fails to cancel HTLD application.
The applicants also want a hearing so they can argue their case in person, and a “substantive review” of the .hotel CPE.
The HTLD application for .hotel is currently “On Hold” while ICANN sorts through the mess.

Are .mail, .home and .corp safe to launch? Applicants think so

ICANN should lift the freeze on new gTLDs .mail, .home and .corp, despite fears they could cause widespread disruption, according to applicants.
Fifteen applicants for the strings wrote to ICANN last week to ask for a risk mitigation plan that would allow them to be delegated.
The three would-be gTLDs were put on hold indefinitely almost three years ago, after studies determined that they were at risk of causing far more “name collision” problems than other strings.
If they were to start resolving on the internet, the fear is they would lead to problems ranging from data leakage to systems simply stopping working properly.
Name collisions are something all new TLDs run the risk of creating, but .home, .corp and .mail are believed to be particularly risky due to the sheer number of private networks that use them as internal namespaces.
My own ISP, which has millions of subscribers, uses .home on its home hub devices, for example. Many companies use .corp and .mail on their LANs, due to longstanding advice from Microsoft and the IETF that it was safe to do so.
A 2013 study (pdf) showed that .home received almost 880 million DNS queries over a 48-hour period, while .corp received over 110 million.
That was vastly more than other non-existent TLDs.
For example, .prod (which some organizations use to mean “production”) got just 5.3 million queries over the same period, and when Google got .prod delegated two years it prompted an angry backlash from inconvenienced admins.
While .mail wasn’t quite on the same scale as the other two, third-party studies determined that it posed similar risks to .home and .corp.
All three were put on hold indefinitely. ICANN said it would ask the IETF to consider making them officially reserved strings.
Now the applicants, noting the lack of IETF movement to formally freeze the strings, want ICANN to work on a thawing plan.
“Rather than continued inaction, ICANN owes applicants for .HOME, .CORP, and .MAIL and the public a plan to mitigate any risks and a proper pathway forward for these TLDs,” the applicants told ICANN (pdf) last Wednesday.
A December 2015 study found that name collisions have occurred in new gTLDs, but that no truly serious problems have been caused.
That does not mean .home, .corp and .mail would be safe to delegate, however.

Dot Registry backs .africa loser, batters on the ICANN lawsuit floodgates

Rejected community gTLD applicant Dot Registry has waded into the lawsuit between DotConnectAfrica and ICANN.
Filing an amicus brief on Friday in support of the unsuccessful .africa applicant, Dot Registry argues that chagrined new gTLD applicants should be allowed to sue ICANN, despite the legal releases they all signed.
The company is clearly setting the groundwork for its own lawsuit against ICANN — or at least trying to give that impression.
If the two companies are successful in their arguments, it could open the floodgates for more lawsuits by pissed-off new gTLD applicants.
Dot Registry claims applicants signed overly broad, one-sided legal waivers with the assurance that alternative dispute mechanisms would be available.
However, it argues that these mechanisms — Reconsideration, Cooperative Engagement and Independent Review — are a “sham” that make ICANN’s assurances amount to nothing more than a “bait-and-switch scheme”.
Dot Registry recently won an Independent Review Process case against ICANN that challenged the adverse Community Priority Evaluation decisions on its .inc, .llc, and .llp applications.
But while the IRP panel said ICANN should pay Dot Registry’s share of the IRP costs, the applicant came away otherwise empty-handed when panel rejected its demand to be handed the four gTLDs on a plate.
The ICANN board of directors has not yet fully decided how to handle the three applications, but forcing them to auction with competing applications seems the most likely outcome.
By formally supporting DotConnectAfrica’s claim that the legal waiver both companies signed is “unconscionable”, the company clearly reckons further legal action will soon be needed.
DotConnectAfrica is suing ICANN on different grounds. Its .africa bid did not lose a CPE; rather it failed for a lack of governmental support.
But both companies agree that the litigation release they signed is not legally enforceable.
They both say that a legal waiver cannot be enforceable in ICANN’s native California if the protected party carries out fraud.
The court seems to be siding with DotConnectAfrica on this count, having thrown out motions to dismiss the case.
Dot Registry’s contribution is to point to its own IRP case as an example of how ICANN allegedly conned it into signing the release on the assumption that IRP would be able to sort out any disputes. Its court brief (pdf) states:

although claiming to provide an alternative accountability mechanism, the Release, in practice, is just a bait-and-switch scheme, offering applicants a sham accountability procedure
…
Indeed, the “accountability” mechanism is nothing of the sort; and, instead of providing applicants a way to challenge actions or inactions by ICANN, it gives lip-service to legitimate grievances while rubber-stamping decisions made by ICANN and its staff.

That’s an allusion to the IRP panel’s declaration, which found no evidence that ICANN’s board of directors had conducted a thorough, transparent review of Dot Registry’s complaints.
Dot Registry is being represented by the law firm Dechert. That’s the current home of Arif Ali, who represented DotConnectAfrica in its own original IRP, though Ali is not a named lawyer in the Dot Registry brief.

Confused by new gTLDs? Allow this Nominet infographic to make your brain explode

There are over 1,000 new gTLDs out there right now, and figuring out what’s going on in the marketplace can be difficult.
So what better way to reduce confusion than to plot the 250 most populous TLDs into an infographic that vaguely resembles the iconic London Underground route map?
There must be thousands of better ways.
Regardless, the Tube map idea is the one Nominet decided to run with, and it released this beauty today.

While the strings have been roughly organized by categories, there doesn’t seem to be much logic to the layout otherwise.
If one were to overlap the map on a map of London, there doesn’t appear to be much relationship between the string and the characteristics of the corresponding neighborhood.
DI World International Global Headquarters would be sandwiched between .lawyer and .marketing, or thereabouts, just to the north of Jack the Ripper’s stalking ground of .miami.
There is a Citizens Advice Bureau across the street, but I’m not sure that makes this area a hotbed of legal activity.
Market-leading .xyz would be up in Walthamstow somewhere, quite off the beaten track, .tokyo would be close to Chinatown, and .city is nowhere near the City.
I’m probably reading it wrong.
Anyway, the full map can be puzzled over in PDF format here, and you can read Nominet CEO Russell Haworth’s accompanying blog post here.

“Dave” becomes first .blog blogger

Blogging pioneer Dave Winer has become the first person to start blogging at a .blog domain name.
His new site, dave.blog, went live yesterday as a beneficiary of registry Knock Knock Whois There’s pioneer program.
The site is one of two pioneer .blog domains — the other being design.blog — highlighted by KKWT yesterday in publicity connected to the opening of its sunrise period.
Winer is the author of Scripting News, which has been around since 1997, one of the first must-read tech blogs.
He also made major contributions to the format and popularity of RSS syndication technology.
He was an outspoken critic of Google, which had planned to use blog in a “closed generic” fashion, linked closely to its Blogger service, writing in 2012:

I played a role in establishing blogs. How does Google get the right to capture all the goodwill generated in the word blog?

Yesterday he expressed relief that the .blog auction was actually won by KKWT, a subsidiary of WordPress owner Automattic, writing:

I’m glad to say that my friend Matt Mullenweg and Automattic are consistent champions of user and developer freedom. That’s why they host .blog for all to use. They could have said “blog” == “wordpress” — many companies would have — but they didn’t. That’s very good! I wish more big tech companies had that philosophy.

Winer said he will use his self-developed 1999.io blogging software on his new domain.
His allocation of dave.blog is arguably bad news for blokey British cable TV station Dave and disgraced former prime minister David “Call Me Dave” Cameron.

Next new gTLD round could start sooner than expected

The ICANN board of directors is wondering whether the next new gTLD application round should kick off sooner than expected.
Chair Steve Crocker reached out to the Generic Names Supporting Organization this week to ask whether the next round could start before all GNSO policy work has been completed.
Or, he asked, are there any “critical issues” that need to be resolved before ICANN starts accepting more applications.
Akram Atallah, head of ICANN’s Global Domains Division, said in May that 2020 is the earliest the next round could feasibly begin, but Crocker’s letter this week (pdf) suggests that that date could be brought forward.
Crocker asked “whether a future application process could proceed while policy work continues”.
There are a number of reviews that ICANN has committed to carry about before the next round starts.
There’s a consumer choice, competition and trust survey to be completed, for example, and a review of trademark protection mechanisms.
Atallah said in may that these would likely be complete by the end of 2017.
But the GNSO is also conducting policy work designed to highlight flaws and inefficiencies in the current 2012 and recommend changes and improvements.
It’s this so-called GNSO Policy Development Process (PDP) Working Group on New gTLD Subsequent Procedures (or NewgTLD-WG) that Crocker is interested in. He wrote:

assuming all other review activities are completed, it would be helpful to understand whether the GNSO believes that the entirety of the current Subsequent Procedures PDP must be completed prior to advancing a new application process under the current policy recommendations. The Board is cognizant that it may be difficult to provide a firm answer at this stage of the process as the reviews are still underway and the PDP is in its initial stages of work, but if any consideration has been given in relation to whether a future application process could proceed while policy work continues and be iteratively applied to the process for allocating new gTLDs, or that a set of critical issues could be identified to be addressed prior to a new application process, the Board would welcome that input.

The current plan for the NewgTLD-WG is to wrap up two years from now, in the third quarter of 2018 (though this may be optimistic).
Members of the group seem to think that we’re looking at a post-2020 next round with 10,000 to 15,000 applications.
It’s difficult to imagine a second round (or fourth, if you’re a pedant) beginning a whole lot earlier than 2020, given the snail’s pace ICANN and its community moves at.
The WG was chartered over half a year ago and the conversations going on are still at a depressingly high level.
Perhaps Crocker’s letter is an early indication that board will not be the significant drag factor on the process.

Centuries-old companies both fail community gTLD test

Two companies called Merck have separately failed ICANN Community Priority Evaluations, meaning the new gTLD .merck could be the first dot-brand to head to ICANN auction.
Merck KGaA applied for .merck for the Merck Group, a German chemicals company founded — staggeringly — in 1668, the same year Newton built the world’s first reflecting telescope.
Merck Registry Holdings Inc applied for the same string on behalf of Merck & Co, which was originally the US subsidiary of the German outfit. The US firm was seized by the US government and subsequently became independent during World War I.
Despite the substantial pedigrees of these multi-billion dollar businesses, neither were able to muster up the required 14/16 points to be considered a “Community” under ICANN CPE standards.
The German firm scored 11 points, the American 9.
The main failing in both evaluations, which were conducted by the Economist Intelligence Unit, was the existence of the other.
Both applicants defined their communities as their own companies and lost points because “.merck” did not uniquely identify all legitimate users of the string.
Both panels marked the applications down for “over-reaching substantially beyond the community” by not including the rival company in its community definition.
The US company also lost a couple of points for failing to come up with a list of registration restrictions.
As neither company has passed CPE, the next step of the ICANN process would have them attempt to resolve the contention set privately. Failing that, they would go to an ICANN last-resort auction.
Another possibility, an increasingly favored choice among CPE losers, would be an interminable series of ICANN process appeals and lawsuits.

Afilias buys three gTLDs from Starting Dot

Registry upstart StartingDot has sold its small portfolio of new gTLDs to Afilias.
.archi, .bio and .ski are the three components of the package.
While the size of the deal was not disclosed, retail prices and zone file volumes suggest the portfolio probably brings in about $2 million a year in revenue.
The biggest seller of the three is .bio, which was originally intended for farmers but its basically unrestricted and has a variety of use cases.
Given the high ticket price — around $90 a year retail — .bio has a surprisingly impressive 14,000 names under management.
.archi and .ski have fared less well, with 3,500 and 6,200 names in their respective zones. Both have premium fees — retailing at about $100 and $60 a year respectively.
Due to the high prices, Afilias gets to call these TLDs “premium”.
.archi is the only one of the three to have registration restrictions — you need to be an architect to get one.
Both .archi and .bio have been available to buy for a couple of years, while .ski’s first renewal cycle is about a month away.
All three sell predominantly through European registrars. Starting Dot is itself based in Paris and Dublin.
The deal seem to have been struck due to Afilias’ we-buy-any-TLD offer, which executives discussed with us a year ago.
Afilias said that StartingDot execs Godefroy Jordan and Stephane Van Gelder will continue to be employed for a transition period.

Donuts rolls the dice with $22.5 million .web lawsuit

Donuts is demanding ICANN pay up the $22.5 million it reckons it is owed from the auction of the .web gTLD, which sold late last month for $135 million.
The company yesterday amended its existing California lawsuit against ICANN to allege that Verisign tried to avoid regulatory scrutiny by secretly bankrolling successful bidder Nu Dot Co.
The updated complaint (pdf) reads:

VeriSign’s apparent acquisition of NDC’s application rights was an attempt to avoid allegations of anti-competitive conduct and antitrust violations in applying to operate the .WEB gTLD, which is widely viewed by industry analysts as the strongest competitor to the .COM and .NET gTLDs.

Donuts wants a minimum of $22.5 million, which is roughly what each of the six losing .web applicants would have received if the contention set had been resolved via private auction.
(I previously reported that number as $18.5 million, because I accidentally counted .webs applicant Vistaprint as losing .webs applicant, when in fact it won .webs, paying $1.)
The company’s claims are still based around the allegation that ICANN breached its duties by failing to root out Verisign as the puppet-master.
The complaint alleges breach of contract, negligence, unfair competition and other claims. It says:

ICANN allowed a third party to make an eleventh-hour end run around the application process to the detriment of Plaintiff, the other legitimate applicants for the .WEB gTLD and the Internet community at large.
…
ICANN intentionally failed to abide by its obligations to conduct a full and open investigation into NDC’s admission because it was in ICANN’s interest that the .WEB contention set be resolved by way of an ICANN auction.

The irony here is that Ruby Glen LLC, the Donuts company that applied for .web, is subject to an arrangement not dissimilar to NDC’s with Verisign.
Ruby Glen is owned by Covered TLD LLC, in turn a wholly-owned Donuts subsidiary.
It’s well-known that fellow portfolio registry Rightside has rights to acquire Covered TLD’s over 100 applied-for strings, but this is not disclosed in its .web application.
ICANN will no doubt make use of this fact when it files its answer to the complaint.
Verisign itself has not been added as a defendant, but much of the new text in the complaint focuses on its now-confirmed involvement with NDC. The suit reads:

Had VeriSign’s apparent acquisition of NDC’s application rights been fully disclosed to ICANN by NDC… the relationship would have also triggered heightened scrutiny of VeriSign’s Registry Agreements with ICANN for .COM and .NET, as well as its Cooperative Agreement with the Department of Commerce.

The fact that Verisign is allowed to collect over half a billion dollars cash every year as a result of its state-endorsed monopoly is a longstanding cause of embarrassment for the Department of Commerce.
It has taken an interest in regulating Verisign’s .com contract in the past — it’s the only reason Verisign has not been able to raise .com prices in the last few years.
But the US government is not a party to the .web contract (unlike .com, where it has a special relationship with Verisign) and is not involved in the new gTLD program’s management or policies.
The complaint also makes reference to a completely unrelated Independent Review Process declaration from last week, which slammed ICANN for its lack of accountability and transparency.
Donuts faces the additional problem that, like all new gTLD applicants, it signed a covenant not to sue ICANN when it applied for its new gTLDs.
A judge in the DotConnectAfrica v ICANN can has allowed that lawsuit to proceed, regardless, but it may prove a stumbling block for Donuts.
It all looks a bit flimsy to me, but I’ve learned not to second-guess American judges so we’ll just have to see how it plays out.