New gTLDs not an illegal conspiracy, court rules

ICANN has beaten off a lawsuit from alternate root provider name.space for a second time, with a US appeals court ruling that the new gTLD program was not an illegal conspiracy.
name.space sued ICANN in 2012, claiming that the program broke competition laws and that “conflicted” ICANN directors conspired with the industry in an “attack” on its business model.
The company runs an alternate DNS root containing hundreds of TLDs that hardly anyone knows about, cares about, or has access to.
Almost 200 of the strings in its system had matching applications in the 2012 new gTLD round; many have since been delegated.
The company’s complaint asked for an injunction against all 189 matching TLDs.
But a court ruled against it in 2013, saying that name.space had failed to make a case for breaches of antitrust law.
Last week, an appeals court upheld that ruling, saying that the company had basically failed to cross the legal threshold from simply making wild allegations to showing evidence of an illegal conspiracy.
“We cannot… infer an anticompetitive agreement when factual allegations ‘just as easily suggest rational, legal business behavior.’,” the court ruled, citing precedent.
“Here, ICANN’s decision-making was fully consistent with its agreement with the DOC [US Department of Commerce] to operate the DNS and the Root,” it wrote. “In transferring control to ICANN, the DOC specifically required it to coordinate the introduction of new TLDs onto the Root. This is exactly what ICANN did in the 2012 Application Round”.
“The 2012 rules and procedures were facially neutral, and there are no allegations that the selection process was rigged,” the panel ruled.
The court further ruled that ICANN is not a competitor in the markets for domain names as registry, registrar or defensive registration services, therefore it could not be subject to antitrust claims for those markets.
A few other claims against ICANN were also dismissed.
In short, it’s a pretty decisive victory for ICANN. General counsel John Jeffrey said in a statement that ICANN is “pleased” to have won.
All the major documents in the case, including the latest opinion, can be downloaded here.
While the lawsuit has been making its way through the courts, the .space gTLD has actually been delegated and the domain name.space is owned by its new registry, Radix.
There’s some salt in the wounds.

Most governments keep restrictions on country names in new gTLDs

Just one out of every 10 governments in the ICANN Governmental Advisory Committee is happy for people to register its country name in new gTLDs.
That’s according to a new GAC database detailing which countries want to keep tabs on how their names are being used.
Out of 80 GAC members contributing to the database, just eight have said registries can sell their country names with no restrictions.
The eight countries and territories are the UK, the USA, Denmark, Finland, Netherlands, Sweden, Guernsey and Pitcairn.
New gTLD registries will therefore be able to auction off, for example, finland.guru or pitcairn.news, to whoever wants them.
Another 10 governments — Belgium, Brazil, Bulgaria, Czech Republic, Georgia, Montenegro, New Zealand, Romania, Spain and Switzerland — have relinquished oversight in the case of dot-brand registries that have signed Specification 13 of the ICANN Registry Agreement.
So if Sony wants to register brazil.sony to itself, it can without restrictions.
Under the new gTLD Registry Agreement, all country and territory names in the six official UN languages have to be reserved by all registries unless they can reach agreement with the applicable government.
The 18 governments mentioned above have basically waived this right to be notified in whole or in part.
The remaining 62 governments say they still wish to be notified when a registry wants to release its name.
GAC chair Thomas Schneider told ICANN (pdf) that countries not yet listed in the database should be treated as if they’re still restricted, so the actual number is closer to 200.
In short, this database is not a lot of help to dot-brands and other registries that want to start using or selling country names.
Critics have pointed out that many governments wanting to regulate their names in new gTLDs have not done so in their own ccTLDs.
Of the 62, ownership of country names is mixed. Italy owns italy.it and italia.it, for example, while germany.de and deutschland.de appear to be in private hands.

Sharp wants dot-brand Whois requirement relaxed

Electronics firm Sharp wants to remove part of its new gTLD registry contract relating to Whois.
The company has filed a Registry Services Evaluation Process request to get its requirement to offer “searchable Whois” dropped. RSEP is the mechanism registries use to amend their contracts.
ICANN’s initial review has not found any security, stability or competition problems and has now opened the request up for public comment.
Because .sharp will be a dot-brand, all the domains would belong to Sharp and its affiliates, reducing the value of searchable Whois.
Searchable Whois is an enhanced Whois service that allows users to search on all fields (such as registrant, email address, etc) rather than just the domain name.
Such services are not mandatory under ICANN’s new gTLD rules, but applicants that said they would offer them could score an extra point in their Initial Evaluation.
In Sharp’s case, a one-point difference would not have affected the outcome of its IE. In any event, it did not score the extra point.
Sharp said it was requesting the change because it’s switching back-ends from GMO Internet to JPRS, which apparently does not or does not want to support searchable Whois.

Neustar becomes “world’s largest registry” with $87m ARI buy

Consolidation in the domain name industry continued last night with Neustar’s $87 million acquisition of Bombora Technologies, the holding group for ARI Registry Services and AusRegistry.
Bombora CEO Adrian Kinderis told DI that the deal makes Neustar the “biggest registry services back-end provider on the market”, as measured by the number of TLDs on its platform, which now weighs in at over 400.
Kinderis and Neustar registry VP Sean Kaine said that the acquisition — conceived as so many deals are, Kinderis joked, in a “drunken ICANN bar” — is not so much about consolidation and more about growth opportunities.
Neustar will be able to cross-sell its suite of identity, security and marketing services, which Bombora does not offer, into ARI’s 100+ TLD client base. It will also be able to pitch ARI’s consulting services to its own clients.
Neustar also gets a “beachhead” in the Asia-Pacific region. While Bombora may not be a hell of a lot closer to Asia than Neustar, it’s in a much more convenient time zone.
Neustar currently faces the losing about half of its annual revenue — some $475 million — due to the loss of its contract to administer telephone number portability in North America.
That contract has been won by Ericsson, but Neustar has sued the US Federal Communications Commission in an attempt to keep it.
The Bombora acquisition won’t exactly fill the gap. The company had $20.6 million in revenue in 2014 and is expected to contribute $8 million to Neustar’s top line in 2015.
The deal is for AUD 118 million, which works out to roughly USD 87 million. Kinderis and business partner Simon Delzoppo will be the primary beneficiaries — between them they held a majority shareholding in Bombora.
The deal includes all of the company’s subsidiaries: ARI, AusRegistry and new gTLD operators such as dotShabaka.
ARI clients will notice a change of branding — the ARI and Bombora brands are to go almost immediately — but no technical changes at first.
“We’re going to continue to operate two registry systems right now,” Kaine said.
One business where there will be even less visible change is AusRegistry, which operates .au.
The AusRegistry brand is staying and .au will continue to be run in Australia, per the terms of the company’s contract with ccTLD policy overseer auDA.
“The .au contract is very important to Bombora,” Kinderis said. “If we had thought there would be any negative impact to that contract we would not have embarked on a deal.”
Kinderis, whose new job title has yet to be agreed, said he expects to take a “prominent role” in Neustar’s registry business. He said he expects to stay with the company “for a long time yet”.
“I want to see Neustar snapping at the heels of Verisign and I’d love to be able to contribute to that,” he said. “We’ve been punching above our weight and now we’re one of the heavyweights.”

As deadline looms, over 100 dot-brands still in contract limbo

With the minutes ticking down to the deadline for scores of dot-brands to sign registry agreements with ICANN, over 100 have not, according to ICANN’s web site.
New gTLD applicants had until July 29 to sign their contracts or risk losing their deposits.
I reported a week ago that roughly 170 would-be dot-brands had yet to sign on the dotted line, and my records show that only 35 have done so in the meantime.
Another four applications have been withdrawn.
One of the newly contracted parties is Go Daddy, which signed an RA for .godaddy last week. Others include .nike, .comcast and .mitsubishi.
Unless we see a flood of new contracts published over the next day or two, it seems likely well over 100 strings will soon be flagged as “Will Not Proceed” — the end of the road for new gTLD applications.
That may not be the final nail in their coffins, however.
Last week, ICANN VP Cyrus Namazi said that applicants that miss today’s deadline will receive a “final notice” in about a week. They’ll then have 60 days to come back to the process using the recently announced Application Eligibility Reinstatement process.

Another new gTLD up for sale with $750,000 reserve

Another new gTLD contract is hitting the market, with Dotversicherung-registry offering .versicherung at auction next month.
The August 26 auction, to be managed by RightOfTheDot and Heritage Auctions, has a $750,000 reserve.
The string is the German word for “insurance”. The gTLD launched 10 months ago.
“There are over 3,000 domain names registered to the German speaking insurance industry at 99 euro’s a year with virtually no advertising, marketing or promotion,” RightOfTheDot’s Monte Cahn said.
Retail prices range from 150 euros to 250 euros a year.
The registry has 10,000 reserved keyword domains that will pass to the buyer, according to RightOfTheDot.

Flood of wait-and-see dot-brands expected this week

ICANN expects to sign as many as 170 new gTLD contracts with dot-brand applicants over the coming week.
Dot-brands that have been treading water in the program to date are up against a hard(ish) July 29 deadline to finally sign a Registry Agreement with ICANN.
VP of domain name services Cyrus Namazi told DI today that ICANN expects most of the backlog to be cleared in the next couple of weeks.
“The end of the July is a bit of a milestone for the program as a whole,” Namazi said. “A substantial number of contracts will be signed off and move towards delegation.”
“I think within a short period after the end of July most of these will be signed off,” he said.
There are currently 188 applications listed as “In Contracting” in the program. Namazi and myself estimate that roughly 170 are dot-brands, almost all of which have July 29 deadlines.
Namazi said that ICANN has planned for a last-minute rush of “hundreds” of applicants trying to sign contracts in the last month.
The July 29 deadline for dot-brands was put in place because of delays creating Specification 13 of the RA — that’s the part that allows dot-brands to function as dot-brands, by eschewing sunrise periods for example.
For most dot-brand wannabes, it was already an extension of nine months or more from their original deadline.
But it seems inevitable that some will miss the deadline.
Namazi said that those applicants that do miss the deadline will receive a “final notice” about a week later, which gives the applicant 60 days to come back to the process using the recently announced Application Eligibility Reinstatement process.
That creates a new deadline in early October. Applicants that miss that deadline might be shit outta luck.
“They’ll essentially just sit in a bucket that will not be proceeding,” Namazi said. “We don’t have a process to reactivate beyond that.”
So why are so many dot-brand applicants leaving it so late to sign their contracts?
The answer seems to be, essentially: lots of them are playing wait-and-see, and they still haven’t seen.
They wanted to see how other dot-brands would be used, and there’s not a lot of evidence to draw on yet. The number of dot-brands that have fully shown their cards could be counted on your fingers. Maybe even on just one hand.
“Some of them have a different level of enthusiasm for having their own TLD,” Namazi said. “Some of them don’t have their systems or process in place to accept or absorb a new TLD. Some of them don’t even know what to do with it. There may have been some defensive registrations in there. There were probably expectations in terms of market development for new TLDs that have gone a bit slower than some people’s business plans called for.”
“That has probably made some of the large brands more hesitant in terms of rushing to market with their new TLDs,” he said.

.sucks won’t discount its fee for $10 domains

Vox Populi Registry is looking for a free speech advocate partner willing to absorb hundreds of thousands, maybe even millions, of dollars in costs.
The .sucks registry has for many months promised that later this year it will introduce a Consumer Advocate Subsidies program that will enable people to get a .sucks for the deeply discounted price of $10 a year.
Currently, the standard recommended retail price of a .sucks is $249, with a registry fee of $199.
Users of the subsidy program would get their names for $10 or under but they’d have to agree to host a free forum on the site, open to anyone that wanted to criticize (or, I guess, praise) the subject of the domain.
It has been broadly assumed that the subsidy would be matched by a discount in the registry fee.
But it’s emerged that Vox Pop has no plans to lower its own fees in order to offer the subsidy.
Essentially, it’s looking for a partner willing to swallow a cost of essentially $189 a year for every subsidized domain name.
CEO John Berard said in a blog post this week, and has subsequently confirmed to DI, that the subsidy is a subsidy and not a discount.
Vox Pop will still demand its full wholesale registry fee for every .sucks domain that is sold. Berard blogged:

Whether a registration is subsidized, the price to the registrar and registry is unaffected. That is the nature of a subsidy. Neither is the program to be offered by the registry. We are talking to a number of free speech advocates and domain name companies to find the right partner.

“The partner has to be one committed to free speech and confident in its ability to rally contributions to underwrite the activity,” Berard told DI.
To me, this proposition suddenly looks hugely unattractive.
There are over 6,000 domains in the .sucks zone today, just a month after general availability began, and that’s with registrants paying $250 to $2,500 a year.
With a $10 free-for-all, the number of registrations would, in my view, spike.
Unless there was some kind of gating process in place, the subsidy partner would likely face hundreds of thousands of dollars in recurring annual fees almost immediately. It could escalate to millions a year over the long run.
I’m trying to imagine how an organization such as Which? (which I’m guessing is the kind of organization Vox Pop is talking to) would benefit from this arrangement.
There is “quite an interest” in signing up to become the subsidy partner, Berard said. He said that in some cases potential partners are looking for marketing opportunities or ways to “enhance their reputation”.
Details of subsidy program are expected to be announced early in the fourth quarter.

What split? TLD webinar series folded into the DNA

A TLD operators’ webinar series initially cast as a community group has been folded in to the Domain Name Association.
The DNA has announced the creation of the DNA University, which promises to pick up where the TLD Operators Webinar left off.
Tony Kirsch of ARI Registry Services has been appointed inaugural “Dean” of the University.
The first webinar will be entitled “Premium Domain Name Planning” and will be held July 28 at 1500 UTC.
Future webinars, which are open to all registries, registrars and new gTLD applicants, will address subjects including IDNs, rights protection, contractual compliance, and many more.
The TLD Operators Webinar was originally called the TLD Operators Community and characterized as a new industry group, which led to gossip about a split within the DNA.
The program was hurriedly re-branded and re-domained to clarify that it was more, as ARI CEO Adrian Kinderis put it, “a one off effort by our consultancy team to get everyone together for a chat.”
Now it’s just a service under the DNA umbrella.

Read that controversial .africa letter

Did the African Union Commission really use a letter written by ICANN to express its support for ZA Central Registry’s .africa bid?
Having now obtained and read it, I have my doubts.
I’m publishing it, so you can make your own mind up. Here it is (pdf).
That’s the letter that The Register’s Kieren McCarthy reported yesterday was “ICANN-drafted” and “duly signed by the AUC”
“Essentially, ICANN drafted a letter in support of ZACR, gave it to the AUC, and the AUC submitted the letter back to ICANN as evidence that ZACR should run dot-africa,” The Reg reported.
I don’t think that’s what happened.
What I see is a two-page letter that has one paragraph indisputably written by ICANN and whole bunch of other stuff that looks incredibly remarkably like it was written by the AUC and ZACR.
And that one ICANN paragraph was drawn from the new gTLD program’s Applicant Guidebook, where it was available to all governments.
The Reg reported that ICANN, in the unredacted ruling of the Independent Review Panel, admitted it drafted the letter.
What The Reg didn’t report is that ICANN merely admitted to sending the AUC a letter based on the aforementioned AGB template, and that it was subsequently heavily revised by the AUC.
It was not, I believe, a simple case of the AUC putting its letterhead and John Hancock on an ICANN missive.
I believe that ZACR had quite a big hand in the redrafting too. The stylized “.africa (dotAfrica)” is not how ICANN refers to gTLDs, but it is how ZACR refers to its own brand.
The letter was written in order to satisfy the requirements of the Geographic Names Panel, which reviews new gTLD applications for the required government support.
The original AUC letter (read it here) was simply one paragraph confirming that ZACR had been appointed .africa registry, as the winner of an African Union RFP process.
It didn’t have enough information, or was not specific and formal enough, for the GNP, which issued a “Clarifying Question”.
In response to the CQ, it seems AUC reached out to ICANN, ICANN sent over something not dissimilar to its AGB template, the AUC and ZACR redrafted, edited and embellished it and sent it to ICANN to support their .africa application.
Did ICANN act inappropriately? Maybe. But I’m losing my enthusiasm for thinking about this as a massive scandal.