Is the free ride over for Verisign’s .net?

Verisign’s .net is on the rocks due to new gTLDs, executives have confirmed.
Speaking to investors and analysts on the company’s third-quarter earnings call last week, CFO George Kilguss said that .net “is experiencing some headwinds from the launch of the new gTLD program”.
Further comments from Kilguss and CEO Jim Bidzos seem to confirm what DI reported a month ago: .net is in trouble.
Latest stats collated by DI show that the .net zone file shrunk by over 121,000 domains in the seven months between March 26 and October 26 this year.
Executives said on the call that .net stood at 15.1 million names at the end of September. That compares to 15.2 million at the end of the previous quarter.
“It’s been relatively flat,” Kilguss said. “I actually think .net has held up pretty well over the year with all these new names coming on… So I don’t view .net’s performance as anything negative.”
Bidzos told analysts that “confusion” around the new gTLDs was to blame.
“I think generally, .net may be more susceptible to that confusion that swirls around new gTLDs,” he said.
He characterized .net as being like new gTLDs, falling into “that category of ‘different'”.
In my view, this is an implicit acknowledgement that .net has been getting a free ride for the last 20 years.
Asked whether the .net weakness could spill over to .com, Bidzos said that .com is a “trusted brand” because it’s almost 30 years old and has a 17-year record of uninterrupted up-time.
While there’s no doubt that .com is a trusted brand, it’s not because of its up-time or longevity, in my view — .net has the same stability record and is actually fractionally older than .com.
The reason .net is suffering now is that that for the last two decades it’s been essentially a defensive play.
People buy the .net when they buy the .com because they’ve been marketed as a bundle — the only two truly generic TLDs out there. Unlike .org, .net lost its semantic differentiation a long time ago.
As .com buyers start to see more and more options for duplicative or defensive registrations in their shopping carts, they’re going to be less likely to grab the .net to match their .com, in my opinion.
And it’s likely to get worse.
“It’s going to continue,” Bidzos said. “We’re seeing hundreds of more new gTLDs coming, and they’re coming at the rate of many every single week. So that confusion is likely to get worse.”

Two-letter domains to be released in new gTLDs

New gTLD registries will be able to release all two-character strings in their zones, following an ICANN decision last week.
The ICANN board of directors voted on Thursday to instruct ICANN’s executive to

develop and implement an efficient procedure for the release of two-character domains currently required to be reserved in the New gTLD Registry Agreement

The procedure will have to take into account the advice of the Governmental Advisory Committee issued at the end of last week’s ICANN 51 meeting in Los Angeles.
But that advice merely asks that governments are informed when a registry requests the release of two-character names.
All two-character strings were initially reserved due to the potential for confusion with two-letter ccTLDs.
But the GAC decided in LA that it doesn’t really have a problem with such strings being released, with some governments noting that ccTLD second-levels such as us.com and uk.com haven’t caused a problem to date.
The board’s decision is particularly good news for dot-brand applicants that may want to run domains such as uk.google or de.bmw to service specific regions where they operate.
Registries representing over 200 new gTLDs have already filed Registry Service Evaluation Process requests for the release of some two-character strings (some including ccTLD matches, some not).
It’s not yet clear how ICANN will go about removing the two-character restriction.
It may be more efficient to offer all registries a blanket amendment to the RA rather than process each RSEP request individually as it is today.
However, because the GAC has asked for notification on a case-by-case basis, ICANN may be forced to stick to the something along the lines of the existing procedure.

Two new gTLD confusion decisions thrown out

ICANN has reopened the contention sets for .cam and .通販 after deciding that two String Confusion Objection panels may have been wrong to reject certain applications.
Two rulings — that .cam is confusingly similar to .com and that .通販 is confusingly similar to .shop (really) — will now head to an appeals panel for a “final” determination.
The decision was made by the ICANN board’s New gTLD Program Committee this week at the ICANN 51 public meeting in Los Angeles.
The first case being reopened for scrutiny is Verisign versus Rightside, where the original SCO panel found that .cam and .com were too similar to coexist on the internet.
But a different panelist found that the two strings were not confusingly similar in objections filed by Verisign against two other applicants — Dot Agency and AC Webconnecting.
The opposing rulings meant that Rightside’s application would have been kicked out of the .cam contention set, which hardly seems fair.
This and many other “perceived inconsistencies” led to the ICANN board being pressured to come up with some kind of appeals process, which it agreed to do in February.
Verisign, unfairly in my view, was not given the opportunity to appeal the two .cam decisions that went against it, even though they were made by the same panelist for the same reasons.
The second, altogether more peculiar, case was .shop applicant Commercial Connect versus .通販 applicant Amazon.
The panelist in that case seemed to have checked his brain at the door that day, concluding that the two strings are confusingly similar simply because 通販 means “online shopping” in Japanese.
Another panelist, in a different case also involving Commercial Connect, had found that .购物 (Chinese for “shopping”) was not confusingly similar to .shop because duh.
ICANN’s NGPC has now decided that the two controversial decisions are “not being in the best interest of the New gTLD Program and the Internet community”.
Both .cam and .通販 will now be referred to a three-person panel at the International Center for Dispute Resolution, the same body that processed the original objections, for a final determination.

Governments totally cool with two-letter domains

ICANN’s Governmental Advisory Committee does not plan to advise against the release of two-character domain names in new gTLDs.
In fact, judging by a GAC discussion at ICANN 51 in Los Angeles yesterday, the governments of many major nations are totally cool with the idea.
Under the standard Registry Agreement for new gTLD registries, all two-character domains (any combination of letters, numbers) must not be sold or activated in the DNS.
The blanket ban was designed to avoid clashes with two-letter ccTLD codes, both existing and future.
ICANN left the door open for registries to request the release of such names, however, and many companies have formally applied to do so via the Registry Services Evaluation Process.
Some registries want all two-character domains released, others have only asked for permission to sell those strings that do not match allocated ccTLDs.
There seems to have been an underlying assumption that governments may want to protect their geographic turf. That assumption may turn out to be untrue.
Representatives from the United States, Netherlands, Spain, Denmark, Australia, Austria and Iran all said yesterday that the GAC should not issue formal advice against the the two-character proposals.
No governments opposed that apparent consensus view.
“The use of the ‘US’ two-letter country code at the second level has not presented any technical or policy issues for the United States,” US rep Suzanne Radell said.
“We, in fact, do not require any approval for the use of US two-character country codes at the second level in existing gTLDs, and do not propose to require anything for new gTLDs,” she said.
She even highlighted domains such as us.com and us.org — which are marketed by UK-based CentralNic as alternatives to the .us ccTLD — as being just fine and dandy with the US government.
It seems likely that the GAC will instead suggest to ICANN that it is the responsibility of individual governments to challenge the registries’ requests via the RSEP process.
“What we see at the moment is that ICANN is putting these RSEP requests out for public comment and it would be open to any government to use that public comment period if they did feel in some instances that there was a concern,” Australian GACer Peter Nettlefold said.
I’ve not been able to find any government comments to the relevant RSEP requests.
For example, Neustar’s .neustar, which proposes the release of all two-character strings including country codes, has yet to receive a comment from a government.
Many comments in other RSEP fora appear to be from fellow dot-brand registries that want to use two-letter codes to represent the countries where they operate.

Music industry gets its ass handed to it by gTLD panel

The music industry-backed application for the new gTLD .music today suffered a humiliating defeat at the hands of a Community Priority Evaluation panel.
The Far Further (.music LLC) application scored a pitiful 3 out of 16 possible points in the evaluation, missing the required 14-point passing threshold by a country and western mile.
CPE is a way for applicants representing genuine communities to avoid an auction. If one applicant in a contention set wins a CPE, all the others must withdraw their applications.
But in this case the CPE panel went so far as to accuse the applicant of attempting to get its hands on a nice generic string by creating a new community, rather than by representing an existing one:

The Panel determined that this application refers to a proposed community construed to obtain a sought-after generic word as a gTLD. Moreover the applicant appears to be attempting to use the gTLD to organize the various groups noted in the application documentation, as opposed to applying on behalf of an already organized and cohesive community.

The application was backed by dozens of music industry trade groups and (by inference) thousands of their member associations and millions of individual members, spread over 150 countries.
But that wasn’t enough to persuade the CPE panel that “music” is even a “community” within the meaning of the ICANN new gTLD program’s Applicant Guidebook:

While the Panel acknowledges that many of the members in the proposed community share an interest in music, the AGB specifies that a “commonality of interest” is not sufficient to demonstrate the requisite awareness and recognition of a community among its members.

The panel pointed to the existence of legions of amateur musicians — estimated at 200 million — that do not identify with the community as defined in Far Further’s new gTLD application, which is restricted to the four million or so members of the application’s backers.
The panel found therefore that “there is no entity mainly dedicated to the entire community as defined by the applicant, nor does the application include reference to such an organization”.
The very fact that the Far Further application included reference to 42 trade groups, covering different facets of the music industry, seems to have counted against it. One overarching body dedicated to “music” in its entirety may have been enough to win the applicant some points.
The fact that the panel decided the community did not exist had a knock-on effect in other parts of the evaluation.
Has the community been around for a long time? No, because the community doesn’t exist. Is it a big community? No again, because the community doesn’t exist. And so on.
The only places Far Further managed to pick up points were on its registration policies, where it had promised to restrict registration to certain community members, and on community endorsement.
There are eight applicants for .music in total. One other, regular DI commenter Constantine Roussos’ DotMusic Limited, is also a Community application that is eligible for CPE.
It’s always seemed highly improbable that any .music applicant could pass CPE, but it’s looking even less likely for DotMusic after today’s result for Far Further.
.music, it seems, is heading to auction, where it is likely to fetch big bucks.

.now and .realestate will be restricted, but Donuts keeps .tires open

It was a battle between open and restricted registration rules this week, as three more new gTLD contention sets were resolved between applicants with opposing policies.
Donuts won .tires (open), Amazon won .now (closed) and the National Association of Realtors won .realestate (restricted).
Donuts beat Goodyear and Bridgestone — two of the biggest tire companies in the world — to .tires. Both withdrew their respective applications over the last week.
If it was an auction it was not conducted via the usual new gTLD auction houses. It seems like Donuts settled the contention privately (or maybe just got lucky).
Both tire companies had proposed single-registrant closed generic spaces. Donuts, of course, has not.
Goodyear has active dot-brand applications for .goodyear and .dunlop remaining. Bridgestone has active applications for .bridgestone and .firestone, also dot-brands.
Amazon, meanwhile, won the .now contention set over five other applicants — Starbucks HK, XYZ.com, One.com, Global Top Level and Donuts, which have all withdrawn their bids.
Amazon’s application for .now envisages a closed registry in which all the second-level domains belong to the company’s intellectual property department.
Also this week, the NAR, which already has the dot-brand .realtor under its belt, beat Donuts, Minds + Machines and Uniregistry to the complementary generic .realestate.
Unfortunately for estate agents worldwide, the NAR plans a tightly restricted .realestate zone, in which only its own members will at first be able to register, according to its application.
The application does seem to envisage a time when others will be permitted to register, however.
The organization said in a press release this week that .realestate will be more open than .realtor, but that full policies will not be released until next year.

“Frustrated” Morocco denies it supported .tata gTLD

The Moroccan government claims that it did not give its support to the .tata dot-brand gTLD, which was granted to Tata Group, the massive Indian conglomerate, in July.
According to Boubker Seddik Badr, director of digital economy at Morocco’s ministry of trade, .tata “did not receive any endorsement from any Moroccan authority”.
In a September 17 letter (pdf), he expressed his “surprise and very deep frustration” that .tata had been approved by ICANN regardless.
Under ICANN rules, .tata was classified as a “geographic” string because it matches the name of a Moroccan province found on an International Standards Organization list of protected names.
But Tata’s application was finally approved — it was the last bid to pass through evaluation — after a period Extended Evaluation. Its evaluation report (pdf) reads:

The Geographic Names Panel has determined that your application falls within the criteria for a geographic name contained in the Applicant Guidebook Section 2.2.1.4, and the documentation of support or non-objection provided has met all relevant criteria in Section 2.2.1.4.3 of the Applicant Guidebook.

The Guidebook states that letters of support or non-objection:

could be signed by the minister with the portfolio responsible for domain name administration, ICT, foreign affairs, or the Office of the Prime Minister or President of the relevant jurisdiction; or a senior representative of the agency or department responsible for domain name administration, ICT, foreign affairs, or the Office of the Prime Minister.

It’s not clear what documentation Tata provided in order to pass the geographic names review.
Tata Group is a family-owned, $103.27 billion-a-year conglomerate involved in everything from oil to tea to cars to IT consulting to airlines.
The company does not yet appear to have signed a Registry Agreement with ICANN for .tata.
ICANN is to hold its 52nd week-long public meeting in Marrakech, Morocco in February 2015.

OVH to give away 50,000 new gTLD names for free

France-based registrar OVH is to make up to 50,000 domain names in its new gTLD .ovh available for free.
According to its web site and a bulletin send to customers today, the regular price of £2.69 ($4.35) will be waived for the first year and renewal pricing will be discounted.
The first 20,000 names registered will renew at £1.01 ($1.63), the remaining 30,000 names will renew at £2.03 ($3.29). There will be a limit of five domains per customer.
While “free” is not an unusual business model in the new gTLD round, .ovh is noteworthy for several other reasons.
It’s the first “dot-brand” new gTLD to accept registrations from third parties, for starters.
It’s also the only live dot-brand belonging to an accredited domain name registrar.
The restrictions on the gTLD also raise eyebrows — in order to register a name in .ovh, you need an OVH customer number.
So while the .ovh names should in theory be available via third-party registrars, such registrars would have to capture the OVH customer number of their own customers — or encourage their own customers to become OVH customers — in order to process the registration.
Unsurprisingly, there’s no mention of any approved third-party registrars on the official .ovh web site.
General availability begins at 1000 UTC Wednesday October 2.
Thanks to Andrew Bennett for the tip.

.bayern starts GA with almost 20,000 names

Bayern Connect took its .bayern new gTLD into general availability yesterday and secured close to 20,000 registrations.
This morning’s zone file count shows that at least 19,121 domains were registered during .bayern’s combined sunrise/landrush period, which ended a few weeks ago.
GA kicked off at 1300 local time yesterday.
There are no local presence requirements to register names, according to the registry’s web site.
Bayern in the German word for Bavaria, Germany’s second most-populous state. It has 12.5 million inhabitants, 1.5 million of whom live in its capital, Munich.
It’s the third most-successful geographic gTLD launch of the current round, after .london’s 35,000 names and .berlin’s 33,000.
On a per-head basis, however, the numbers don’t look so good.
While .koeln, the gTLD for the city of Cologne, had one registered domain for every 79 inhabitants at the end of its first GA day, .bayern has one domain per 663 people. The numbers for .berlin and .london were 106 and 240 respectively.

Safeway pulls all four new gTLD apps

Retail giant Safeway has removed itself from the new gTLD program entirely, last week withdrawing all four of its applications.
The $139-billion-a-year company had applied for the dot-brands .safeway, .vons, .justforu and the generic .grocery, but all four bids are now showing as withdrawn.
Now that Safeway has withdrawn, the only remaining applicant for .grocery is rival retailer Wal-Mart.
.grocery had been applied for as a “closed generic”, in which Safeway would be the only eligible registrant.
The ICANN Governmental Advisory Committee had advised against closed generics on consumer protection grounds.
When ICANN pressed applicants for such strings to clarify whether they were in fact “closed generics”, Safeway denied (pdf) that .grocery was.
Wal-Mart, on the other hand, said that its .grocery would be restricted to Wal-Mart and its affiliates.