Nominet warns of government takeover as Namecheap backs fire-the-directors campaign

Nominet has raised the specter of a government takeover of the .uk registry, should members vote to oust five of its top directors at an Emergency General Meeting a week from now.

The warning came as part of the company’s anti-EGM publicity, and at a time when the campaign for a Yes vote has passed 25% of eligible votes, with Namecheap becoming the biggest name yet to support the ouster.

In a blog post, the company refers readers back to the Digital Economy Act of 2010, which in part gives the UK government the ability to unilaterally take over .uk, should Nominet seriously mess up:

It means that the government can step in, if Nominet is ever considered unstable or not capable of governing itself.

Removing five directors, including two of the four independents, and pressuring the remaining directors to install candidates outside normal procedures, as the EGM petitioners seek to do, would be a huge step backwards in terms of good governance. We have been warned that instability will be of serious concern to government. We know it would create a scenario which would make intervention more likely.

That part of the Act was brought in because at the time Nominet was perceived to be at risk of capture by domain investors. It has since reformed its constitution to make this less likely.

The current situation could be seen as a replay of the situation 11 years ago, with many of those most unhappy with Nominet’s recent strategy among the domainer community.

The campaign, PublicBenefit.uk, wants to fire five directors including the chair and CEO and replace them with two new appointments who have promised to lower .uk domain prices and direct more profit to public benefit causes.

As of today, the campaign has 429 member signatories, representing 25.1% of voting rights. This is probably enough to pass its resolutions, which call for a simple majority of members attending the EGM.

Namecheap has become the largest registrar so far to sign up. It’s the seventh-largest .uk registrar, with 201,355 domains under management. GoDaddy, 1&1 Ionos, Tucows, and the others in the top 10 are so-far undecided. Google has said it will abstain.

It’s debatable whether the Digital Economy Act applies here. The Act deems that a registry has failed under two quite narrow circumstances:

(a)the registry, or any of its registrars or end-users, engages in prescribed practices that are unfair or involve the misuse of internet domain names, or

(b)the arrangements made by the registry for dealing with complaints in connection with internet domain names do not comply with prescribed requirements.

Do either of those apply to PublicBenefit.uk’s demands? It looks like a stretch.

The EGM will take place March 22, next Monday, and right now it’s not looking great for Nominet’s top brass.

Nominet declares member coup “invalid”

Nominet has stared fighting back against a plot by some of its members to kick out the CEO, chair and three other directors, declaring part of the plan “invalid”.

The PublicBenefit.uk campaign, which currently has the backing of over 17% of members’ voting rights, wants to replace these five directors with two of its own choosing: former BBC Trust chair Sir Michael Lyons and former RIPE NCC managing director Axel Pawlik.

Nominet confirmed yesterday that it will shortly call the demanded Extraordinary General Meeting, as required by its bylaws, and that the resolution calling for the board cull will be voted on.

But it said it cannot allow the second resolution, which would bring in the two new directors, to go ahead. Chair Mark Wood wrote that such a move would be illegal under Nominet’s own rules on director selection:

we have unequivocal advice that the second resolution, seeking to designate Sir Michael Lyons and Axel Pawlik as Directors is invalid and cannot be put before members. We have reviewed this carefully with our legal advisors, and independent counsel, who have all advised us that this is the case. This is because Members may appoint directors only through the elections process specified by our constitution, articles and bylaws, and the maximum number of member-elected Board seats are already filled.

Wood goes on to say that to remove so many key directors and leave their seats empty would be a further destabilizing factor on the company, which runs the .uk registry.

The risk of leaving Nominet rudderless has been a key theme of the company’s response to PublicBenefit.uk since its petition first emerged last month. Nominet wants the EGM request withdrawn.

The campaign, which is fronted by Simon Blackler of Krystal Hosting, tweeted in response:

We sought legal advice before we started and believe both resolutions are valid.

If you’re truly worried about stability resign and appoint the Directors the members want?

The campaign wants a clean slate on the board in order to have Nominet reduce its wholesale prices, rein in its efforts at product diversification, and start returning more of its profits to public benefit causes.

Wood last week committed to pay £4 million to such causes in the first half of this year, double its 2020 contribution and a return to 2016 levels.

Nominet chair eats humble pie to stave off mass board cull

Nominet’s board of directors has outlined a series of changes it plans to make, including freezing its own pay and .uk domain prices, in an effort to avoid a member move to fire half the board, including the CEO and chair.

They’re also going to bring back the late, lamented member discussion forums.

Chair Mark Wood today wrote that Nominet plans to increase the amount of revenue it gives to “public benefit” purposes, which he said will hit £4 million by June, double last year’s amount.

After 2021, the company will donate 10% if its annual revenue to these causes, he said. That would be roughly £4.5 million a year, based on 2020 revenues, and roughly in line with 2015 levels, when the current senior management took over.

He went on to say that .uk registry fees will be frozen for two years. The last price increase went into effect last year after staying in place for four years.

The board won’t bump up its own salaries for two years either, Wood wrote.

The letter is in response to the member-driven move to fire Wood, CEO Russell Haworth, and three other members of the board, over what they see as mismanagement of the company. Currently, 13.6% of member votes — 196 registrars and individuals — have backed an Extraordinary General Meeting to hold this vote. This may be sufficient to successfully oust the targeted directors.

Among the demands of PublicBenefit.uk, initiated by Krystal Hosting, are an increased focus on public benefit causes, lower prices, improved member communications and a reversal of Nominet’s policy of diversification into non-registry services.

Wood thinks the EGM effort is foolhardy, however. He wrote:

Whatever the intention, the EGM proposal destabilises the organisation and, as a result, is not in the interest of members, registrars or registrants. If the EGM initiative achieves its aims, it will leave the company leaderless and facing an exodus of the highly-skilled staff we depend on to maintain the highly complex registry service we provide. It will erode trust and confidence in .UK, which is part of critical national infrastructure, and put Nominet’s independence at risk.

He’s proposing increased transparency of the cyber-security division, a new Registry Advisory Council, and new communication tools for members, including the launch of a “a well-governed next-generation member forum”.

The old forum was shut down last year, and announced (some members think with a certain amount of glee) by Haworth during Nominet’s Annual General Meeting. The forum was overly hostile to Nominet staff, he said at the time.

Wood now says “the decision to close the Nominet Forum, and the way in which this was done, damaged our relationship with some members in a way we had not intended.”

It’s quite a list of concessions from a board that clearly knows it’s on the ropes, but whether it’s enough to change the minds of large enough number of members remains to be seen.

Nominet boss has epiphany and calls for calm as his job hangs by a thread

Nominet’s CEO has abruptly taken a conciliatory tone with members in a new blog post, as support grows for his ouster.

Russell Haworth today posted that the organization and its members need to change the tone of their often-hostile arguments, and agreed to play his part in doing that in future.

In the next several weeks, Nominet will be forced to hold an Extraordinary General Meeting in which members will try to fire Haworth and most of the board of directors.

He also called for members to be “pragmatic” about Nominet’s strategy, reminding them that the internet is a very different and more dangerous place than the idealistic technology Eden that birthed it 25 years ago:

Nominet was founded at a time when the Internet was a palpable source of hope and optimism, long before it was considered critical national infrastructure, and before the very real challenges all of us now face keeping things running and safe.

We try to manage Nominet for the Internet that we have, even as we keep striving for the world where technology continues to deliver on its potential as a force for good.

As we know, today’s Internet sadly has too many bad actors bent on destruction and equipped with increasingly complex digital weaponry. Managing crucial elements of the UK’s Internet infrastructure requires that we bring a cold realism to the challenge and that we equip ourselves professionally and commercially to succeed.

This appears to be a justification for the company’s venture into commercial network security services, which Nominet’s critics believe is non-core, eating up resources that could otherwise be diverted to public benefit causes.

Simon Blackler of the registrar Krystal Hosting, who launched the petition for the EGM at PublicBenefit.uk, told DI:

He seems to be saying that Nominet needs to protect against bad actors; something we’ve not disagreed with. Of course Nominet should secure critical .UK infrastructure. That’s just a part of the core business. It’s more questionable whether it needs to be making forays in to commercial “cyber defence”, something that’s being covered by the private sector (and presumably Government) already.

One of PublicBenefit’s criticisms has been that spending on board compensation, and Haworth’s pay in particular, has risen even while operating profits have declined.

Haworth’s post goes on to say that Nominet staff are regularly headhunted by other tech firms, which may or may not be a response to this criticism.

Addressing the “tone” of the debate, Haworth acknowledges that Nominet has been at odds with some members for a very long time. Members have been angered by changes such as the decision six years ago to allow direct, second-level registrations, he notes.

Perhaps as a result of the length of some of these disagreements, we all may have found ourselves approaching our interactions with the wrong tone.

In order to make progress, that needs to change. I commit to playing my part to make that happen. Starting now.

The post comes as the PublicBenefit.uk campaign hits 176 supporting members representing 13% of all potential votes.

That not may not seem like a lot, but due to Nominet’s complicated system of vote caps and the fact that EGN turnout is not usually very high, it could well be enough to get the 50%+1 of votes cast required to ouster Haworth and the other targeted board members.

On the “tone” question, Blackler disputes Haworth’s narrative, telling us:

I find it surprising that he feels the need to address “tone”. The campaign I’ve put together is based on fact and where there’s emotion from me it’s to do with the staggering waste of an opportunity with regards to Nominet’s public benefit mandate

He said he talked this week to chairman Mark Wood, who’s also on the EGM hit-list, and the tone was “entirely civil”.

An impetus for the current campaign was Nominet’s decision to close down its age-old web-based member discussion forum, which happened live during the company’s Annual General Meeting last year.

While Haworth described the forum at the time “increasingly become aggressive and hostile” towards Nominet staff, many members took the move as a deliberate slap in the face and an indication the company was no longer interested in engaging with members.

It is now.

Fire the board! Registrars attempt a coup at Nominet

The registrars are revolting — again — at Nominet.

Members representing 12.2% of the .uk registry’s voting rights have put their names to a call for five of the company’s unelected directors, including CEO Russell Haworth, to be fired and replaced with two hand-picked alternatives.

The plan is to shake up the company by slashing wholesale .uk prices and donating more money to worthy “public benefit” causes.

Nominet has warned in response that such a move would be “highly disruptive to our work and our team”.

The campaign, which can be found at PublicBenefit.uk, was kicked off by the registrar Krystal Hosting, which has about 45,000 .uk domains under management.

Signatories want to call an Extraordinary General Meeting that would vote on kicking out Haworth, along with chair Mark Wood, registry managing director Eleanor Bradley and directors Benjamin Hill and Jane Tozer.

Four elected non-exec directors and two non-elected directors would remain.

A second resolution would replace these directors with former BBC Trust chair Sir Michael Lyons and former RIPE NCC managing director Axel Pawlik, who have both confirmed their interest in the positions. Lyons would be chair.

Only 5% of Nominet’s voting rights — calculated largely from how many domains each member manages — are needed to call an EGM. At 12.2%, the campaign has already succeeded in passing that threshold. It would need 50%+1 of those attending the EGM to actually carry the resolutions.

The campaign claims that Nominet has gone downhill ever since Haworth was appoint five years ago.

It claims that the amount of money Nominet donates to “public benefit” causes has shrunk from £26 million ($35.5 million) in the preceding five years to £9.8 million in the five years since. That’s even while its wholesale prices for .uk domains increased 50% from £2.50 to £3.75 a year.

Director pay has gone up by 70% over the same period, it claims.

The registry also stands accused of frittering away money on acquisitions and pointless diversification into non-core businesses. Krystal founder Simon Blackler wrote:

This is not a VC-backed Silicon Valley startup that needs to take risks, make speculative acquisitions, “pivot” or worry about unnecessary diversifications. This is Nominet, the guardian of the .UK namespace and we’d like it back, please.

A second — and arguably more-important, if you’re a cynic — goal is to get the price of .uk domains to come down. This would reduce the carrying cost of portfolios held for resale by some Nominet members.

In response, Haworth has blogged that “an EGM and change of board at this time would be highly destabilising to Nominet and disrupt a range of fantastic programmes that are currently underway or planned”. He wrote:

I understand that there are frustrations and disagreements about how we run the business, and we are open to looking at those and making any adjustments that are in the interests of the company and the wider stakeholder community we serve. More on that to come.

The company has just approved a pricey multi-year investment in improving the registry infrastructure, he wrote.

The board has also approved a new Registry Advisory Council, which would be made up of members and have the ability to make recommendations on pricing, which could address concerns that Nominet has not been especially responsive to its members, he wrote.

Nominet came under fire last year when it unilaterally closed down the discussion forums on its web site, announcing and executing the move during its Annual General Meeting, saying posters had become “increasingly aggressive and hostile” towards Nominet staff.

At time of writing, 153 Nominet members, including four of the top 20 by .uk domain volume, have signed up to the campaign.

UPDATE: This article was updated 1248 UTC to correct the composition of the board and voting thresholds.

“Criminal” domain suspensions drop again in .uk but thousands of pandemic domains frozen

Nominet suspended thousands fewer suspected criminal domains in 2020 than last year, according to the registry’s latest annual update.

For the 12 months to the end of October, Nominet took down 22,158 domains, is down from 28,937 in the year-ago period.

As usual, suspected intellectual property crime made up almost all the takedowns — the Police Intellectual Property Crime Unit was behind 21,632 requests, down from 28,606.

Notably, despite the reported uptick in scams related to the coronavirus pandemic, the Medicines and Healthcare Products Regulatory Agency made just 13 takedown requests, down from 31.

This is perhaps due to Nominet taking a proactive approach, putting domains containing certain related keywords on hold at the point of registration. It froze 3,811 such domains this year, later releasing 1,568.

Eight domains were suspended for criminal activity related to Covid-19, the company said.

There were no suspensions related to banned “rape” domains, despite over a thousand new registrations being flagged for manual review. Nor were there any takedowns of domains hosting child sexual abuse material.

It’s the second year in a row that suspensions have been down. In the 2017/18 period Nominet took down 32,813 domains.

Vaccine agency to get more domain takedown powers next year

The UK’s health regulator is going to be added to a Nominet pilot program enabling the speedy takeover of suspected criminal .uk domains next year, according to the registry.

The Medicines and Healthcare products Regulatory Agency will become the second government agency after the Police Intellectual Property Crime Unit of the City of London Police to be added to the program.

The program is an expansion of the years-old takedown procedure coordinated between Nominet and law enforcement agencies, under which domains suspected by LEA of being used in criminal activity such as counterfeiting are promptly suspended by the registry.

In the pilot, when a domain is suspended it will bounce users to this informational image, rather than merely not resolving.

MHRA is the agency responsible for approving vaccines for, among everything else, COVID-19, so it’s bound to see nefarious activity next year as vaccines actually start hitting the market.

The news of its involvement was first announced in March as the pandemic took hold of the country but, like so much else in the UK government’s technology response to coronavirus, it looks like it’s going to be a year late and a quid short.

Forty weddings and a funeral? .wed is dead but may come up for auction

.wed has become the first commercial, open, non-branded new gTLD to have its registry contract unilaterally terminated by ICANN, and it could soon be looking for a new home.

ICANN terminated the contract with US-based Atgron last week, almost three years after imposing emergency measures to protect registrants after the company’s business model failed miserably.

The company wanted to provide a space for engaged couples to promote their weddings for about $50 a year, but its business model was based around basically forcing registrants to abandon their names by charging a $30,000 renewal fee after year two.

Unsurprisingly, it attracted few registrants — about 300 at its 2016 peak — and only one registrar.

By the time the end of 2017 rolled around, it was languishing at 39 domains (for the purposes of a whimsical headline, let’s round it up to 40) and its agreement with its back-end registry operator was on the verge of expiring.

In the hope of keeping its customers’ domains working, Atgron turned off its Whois for a week, attracting the attention of ICANN and triggering a criterion for transitioning to an Emergency Back-End Registry Operator.

It’s been on an EBERO, in this case Nominet, since December 2017, with all domains essentially frozen.

In the meanwhile, it’s been fighting against contract termination with ICANN, first in mediation and then in arbitration.

Last month, the arbitrator ruled that Atgron was in breach for failure to pay its ICANN fees, and ICANN terminated the registry agreement October 5.

.wed is certainly not the first new gTLD to get terminated by ICANN — there’s been about a dozen to date — but it is the first to be a non-dot-brand.

This means ICANN will get to test its Registry Transition Process for the first time.

When a dot-brand dies, ICANN just removes it from the root and lets it stay dead on the grounds that there’s no plausible successor and no registrants will suffer.

In this case, we’re talking about an open, non-branded gTLD with a generic string that could potentially rack up many thousands of registrations.

There’d be no obligation for a future operator to take on the silly business model.

The Registry Transition Process will go one of two ways.

If Atgron has already picked a successor registry, ICANN will conduct a series of evaluations that look like they would be a piece of cake for any existing gTLD portfolio owner to pass.

But if Atgron has no heir apparent, it goes to an RFP which basically amounts to an auction, with the company prepared to pay Atgron the most money becoming the company’s presumed preferred successor.

With Atgron still owing ICANN money — presumably hundreds of thousands of dollars — in past-due fees, I’ve little doubt what ICANN’s preferred outcome would be.

For Atgron, there’s the distinct possibility that it could make more money from crashing .wed into the ground than it ever did by actually selling domains.

.wed is not a bad string — it’s short, meaningful, and has a niche of potential registrants already forced to overpay for almost everything else — and I’m fairly confident it could easily find a new home at an existing registry.

Nominet shuts down “hostile” discussion forum

Nominet has angered members by unilaterally shutting down a discussion forum that has been for many years the main place for discussions about .uk policy.

The forum, which Nominet hosted on its web site, went dark abruptly during the company’s annual general meeting yesterday.

Speaking to members tuning in to the live webcast, CEO Russell Haworth said that the forum was “dominated by a handful of posters, and has increasingly become aggressive and hostile, not least towards our staff”.

And then it was gone.

Haworth said he expected criticism over the move, which was “fine”, adding that posters have plenty of other venues to air their grievances.

He also suggested periodic Zoom calls to communicate with members.

The decision to close the forum is being greeted poorly by affected members (presumably the ones who most actively used it) on social media and seen as a way for power to be further consolidated among Nominet’s biggest revenue-generators.

Nominet recently came in for criticism for its efforts to grab a slice of the drop-catching pie by charging registrars an extra £600 a year (now, members note, up to £1,000) for additional EPP tunnels.

It also recently admitted privately to members that it last year miscalculated how many votes members they should get in directorship elections, but insisted the error did not have an effect on the outcome of the most recent poll.

The move is not entirely without precedent. Those of you with as many grey hairs as me may recall the old Domain-Policy mailing list, once the central hub for community discussions, going dark back in 2001.

But Verisign, which hosted the list and its archives, explained that move as a measure to reduce redundancy, rather than straight-up admitting that it was a PR move to silence its legion of critics.

Told us so? Nominet ditches auctions plan, will charge drop-catchers higher fees instead

Nominet has ruled out auctioning off expired .uk domains names, after a member rebellion.

The .uk registry said last Thursday that it “will not pursue an auction model”, despite previously indicating that it was the best option for how to reform the dropping domains market.

This means the most likely model in future is going to be a huge increase in fees for registrars that aggressively engage in drop-catching.

A month ago, Nominet said that it was considering changing how it handles dropping domains, with either a system of registry-managed auctions or a system of increased fees for drop-catchers.

It appeared to many (yours truly included), based on a Nominet scoring system for each available option, that auctions were the preferred choice.

The registry originally denied that auctions were a shoo-in and now, apparently responding to critics, has ruled that option out completely.

Registry MD Eleanor Bradley wrote:

we will not pursue an auction model. While a proportion of responses from a wide range of sectors including the drop–catching market supported this approach, the prevailing view was this is not the role of the Registry.

…

Introducing a new approach for those that wish to drop–catch names where participants can purchase connections is the option we will pursue further.

Nominet says that some kind of change is “necessary” because currently .uk drop-catchers are sometimes in the habit of creating spurious Nominet memberships in order to increase the number of simultaneous EPP connections they can use, maximizing their chances of securing drops.

The registry calls this “collusion” and against its acceptable use policies.

In future, it seems drop-catchers will instead have to directly buy extra connections from Nominet. An annual price of £600 ($800) for a batch of six connections, up to a maximum of £6,000 for 60, has previously been floated.

Bradley said that the final details of the plan have yet to be determined.

The decision follows a consultation which received 107 comments and a member petition.