.org now has no price caps, but “no specific plans” to raise prices

ICANN has rubber-stamped Public Interest Registry’s new .org contract, removing the price caps that have been in effect for the best part of two decades.
That’s despite a huge outcry against the changes, which saw the vast majority of respondents to ICANN’s public comment period condemn the removal of caps.
The new contract, signed yesterday, completely removes the section that limited PIR to a 10% annual price increase.
It also makes PIR pay the $25,000 annual ICANN fee that all the other registries have to pay. Its ICANN transaction tax remains at $0.25.
PIR, a non-profit which funnels money to the Internet Society, is now allowed to raise its wholesale registry fee by however much it likes, pretty much whenever it likes.
But PIR again insisted that it does not plan to screw over the registrants of its almost 11 million .org domains.
The company said in a statement:

Regarding the removal of price caps, we would like to underscore that Public Interest Registry is a mission driven non-profit registry and currently has no specific plans for any price changes for .ORG. Should there be a need for a sensible price increase at some point in the future, we will provide advanced notice to the public. The .ORG community is considered in every decision we make, and we are incredibly proud of the more than 15 years we have spent as a responsible steward of .ORG. PIR remains committed to acting in the best interest of the .ORG community for years to come.

That basically restates the comments it made before the contract was signed.
The current price of a .org is not public information, but PIR has told me previously that it’s under $10 a year and “at cost” registrar Cloudflare sells for $9.93 per year.
The last price increase was three years ago, reported variously as either $0.88 or $0.87.
ICANN received over 3,200 comments about the contract when it was first proposed, almost all of them opposed to the lifting of caps.
Opposition initially came from domainers alerted by an Internet Commerce Association awareness campaign, but later expanded to include general .org registrants and major non-profit organizations, as the word spread.
Notable support for the changes came from ICANN’s Business Constituency, which argued from its established position that ICANN should not be a price regulator, and from the Non-Commercial Stakeholders Group, which caps should remain but should be raised from the 10%-a-year limit.
There’s a bit of a meme doing the rounds that ICANN has been hit by “regulatory capture” in this case, following a blog post from ReviewSignal.com blogger Kevin Ohashi last week, which sought to demonstrate how those filing comments in favor of the new contract had a vested interest in the outcome (as if the thousands of .org registrants filing opposing comments did not).
But I find the argument a bit flimsy. Nobody fingered by Ohashi had any decision-making power here.
In fact, the decision appears to have been made almost entirely by ICANN employees (its lawyers and Global Domains Division staff) “in consultation with the ICANN board of directors”.
There does not appear to have been a formal vote of the board. If there was such a vote, ICANN has broke the habit of a lifetime and not published any details of the meeting at which it took place.
After the public comment period closed, ICANN senior director for gTLD accounts and services Russ Weinstein prepared and published this comment summary (pdf), which rounds up the arguments for and against the proposed changes to the contract, then attempts to provide justification for the fait accompli.
On the price caps, Weinstein argues that standardizing .org along the lines of most of the other 1,200 gTLDs in existence fits with ICANN’s mission to enable competition in the domain name industry and “depend upon market mechanisms to promote and sustain a competitive environment”.
He also states:

Aligning with the Base gTLD Registry Agreement would also afford protections to existing registrants. The registry operator must provide six months’ notice to registrars for price changes and enable registrants to renew for up to 10 years prior to the change taking effect, thus enabling a registrant to lock in current prices for up to 10 years in advance of a pricing change.

This appears to be misleading. While it’s true that the new contract has the six-month notice period for price increases, so did the old one.
The new contract language takes several sentences to say what the old version did in one, and may remove some ambiguity, but both describe the notice period and lock-in opportunity.
If there’s a problem with how the new .org contract was signed off, it appears to be the lack of transparency.
It’s signed by GDD senior VP Cyrus Namazi, but who made the ultimate decision to sign it despite the outrage? Namazi? CEO Göran Marby? It certainly doesn’t seem to have been put before the board for a formal vote.
What kind of “consultation” between GDD and the board occurred? Is it recorded or noted anywhere? Was the board briefed about the vast number of negative comments the price cap proposal elicited?
Are public comment periods, which almost never have any impact on the end result, just a sham?
In my view, .org (along with .com and .net) are special cases among gTLDs that deserve a more thorough, broad and thoughtful consideration than the new .org contract received.
UPDATE: This article was updated at 1600 UTC to correct information related to .org’s current wholesale price.

Dodgy registrars could be banned from .org promotions

The worse a registrar is at tackling abuse, the more likely it is to be excluded from promotions in the .org space, according to a new policy from Public Interest Registry.
The .org registry said today that it is introducing a new “Quality Performance Index” to rate its registrars according to the quality of their registrations.
They’ll be ranked according to three criteria: abuse takedown, renewal rates, and domain usage.
Those that score above a certain threshold will be pre-qualified for promotions. The others will be encouraged to talk to their PIR rep about things they could do to get their scores up.
This kind of mechanism should in theory make it relatively easy to separate registrars into conscientious corporate citizens on the one hand and fly-by-night spam-friendly jerks on the other.
Keeping the bad guys away from the discounts could go a long way to keeping .org a relatively healthy zone.
But I expect there may be concern from the middle-ground of the registrar space, where we have well-meaning but under-resourced registrars that may find their scores wanting.
An additional concern may be that PIR said it intends to change the score threshold depending on the promotion, which appears to give it the ability to exclude registrars more or less at will.
The QPI initiative also extends to PIR’s newer, lesser-used gTLDs.

PIR says it has no plans to raise .org prices

Public Interest Registry claims it has no plans to raise its wholesale fee for .org domains, in the face of outrage from domainers and non-profits.
Under a proposed renegotiated contract with ICANN, price caps that have limited PIR to a 10% price increase every year would be removed.
But in a statement last week, the company said:

Rest assured, we will not raise prices unreasonably. In fact, we currently have no specific plans for any price increases for .ORG. We simply are moving to the standard registry agreement with all of its applicable provisions that already is in place for more than 1,200 other top-level domain extensions.

This does not necessarily translate to a commitment to not raise prices, of course. PIR may have “no specific plans” today, but it may tomorrow.
Over 3,300 people and organizations filed comments with ICANN about the proposed removal of the price caps, almost all of them negative.
Comments came initially from domain investors, but they were soon joined by many non-profit .org registrants and others.
Most claimed that it was unfair to allow unlimited price increases in legacy, pre-2012 gTLDs such as .org, which can be seen more as a public trust.
PIR went on to point out in its letter that it has not raised its prices — believed to be still under $10 a year — for the last three years.
But it might be worth noting that senior management has changed in that period. Brian Cute left the CEO job a year ago and, after an interim caretaker manager, was replaced by Donuts alumnus Jon Nevett in December.
.org’s registration numbers have been dipping. Over the last three years, it’s dropped from a peak of 11.3 million to 10.6 million at the end of 2018.
But it’s also renegotiated its back-end contract with Afilias over that period, meaning it’s now paying millions less on technical running costs than it once was.
PIR also reiterates that, like many of its customers, it is also a non-profit that is not motivated by investors and share prices.
More than half of its profits go to fund the Internet Society, itself a non-profit organization.
“We are different. We are mission based and not every decision is a financial one; we are not just driven by the bottom line,” its statement says.
PIR says that registrants are also protected by the measure in all ICANN gTLD contracts that allows registrants to lock in prices for up to 10 years in the event of a price increase, and by the fact that .org operates in a competitive market.
Reasonable people can and do disagree on whether these are effective protections in a case like .org.

Afilias bought .io for $70 million

Did you know Afilias owns .io? I didn’t, but it paid $70 million for the popular alternative TLD 18 months ago.
A recently published financial statement in Ireland shows that the company spent $70.17 million cash — a 10x revenue multiple — for 100% of Internet Computer Bureau Ltd in April 2017.
ICB runs .io, .ac and .sh, the ccTLDs for the British Indian Ocean Territories (.io), Ascension Island (.ac), and Saint Helena, Ascension and Tristan Da Cunha (.sh).
Afilias has never publicly announced the deal, and I haven’t seen it reported elsewhere, so I thought it was worth blogging up here.
At the time, the deal was characterized to registrars as a back-end contract win.
But it seems that Afilias actually purchased the back-end provider, then migrated (not as smoothly as it usually does) the TLDs over to its own infrastructure.
That would have opened up .io to all the registrars already plugged in to Afilias’ TLDs, potentially greatly increasing its reach.
But it’s probably not just the back-end Afilias has acquired.
Would a registry service provider spend 10 times annual revenue on a ccTLD back-end contractor, unless it had a damn good reason to believe that it would be able to at least recoup its investment, either through a long-term contract or some other mechanism?
It’s quite possible Afilias actually bought the .io ccTLD Manager.
The ccTLD Manager listed by ICANN in the IANA database is “IO Top Level Domain Registry”, but “c/o Sure (Diego Garcia) Limited”. That changed a week or so ago from “IO Top Level Domain Registry, Cable & Wireless”
Sure is the arm of telecommunications firm Cable & Wireless that provides internet access to remote islands in various parts of the world.
I don’t know what “IO Top Level Domain Registry” is.
Afilias tells me confidentiality arrangements are in place.
.io has proven popular as a TLD for technology startup companies that couldn’t get the .com they wanted.
Across its small portfolio, ICB was a $6.9 million business last year, but .io, with a reported 270,000 domains, must account for the large majority of that.
Due to the timing of the deal, ICB contributed $5.3 million to Afilias’ top line and was the main reason its revenue grew last year, its 2017 accounts reveal.
In 2017, Afilias saw revenue grow from $106.7 million to $113.6 million. Profit before tax was down slightly, from $38.6 million to $36 million
Again, that was due largely to ICB, which contributed $1.4 million of red ink to the bottom line.
Afilias is a private company, by the way, which is why these numbers all refer to 2017. It’s the final full year of it being based in Ireland, before its move to the US for tax reasons.
The disclosure also reveals that Afilias took a 45% stake in Dot Global, manager of the .global gTLD registry, in December 2017.
Dot Global had revenue of $1.9 million and a $320,000 loss last year, the report states.
doMEn, the Montenegro ccTLD (.me) operator in which Afilias has a 36.85% share, made a profit of $2.59 million on revenue of $7.39 million, it says. Both of those numbers were down slightly on 2016.
Afilias also says in the filing that it expects revenue to be down in 2018, due to the renegotiation of back-end contracts. I gather the contract with Public Interest Registry, which reportedly could cost about $10 million a year, is the main problem.
Given the accounts were signed off in May this year, it seems that this decline is expected despite the lucrative .au ccTLD contract, which Afilias signed at the end of 2017.

PIR chief: registries should stop stressing about volume

Public Interest Registry has announced some sweeping changes to how it markets .org and its other TLDs, with interim CEO Jay Daley telling DI that there’s too much focus on volumes in the industry today.
PIR is scrapping is volume discount programs after the current batch of incentives expires at the end of the year.
These are the programs that offer rebates to registrars if they hit certain performance targets, all based around newly created domains.
“They particularly favor large registrars, and we don’t think that’s appropriate going forward,” Daley told DI yesterday.
He said that when PIR removed some developed markets from its geographically-targeted discount programs, it saw creates go down but revenue improve.
He suggested that some registries have too much focus on volumes as a benchmark of success, failing to take account of important factors such as renews and abuse rates.
Part of the problem is that success is often measured (by folk including yours truly) by domains under management, rather than TLD health or revenue-per-domain.
“How many people are simply trying to get their numbers up without worrying about the underlying revenue, or taking a very low underlying revenue in order to get their numbers up?” Daley said.
“We’re not in any way somebody who is trying to get our numbers up at all costs, certainly not,” he said.
Another marketing program getting a makeover is pay-per-placement, where PIR would pay for prominent positions in the TLD drop-down menu of registrars storefronts.
These relationships have been based purely on new creates, Daley said, with appropriate “clawback” provisions when registrations turn out to be predominantly abusive.
In future, PIR intends to take a “longer-term, hygiene oriented view” of how its marketing money is used, making better use of data, he said.
“We need to be looking more at the quality of the registrations we get, the level of technical abuse generated by those registrations, looking at the renewal rates that come from those registrations,” he said.
PIR has a new four-strong channel services team that will be leading these changes.
“We are a public interest organization and need to take a public interest view on everything we do,” Daley said. “We need to be looking at our promotions for more than just commercial reasons, we need to be looking at public interest reasons as well.”
Daley, who ran New Zealand’s .nz registry from 2009 until this January, said that the big changes he is overseeing do not reflect an attempt to put his stamp on PIR and take over the CEO office on a permanent basis.
He does not want to run a registry and does not want to relocate to PIR’s headquarters in Virginia, he said.
“I’ve been a registry CEO for nine years,” he said. “I’ve done this and it’s time for me to look at other things.”
He also sits on PIR’s board of directors.

Neustar swaps out CEO, PIR looking for new CEO

There are to be changes at the top at two of the industry’s stalwarts.
Neustar has announced that eight-year CEO Lisa Hook has stepped aside to be replaced by Charles Gottdiener, who comes from the world of private equity.
He was most recently COO and MD at Providence Equity Partners.
Hook, who became CEO in 2010, will remain on the Neustar board of directors.
Neustar, which manages .biz, .co and many dot-brand gTLDs, is now owned by private equity group Golden Gate Capital, with a minority ownership by Singapore-based investor GIC, following a $2.9 billion deal last year.
Meanwhile, Public Interest Registry has started advertising for a new CEO of its own, following the mysterious resignation of Brian Cute in May. PIR runs .org and related gTLDs.
PIR said its new boss will need “excellent organizational, strategic planning, financial management and diplomatic skills”.
If it sounds like you, you have a few days to get your application in.

Cute abruptly quits PIR

Brian Cute unexpectedly resigned as CEO of Public Interest Registry late last week. No reason was given for his departure.
In a May 10 press release, the .org registry said that he’d left May 7.
He’s been replaced temporarily by board member Jay Daley until a permanent replacement can be found.
I asked a PIR spokesperson the reasons for the resignation and was told yesterday: “Brian has chosen to move on to pursue new challenges.”
Hmm.
Cute, a Verisign and Afilias alum, had been with PIR for seven years.

Now the DNA backpedals on “Copyright UDRP”

The Domain Name Association has distanced itself from the Copyright ADRP, a key component of its Healthy Domains Initiative, after controversy.
The anti-piracy measure would have given copyright owners a process to seize or suspend domain names being used for massive-scale piracy, but it appears now to have been indefinitely shelved.
The DNA said late Friday that it has “elected to take additional time to consider the details” of the process, which many of us have been describing as “UDRP for Copyright”.
The statement came a day after .org’s Public Interest Registry announced that it was “pausing” its plan for a Systemic Copyright Infringement Alternative Dispute Resolution Policy modeled on UDRP.
PIR was the primary pen-holder on the DNA’s Copyright ADRP and the only registry to publicly state that it intended to implement it.
It’s my view that the system was largely created as a way to get rid of the thepiratebay.org, an unwelcome presence in the .org zone for years, without PIR having to take unilateral action.
The DNA’s latest statement does not state outright that the Copyright ADRP is off the table, but the organization has deleted references to it on its HDI web page page.
The HDI “healthy practices” recommendations continue to include advice to registries and registrars on handling malware, child abuse material and fake pharmaceuticals sites.
In the statement, the DNA says:

some have characterized [Copyright ADRP] as a needless concession to ill-intentioned corporate interests, represents “shadow regulation” or is a slippery slope toward greater third party control of content on the Internet.
While the ADR of course is none of these, the DNA’s concern is that worries over these seven recommendations have overshadowed the value of the remaining 30. While addressing this and other illegalities is a priority for HDI, we heard and listened to various feedback, and have elected to take additional time to consider the details of the ADR recommendations.
…
Thus, the DNA will take keen interest in any registrar’s or registry’s design and implementation of a copyright ADR, and will monitor its implementation and efficacy before refining its recommendations further.

The copyright proposal had been opposed by the Electronic Frontier Foundation, the Internet Commerce Association and other members of ICANN’s Non-Contracted Parties House.
In a blog post over the weekend, ICA counsel Phil Corwin wrote that he believed the proposal pretty much dead and the issue of using domains to enforce copyright politically untouchable:

While the PRI and DNA statements both leave open the possibility that they might revive development of the Copyright UDRP at some future time, our understanding is that there are no plans to do so. Further, notwithstanding the last sentence of the DNA’s statement, we believe that it is highly unlikely that any individual registrar or registry would advance such a DRP on its own without the protective endorsement of an umbrella trade association, or a multistakeholder organization like ICANN. Ever since the U.S. Congress abandoned the Stop Online Privacy Act (SOPA) in January 2012 after millions of protesting calls and emails flooded Capitol Hill, it has been clear that copyright enforcement is the third rail of Internet policy.

PIR slams brakes on “UDRP for copyright”

Public Interest Registry has “paused” its plan to allow copyright owners to seize .org domains used for piracy.
In a statement last night, PIR said the plans were being shelved in response to publicly expressed concerns.
The Systemic Copyright Infringement Alternative Dispute Resolution Policy was an in-house development, but had made its way into the Domain Name Association’s recently revealed “healthy practices” document, where it known as Copyright ADRP.
The process was to be modeled on UDRP and similarly priced, with Forum providing arbitration services. The key difference was that instead of trademark infringement in the domain, it dealt with copyright infringement on the associated web site.
PIR general counsel Liz Finberg had told us the standard for losing a domain would be “clear and convincing evidence” of “pervasive and systemic copyright infringement”.
Losers would either have their domain suspended or, like UDRP, seized by the complainant.
The system seemed to be tailor-made to give PIR a way to get thepiratebay.org taken down without violating the owner’s due process rights.
But the the announcement of Copyright ADRP drew an angry response from groups representing domain investors and free speech rights.
The Electronic Frontier Foundation said the system would be captured by the music and movie industries, and compared it to the failed Stop Online Piracy Act (SOPA) in the US.
The Internet Commerce Association warned that privatized take-down policies at registries opened the door for ICANN to be circumvented when IP interests don’t get what they want from the multi-stakeholder process.
I understand that members of ICANN’s Non-Contracted Parties House was on the verge of formally requesting PIR pause the program pending a wider consultation.
Some or all of these concerns appear to have hit home, with PIR issuing the following brief statement last night:

Over the past year, Public Interest Registry has been developing a highly focused policy that addresses systemic, large scale copyright infringement – the ”Systemic Copyright Infringement Alternative Dispute Resolution Policy” or SCDRP.
Given certain concerns that have been recently raised in the public domain, Public Interest Registry is pausing its SCDRP development process to reflect on those concerns and consider forward steps. We will hold any further development of the SCDRP until further notice.

SCDRP was described in general terms in the DNA’s latest Healthy Domains Initiative proposals, but PIR is the only registry to so far publicly express an interest in implementing such a measure.
Copyright ADRP may not be dead yet, but its future does not look bright.

UPDATE: This post was updated 2/26 to clarify that it was only “some members” of the NCPH that were intending to protest the Copyright ADRP.

The Pirate Bay likely to be sunk as .org adopts “UDRP for copyright”

Controversial piracy site The Pirate Bay is likely to be the first victim of a new industry initiative being described as “UDRP for copyright”.
The Domain Name Association today published a set of voluntary “healthy practices” that domain registries can adopt to help keep their TLDs clean of malware, child abuse material, fake pharmacies and mass piracy.
And Public Interest Registry, the company behind .org, tells DI that it hopes to adopt the UDRP-style anti-piracy measure by the end of the first quarter.
This is likely to lead to thepiratebay.org, the domain where The Pirate Bay has resided for some time, getting seized or deleted not longer after.
Under its Healthy Domains Initiative, the DNA is proposing a Copyright Alternative Dispute Resolution Policy that would enable copyright holders to get piracy web sites shut down.
The version of the policy published (pdf) by the DNA today is worryingly light on details. It does not explain exactly what criteria would have to be met before a registrant could lose their domain name.
But PIR general counsel Liz Finberg, the main architect of the policy, said that these details are currently being finalized in coordination with UDRP arbitration firm Forum (formerly the National Arbitration Forum).
The standard, she said, will be “clear and convincing evidence” of “pervasive and systemic copyright infringement”.
It’s designed to capture sites like The Pirate Bay and major torrent sites than do little but link to pirate content, and is not supposed to extend to sites that may inadvertently infringe or can claim “fair use”.
That said, it’s bound to be controversial. If 17 years of UDRP has taught us anything it’s that panelists, often at Forum, can take a liberal interpretation of policies, usually in favor of rights holders.
But Finberg said that because the system is voluntary for registries — it’s NOT an ICANN policy — registries could simply stop using it if it stops working as intended.
Filing a Copyright ADRP complaint will cost roughly about the same as filing a UDRP, typically under $1,500 in fees, she said.
Penalties could include the suspension or transfer of the domain name, but monetary damages would not be available.
Finberg said PIR chose to create the policy because she wasn’t comfortable with the lack of due process for registrants in alternative methods such as Trusted Notifier.
Trusted Notifier, in place at Donuts and Radix, gives the Motion Picture Association of America a special pass to notify registries about blatant piracy and, if the registry agrees, to have the domains suspended.
While stating that .org is a fairly clean namespace, Finberg acknowledged that there is one big exception.
“The Pirate Bay is on a .org, we’re not happy about that,” she said. “If I were to say what’s the one .org that is the prime candidate for being the very first one out of the gate, I would say it’s The Pirate Bay.”
Other registries have yet to publicly state whether they plan to adopt this leg of the DNA HDI recommendations.