Looks like the fight for .hotel gTLD is over
One of the longest-running fights over a new gTLD may be over, after three unsuccessful applicants for .hotel appeared to throw in the towel on their four-year-old legal fight with ICANN.
In a document quietly posted by ICANN last week, the Independent Review Process panel handling the .hotel case accepted a joint request from ICANN and applicants Fegistry, Radix and Domain Venture Partners to close the case.
The applicants lawyers had told ICANN they were “withdrawing all of their claims” and the panel terminated the case “with prejudice”.
They had been fighting to get ICANN to overturn its decision to award .hotel to HOTEL Top-Level-Domain (HTLD), formerly affiliated with Afilias, which had won a controversial Community Priority Evaluation.
CPE was a process under the 2012 new gTLD program rules that allowed applicants in contention sets to avoid an auction if they could show sufficient “community” support for their bids, which HTLD managed to do.
The Fegistry complaint was the second IRP to focus on this decision, which was perceived as unfair and inconsistent with other CPE cases. The first ran from 2015 to 2016 and led to an ICANN win.
Part of the complaints focused on allegations that an HTLD executive improperly accessed private information on competing applicants using a vulnerability in ICANN’s applications portal.
The IRP complainants had also sued in Los Angeles Superior Court, but that case was thrown out in July due to the covenant not to sue (CNTS) that all new gTLD applicants had to agree to when they applied.
The fight for .hotel had been going on for longer than that for .web, but unlike .web it appears that this fight may finally be over.
Radix looking for a back-end
Radix is looking for a back-end registry services provider, possibly ending its 10-year relationship with CentralNic (now Team Internet).
The company announced an invitation-only RFP covering all of its stable of TLDs: .online, .store, .tech, .website, .space, .press, .site, .host, .fun, .uno, and .pw.
.online alone has 2.6 million names in its zone right now; should it switch to a different back-end it would be the largest migration since 3.1 million .au domains changed hands in 2018.
Radix says its portfolio contains seven million domains altogether.
The company has put a September 16 deadline on interested parties returning their RFP forms. It expects to make its decision by the end of November.
Radix sold almost $8 million of premiums last year
New gTLD portfolio Radix made $7.8 million from the sale of $100+ premium domains in 2022, over $5 million of which came from premium renewals.
The company this week released its second-half premiums roundup, showing $4 million in total premium retail revenue, $2.7 million of which came from renewals.
That follows first-half numbers of $3.8 million total and $2.5 million from renewals.
It made $1.3 million selling 1,458 first-year premiums, and $2.7 million renewing 2,483 names.
First year renewals were at 61%, second year at 79% and subsequent years, as we revealed in January, at a whopping 90%.
The best-performing TLDs were .tech, .store and .space.
The dollar values are at the retail level; Radix’s own share will be about 30% lighter.
Interview: Sandeep Ramchandani on 10 years of Radix and new gTLDs
It’s over a decade since ICANN’s last new gTLD application round, and naturally enough many companies in the industry are celebrating their 10th anniversaries too. Radix has been putting a lot of effort into promoting its own birthday, so a couple months ago I had a long chat with CEO Sandeep Ramchandani about the last decade and what the future holds.
We discussed Radix’s business model, rivalries, performance, blockchain-based alt-root gTLDs, the company’s plans for the next application round, and the TLDs he wishes the company had bought.
Measuring success
Radix is based in Dubai but has most of its 75-person headcount located in Mumbai, India. It also has satellites, mainly focused on registrar relations and marketing, in the US, South America (where it markets .uno) and Asia.
Across 10 gTLDs, it has amassed over 5.6 million registrations, according to its web site. If you exclude pre-2012 TLD .info, that’s more than Identity Digital, which has more than 20 times as many TLDs in its stable.
“Donuts went for the long tail, category-specific names,” Ramchandani said. “Our idea was to launch TLDs that had mass-market potential.”
More than half of the regs to date have been concentrated in two TLDs — .online and .site, each of which measure their volumes in seven figures. The TLD .store is approaching a million names also.
More than half of the company’s sales are coming from the US, with 20% to 30% from Europe. It’s pretty much the same mix across premium sales and basic regs, he said.
Radix has been focusing most of its marketing effort on .store, .tech and .online, but Ramchandani says he thinks .site, currently at around 1.2 million domains and the company’s second-biggest seller, has a lot of untapped potential.
“We have about six million domains right now, but I don’t think that’s the best metric, as you can easily spike volumes by selling cheap,” Ramchandani said.
“The real metric is domains that are renewing every year,” he said. “Our first year registration price is still fairly low, but we optimize it to maximize our renewals.”
There’s also the matter of live web sites, of course. Radix estimates there are over 725,000 live sites on its domains, according to its web site.
On premium renewals
If you’re a domain investor, imagine you have a portfolio of tens of thousands of domains that you price at between $100 and $10,000, and you get to sell them not once, but every single year.
That’s Radix’s “high-high” business model, where domains in premium tiers are priced for users and renew at premium prices.
Ramchandani says that between 10% and 15% of Radix’s revenue comes from premiums, but it’s growing faster than regular-price regs. So far, it’s sold about 5% to 6% of its premium inventory. Many thousands of domains remain.
But the problem with premiums is of course whether or not they will renew at all, particularly if they’ve been sold to a domain investor who failed to secure the quick flip.
Ramchandani said premium renewals have been running at about 55% for the first renew, 75% for the second and above 90% for the third. The second and third-time figures are very respectable indeed for any TLD.
Premiums are typically held by end-user registrants rather than investors, he said. Probably lower the one in 10 premiums are owned by domainers, he guessed.
“We don’t have a lot of domainer interest, because the holding cost is too high,” he said. “A lot of the best web sites we see on our TLDs are on premiums.”
On industry consolidation
One of Ramchandani’s regrets over that last decade is that Radix didn’t manage to pick up some of the gTLDs that changed hands as the industry began to consolidate.
“We could have gone a bit harder to acquire some of the larger TLDs that did sell over the last few years,” he said. He would have to loved to have gobbled up .club or .design, he said, but these were bought by deeper-pocketed GoDaddy.
He said Radix sees itself as a buyer rather than a seller “for sure”, but the problem is: “We are interested in buying, but there aren’t so many out there that are really good TLDs.”
The company is not interested in the business model of buying up a dormant dot-brand and repurposing it to mean something other than its original meaning, which other registries have tried.
Ironically, that was where Radix started out, selling Palau’s .pw ccTLD as a domain for the “professional web”, which was a hard sell.
On the next round and alt-root TLDs
The long-touted next application round has been in policy development hell at ICANN for a decade, and Ramchandani agrees that “it’s a couple years away at this point and could very well be longer than that”.
“We will participate,” he confirms, adding “we’ll have to look at which TLDs we think are worth going for.”
“I think the best ones are already on the market, but there may be a few — based on recent trends — that make really good TLDs that qualify to have the scale and global impact that we look for,” he says.
“But honestly if we end up with none I think we still think have a very, very exciting business opportunity ahead of us for the next 10 years at least with the TLDs we already have, so it’s not something we’re betting the business on,” he says.
But how big will the next round be? There were 1,930 applications in the 2012 round, and plenty of anecdotal evidence today about pent-up demand, particularly from brands. That said, many say the first round wasn’t as successful as some had anticipated, which could lower turnout.
“A lot depends on the barrier to entry,” Ramchandani says. “Last time there was an investment of $185,000 for an application so there was a decent barrier to entry, but there are talks about potentially reducing that spectacularly. If that happens, I think the floodgates will open.”
(I should note that our conversation took place before ICANN announced that applications fees will likely be closer to $250,000 in the next round.)
“Last time this process ran there was less confidence that there was a sustainable business around new gTLDS, but given how some of the domainers in that round have performed — there are a bunch of TLDs that have done substantially better than everyone’s expectations — there might a lot more coming in to fight for those in contention with us in the next round,” he said.
He’s expecting to see “really high numbers” in dollar terms when strings come up for auction, but “a dozen, max, that will be really highly contested”.
One factor that could push down applications are blockchain-based alt-roots, where the likes of Unstoppable Domains throwing its legal weight around to prevent versions its TLDs appearing in other roots.
That said, Ramchandani would not rule out applying for TLDs that exist in alt-roots.
Radix premium revenue hits $3.8 million in first half
New gTLD portfolio registry Radix this week gave its twice-yearly premium domain sales report, declaring first-half revenue of $3.8 million.
That figure includes $2.5 million in renewal revenue from premium-priced names, because Radix charges premium renewal fees.
For Radix, premiums sold through the registrar channel are arranged into eight tiers from $100 to $10,000 a year. While there were eight sales at the top end, most sales were concentrated in the $500-and-below tiers.
The average first-year revenue was $558 per domain.
There were 1,767 premiums sold across the stable of 10 gTLDs, compared to 1,378 in the second half of 2021 and 1,436 in H1 2021.
.tech is the highest-performing, with $643,825 of recurring retail renewal revenue reported.
Radix renewals drive growth as revenue hits $38 million
New gTLD registry Radix brought in revenue of $38 million in 2021, up 35% on the year before, the privately held company said today.
Profit was up 60% over the same period, Radix said, without disclosing the dollar amount.
It made almost as much in renewal revenue in 2021 as it made overall in 2020 — $27 million versus $17.9 million in the prior year. Last year 72% of revenue was standard-fee renewals versus 64% in 2020.
But the revenue from new regs was basically basically flat at $5.7 million versus $5.6 million — 15% versus 20% of overall revenue.
Revenue from premium-tier domains (both new regs and renews) was 12.5% of revenue, or $4.75 million, up from $4.5 million in 2020.
The customer country mix may be a little broader too. Radix said 47% of revenue now comes from the US, which is down from the 64% it reported for the previous year.
The company said .online is still the strongest performer in its portfolio.
Universal Acceptance – making the internet work for everyone [Guest Post]
Editor’s note: this is a guest post written by Aman Masjide, head of compliance at new gTLD registry Radix.
Back in 2014, to foster innovation and to better the choice in domain names, ICANN introduced new generic top-level domains through its New gTLD Program. It was a monumental move that enabled businesses, individuals, and communities across the globe to mark their presence on the internet.
Allowing users to be present digitally in their chosen language (non-ASCII characters and scripts) gave opportunities to local businesses, civil societies, and governments to better serve their communities.
Analysys Mason conservatively estimates that there is scope of $9.8 billion growth in potential revenue from both; existing users who are using new domain names and from new internet users coming online through Internationalized Domain Names (IDNs).
To achieve this, Universal Acceptance of new gTLDs and IDNs is critical in making the Internet more accessible to the next billion users. Founded in February 2015, the Universal Acceptance Steering Group (UASG) undertakes activities to promote Universal Acceptance of all valid domain names and email addresses.
Through its ambassadorship and local Initiative programs, UASG promotes Universal Acceptance globally. Their efforts are divided and executed through five working groups that include:
- Technology Working Group
- Email Address Internationalization Working Group
- Communications Working Group
- Measurement Working Group
- Local Initiatives Working Group
Before we get into the acceptance of new domain extensions (nTLDs), we must first understand what acceptance means and how it’s measured.
The Universal Acceptance Steering Group’s mission sums up acceptance in one short statement: “All domain names and all email addresses work in all software applications.”
While this is a simple understanding of the concept, for an end user of an nTLD, this statement further branches out into multiple questions such as:
- Will my domain name work on all platforms/applications–online or offline?
- Will my email address on a new domain extension get accepted on all websites/platforms and pass all the validation tests?
- Will my emails on new domain extensions, once accepted, stop going into the junk folder?
- Will I be able to use all the features of a website/platform irrespective of my domain extensions? For example, will a social media platform accept a new domain extension in the bio, comments, posts, messenger, etc, and process it exactly like any other legacy TLD?
The Universal Acceptance (UA) of all domain names and email addresses requires that every piece of software is able to accept, validate, process, store, and display them correctly and consistently.
As a new domains registry, it was critical for us to understand what the gaps were and how to close them so that the internet operates the same for nTLD users as it does for the legacy TLD users.
Initial research concluded that UA readiness issues occur when applications are not able to handle the following categories of a domains name or email addresses:
Domain Names
- New short top-level domain names: example.fun, example.site
- New long top-level domain names: example.berlin, example.space
- Internationalized Domain Names: παράδειγμα.ευ
Email Addresses
- ASCII@ASCII; new short or long TLD: ekrem@misal.istanbul
- ASCII@IDN: john@société.org
- Unicode@ASCII: 测试@example.com
- Unicode@IDN: ईमेल@उदाहरण.भारत
- Unicode@IDN; right to left scripts: لیم@لاثم.عقوم ای
For Universal Acceptance to succeed, it needs to be examined holistically.
Over the years, UASG working group members have conducted several gap analysis on programming languages and frameworks, networking command-line tools, web browsers, websites, and have made great strides in acceptance of new domain extensions.
According to UASG’s FY 2020 report, tests conducted on top websites showed that
- The acceptance rate of emails on short nTLDs has increased from 91% in 2017 to 98.3% in 2020.
- The acceptance rate of emails on long nTLDs has increased from 78% in 2017 to 84.8% in 2020.
Note: The table above compares the 2020 results to the earlier 2017 and 2019 testing results.
Two important caveats should be remembered in this case:
- Different email addresses were tested (but they were of the same type).
- The websites tested in 2020 were different from previous ones as they were the 50 most popular in the 20 countries rather than the 1,000 most popular globally.
However, these results may still be used to compare overall trends.
Universal Acceptance Readiness Report 2020 (pdf) also segregated test websites as per different categories such as eCommerce, government, education, etc and the results were promising.
Such studies help UASG ambassadors and advocates to identify and focus on websites of a specific category that require immediate attention. We conducted a similar study at Radix where we analysed top websites belonging to different categories. These were the results (click to enlarge):
While the acceptance rates for new short and new long cases is more than 80% under most categories, we see a drastic dip when a domain is on an IDN TLD. Such comparisons highlight problem areas and provide direction to ambassadors and members who are advocating for Universal Acceptance.
Radix’s contribution to UASG
UA is something that affects nTLD users the most. This is why it’s crucial to focus on the feedback that we receive from them. At Radix, we work closely with our users to ensure we have the first hand information on any UA related issues faced by the customer.
The feedback could be about linkification, validation or acceptance of emails on nTLDs on different websites and platforms. Radix also actively invests its resources in gap analysis by testing various websites and social media platforms. We are also part of the ambassadorship program promoting and supporting local and global UA initiatives.
Here are some of the UASG initiatives that Radix is part of:
- Participating in the Technical And Measurement working group
- Participating in workshops on Universal Acceptance such as:
– India Internet Week 2020 Online Edition
– FICCI – Bhashantara – Panel Discussions - Sharing gaps and issues reported by customers to UASG
At Radix, our objective is to ensure that nTLDs are accepted across websites and platforms. To achieve this, we actively work with UASG and share as many issues and gaps noticed and reported by customers.
Contribution by other registries
A key objective for most registries is to ensure great customer experience when it comes to their nTLDs and I’ve always admired it when registry operators have actively taken initiative and participated in the five UASG groups mentioned above.
One of the ways to do this is to capture all the queries and complaints reported by their customers/registrar partners and share it with UASG. This will help their support team direct their resources in solving the problems and encouraging those websites to become UA compliant.
Contribution by registrars
When it comes to UA-related issues, registrars are the first in chain to receive a complaint or feedback from the user. Therefore, it’s crucial that their support teams have all the necessary information needed on how to best handle such complaints.
For now, they can:
- Inform the customer about the potential UA issue and raise a request on behalf of the customer with UASG. Issues can be logged at – https://uasg.tech/global-support-center/
- Report these instances to the Registry Operator so that they can connect and follow up with UASG.
- Join any of the five working groups and participate.
The path ahead
The UASG is consistently compiling and sharing all the important information needed for organizations and developers to become UA ready. This is not only about ensuring the readiness of a system to accept certain TLDs or emails, but also about realising the full potential of an organization by connecting with people and businesses that might not be even on it’s radar.
Every successful step taken by an organization towards UA readiness is also a step towards equality and inclusiveness on the internet.
Guest poster Aman Masjide leads compliance and abuse mitigation at Radix.
.hotel battle lands ICANN in court over accountability dodges
ICANN’s accountability mechanisms, or lack thereof, have landed the Org in court.
Three applicants for the .hotel new gTLD have sued in California’s Superior Court in LA, claiming ICANN has consistently failed to provide true accountability, refusing for over seven years to implement fundamental mechanisms required by its bylaws.
They want the court to force ICANN to stick to its bylaws and to also temporarily freeze an Independent Review Process case related to .hotel.
The registries in question are Fegistry, Domain Venture Partners and Radix. They filed their complaint at the end of October, but ICANN did not publish it until the end of January, after its terse reply, and an administrative ruling, had also been filed with the court.
While the endgame is presumably to get the .hotel contention set pushed to auction, the lawsuit barely mentions the gTLD at all. Rather, it’s a broad-ranging challenge to ICANN’s reluctance to submit to any kind of accountability at all.
The main beef is that ICANN has not created a so-called “Standing Panel” of judges to preside over IRP cases, something that its bylaws have required since 2013.
The Standing Panel is meant to comprise seven legal experts, trained up in all things ICANN, from which the three panelists presiding over each IRP would be selected.
It would also operate as a final appeals court for IRP rulings, with all seven panelists involved in such “en banc” challenges.
The idea is to have knowledgeable panelists on a retainer to expedite IRPs and ensure some degree of consistency in decision-making, something that has often been lacking in IRP decisions to date.
Despite this requirement being in the bylaws since 2013, ICANN has consistently dragged its feet on implementation and today there still is no Standing Panel.
The .hotel plaintiffs reckon ICANN has dodged $2.7 million in fees by refusing to pick a panel, all the while offloading certain fees onto complainants.
It didn’t get the ball rolling until January 2018, but the originally anticipated, rather streamlined, selection process quickly devolved into the usual mess of ICANN bureaucracy, red tape and circular community consultation.
The latest development was in November 2020, when ICANN announced that it was looking for volunteers for a cross-community “IRP Community Representatives Group”, a team similar to the Nominating Committee. which would be responsible for picking the Standing Panel members.
The deadline to apply was December 4, and we’ve not heard anything else about the process since.
The .hotel litigants also have beef with the “sham” Request for Reconsideration process, which is notorious for enabling the board to merely reinforce its original position, which was drafted by ICANN staff lawyers, based on advice provided by those same ICANN staff lawyers.
They also take aim at the fact that ICANN’s independent Ombudsman has recused himself from any involvement in Reconsideration related to the new gTLD program, for unclear reasons.
The lawsuit (pdf) reads:
ICANN promised to implement these Accountability Mechanisms as a condition of the United States government terminating its formal oversight of ICANN in 2016 — yet still has wholly failed to do so.
Unless this Court forces ICANN to comply with its bylaws in these critical respects, ICANN will continue to force Plaintiffs and any other complaining party into the current, sham “Reconsideration” and Independent Review processes that fall far short of the Accountability Mechanisms required in its bylaws.
The plaintiffs say that ICANN reckons it will take another six to 12 months to get the Standing Panel up and running. The plaintiffs say they’re prepared to wait, but that ICANN is refusing and forcing the IRP to continue in its absence.
They also claim that ICANN was last year preparing to delegate .hotel to HTLD, the successful applicant now owned by Donuts, which forced them to pay out for an emergency IRP panelist to get the equivalent of an injunction, which cost $18,000.
That panelist declined to force ICANN to immediately appoint a Standing Panel or independent Ombudsman, however.
The .hotel plaintiffs allege breach of contract, fraud, deceit, negligence and such among the eight counts listed in the complaint, and demand an injunction forcing ICANN to implement the accountability mechanisms enshrined in the bylaws.
They also want an unspecified amount of money in punitive damages.
ICANN’s response to the complaint (pdf) relies a lot on the fact that all new gTLD applicants, including the plaintiffs in this case, signed a covenant not to sue as part of their applications. ICANN says this means they lack standing, but courts have differed of whether the covenant is fully enforceable.
ICANN also claims that the .hotel applicants have failed to state a factual case for any of their eight counts.
It further says that the complaint is just an effort to relitigate what the plaintiffs failed to win in their emergency hearing in their IRP last year.
It wants the complaint dismissed.
The court said (pdf) at the end of January that it will hold a hearing on this motion on DECEMBER 9 this year.
Whether this ludicrous delay is related to the facts of the case or the coronavirus pandemic is unclear, but it certainly gives ICANN and the .hotel applicants plenty of time for their IRP to play out to conclusion, presumably without a Standing Panel in place.
So, a win-by-default for ICANN?
Radix premium renewals approach $1 million
New gTLD registry Radix made almost a million bucks in the first half of the year from renewal fees on its premium domains.
That’s one data point that jumps out from Radix’s latest premium sales report, released last night.
The company said that it made $1.96 million at the top line from premiums in the period, up 19% on the second half of 2019.
It added that $996,771 of that was from renewals, up from $903,687 in H2 2019.
Radix is one of the registries that charges a premium fee every year over the lifetime of the registration, a practice controversial among domain investors.
Still, it appears there is demand (or, at least, acceptance) among end users. Radix said it saw a 41% sequential increase in the number of premium sales in H1.
.tech, .online and .store were the biggest sellers, with the vast majority of sold names clustering in the $250 to $2,500 range.
The renewal rate after the first year was 63%, growing to 72% at the second renewal and a very respectable 78% thereafter.
Radix said it saw .store premium sales grow by more than fivefold during the half, which it attributed to the coronavirus pandemic:
While premium registrations and revenue have grown steadily for five quarters since Q2 2019, the 2020 pandemic has led to significant demand in eCommerce and have urged businesses from all verticals to build a strong web presence.
This has led to a surge in the adoption of premium domain names on meaningful extensions that are most suited for these businesses such as .STORE. Premium registrations for .STORE in Q2 2020 was up by 5.5X compared to Q2 2019.
More stats can be found here.
ICANN ordered to freeze .hotel after “serious questions” about trade secrets “theft”
ICANN has been instructed to place the proposed .hotel gTLD in limbo after four applicants for the string raised “sufficiently serious questions” that ICANN may have whitewashed the “theft” of trade secrets.
The order was handed down last month by the emergency panelist in the Independent Review Process case against ICANN by claimants Fegistry, MMX, Radix and Domain Ventures Partners.
Christopher Gibson told ICANN to “maintain the status quo” with regards the .hotel contention set, meaning currently winning applicant Hotel Top Level Domain, which is now owned by Afilias, won’t get contracted or delegated until the IRP is resolved.
At the core of the decision (pdf) is Gibson’s view that the claimants raised “sufficiently serious questions related to the merits” in allegations that ICANN mishandled and acted less than transparently in its investigation into a series of data breaches several years ago.
You may recall that ICANN seriously screwed up its new gTLD application portal, configuring in such a way that any applicant was able to search for and view the confidential data, including financial information such as revenue projections, of any other competing applicant.
Basically, ICANN was accidentally publishing applicants’ trade secrets on its web site for years.
ICANN discovered the glitch in 2015 and conducted an audit, which initially fingered Dirk Krischenowski — who at time was the half-owner of a company that owned almost half of HTLD as well as a lead consultant on the bid — as the person who appeared to have accessed the vast majority of the confidential data in March and April 2014.
ICANN did not initially go public with his identity, but it did inform the affected applicants and I managed to get a copy of the email, which said he’d downloaded about 200 records he shouldn’t have been able to access.
It later came to light that Krischenowski was not the only HTLD employee to use the misconfiguration to access data — according to ICANN, then-CEO of HTLD Katrin Ohlmer and lawyer Oliver Süme had too.
HTLD execs have always denied any wrongdoing, and as far as I know there’s never been any action against them in the proper courts. Krischenowski has maintained that he had no idea the portal was glitched, and he was using it in good faith.
Also, neither Ohlmer nor Krischenowski are still involved with HTLD, having been bought out by Afilias after the hacking claims emerged.
These claims of trade secret “theft” are being raised again now because the losing .hotel applicants think ICANN screwed up its probe and basically tried to make it go away out of embarrassment.
Back in August 2016, the ICANN board decided that demands to cancel the HTLD application were “not warranted”. Ohlmer barely gets a mention in the resolution’s rationale.
The losing applicants challenged this decision in a Request for Reconsideration in 2016, known as Request 16-11 (pdf). In that request, they argued that the ICANN board had basically ignored Ohlmer’s role.
Request 16-11 was finally rejected by the ICANN board in January last year, with the board saying it had in fact considered Ohlmer when making its decision.
But the IRP claimants now point to a baffling part of ICANN’s rationale for doing so: that it found “no evidence that any of the confidential information that Ms. Ohlmer (or Mr. Krischenowski) improperly accessed was provided to HTLD”.
In other words, ICANN said that the CEO of the company did not provide the information that she had obtained to the company of which she was CEO. Clear?
Another reason for brushing off the hacking claims has been that HTLD could have seen no benefit during the application process by having access to its rivals’ confidential data.
HTLD won the contention set, avoiding the need for an auction, in a Community Priority Evaluation. ICANN says the CPE was wholly based on information provided in its 2012 application, so any data obtained in 2014 would have been worthless.
But the losing applicants say that doesn’t matter, as HTLD/Afilias still have access to their trade secrets, which could make the company a more effective competitor should .hotel be delegated.
This all seems to have been important to Gibson’s determination. He wrote in his emergency ruling (pdf) last month:
The Emergency Panelist determines that Claimants have raised “sufficiently serious questions related to the merits” in in relation to the Board’s denial of Request 16-11, with respect to the allegations concerning the Portal Configuration issues in Request 16-11. This conclusion is made on the basis of all of the above information, and in view of Claimants’ IRP Request claim that ICANN subverted the investigation into HTLD’s alleged theft of trade secrets. In particular, Claimants claim that ICANN refused to produce key information underlying its reported conclusions in the investigation; that it violated the duty of transparency by withholding that information; that the Board’s action to ignore relevant facts and law was a violation of Bylaws; and further, to extent the BAMC and/or Board failed to have such information before deciding to disregard HTLD’s alleged breach, that violated their duty of due diligence upon reasonable investigation, and duty of independent judgment.
The Emergency Panelist echoes concerns that were raised initially by the Despegar IRP Panel regarding the Portal Configuration issues, where that Panel found that “serious allegations” had been made188 and referenced Article III(1) of ICANN’s Bylaws in effect at that time, but declined to make a finding on those issues, indicating “that it should remain open to be considered at a future IRP should one be commenced in respect of this issue.” Since that time, ICANN conducted an internal investigation of the Portal Configuration issues, as noted above; however, the alleged lack of disclosure, as well as certain inconsistencies in the decisions of the BAMC and the Board regarding the persons to whom the confidential information was disclosed and their relationship to, or position with HTLD, as well as ICANN’s decision to ultimately rely on a “no harm no foul” rationale when deciding to permit the HTLD application to proceed, all raise sufficiently serious questions related to the merits of whether the Board breached ICANN’s Article, Bylaws or other polices and commitments.
It’s important to note that this is not a final ruling that ICANN did anything wrong, it’s basically the ICANN equivalent of a ruling on a preliminary injunction and Gibson is saying the claimants’ allegations are worthy of further inquiry.
And the ruling did not go entirely the way of the claimants. Gibson in fact ruled against them on most of their demands.
For example, he said their was insufficient evidence to revisit claims that a review of the CPE process carried out by FTI Consulting was a whitewash, and he refused to order ICANN to preserve documentation relating to the case (though ICANN has said it will do so anyway).
He also ruled against the claimants on a few procedural issues, such as their demands for an Ombudsman review and for IRP administrator the International Center for Dispute Resolution to recuse itself.
Some of their claims were also time-barred under ICANN’s equivalent of the statute of limitations.
But ICANN will be prevented from contracting with HTLD/Afilias for now, which is a key strategic win.
ICANN reckons the claimants are just using the IRP to try to force deep-pocketed Afilias into a private auction they can be paid to lose, and I don’t doubt there’s more than a grain of truth in that claim.
But if it exposes another ICANN cover-up in the process, I for one can live with that.
The case continues…
Recent Comments