UK and Israel cut ICANN funding

The ccTLD registries for UK and Israel cut their funding to ICANN by the largest amounts in the Org’s last financial year, according to the latest numbers.

ICANN received mostly voluntary ccTLD contributions totaling $2,135,937 in its fiscal 2024, which ended June 30, according to its report, which was published (pdf) a couple weeks ago. That’s down $80,302 from the $2,216,240 it received in FY23.

The biggest single reason for the decline is that Nominet, the .uk registry, slashed its contribution from its usual $225,000 tribute by $75,000 to $150,000 in FY24.

Under ICANN guidelines (pdf) for ccTLDs, registries with over five million domains under management should contribute the maximum $225,000 a year. While .uk has been in decline for a while, it still has well over 10 million DUM.

But Nominet was the only ccTLD still paying the $225,000. All the other ccTLDs with over five million domains were already paying substantially less.

The Netherlands reduced its contribution from $225,000 to $180,000 in FY23. Germany has not given ICANN more than $130,000 a year in the last five years. China always pays $45,000. Brazil pays $100,000.

Nick Wenban-Smith, Nominet’s general counsel told us: “Our relationship with ICANN has not changed. We are a long-standing supporter of the organisation in many ways, lending our resources to policy work and other community efforts alongside our annual financial contribution.”

Israel is the second big funding-cutter in the latest report. It had been giving the recommended $15,000 for its 250,000+ domains, but reduced that to just $5,000 in FY24, despite its DUM being up slightly over the period.

Registries from nine territories that contributed $1,000 or less every year from FY20 to FY23 did not contribute at all in FY24. These include Nigeria, Antigua and Barbuda, Malawi, Guernsey, Jersey, Saint Lucia, Tokelau, and the US Virgin Islands.

The lack of any money from Tokelau’s .tk is expected given the death of the registry. Jersey and Guernsey are perhaps more surprising, given the registries are run by a former ICANN director.

A handful of other ccTLDs from small territories that have only sporadically given in the past did not contribute in FY24.

Fourteen registries contributed more in FY24 than they did in FY23, but the difference amounted to just $13,000 extra cash in ICANN’s coffers. South Africa, Slovenia, Vietnam, Tanzania, and Mongolia all paid $1,000 or more over FY23.

Russia, which stopped providing funding in FY23 despite its almost six million DUM, also did not give any money in FY24.

No .uk price hikes despite tumbling sales

Nominet said today that it has no plans to raise the price of .uk domains, even as registration volumes continue to sink and profits tumbled.

The registry said in its annual report that its net loss for the year ended March 31 was £6 million ($7.7 million), compared to £3.9 million ($5 million) in fiscal 2023, on revenue up £2.3 million ($3 million) to £56.4 million ($72.4 million).

The increase in revenue was due to its non-domains Cyber business, which was up by £2.7 million, offsetting a £400,000 decrease in domains revenue that was due to a 300,000 decline in domains under management.

Domains brought in £41.1 million at the top line during the period, but profit dropped from £14.8 million in 2023 to £9.8 million.

Nominet also lost a Protective DNS contract with the UK government during the year, which led to 40 layoffs and 19 employees being reassigned, but said the setbacks will not lead to price hikes.

“Even with the loss of the UK PDNS contract, and lower domain name renewals indicative of a maturing market, we see no immediate need to increase pricing, but we will continue to regularly review,” chair Andy Green and CEO Paul Fletcher said in the report.

.uk names currently cost £3.90 per year, with the last price increase happening in 2020.

Fletcher and CFO Carolyn Bedford both received hefty bonuses during the year, amounting to an extra £180,000 for Fletcher on top of his £304,500 base salary and an extra £94,557 for Bedford to add to her £190,000 base.

The company confirmed in its report that it plans to participate in the next new gTLD application round in 2026 as a back-end registry services provider, saying it expects the market to be very competitive.

Two seats up for grabs on Nominet board

The .uk registry, Nominet, has opened up its call for nominations for its 2024 non-executive director elections.

There are two seats up for grabs this year, currently occupied by Simon Blackler of Krystal Hosting and Ashley La Bolle of Tucows, both of whom were originally elected in 2021 and are eligible for reelection if they choose to stand again.

Blackler, you may recall, was the instigator of the PublicBenefit.uk campaign, which resulted in a boardroom bloodbath three years ago.

The seats represent half of the member-elected NEDs on Nominet’s board.

Non-members are eligible for nomination but only members may nominate and vote. Votes are weighted so the members with the most domains under management get the most votes, albeit with a cap to avoid capture by the largest players.

The deadline for nominations is July 7, and the vote takes place in September. Elections have historically reliably highlighted divisions in the .uk community.

Up to 70 jobs on the line at Nominet as .uk regs dwindle

Nominet plans to lay off as many as 70 employees to cut costs, and is preparing for a .uk price increase, after years of dwindling domain registrations and the loss of a major government contract.

CEO Paul Fletcher told members yesterday that it won’t be providing the UK government with its Protective DNS recursive DNS service, PDNS, after its contract ends later this year. He implied that the government has selected a cheaper competitor to replace it, without giving details.

The deal was with the UK National Cyber Security Centre, and saw Nominet resolve half a trillion DNS queries a year for central government and other public services.

Nominet had been banking on this “cyber” business to bolster revenue in the face of “static or reduced demand for domains”, but the contract loss means some serious belt-tightening is in order, Fletcher indicated.

In its last financial year, Nominet said its cyber business had revenue of £12.6 million but had a loss of £2.4 million

“The changes that we are proposing to give us a sustainable cost base mean that up to 70 of our current roles could be made redundant,” he told members in an email. “While this would be partially offset by some redeployment opportunities, our overall headcount will reduce.”

He added that members should expect the price of .uk domains to increase in future, without giving a timetable.

“Our pricing will remain at current level of £3.90 until at least the end of the year, extending the freeze in place since 2021,” he wrote, but added that lower volume means “prices cannot be held at the level set in January 2020 indefinitely.”

Nominet had 10,688,932 .uk domains under management at the end of January, down from 11,045,559 a year earlier (a loss of almost a thousand domains a day) and its 2019 peak of 13,348,378.

Fletcher also delivered the news that one of its longest-serving staffers, registry managing director Eleanor Bradley, will leave the company later this year.

Finally, he said the company has successfully challenged a default court judgment (pdf) ordering it to repay a member’s subscription fees, a ruling that had been put forward as proof that Nominet has been breaking the law by charging membership fees for the last quarter-century.

Fletcher said the judgment came because Nominet had no idea it had been sued, adding: “On 31 January, we successfully applied to have the default judgment set aside in the County Court, having made every effort to avoid unnecessary, costly and time-consuming court proceedings. This ruling, which the claimant is appealing, allows us to defend the original claim.”

The lawsuit came as part of a campaign operated at WeightedVoting.uk that seeks to prove Nominet’s membership and voting structure is illegal.

Police .uk domain takedowns dive in 2023

The number of .uk domain names taken down as a result of requests from law enforcement shrank substantially last year, according to the latest stats from Nominet.

The registry said today that it suspended 1,193 domains in the 12 months to October 31, down from 2,106 in the previous period. It’s a record low since Nominet started tracking the data, for the second year in a row.

As usual, alleged intellectual property violations were the biggest cause of action. The Police Intellectual Property Crime Unit had 717 names taken down, with the National Fraud Intelligence Bureau suspending 321 and the Financial Conduct Authority 116.

While police takedowns were low, domains suspended by Nominet’s proactive Domain Watch anti-phishing technology were up about 20%, from 5,005 to 5,911. Nominet said this is because the tech, which flags possible phishing domains for human review at point of registration, is getting better.

The number of domains suspended because they appeared on threat feeds doubled, from 1,108 in the 2022 period to 2,230 last year, the company said.

Cybersquatting cases in .uk have also been declining, Nominet reported earlier this month.

While correlation does not equal causation, it might be worth noting that .uk registrations overall have been on the decline for some time. There were 10.68 million .uk domains at the end of January, down from 11.04 million a year earlier.

UK gov takes its lead from ICANN on DNS abuse

The UK government has set out how it intends to regulate UK-related top-level domain registries, and it’s taken its lead mostly from existing ICANN policies.

The Department for Science, Innovation and Technology said last year that it was to activate the parts of the Digital Economy Act of 2010 that allow it to seize control of TLDs such as .uk, .london, .scot, .wales and .cymru, should those registries fail to tackle abuse in future.

It ran a public consultation that attracted a few dozen responses, but has seemingly decided to stick to its original definitions of abuse and cybersquatting, which were cooked up with .uk registry Nominet and others and closely align to industry norms.

DSIT plans to define abuse in the same five categories as ICANN does — phishing, pharming, botnets, malware and vector spam (spam that is used to serve up the first four types of attack) — in its response to the consultation, published yesterday (pdf).

But it’s stronger on child sexual abuse material than ICANN. While registries and registrars have developed a “Framework to Address Abuse” that says they “should” take down domains publishing CSAM, ICANN itself has no contractual prohibitions on such content.

DSIT said it will require UK-related registries to have “adequate policies and procedures” to combat CSAM in their zones. The definition of CSAM follows existing UK law in being broader than elsewhere in the world, including artworks such as cartoons and manga where no real children are harmed.

DSIT said it will define cybersquatting as “the pre-emptive, bad faith registration of trade marks as domain names by third parties who do not possess rights in such names”. The definition omits the “and is being used in bad faith” terminology used in ICANN’s UDRP. DSIT’s definition includes typosquatting.

In response to the new document, Nominet tweeted:

The response highlights that Government recognises the work registries already do to support law enforcement agencies prevent the registration of domains to carry out illegal activity and "expect the existing voluntary arrangements to be used as the first port of call".

— Nominet (@Nominet) February 23, 2024

DSIT said it will draft its regulations “over the coming months”.

Nominet to overhaul .uk registry, turn off some services

Nominet has opened a public consultation on its plans to modernize the .uk domain registry, which will involve increased standardization around international norms and turning off some older services.

It’s an extensive consultation — 37 proposals and 92 questions spread over more than 50 pages — aimed mainly at the registrars that will have to update their systems to integrate with the new registry. But registrants will also be affected.

The plans would see changes to Nominet’s underlying registry platform that would alter how renewals, proxy registrations, grace periods and transfers between registrants and registrars are handled, and the retirement of the current Whois system, among many other items.

Nominet reckons its proposals will help it save money on ongoing maintenance and software licensing as well as eventually simplifying things for its member registrars.

The company currently runs two registry platforms in parallel: the old UK registry and the newer EPP registry, which is based on the latest technical standards and compliant with ICANN requirements.

It runs its gTLDs, such as .wales and .cymru, as well as its dozens of back-end clients, on the newer system. The plan is to shift .uk over to the newer RSP platform too.

The proposal also calls for Nominet to align with ICANN’s plans to stop requiring registrars to operate Whois services a year from now, replacing them with the newer RDAP standard, which provides the same functionality.

Other older, less-used services, such as the Domain Availability Checker, would either be retired or replaced with EPP-based equivalents.

There’s a lot to absorb in the consultation documents, but at first glance it strikes me that large international registrars that already integrate with dozens of registries probably don’t have much to worry about; smaller, .uk-focused registrars with fewer resources may show some resistance due to the amount of development work likely to be required.

But Nominet says that it is taking this into account with its timetable, saying: “If the changes go ahead, we will give considerable advance notice to Registrars to allow time for development activities”.

The consultation is open for the next three months, punctuated by five explanatory webinars.

Domain universe grows despite .com drag

The number of registered domain names in the world grew by 2.7 million in the third quarter, despite market-leading .com shrinking, according to Verisign’s latest Domain Name Industry Brief.

There were 359.3 million domains across all TLDs at the end of September, according to the DNIB. up from 356.6 million at the end of June.

Over the same period, .com shrunk by half a million names as Verisign faces challenges from exposure to erratic demand from China.

New gTLD volumes were up by 2.1 million names to end the quarter at 30.2 million. Judging by zone files, at least half of these new names seem to be cheap, low-quality regs in the likes of .top and .cfd.

Total ccTLD names were 138.1 million at the end of the quarter, up by a million. All of the top 10 ccTLDs grew or were flat, except .uk, which lost about a hundred thousand names.

Wright elected to Nominet board

Nominet members have selected Steve Wright to a non-executive directorship on the company’s board.

The .uk registry said today that his three-year term started at the company’s AGM yesterday.

Wright came very close to winning in the first round of voting, securing 723,027 votes. That was just shy of the threshold of 743,038 required to win. He picked up 79,264 in the second round to end up with a total of 802,291.

David Thornton was knocked out in the first round and Thomas Rickert was defeated in the second. Turnout was 13% of members.

Nominet members each have as many votes as they have .uk domains under management, capped to avoid capture by the largest registrars.

The election was somewhat controversial. Five candidates were initially nominated, but incumbent Phil Buckingham pulled out for mysterious reasons and regular Nominet antagonist Jim Davies was disqualified for missing a deadline on the screening process, which he denied doing.

Wright and Rickert debated during the London Domain Summit in August, and the consensus in the bar afterward was that you couldn’t really slide a cigarette paper between their platforms, which revolved around similar themes of transparency and communication.

Wright is a consultant and former owner of a hosting company.

This article was updated October 19 to correct Wright’s current job description.

Nominet adds handcuffs clause to proposed new Articles

Nominet wants to add a new clause to its foundational Articles of Association that would prevent it adventuring into non-domain businesses without telling its members.

The proposal follows the scandal surrounding its CyGlass security business, which the company invested about $23.5 million in before eventually selling for a dollar.

“The Board will inform the Membership in advance of any proposed significant change in scope, together with an explanation as to how this relates to the Company’s objects for the public benefit,” the new Article 2 reads.

While there’s nothing requiring member approval of diversification, notice would at least give members time to organize resistance if it looked like history repeating itself.

Nominet chair told members the proposed article “creates an important constitutional safeguard to ensure Nominet remains aligned with its Members in future.”

Members will vote on the proposed new Articles at the company’s AGM next month, but Nominet has set a massive 90% majority threshold for the changes to be approved.

Green said that the current board plans to live by the spirit of the proposed Article 2 even if the vote fails, but noted that there can be no guarantee future boards would also do so.