Stick a fork in Nominet’s leadership. Tucows votes to fire half the board

Tucows has become the latest registrar to say it will vote to fire five of Nominet’s 11 directors, including its CEO and chair, making the success of the ongoing member-driven coup pretty much inevitable.

The company said yesterday that it has already voted for the PublicBenefit.uk campaign’s motion, to be considered at the .uk registry’s Emergency General Meeting on Monday.

Tucows is Nominet’s fourth-largest registrar, with 381,468 domains under management. Its voting rights are capped at 3% of the total.

PublicBenefit.uk now says it has 29.1% of all votes backing its campaign, with 473 members signed up.

Because the threshold to pass its resolution is a simple majority of those who actually turn out to vote on the day, the likelihood of the five directors surviving the EGM are now surely negligible.

The first motion kicks out CEO Russell Haworth, chair Mark Wood, CFO Ben Hill, registry managing director Eleanor Bradley and appointed non-executive director Jane Tozer.

The second, which Nominet refused to put on the ballot, would have appointed two new directors: Sir Michael Lyons, who will serve as chair, and Axel Pawlik, deputy chair. Lyons is a former chair of the BBC Trust, who in 2015 oversaw a review into Nominet’s corporate governance. Pawlik is a former MD of European IP address registry RIPE-NCC.

Both have promised to refocus Nominet by abandoning its attempts to diversify into commercial areas such as cybersecurity, while also reducing .uk wholesale prices and donating more of its profits to public benefit causes.

In throwing its weight behind the resolution, Tucows’ director of domains Ashley La Bolle said in a blog post:

Most registries, but particularly country code registries are, or should be, very profitable operations. A country code TLD is also a public asset and an important component of a nation’s critical infrastructure. The registry should have a narrow and focused mandate, deliver a stable and secure service, operate in a risk-averse manner, and manage costs appropriately. As a public asset, surplus funds from the operation of a registry should be delivered to thoughtful and relevant public benefit initiatives, while also containing and reducing costs for the millions of businesses and consumers that use and rely on the domain names.

It’s the second of Nominet’s top 10 registrars to back PublicBenefit.uk, after #7 Namecheap, which has 201,355 .uk names under management.

The Internet Commerce Association, which represents the interest of domain investors but is not a Nominet member, said it took no position on the resolution, but broadly supported the overarching goals:

The ICA urges Nominet members to support efforts to restore Nominet’s core mission to operate the registry at cost as a not-for profit. Nominet’s management should never raise registration fees beyond what it takes to operate the registry in a prudent manner, with any excess revenue being directed to worthy causes and not to growing the breadth of Nominet’s limited mandate.

Those Nominet members who have pledged support for the board shakeup are being urged to give their voting proxy to Simon Blackler, who runs the registrar Krystal Hosting and initiated the PublicBenefit.uk campaign, before close of business UK time today.

Blackler says that almost all of these members have already voted.

It’s going to take an unprecedented turnout of Nominet’s remaining membership, with the vast majority opposed to the firings, to save these five directors at this point.

UPDATE: This article was updated shortly after its original posting to clarify that Nominet had refused to put the campaign’s second motion on the ballot.

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 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.

Domain growth dropped off in Q3, says Verisign

The third quarter saw the worldwide domain industry base of registrations increase by 600,000 names over the second quarter, according to Verisign’s latest Domain Name Industry Brief.

September ended with 370.7 million names registered across all TLDs, up 0.2% sequentially and 3% year over year.

Annual growth of 10.8 million names is a sharp drop off from the 15.3 million growth seen in Q2, during which many nations were under coronavirus lockdown.

Breaking it down by sector, it’s a case of .com growth being offset by shrinkages in new gTLDs and ccTLD, at least on an annual basis.

.com ended the quarter with 150.3 million names, up from 148.7 million three months earlier, which .net was flat at 13.4 million.

ccTLDs as a whole were at 160.6 million, up by 500,000 sequentially but down by 1.2 million compared to Q3 2019.

Unusually, the ccTLD numbers were not affected one way or the other by free extension .tk, where domains are never deleted. Verisign reports the TLD flat in Q3, but I suspect that’s due to a lack of fresh data rather than anything else.

In the top 10 largest ccTLDs, most grew or were flat sequentially. The notable standout was .uk, which lost a full million domains compared to Q2 due to the expiry of a million second-level names in September.

New gTLDs declined by 1.5 million names to settle at 30.2 million at the end of the quarter, according to the DNIB.

The report can by downloaded from this page.

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.

Drop auctions not a slam-dunk, says Nominet

Nominet has responded to criticism of its plans to introduce registry-level .uk drop auctions by saying it’s not about money-grabbing and is not guaranteed to even happen.

Registry MD Eleanor Bradley today blogged:

In some quarters the commentary suggests the driver for change is financial, or to make life more difficult for some business models. It is not.

…

As commercial gain was not our objective, we have suggested that any additional funds raised by changing the policy would be directed towards public benefit activity or used to provide specific services to registrars. Indeed, how to best spend additional funds that result from any policy change is part of the consultation.

The consultation referred to here was launched earlier this month. It suggests replacing the current drop-catching system, in which Nominet suspects some members “collude” to pool their EPP connections, with one of two new processes.

One would be a straightforward auction of desirable dropping names. The other would be to charge drop-catchers up to £6,000 a year for extra concurrent registry connections.

Bradley wrote that “the assumption in some quarters that an auction approach is our preferred option — a fait accompli –- are wide of the mark”.

As I’m one of the people who reported that auctions were Nominet’s “apparently preferred” option, I’ll note that my take was based on the company’s own consultation document, which scores auctions more highly than the alternative on a five-point scale of its own devising.

And a preferred option is not the same as a fait accompli, of course.

The consultation is open for a couple more weeks. A group of disgruntled members plan to petition the board to retain the status quo at its AGM in September.