VeriSign to raise .com and .net prices again

VeriSign has announced price increases for .com and .net domain name registrations.
From January 15, 2012, .com registry prices will increase from $7.34 to $7.85 and .net fees will go up from $4.65 to $5.11.
That’s a 10% increase for .net and a 7% increase for .com, the maximum allowable under its registry agreements with ICANN.
As ever, registrants have six months to lock down their domains at current pricing by renewing for periods of up to 10 years.
The last time VeriSign raised prices, also by 7% and 10%, the higher prices became effective a year ago, July 2010.
VeriSign’s contract for .net was renewed last month after it was approved by the ICANN board of directors.
Its .com contract comes up for renewal next year.

Buy a .com in England, go to jail in America?

People who register .com or .net domain names to conduct illegal activity risk extradition to the United States because the domains are managed by an American company.
That’s the startling line reportedly coming from the Immigration and Customs Enforcement agency, which is trying to have the British operator of TVShack.net shipped out to stand trial in the US.
According to reports, 22-year-old student Richard O’Dwyer is fighting extradition to face charges of criminal copyright infringement.
ICE assistant deputy director Erik Barnett told The Guardian that any overseas web site using a .com or .net address to spread pirated material is a legitimate target for prosecution in the States.
The agency has already started shutting down .com and .net sites by seizing their domains, even if the sites in question had been found legal in their own overseas jurisdictions.
It does so by serving a court order to VeriSign, the registry manager, which is based in Virginia. The company is of course obliged to obey the order.
TVShack.net provided links to bootleg movies and TV shows, rather than hosting the content itself. It appears to be a matter of some confusion in the UK whether that behavior is actually illegal or not.
The site reportedly was hosted outside the US, and O’Dwyer never visited the US. The only link was the domain name.
I’m British, but DI is a .com, so I’d like to exercise my (presumed conferred) First Amendment rights to call this scenario utterly insane.
The issue of legal jurisdiction, incidentally, is one that potential new gTLD applicants need to keep in mind when selecting a back-end registry services provider.
Most incumbent providers are based in the US, and while we’ve seen plenty of upstarts emerge in Europe, Asia and Australia, some of those nations sometimes have pretty crazy laws too.

VeriSign’s .net contract renewed

VeriSign has been given the nod to continue to run the .net domain registry after a vote by ICANN’s board of directors today.
The vote was 14-0, with director Bertrand De La Chappelle abstaining without explanation.
The renewal is hardly surprising – nobody thought for a second that VeriSign would fail to retain the contract – but the deal was controversial anyway, due to a Boing-Boing misunderstanding.
The contract still allows VeriSign to carry on raising prices, by up to 10% in any given year, and it still calls for ICANN to receive $0.75 per domain, which currently adds up to over $10 million a year.
The money is still ostensibly earmarked for special projects including extending ICANN’s outreach into developing nations and DNS security, and the resolution passed by the board today says:

ICANN commits to provide annual reporting on the use of these funds from .NET transaction fees.

This is presumably designed to address criticisms that it basically ignored its commitment under the 2006 .net agreement to set up two “special restricted funds” to manage .net cash, as I reported on here.

Hot topics for ICANN Singapore

ICANN’s 41st public meeting kicks off in Singapore on Monday, and as usual there are a whole array of controversial topics set to be debated.
As is becoming customary, the US government has filed its eleventh-hour saber-rattling surprises, undermining ICANN’s authority before its delegates’ feet have even touched the tarmac.
Here’s a high-level overview of what’s going down.
The new gTLD program
ICANN and the Governmental Advisory Committee are meeting on Sunday to see if they can reach some kind of agreement on the stickiest parts of the Applicant Guidebook.
They will fail to do so, and ICANN’s board will be forced into discussing an unfinished Guidebook, which does not have full GAC backing, during its Monday-morning special meeting.
It’s Peter Dengate Thrush’s final meeting as chairman, and many observers believe he will push through some kind of new gTLDs resolution to act as his “legacy”, as well as to fulfill the promise he made in San Francisco of a big party in Singapore.
My guess is that the resolution will approve the program in general, lay down some kind of timetable for its launch, and acknowledge that the Guidebook needs more work before it is rubber-stamped.
I think it’s likely that the days of seemingly endless cycles of redrafting and comment are over for good, however, which will come as a relief to many.
Developing nations
A big sticking point for the GAC is the price that new gTLD applicants from developing nations will have to pay – it wants eligible, needy applicants to get a 76% discount, from $185,000 to $44,000.
The GAC has called this issue something that needs sorting out “as a matter of urgency”, but ICANN’s policy is currently a flimsy draft in desperate need of work.
The so-called JAS working group, tasked with creating the policy, currently wants governmental entities excluded from the support program, which has made the GAC, predictably, unhappy.
The JAS has proven controversial in other quarters too, particularly the GNSO Council.
Most recently, ICANN director Katim Touray, who’s from Gambia, said the Council had been “rather slow” to approve the JAS’s latest milestone report, which, he said:

might well be construed by many as an effort by the GNSO to scuttle the entire process of seeking ways and means to provide support to needy new gTLD applicants

This irked Council chair Stephane Van Gelder, who rattled off a response pointing out that the GNSO had painstakingly followed its procedures as required under the ICANN bylaws.
Watch out for friction there.
Simply, there’s no way this matter can be put to bed in Singapore, but it will be the topic of intense discussions because the new gTLD program cannot sensibly launch without it.
The IANA contract
The US National Telecommunications and Information Administration wants to beef up the IANA contract to make ICANN more accountable to the NTIA and, implicitly, the GAC.
Basically, IANA is being leveraged as a way to make sure that .porn and .gay (and any other TLD not acceptable to the world’s most miserable regimes) never make it onto the internet.
If at least one person does not stand up during the public forum on Thursday to complain that ICANN is nothing more than a lackey of the United States, I’d be surprised. My money’s on Khaled Fattal.
Vertical integration
The eleventh hour surprise I referred to earlier.
The US Department of Justice, Antitrust Division, informed ICANN this week that its plan to allow gTLD registries such as VeriSign, Neustar and Afilias to own affiliated registrars was “misguided”.
I found the letter (pdf) utterly baffling. It seems to say that the DoJ would not be able to advise ICANN on competition matters, despite the fact that the letter itself contains a whole bunch of such advice.
The letter has basically scuppered VeriSign’s chances of ever buying a registrar, but I don’t think anybody thought that would happen anyway.
Neustar is likely to be the most publicly annoyed by this, given how vocally it has pursued its vertical integration plans, but I expect Afilias and others will be bugged by this development too.
The DoJ’s position is likely to be backed up by Europe, now that the NTIA’s Larry Strickling and European Commissioner Neelie Kroes are BFFs.
Cybercrime
Cybercrime is huge at the moment, what with governments arming themselves with legions of hackers and groups such as LulzSec and Anonymous knocking down sites like dominoes.
The DNS abuse forum during ICANN meetings, slated for Monday, is usually populated by pissed-off cops demanding stricter enforcement of Whois accuracy.
They’ve been getting louder during recent meetings, a trend I expect to continue until somebody listens.
This is known as “engaging”.
Geek stuff
IPv6, DNSSEC and Internationalized Domain Names, in other words. There are sessions on all three of these important topics, but they rarely gather much attention from the policy wonks.
With IPv6 and DNSSEC, we’re basically looking at problems of adoption. With IDNs, there’s impenetrably technical stuff to discuss relating to code tables and variant strings.
The DNSSEC session is usually worth a listen if you’re into that kind of thing.
The board meeting
Unusually, the board’s discussion of the Guidebook has been bounced to Monday, leading to a Friday board meeting with not very much to excite.
VeriSign will get its .net contract renewed, no doubt.
The report from the GAC-board joint working group, which may reveal how the two can work together less painfully in future, also could be interesting.
Anyway…
Enough of this blather, I’ve got a plane to catch.

Find domain keywords with new VeriSign apps

VeriSign has released a suite of cute applications for visualizing keywords mined from newly registered domain names.
DomainView has been around for a few months as a tag cloud on the VeriSign web site, but it’s now also an embeddable web widget and a scrolling ticker plug-in for Firefox and Chrome browsers.
The service samples recently registered .com and .net domains for recurring keywords, and spits those keywords back out, along with a short list of related domains that are available to register.
The company is planning to release an iPhone app in the near future, and there’s an API for developers to use today.
I’ve installed the ticker. It’s a nice idea, but it does get a bit distracting after a few minutes. Thankfully, it can be hidden through the options menu.
You can find the new applications here.

Senior ICANN staffer hired by .bank project

Craig Schwartz, ICANN’s chief gTLD registry liaison, has been headhunted by BITS, the tech arm of the Financial Services Roundtable, to head up its .bank top-level domain application.
Schwartz will become BITS’ general manager of registry programs in early July, following the conclusion of the next ICANN meeting in Singapore.
BITS has yet to reveal the TLDs it plans to apply for, but .bank is the no-brainer. I understand it is also considering complementary strings, such as .finance and .insurance
The organization has already said that it plans to use VeriSign as its back-end registry services provider.
Schwartz is a five-year ICANN veteran, and his experience dealing with registries will no doubt be missed, particularly at a time when the number of gTLDs is set to expand dramatically.
His replacement will have plenty of time to settle into the role, however. The first new gTLDs approved under the program are not likely to go live until late 2012 at the earliest.

ICANN beefs up new TLD fraudster checks

ICANN has broadened the background checks in its new top-level domains program to ban companies with a history of consumer fraud from applying for a new gTLD.
The new check in the Applicant Guidebook reads as follows:

a final and legally binding decision obtained by a national law enforcement or consumer protection authority finding that the applicant was engaged in fraudulent and deceptive commercial practices as defined in the Organization for Economic Co-operation and Development (OECD) Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders may cause an application to be rejected. ICANN may also contact the applicant with additional questions based on information obtained in the background screening process.

The OECD guidelines, which define deceptive practices, were suggested by ICANN’s Governmental Advisory Committee as a way to keep out the fraudsters.
I speculated last week that implementation of such rules could capture Network Solutions and/or VeriSign, due to their dodgy dealings almost a decade ago.
But it appears that the two companies are safe – the wording is such that it likely does not apply to the settlement NetSol made with the Federal Trade Commission which, while legally binding, was explicitly not a “finding” of fact or law.
The Guidebook also now asks applicants to disclose if they have been “disciplined by any government or industry regulatory body for conduct involving dishonesty or misuse of funds of others”. The “industry regulatory body” text is a new insertion.

Could VeriSign be banned from new TLDs?

Governments have proposed stricter background checks on new top-level domain operators that could capture some of the industry’s biggest players.
Top-five registrar Network Solutions and .com manager VeriSign may have reason to be concerned by the latest batch of Governmental Advisory Committee recommendations.
The GAC wants checks on new gTLD applicants expanded to include not only criminal convictions and intellectual property violations but also government orders related to consumer fraud.
The GAC advised ICANN, with my emphasis:

The GAC believes that the categories of law violations that will be considered in the background screening process must be broadened to include court or administrative orders for consumer protection law violations. If an applicant has been subject to a civil court or administrative order for defrauding consumers, it should not be permitted to operate a new gTLD.

This is not new – the GAC has proposed similar provisions before – but it seems to be the only GAC advice on applicant screening that ICANN has not yet adopted, and the GAC is still pushing for it.
Why could VeriSign and NetSol be worried by this?
One reason that springs to mind is that, back in 2003, NetSol was officially barred by the US Federal Trade Commission from the practice known as “domain slamming”.
Domain slamming, you may recall, was one of the dirtiest “marketing” tactics employed by the registrar sector during the early days of competition.
Registrars would send fake invoices with titles such as “Renewal and Transfer Notice” to the addresses of their rivals’ customers, mined from Whois data.
The letters were basically tricks designed to persuade customers ignorant of the domain name lifecycle to transfer their business to the slamming registrar.
Respectable registrars have nothing to do with such practices nowadays, but a decade ago companies including NetSol and Register.com, the two largest registrars at the time, were all over it.
At the time NetSol was carrying out its slamming campaign, it was part of VeriSign. It was spun off into a separate company earlier in 2003, before the FTC entered its order.
The order (pdf) was approved by a DC judge as part of a deal that settled an FTC civil lawsuit, alleging deceptive practices, against the company.
NetSol was not fined and did not admit liability, but it did agree to be permanently enjoined from any further slamming, and had to file compliance notices for some time afterward.
It seems plausible that this could fall into the definition of a “civil court or administrative order for defrauding consumers” that the GAC wants added to the Applicant Guidebook’s background checks.
Whether the GAC’s advice, if implemented by ICANN, would capture NetSol and/or VeriSign is of course a matter of pure speculation at the moment.
I think it’s highly unlikely that ICANN would put something in the Guidebook that banned VeriSign, its single largest source of funding (over a quarter of its revenue) from the new gTLD program.
Sadly, I think I may also be unfairly singling out these two firms here – I’d be surprised if they’re the only companies in the domain name industry with this kind of black mark against their names.
Existing background checks in the Applicant Guidebook governing cybersquatting are already thought to pose potential problems for registrars including eNom and Go Daddy.
UPDATE: It looks like NSI and VeriSign are probably safe.

VeriSign drops $150,000 on ICANN Singapore

VeriSign, which signed up for an unprecedented $500,000 sponsorship package for ICANN’s meeting in San Francisco, has spent a rather more modest amount for the June meeting.
The company is currently listed as a Platinum Elite sponsor for the Singapore meeting, which kicks off June 19. This tier has a list price of $150,000, though I believe ICANN’s prices are negotiable.
VeriSign’s two main registry services competitors, Neustar and Afilias, had already signed up for cheaper sponsorship tiers, with lower visibility.
It would be my guess that the company waited for its rivals to show their hands before deciding to how much it needed to spend to trump them.
The Singapore meeting may see the approval of the Applicant Guidebook for the new top-level domains program.
(UPDATE: Thanks to the reader who pointed out that ICANN will almost certainly vote to approve the renewal of VeriSign’s .net contract in Singapore.)
There are 19 sponsors for Singapore so far, but currently no takers for the two available top-tier Diamond packages, which are listed at $250,000.
The amount VeriSign coughed up for San Francisco is believed to have largely contributed to the speaking fees of former US president Bill Clinton.
ICANN expects to make about $1.2 million from its three fiscal 2011 meetings, which is less than the cost of a single meeting.

What happened to ICANN’s .net millions?

Questions have been raised about how ICANN accounts for the millions of dollars it receives in fees from .net domain name registrations.
The current .net registry agreement between ICANN and VeriSign was signed in June 2005. It’s currently up for renewal.
Both the 2005 and 2011 versions of the deal call for VeriSign to pay ICANN $0.75 for every .net registration, renewal and transfer.
Unlike .com and other TLDs, the .net contract specifies three special uses for these fees (with my emphasis):

ICANN intends to apply this fee to purposes including:
(a) a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders,
(b) a special restricted fund to enhance and facilitate the security and stability of the DNS, and
(c) general operating funds to support ICANN’s mission to ensure the stable and secure operation of the DNS.

However, almost six years after the agreement was executed, it seems that these two “special restricted funds” have never actually been created.
ICANN’s senior vice president of stakeholder relations Kurt Pritz said:

To set up distinctive organizations or accounting schemes to track this would have been expensive, complex and would have served no real value. Rather — it was intended that the ICANN budget always include spending on these important areas — which it clearly does.

He said that ICANN has spent money on, for example, its Fellowships Program, which pays to fly in delegates from developing nations to its thrice-yearly policy meetings.
He added that ICANN has also paid out for security-related projects such as “signing the root zone and implementing DNSSEC, participating in cross-industry security exercises, growing the SSR organization, conducting studies for new gTLDs”.
These initiatives combined tally up to an expenditure “in excess of the amounts received” from .net, he said.
It seems that while ICANN has in fact been spending plenty of cash on the projects called for by these “special restricted funds”, the money has not been accounted for in that way.
Interestingly, when the .net contract was signed in 2005, ICANN seemed to anticipate that the developing world fund would not be used to pay for internal ICANN activities.
ICANN’s 2005-2006 budget, which was approved a month after the .net deal, reads, with my emphasis:

A portion of the fees paid by the operator of the .NET registry will become part of a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders. These monies are intended to fund outside entities as opposed to ICANN staff efforts.

That budget allocated $1.1 million to this “Developing Country Internet Community Project”, but the line item had disappeared by time the following year’s budget was prepared.
Phil Corwin from the Internet Commerce Association estimates that the $0.75 fees added up to $6.8 million in 2010 alone, and he’s wondering how the money was spent.
“We believe that ICANN should disclose to the community through a transparent accounting exactly how these restricted funds have actually been utilized in the past several years,” Corwin wrote.
He points out that the contract seems to clearly separate the two special projects from “general operating funds”, which strongly suggests they would be accounted for separately.
Given that .net fees have been lumped in with general working capital for the last six years, it seems strange that the current proposed .net registry agreement still calls for the two special restricted funds.
The oddity has come to the attention of the ICA and others recently because the new proposed .net contract would allow VeriSign for the first time to offer differential pricing to registrars in the developing world.
The agreement allows VeriSign to “provide training, technical support, marketing or incentive programs based on the unique needs of registrars located in such geographies to such registrars”, and specifically waives pricing controls for such programs.
It seems probable that this amendment was made possible due to the .net contract’s existing references to developing world projects.
Corwin said ICA has nothing against such programs, but is wary that existing .net registrants may wind up subsidizing registrants in the developing world.