ICANN flips off governments over Whois privacy

ICANN has formally extended its middle finger to its Governmental Advisory Committee for only the third time, telling the GAC that it cannot comply with its advice on Whois privacy.
It’s triggered a clause in its bylaws used to force both parties to the table for urgent talks, first used when ICANN clashed with the GAC on approving .xxx back in 2010.
The ICANN board of directors has decided that it cannot accept nine of the 10 bulleted items of formal advice on compliance with the General Data Protection Regulation that the GAC provided after its meetings in Puerto Rico in March.
Among that advice is a direction that public Whois records should continue to contain the email address of the registrant after GDPR goes into effect May 25, and that parties with a “legitimate purpose” in Whois data should continue to get access.
Of the 10 pieces of advice, ICANN proposes kicking eight of them down the road to be dealt with at a later date.
It’s given the GAC a face-saving way to back away from these items by clarifying that they refer not to the “interim” Whois model likely to come into effect at the GDPR deadline, but to the “ultimate” model that could come into effect a year later after the ICANN community’s got its shit together.
Attempting to retcon GAC advice is not unusual when ICANN disagrees with its governments, but this time at least it’s being up-front about it.
ICANN chair Cherine Chalaby told GAC chair Manal Ismail:

Reaching a common understanding of the GAC’s advice in relation to the Interim Model (May 25) versus the Ultimate Model would greatly assist the Board’s deliberations on the GAC’s advice.

Of the remaining two items of advice, ICANN agrees with one and proposes immediate talks on the other.
One item, concerning the deployment of a Temporary Policy to enforce a uniform Whois on an emergency basis, ICANN says it can accept immediately. Indeed, the Temporary Policy route we first reported on a month ago now appears to be a done deal.
ICANN has asked the GAC for a teleconference this week to discuss the remaining item, which is:

Ensure continued access to the WHOIS, including non-public data, for users with a legitimate purpose, until the time when the interim WHOIS model is fully operational, on a mandatory basis for all contracted parties;

Basically, the GAC is trying to prevent the juicier bits of Whois from going dark for everyone, including the likes of law enforcement and trademark lawyers, two weeks from now.
The problem here is that while ICANN has tacit agreement from European data protection authorities that a tiered-access, accreditation-based model is probably a good idea, no such system currently exists and until very recently it’s not been something in which ICANN has invested a lot of focus.
A hundred or so members of the ICANN community, led by IP lawyers who won’t take no for an answer, are currently working off-the-books on an interim accreditation model that could feasibly be used, but it is still subject to substantial debate.
In any event, it would be basically impossible for any agreed-upon accreditation solution to be implemented across the industry before May 25.
So ICANN has invoked its bylaws fuck-you powers for only the third time in its history.
The first time was when the GAC opposed .xxx for reasons lost in the mists of time back in 2010. The second was in 2014 when the GAC overstepped its powers and told ICANN to ignore the rest of the community on the issue of Red Cross related domains.
The board resolved at a meeting last Thursday:

the Board has determined that it may take an action that is not consistent or may not be consistent with the GAC’s advice in the San Juan Communiqué concerning the GDPR and ICANN’s proposed Interim GDPR Compliance Model, and hereby initiates the required Board-GAC Bylaws Consultation Process required in such an event. The Board will provide written notice to the GAC to initiate the process as required by the Bylaws Consultation Process.

Chalaby asked Ismail (pdf) for a call this week. I don’t know if that call has yet taken place, but given the short notice I expect it has not.
For the record, here’s the GAC’s GDPR advice from its Puerto Rico communique (pdf).

the GAC advises the ICANN Board to instruct the ICANN Organization to:
i. Ensure that the proposed interim model maintains current WHOIS requirements to the fullest extent possible;
ii. Provide a detailed rationale for the choices made in the interim model, explaining their necessity and proportionality in relation to the legitimate purposes identified;
iii. In particular, reconsider the proposal to hide the registrant email address as this may not be proportionate in view of the significant negative impact on law enforcement, cybersecurity and rights protection;
iv. Distinguish between legal and natural persons, allowing for public access to WHOIS data of legal entities, which are not in the remit of the GDPR;
v. Ensure continued access to the WHOIS, including non-public data, for users with a legitimate purpose, until the time when the interim WHOIS model is fully operational, on a mandatory basis for all contracted parties;
vi. Ensure that limitations in terms of query volume envisaged under an accreditation program balance realistic investigatory crossreferencing needs; and
vii. Ensure confidentiality of WHOIS queries by law enforcement agencies.
b. the GAC advises the ICANN Board to instruct the ICANN Organization to:
i. Complete the interim model as swiftly as possible, taking into account the advice above. Once the model is finalized, the GAC will complement ICANN’s outreach to the Article 29 Working Party, inviting them to provide their views;
ii. Consider the use of Temporary Policies and/or Special Amendments to ICANN’s standard Registry and Registrar contracts to mandate implementation of an interim model and a temporary access mechanism; and
iii. Assist in informing other national governments not represented in the GAC of the opportunity for individual governments, if they wish to do so, to provide information to ICANN on governmental users to ensure continued access to WHOIS.

.xxx to get lower ICANN fees, accept the URS

ICM Registry has negotiated lower ICANN transaction fees as part of a broad amendment to its Registry Agreement that also includes new trademark protection measures.
The company’s uniquely high $2 per-transaction fee could be reduced to the industry standard $0.25 by mid-2018.
As part of the renegotiated contract, ICM has also agreed to impose the Uniform Rapid Suspension policy on its registrants.
URS is the faster, cheaper version of UDRP that allows trademark owners to have domain names suspended in more clear-cut cases of cybersquatting.
The $2 fee was demanded by ICANN when ICM first signed its RA in 2011.
At the time, ICANN said the higher fee, which had doubled from a 2010 draft of the contract, was to “account for anticipated risks and compliance activities”.
The organization seemed to have bought into the fears that .xxx would lead to widespread misuse — something that has noticeably failed to materialize — and was expecting higher legal costs as a result.
The companion TLDs .adult, .porn and .sex, all also managed by ICM, only pay $0.25 per transaction.
The overall effects on registrants, ICANN and ICM will likely be relatively trivial.
With .xxx holding at roughly 170,000 domains and a minimal amount of inter-registrar transfer activity, ICM seems to be paying ICANN under $400,000 a year in transaction fees at the moment.
Its registry fee is usually $62, though a substantial number of domains have been sold at lower promotional pricing, so the cost to registrants is not likely to change a great deal.
The reduction to $0.25 would have to be carried out in stages, with the earliest coming this quarter, and be reliant on ICM keeping a clean sheet with regards contract compliance.
Under the deal, ICM has agreed to adopt many of the provisions of the standard Registry Agreement for 2012-round gTLDs.
One of those is the URS, which may cause consternation among domainers fearful that the rights protection mechanism may one day also find its way into the .com registry contract.
ICM has also agreed to implement its existing policies on, for example, child abuse material prevention, into the contract as Public Interest Commitments.
The RA amendment is currently open for public comment at ICANN.

Priced to sell: $46m of two-letter .xxx names

ICM Registry has added over 1,200 two-character .xxx names to its catalog of priced premiums.
With prices ranging from $100,000 to $37,500, the newly offered domains carry a total ticket price of over $46 million.
The only six-figure name on the list is vr.xxx. ICM said in a press release today it has already sold vr.porn and vr.sex for $100,000 apiece.
There are seven names with adult connotations (such as 69.xxx and bj.xxx) priced at $75,000, eight more at $50,000 and two at $40,000.
The rest of the list of 1,227 names are being offered at $37,500, which is roughly 10 times the prices on the equivalent .porn, .sex and .adult domains.
While ICM noted the interest in domain investing from China recently, it does not appear to have valued its numeric-only domains (such as 88.xxx) any more highly than less attractive-looking combinations (such as 0o.xxx).
Judging by the list published on ICM’s web site, it has already sold well over 300 two-character domains in its newest three gTLDs.
Had those sold at the buy-now prices it would have raised over $1.1 million in revenue.
But ICM since September has been offering an option to register premium names for premium annual fees that are lower than the one-off price. A $37,500 domain costs $3,000 a year to register, under this model.
The total value of ICM’s premium list, including all the longer domains, is roughly $115 million.

Third ICM windfall due as .sex hits sunrise

If we’ve learned one thing about new gTLD sunrise periods, it’s that adult-oriented TLDs sell quite well.
ICM Registry started its third such period yesterday, as .sex went into its “TMCH Sunrise” phase.
Until October 1, any company with a trademark in the Trademark Clearinghouse will be able to buy a matching .sex domain on a first-come, first-served basis.
From October 5 to October 30, anyone with a .xxx domain name or current .xxx “Sunrise B” block will be able to buy the matching .sex during the Domain Matching phase.
Anyone who buys a .xxx before October 1 will be able to participate in this second sunrise.
ICM reported in May that .porn received 3,995 sunrise registrations while .adult sold 3,902 — both via a combination of TMCH Sunrise sales and blocks.
At ICM’s prices, that’s enough to comfortably cover its ICANN application fees.
Every other new gTLD with the exception of .sucks has sold fewer than 1,000 sunrise names.
General availability for .sex starts November 4.

ICM claws back 68 .porn names it accidentally released

ICM Registry has recovered nine .porn and .adult domain names from their registrants after they were accidentally released into the market.
Domains such as ads.porn, hosting.adult and buy.porn were among those snapped up by registrants, despite the fact that they were supposed to be registry-reserved.
ICM CEO Stuart Lawley told DI that a list of 68 .porn/.adult names (34 strings in each of the two gTLDs) have been brought back into the registry’s portfolio.
Only nine had been registered in the less than 24 hours the names were in the available pool, he said.
Lawley said it was his own personal fault for not sending the reserved list to back-end provider Afilias.
The affected registrants have been offered a domain from ICM’s premium list up to the value of $2,500 for each of the names ICM took back, he said.
Only one registrant has so far declined the offer, Lawley said.
Konstantinos Zournas of OnlineDomain, who broke the news about ads.porn yesterday, identifies this former registrant as “James” and reported that he is taking legal advice.
This is not the first time that a registry has accidentally released reserved names into the pool, where they were subsequently snapped up by domainers.
In January, .CLUB Domains accidentally sold credit.club, a name it had planned to keep on its premium reserved list for $200,000, for $10.99.
In that case, .CLUB honored the purchase after the buyer agreed to develop the site, scoring many brownie points in the domain investor community.
Both .CLUB and ICM have terms in their agreements allowing domains accidentally released to be recovered.
In ICM’s case, the names it accidentally released were not premiums, but rather domains that the registry plans to use as part of its own business — not to be sold at any price.
It used buy.xxx as a cornerstone of its .xxx marketing, for example, and it plans to use buy.porn and buy.adult for the exact same purpose.

.porn and .adult sunrises net around 8,000 sales

The sunrise periods for .porn and .adult netted just shy of 4,000 domains per TLD, according to ICM Registry.
The company said .porn received 3,995 registrations while .adult trailed slightly with 3,902.
Those numbers are a combination of regular Trademark Clearinghouse sunrise registrations and Sunrise B registrations.
The ICANN-mandated sunrise periods ended April 1 and were followed by unique Sunrise B periods, during which anyone who bought a .xxx block in 2011 could register the matching new gTLD names.
This time, however, Sunrise B domains actually do resolve.
I believe the the Sunrise B phases accounted for something like 1,500 names apiece.
The previous high bar for 2012-round new gTLD sunrises was .london, with just over 800 registrations.
While .porn and .adult may be record breakers for this round, sales were just a twentieth of the levels seen when .xxx launched in 2011 — about 80,000 names were defensively registered back then.
Later this week, ICM will kick off another launch phase — Domain Matching — during which anyone who owned a .xxx domain prior to April 30 can get their matching .porn and .adult names.
General availability is scheduled for June 4.

.porn now the biggest new gTLD sunrise

.porn and .adult have taken the crown of the most-subscribed new gTLD sunrise periods to date.
The two ICM Registry spaces opened up for registrations from users of the Trademark Clearinghouse on March 2.
A little over a week later, the company tells DI that both gTLDs have individually exceeded the previous sunrise record holder.
My understanding is that .london was the new gTLD with the most sunrise registrations, selling just over 800 names to TMCH customers during its combined sunrise/landrush, which ended last July.
ICM revealed in a webinar last week that it expected its new gTLDs to have to biggest sunrise numbers to date.
“Both .porn and .adult will have exceeded that [.london] number comfortably,” ICM president Stuart Lawley confirmed to DI today.
.adult is “almost neck and neck” with .porn, Lawley said.
The numbers are still pretty small compared to ICM’s 2003-round gTLD, .xxx, which had over 80,000 sunrise applications in October 2011.
They’re also pretty small compared to the TMCH’s overall number of registrations, which at the last public disclosure was a little under 35,000.
But ICM has another couple opportunities for trademark owners to defensively register that may work out cheaper.
First, from April 6 to April 30 companies that bought non-resolving “blocked” names in the .xxx Sunrise B will be able to block the same strings in .porn and .adult.
ICM says registrars are offering discounts for five-year blocks.
Then, from May 6 to May 31 the Domain Matching program starts. That’s open to any .xxx registrant, defensive or otherwise, but not to those with .xxx Sunrise B blocks.

.xxx to sell at .com prices to pump .porn launch

ICM Registry is to offer .xxx domain names at dramatically reduced prices, which could be in line with .com pricing at some registrars, for the month of April.
At least one registrar plans to offer .xxx names at about $13 for the duration of the offer.
.porn and .adult are set to go to general availability June 4. Before then, there will be a series of launch phases aimed at giving trademark owners and .xxx registrants plenty of opportunity to defensively register.
One phase, Domain Matching, will run from May 6 to May 31.
During DM, owners of .xxx names will be able to get their matching .porn and .adult domains (assuming they haven’t been claimed in the prior sunrise periods) at a reduced fee.
The discount period in April will enable registrants to pre-qualify for .porn’s Domain Matching by buying .xxx names at a much reduced price.
.porn and .adult prices during general availability are expected to be the same as in .xxx, which retails for around $100 ($62 going to ICM).
I don’t know what ICM’s registry fee during the discount period is, but the registrar EnCirca said it plans to sell a bundle of .xxx, .porn and .adult for $39 during April, which works out to $13 each.
EnCirca and 101domain appear to be pricing DM for a registration in a single TLD at about $19.
ICM’s gesture follows its admission in November that .xxx registrants would not get the free, perpetual block of matching .porn and .adult names that the registry had originally planned to offer.
The company has run a deep-discount program once before, in May 2013, when it sold .xxx at .com prices and saw 13,136 adds, compared to 1,131 in the previous month.

.xxx boss says new gTLD registries need to “wake up”

ICM Registry president Stuart Lawley may be just weeks away from launching his second and third gTLD registries, but that doesn’t mean he has a positive outlook on new gTLDs in general.
“I think people need to wake up,” he told DI in a recent interview. “If you do the math on some of these numbers and prospective numbers, it just doesn’t stack up for a profitable business.”
“The new ‘Well Done!’ number seems to be a lot less than it was six months ago or 12 months ago,” he said.
Lawley said he’s among the most “bearish” in the industry when it comes to new gTLD prospects. And that goes for ICM’s own .porn, .sex and .adult, which are due to launch between March and September this year.
While he’s sure they’ll be profitable, and very bullish on the search engine optimization benefits that he says registrants could be able to achieve, he’s cautious about what kind of registration volumes can be expected. He said:

If you add up everybody that has ever bought a .xxx name, including the Sunrise B defensives, we have got a target market of about 250,000 names. People to go back to and say, “Look, you still have a .xxx or you had a .xxx at some stage. Therefore, we think you may be interested in buying .porn, .sex or .adult for exactly the same reasons.”
So, our expectations to sell to a whole new market outside of those quarter of a million names is probably quite limited.

Lawley said that he believes that the relatively poor volume performance of most new gTLDs over the last year will cause many registrars to question whether it’s worth their time and money to offer them.

I can see why registrars can’t be bothered. How many of these am I going to sell? Am I going to sell two hundred of them? Am I going to make five dollars per name? That’s one thousand dollars. It’s not worth it to me to put in ten thousand dollars worth of labor and effort to make one thousand dollars in revenue. So, I think that’s a challenge that many of the small lone player TLDs may face.

Lawley said he’s skeptical about the ability of major portfolio players, such as Donuts, to effectively market their hundreds of gTLDs, many of which are targeted at niche vertical markets.
He said in an ideal world a gTLD would need to spend $20 million to $30 million a year for a few years in order to do a proper PR job on a single TLD — ICM spent about $8 million to $9 million, $5.5 million of which was on US TV spots — and that’s just not economically viable given how many names are being sold.
But he added that he thinks it’s a good thing that some new gTLDs are seeing a steady and fairly linear number of daily additions, saying it might point to better long-term stability.

A lot of the TLDs that seem to be doing okay — .club for argument’s sake and several others in that ilk — seem to be doing their three hundred domains per day ADD, or 32 or 12 or whatever the number is, in a relatively linear fashion six or seven months after launch, which I think is potentially positive if one extrapolates that out.

The full interview, which also addresses SEO, dot-brands, registrar pay-for-placement and smart search, can be read by DI PRO subscribers here.

After lawsuit, YouPorn buys into .xxx portfolio

Porn site operator Manwin Licensing, known to the domain industry for its antitrust lawsuit against ICANN and ICM Registry that was settled last year, has taken over a portfolio of .xxx domains from a staunch .xxx supporter.
Now known as MindGeek, the YouPorn operator is to manage sites for Really Useful, one of the most enthusiastic buyers of premium .xxx domain names.
Really Useful was the first company to have a live .xxx web site — casting.xxx. It has also bought premiums such as orgasms.xxx, bdsm.xxx, mature.xxx, publicsex.xxx, czech.xxx, tubes.xxx, teen.xxx and mom.xxx directly from ICM.
Its spokesperson, “JT”, has expressed his support for .xxx in a few ICM press releases.
MindGeek is also taking over a selection of .com domains as part of the deal.
As Manwin, MindGeek sued ICANN and ICM in late 2011, alleging breaches of US antitrust law. It claimed the need for defensive registrations when .xxx launched amounted to “extortion”.
The suit was settled by ICM last year, but not before a California court ruled that ICANN is not immune to antitrust law.
Now, MindGeek seems to think .xxx domains are okay. Its director of global sales, “Nick P”, reportedly said: “JT’s content and brands are among the hottest on the Internet right now and the future sites planned are phenomenal.”
In unrelated news, MindGeek came under fire this week for producing a series of porn videos that allegedly depict the simulated rape of illegal immigrants by US border patrols.