IPC asks ICANN to halt controversial .Sucks domain name roll out

Calls it “predatory, exploitative and coercive” and points out bizarre contract with ICANN.

The Intellectual Property Constituency (IPC) is asking (pdf) ICANN to halt Vox Populi’s roll out of the .sucks top level domain name, calling the registry’s unique pricing “predatory, exploitative and coercive”.

The group is upset that Vox Populi plans to charge $2,499 to trademark owners to register their domains while offering a much cheaper price to non-trademark holders. The registry has also placed a premium on a number of brands that have submitted their marks to the Trademark Clearinghouse. This, the IPC claims, will discourage trademark holders from using a key rights protection mechanism.

IPC believes Vox Populi has set this up to encourage bad faith registrations by third parties and increase the likelihood of TM infringement.

In a letter to ICANN, IPC notes:

…Vox Populi may well be liable under the Post Delegation Dispute Resolution Policy (PDDRP), may in fact be accountable under the various intermediary liability laws around the world, and may have breached its Registry Agreement with ICANN (as well as ICANN Consensus Policies) by adding additional elements (the subsidy and “sunrise premium” name schemes) which materially alters the mandatory RPM in a manner which renders them detrimental to brand owners, and a new registry service in the form of its everything.sucks platform.

Everything.sucks is a third party arrangement in which people can register domains for a much lower price if they host them on a third party platform (and if they aren’t the trademark holder).

IPC also points out a peculiar change to the standard new TLD contract that’s in the .Sucks agreement with ICANN. It includes an additional fee for Vox Populi with $100,000 upfront and $1 for each additional transaction for up to 900,000 transactions. It’s very odd that a registry would agree to pay this additional amount to ICANN.

Summarizing the issue, the IPC writes:

We understand that ICANN has previously taken the position that it does not regulate pricing and that compliance has refused to take action based on a pricing issue. However, Vox Populi’s entire business model, and in particular, the categorization of TMCH-registered and protected marks as “premium” and “sunrise premium” for the purposes of setting exorbitant pricing schemes and using “subsidized” domain names to maximize the likelihood that trademarks which are not registered during Sunrise will be registered by third parties, goes far beyond mere “pricing.” This scheme constitutes an abuse and a perversion of the mandatory RPMs approved by the ICANN community, solely to make money off the backs of brand owners, and appears to violate the Registry Agreement as well as numerous Consensus Policies. It creates a mockery of the new TLD process and calls into question the very ability of ICANN as an organization to be able to administer the new gTLD program. This issue is particularly timely, given the accountability debate in which ICANN is embroiled.

ICANN budget proposal shows new TLDs weaker than expected

As registrars predicted, 2015 forecast was too rosy.

ICANN released its 2016 draft FY16 Operating Plan & Budget for the fiscal year beginning this July, and it shows weaker-than-expected new top level domain name results in the current year.

The group expects just $14.1 million in revenue from new TLDs for FY 2015 (which ends in June). That’s well below the budgeted $19.8 million. That $19.8 million number itself was a shadow of its original proposed forecast after ICANN slashed the number of new TLD registrations it expected. Click here to continue reading…

.Com’s biggest winners and losers

Uniregistry wins and Moniker loses when it comes to .com domain name transfers in November.

ICANN has published the most recent monthly report from ICANN showing .com transfer wins and losses from November.

Uniregistry had the biggest net inflow of transfers for a public registrar, while Moniker had the biggest net outflow. As bad as the number was for Moniker (23,847 lost to only 3,136 gained), it wasn’t as bad as its October outflow.

Here are the top 5 winners*, measured by net transfers-in (transfer gain minus transfer loss): Click here to continue reading…

ICA responds to ICANN CEO Fadi Chehadé’s “Hogging” remarks

ICANN boss made questionable comments in Davos last month.

Internet Commerce Association has sent a letter (pdf) to ICANN CEO Fadi Chehadé, following remarks Chehadé made at the World Economic Forum’s annual meeting in Davos.

In a video interview with Huffington Post, Chehadé said:

The reality is, the more there are names, the less people will actually be hogging names in order to charge a lot for them. Because if somebody took your name on dot-x, you can go get another name on dot-y now.” and “We went from twenty-something top-level domains … to hundreds now… We think it will actually reduce cybersquatting eventually.

The remarks were widely rebuked. On this week’s Domain Sherpa Discussion, I noted that it seemed Chehadé went off message while trying to say that new TLDs deliver more consumer choice while not contributing to a meaningful increase in trademark infringing domain names.

ICA’s letter, penned by President Jeremiah Johnston, notes that people investing in domain names (i.e., hogging domains) are the ones footing the bill for ICANN’s massive growth and budget. ICA’s members represent about 10% of all registered domain names, and Johnston points out that this means they paid for about 20 of Chehadé’s 197 trips last year.

The notes that there is nothing wrong with domain name investing, and investors are merely setting a market price. Furthermore, new TLD companies are playing the same role as domain name investors in legacy TLDs, reserving thousands of domain names and setting high prices on the better ones. For the most part, it’s not the case that, if your desired domain is taken in .com, you can acquire it cheaply on a new TLD.

In fact, new TLD operators’ ability to charge whatever they want for new TLDs is probably why contention set auctions are going so high, further lining ICANN’s pockets.

The absence of pricing controls in new gTLDs has in fact shifted pricing discretion away from portfolio registrants and toward registry operators. In .com and other legacy gTLDs with low annual registration fees, domain investors price domains they offer for resale based upon their perceived market value. In the new gTLD program, the registries are pricing annual domain registration based upon on their perception of market value. In both instances, the marketplace is working.

The letter also questions Chehadé’s use of the word “cybersquatting” in the same breathe of “hogging” domain names, and seeks clarification on if he was tying domain name investing together with trademark infringement.

ICANN hacked, zone file system among victims

Hackers phished ICANN employees to gain access to systems.

ICANN revealed today that its systems were compromised by a phishing attack.

The attack involved emails designed to look like they came from ICANN’s own domain name being sent to members of its staff. Email credentials of several ICANN staff members were obtained.

It appears the biggest system to be accessed as a result of the security breach was The Centralized Zone Data System (CZDS). This system is a repository for zone files from each registry, updated daily. Many bloggers use this system to download zone file data.

According to ICANN, the attacker gained access copies of the zone files in the system, as well as information entered by users such as name, postal address, email address, fax and telephone numbers, username and password. It says the passwords were stored as salted cryptographic hashes, but it has reset all passwords as a precaution.

Was CZDS the target of the attack, or was it just one of the few systems the attackers could access with the obtained credentials?

Given the current struggle over the transition of certain internet management functions away from the U.S. government, ICANN could become a target for future politically-motivated attacks. There could certainly be Sony-like emails that people would like to get their hands on.

The attack occurred in November, and ICANN discovered that the compromised credentials were used to access the CZDS in December. ICANN says notice of the issue was not delayed as a result of a law enforcement investigation.