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Verisign applies pressure to ICANN to delegate .web

Verisign is tired of delays (as it should be).

The word .web on an ivory block background, with a picture of a laptop and screen

 

Verisign is applying pressure to ICANN to delegate the .web top level domain name to it.

Today, the company published a blog post that follows up to a letter (pdf) that Nu Dot Co sent to ICANN reviewing the saga and disclosing what it says is proof of inappropriate behavior by its adversaries.

Nu Dot Co, a business founded by .Co Internet’s founders, applied for the .web top level domain in the 2012 expansion round. After the application period closed, Verisign (NASDAQ: VRSN) decided it wanted to own .web and worked out a deal with Nu Dot Co in which Nu Dot Co would bid in the auction and Verisign would then buy the top level domain from it.

Nu Dot Co (NDC) won the auction for $135 million, which was the amount of the second-highest bid, placed by applicant Afilias.

Other applicants were upset. Not only did their rival Verisign win the auction, but Nu Dot Co decided to use an ICANN auction of last resort rather than a private auction in which the losing applicants stood to earn tens of millions of dollars each. Indeed, one .web applicant promised Nu Dot Co it would receive at least $17 million if it lost the auction.

Donuts, another applicant, subsequently sued, but the judge dismissed the case.

After Donuts exhausted its options, Afilias picked up the baton and filed for cooperative engagement with ICANN. Then it escalated to the Independent Review Process (IRP).

The net result of that IRP was that the panel admonished ICANN for punting on whether NDC’s deal with Verisign was legit or not. The panel wrote:

It may be fair to say, as averred in the [ICANN’s] Response, that “ICANN has been caught in the middle of this dispute between powerful and well-funded businesses”. However, in the Panel’s view, it is not open to [ICANN] to add, as it does in the same sentence of its Response, “[and ICANN] has not taken sides”, as if [ICANN] had no responsibility in bringing about a resolution of the dispute by itself taking a position as to the propriety of NDC’s arrangements with Verisign.

The IRP kicked it back to ICANN to make a decision like it should have in the first place.

Verisign’s new blog post and Nu Dot Co’s letter to Verisign contain a fair bit of spin, including by suggesting that the other applicants were trying to rig the auction by settling it amongst themselves and, as written in the blog post, “which would in turn deny the broader internet community the benefit of the proceeds of a public auction.” Private settlement of contention sets was encouraged by ICANN. That said, some parties might have pushed the bounds of the process, and there was one communication that probably violated a blackout clause ahead of the ICANN auction.

Although I’m not a fan of some of Verisign’s business practices, I think the other applicants for .web have been two-faced in this ordeal. They didn’t complain about a similar deal in which Automattic acquired .blog. That was done through a private auction and benefited the other applicants. And it didn’t involve Verisign, which certainly rankled the new TLD-contingent’s feathers.

In fairness to all parties, it’s time for ICANN to step up and make a decision. If it determined that the deal between Nu Dot Co and Verisign did not violate its rules, then it’s time to delegate .web to Verisign.

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  1. kj says

    Frankly a third party should step in and make the decision. It is not good for ICANN to be deciding this when it is receiving $130 million from Verisign. The optics of yet another quid-pro-quo deal here are just too big to ignore. It paints a really bad picture between the two organizations and what is a pattern (the $20 million quid-pro-quo deal from Verisign to ICANN in order to allow Verisign to raise .com prices.) This needs competition oversight to ensure the decision is IMPARTIAL and not in the biggest sweetheart deal there is….

    • rubensk says

      Money won’t go directly to ICANN, but to a fund. Although ICANN did withdraw from that fund before, they could earmark the .web money to only be used by the causes that fund will support.

      While I do see competition issues in .web, they are not part of the decision making process anymore. No competition authority stepped up against it; I think they should have, but the statute of limitations for that has passed.

      Perhaps after Verisign starts running .web and does something anti-competitive with it, authorities could take a fresh look at the case.

      • Andrew Allemann says

        I don’t think there’s any statute of limitations on it. A competition authority can look at things like this at any time. The U.S. looked into .web and didn’t end up taking action.

  2. Snoopy says

    They are all dirty dealers, just release the extension Icann.

    All of these auctions should have been public instead of nonsense with people getting paid to lose.

  3. Nick says

    Serious question, because I don’t understand. How does a blog post apply pressure? Icann gets scared of blog posts? I really don’t get it.

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