ICANN Board: no foul play in .web auction

ICANN Board gives approval to contract the .web top level domain.

The ICANN Board of Directors has determined that an agreement between Nu Dot Co and Verisign for the .web top level domain name did not violate the new TLD application terms.

The backstory: a company called Nu Dot Co won the auction to run the .web top level domain for $135 million. Verisign (NASDAQ: VRSN) struck a deal with Nu Dot Co ahead of the auction in which it would bankroll the auction, and then Nu Dot Co could assign the .web domain to Verisign. Afilias (now Altanovo Domains) was the runner-up bidder and complained about the deal. It ultimately filed for Independent Review. The review panel kicked the issue back to ICANN by informing it that ICANN needed to determine whether Nu Dot Co’s deal with Verisign violated the new TLD rules.

At a board meeting on Sunday, ICANN finally made its determination: Nu Dot Co did not violate the new TLD Guidebook or auction rules and ICANN should proceed with processing its .web application. It determined:

…the [Nu Dot Co and Verisign agreement] falls into a gray area that the Guidebook and Auction Rules do not specifically address. Thus, while both sides make plausible arguments, none of those arguments exactly fits the [agreement] and the parties’ conduct under the current Guidebook and Auction Rules.

It noted that many other applicants had agreements involving post-delegation transfers of domains. Verisign’s deal became public because it’s a public company and had to disclose the deal.

To be sure, no parties seemed to complain when these other deals went through, such as one for .blog. The gripe over .web appears to have been driven by three factors:

1. The auction was an ICANN “auction of last resort” in which the losers didn’t get anything, missing out on a $20 million+ payoff for each party.
2. .Web was arguably the best new TLD applied for in the first round.
3. It involved Verisign.

The Board further resolved that the applicant rules for the next round of top level domains should clarify the validity of these types of agreements.

It did not make a determination on if Altanovo violated auction blackout rules with communications sent to Nu Dot Co shortly before the auction, deciding that it was not necessary at this time given its broader decision.

So, does this mean Verisign will soon start offering .web domain names? That depends on what Altanovo decides to do. It has previously threatened to continue its fight through legal means.