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.Org updates: deadline extended, state regulators ask for time to weigh in

by — Policy & Law 10 Comments

Deal delayed another 30 days as ICANN works through deal blowback.

ICANN logoICANN and Public Interest Registry have mutually agreed to extend the time that ICANN has to review Public Interest Registry’s (PIR) answers to its questions about the sale of .org to Ethos Capital by 30 days. ICANN also says that it will be asking more questions.

Separately, The National Association of State Charities Officials has written to ICANN (pdf) to ask it to allow time for regulators to review the transaction. The association’s members include attorneys general, Secretary of State offices and other groups in charge of preventing the misuse of charitable assets.

Why ICANN’s transparency took a hit last year

by — Policy & Law 0 Comments

MyICANN was critical to following everything happening at ICANN, but it hasn’t been available for a year.

Screenshot of MyICANN daily briefing

MyICANN, a key component of transparency at ICANN, has been gone for a year.

One of the best things that former ICANN CEO Fadi Chehadé oversaw while he led the organization was myICANN.

MyICANN gave a drastic boost to transparency at ICANN by doing a simple thing: notifying you when something was added to ICANN.org.

It sounds simple and it is. But it surfaced critical information on ICANN.org rather than burying it somewhere deep on the hopelessly complex website. Even if it was published on a Saturday.

Unfortunately, the service was shut down at the end of 2018.

It’s quite difficult to find this information now. Some information is syndicated through ICANN’s RSS feed, but not all of it.

I reached out to ICANN to find out why it terminated the service. A spokesperson said it’s working on a more robust version. I don’t think a more robust version is needed. It worked great, and it’s unfortunate that myICANN shut down.

6 lawmakers urge ICANN to reject .Org sale

by — Policy & Law 11 Comments

Warren, Wyden formally ask ICANN to reject sale.

Photo of Elizabeth Warren

Elizabeth Warren is one of the lawmakers asking ICANN to reject the .org sale. Photo from ElizabethWarren.com.

Six U.S. lawmakers have asked (pdf) ICANN to reject the sale of .Org to Ethos Capital, a private equity company.

The lawmakers include presidential candidate Elizabeth Warren, Rony Wyden, Richard Blumenthal, Edward Markey, Anna Eshoo, and Mark Pocan.

In a letter to ICANN, they provide a litany of reasons that ICANN should reject the deal. One is that they believe the new owners will raise prices and cut costs as a way to pay down debt and return funds to investors.

They point out that, even if Ethos raises prices 10% a year on average, this is three times how much PIR has traditionally raised prices.

The letter concludes:

The proposed sale of .ORG is against the public interest and would violate ICANN’s commitment to “preserve and enhance .. . the operational stability, reliability, security … and
openness of the DNS and the Internet.

ICANN has previously said that it doesn’t have authority over the deal. While it can technically not consent to the transfer, its approval can’t be “unreasonably withheld”. What that means is open to interpretation.

Surprisingly, Republican Ted Cruz has not chimed in on the matter. Given his stance about the U.S. controlling ICANN, you’d think he’d be all over this issue.

Vint Cerf and Mike Godwin follow bad talking points for .Org deal

by — Policy & Law 22 Comments

Pricing and investment arguments are wrong.

Logo for .org domain, featuring a blue circle with white letters spelling ORG
Ethos Capital and Internet Society are working overtime to spin the deal to sell .org for $1.35 billion as a good thing. There are certainly some good things about it, but I cringe when I read certain talking points.

One is around pricing. Yesterday, from ISOC board member Mike Godwin:

But could it be at the public’s expense? What about the argument that the prices for domain-name renewals will soar? This argument ignores common sense — you don’t take over a successful business and price most of your customers out of the market or spur a mass migration to an alternative product. Not only would that permanently destroy any faith in .ORG — the business you just bought — but it also would undermine TLDs generally. (I’ve suggested, not entirely jokingly, that the proper response if anybody tries to extort huge renewal fees for .ORG is to launch a mass one-time conversion to the .WTF top-level domain. I’d happily lead any charge in the .WTF Resistance.) In any case, demand for TLDs isn’t inelastic, despite what the deal’s critics say — there are hundreds of TLDs and customers aren’t locked in. It takes only a few minutes of studying PIR’s year-by-year financials to see that jacking up domain-name renewal prices in the way the critics fear would be suicidal for PIR or any other registry that depends primarily on predictable renewal rates, and it would destroy the value of .ORG as well. I don’t think any of the companies that sought to buy PIR were dumb enough to invest a billion dollars in buying the .ORG business in order to destroy it.

And from Vint Cerf:

Moreover, as a for-profit company, PIR has a clear rationale for not driving away its customer base by any excessive raising of prices. Given current .org pricing, a 10% increase in price would be less than $1. Even if an organization had registered a dozen .org domain names, it is hard to believe that such an increase would be viewed as unsustainable for most non-profits. Of course, companies that hold domain names in the tens of thousands for speculative purposes might find such increases more troubling, but I don’t have much sympathy for that business model in the context of the organizations the .org brand is intended to serve.

This thinking ignores the economics of domain names. Godwin suggests that .org customers aren’t locked in. OK, then ISOC should figure out what would be involved with switching from InternetSociety.org to InternetSociety.charity. It would cost lots of money and time, and the headaches from switching email would last for years. True, there is price elasticity to domain demand. But for renewals, it takes a huge price increase to change demand.

Cerf is correct that most charities won’t blink an eye at a $1 increase in the cost of renewing their domain name, at least in the first world. But this assumes that Ethos and whoever owns .org in the future won’t raise prices more than 10% per year. Calling on Godwin’s words, jacking up .org renewal prices would not be ‘suicidal’ to .org. Even if renewals were $100 a year, it wouldn’t be worth the pain for most non-profits to switch.

The other issue I have is with the idea that Ethos can invest in .org to create new products and services for non-profits. It certainly can, but there’s no reason PIR can’t under the current arrangement. Cerf writes:

Second, when the operation of .org was transferred to the Internet Society, it created the non-profit called Public Interest Registry, or PIR. PIR’s primary objectives were, first, to operate .org and, second, to provide significant support for the Internet Society by essentially allocating any surplus from the operation of PIR to fund the Internet Society’s work in promoting a more accessible and secure Internet. This amounted to about $50 million a year, which was hugely helpful to the Internet Society but limited PIR’s ability to invest in improvements to the operation of .org or even the creation of new products and services for the non-profit community.

The idea that Public Interest Registry is cash-strapped because it has to send its profits to ISOC doesn’t hold water. PIR has been able to increase prices 10% per year for the past decade but hasn’t always done so. If it raises prices 10% this year, it gets another $10 million in its bank account that ISOC isn’t depending on. That’s not enough to invest in new products or services?

This isn’t to say the deal isn’t good for ISOC. Godwin does a good job explaining that domain name revenues aren’t certain, and this endowment gives ISOC certainty. That’s a selling point for ISOC and its constituents. But let’s be honest about possible ramifications of this deal.

Naturals.com loss is a “win” for Indian law firm

by — Policy & Law 3 Comments

Its client lost but the panelist didn’t find reverse domain name hijacking.

Screenshot for Naturals.in showing a woman sitting on a chair

A chain of beauty salons in India that uses the domain Naturals.in failed to get Naturals.COM through UDRP.

A UDRP for Naturals.com that was filed in October has been found in favor of the domain name registrant. The case was filed by an India-based chain of hair salons and training centers.

It will come as no surprise that the Complainant lost the case for this dictionary-word domain name. But the law firm that represented the Complainant might view it as a win, because it wasn’t found guilty of reverse domain name hijacking again.

The law firm DePenning & DePenning represented the beauty chain. It has been on the wrong end of at least three reverse domain name hijacking cases, including one last week.

This case could have gone that way. The domain owner registered the domain in 2001, and it seems that the beauty chain’s presence, at least online, started well after that. It didn’t register Naturals.in until much later.

The Complainant’s arguments seem rather flimsly and misguided:

Complainant further states that the use and existence of Domain Name will cause damage to Complainant’s business and reputation, and to customers and the general public. Any misrepresentation caused on account of the Domain Name would result in confusion and deception in the minds of customers. In this regard, domain names are emerging corporate assets and have evolved as a fulcrum of a company’s visibility and marketing operations. Business transactions will soon be carried out only through Internet addresses rather than street addresses, post boxes or faxes. Complainant states that it will not be able to effectively pursue its business plans on the Internet unless the registration of the Domain Name is held by Complainant. Complainant states it is the legitimate owner of the domain names naturals.in and naturals.lk, through which it undertakes business and promotional activities. In view of the Domain Name’s registration, Complainant stands to lose financially and faces the imminent risk of dilution of brand value associated with the mark NATURALS.

Apparently, this concern didn’t develop until just last year.

World Intellectual Property Organization panelist Christopher Gibson gave the Complainant a pass on reverse domain name hijacking:

Panels have found that the mere lack of success of a complaint is not itself sufficient for a finding of RDNH. In this case, the Panel finds that Complainant satisfied two of the three elements under the Policy. Complainant seems to have been convinced that, while it has trademark rights in its NATURALS mark, Respondent was only using the Domain Name for the purpose of offering it for sale to Complainant at an amount clearly in excess of Respondent’s out-of-pocket costs. The file does not show that Complainant knew or should have clearly known that it could not succeed under any fair interpretation of facts reasonably available prior to the filing of the Complaint and before receiving Respondent’s Response.

I disagree. I think with a bit of due diligence, the Complainant would have known that this case was doomed to fail. The domain was clearly not registered in bad faith.