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ICANN responds to Afilias’ .Web emergency stay request

by — Policy & Law 2 Comments

Non-profit domain overseer argues that an emergency stay isn’t required.

ICANN logoICANN has responded to a request by Afilias to stay any ICANN actions that would further the delegation of the .Web top level domain while the International Centre for Dispute Resolution considers a complaint that Afilias filed. (Here’s the backstory.)

In its opposition to the emergency stay, ICANN points out that Afilias has participated in similar behavior to what Afilias is complaining about: buying and selling new TLDs. Afilias has acquired other TLDs and is trying to acquire more, and ICANN posits that the deal between Nu Dot Co and Verisign is essentially the same thing. I’m sure Afilias would argue that doing a deal before an auction is different, but it didn’t register any complaints when Automattic did something similar for .blog.

ICANN also points out that Afilias waited two years before lodging it formal complaint and asking for an emergency stay, which belittles the idea that there’s an emergency.

Also, if ICANN delegates .Web to Nu Dot Co, its contracts will allow it to cancel the agreement should the IRP be found in Afilias’ favor and ICANN’s board agrees.

The full response is here (pdf).

Verisign jumps in on .Web dispute, here’s what it could mean

by — Policy & Law 1 Comment

Actions suggest Verisign is ready to bring .web to market, not to bury it.

Shortly after domain name registry Afilias filed for Independent Review over the .Web top level domain, Verisign filed an amicus brief asking for an end to the shenanigans.

Domain Incite has a great summary of the filing, so I won’t rehash it. But I will discuss what Verisign’s goals might be.

For the uninitiated, here’s the background:

Nu Dot Co, a business founded by .Co’s founders, applied for the .web top level domain. In 2015, 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 won the auction for $135 million, which was the amount of the second highest bid placed by Afilias.

Donuts subsequently sued, upset that Nu Dot Co pushed for an ICANN auction-of-last-resort in which the losers didn’t get to split the proceeds. Donuts lost its battle.

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

During this time, U.S. antitrust forces investigated Verisign’s deal, ostensibly to see if its goal in getting .web was to quash competition. It decided to not take action, which suggests that it didn’t find any evidence that this was Verisign’s goal.

Fast forward to Verisign’s amicus brief. This is the first time Verisign has explained its side of the argument. It wants the matter resolved and wants to get control of .web.

What does this mean? Here are some reasons Verisign might now be pushing for speedy resolution:

1. It wants to bring .web to market. I tend to think that Verisign really wants to make money with .web. It doesn’t want to damage its bread-and-butter .com, but given how new TLDs have gone so far I think it would be very hard for .web to harm .com.

2. Its contract with Nu Dot Co could contain a clause that requires the company to wrap up the assignment soon.

3. It could be weighing in just to make sure it doesn’t lose the deal.

Regardless of Verisign’s thinking (and sometimes I have trouble understanding what the heck it is thinking), it’s fair to suggest that it’s the new top level domain companies, not Afilias, that have delayed the launch of .web. As Verisign points out in its brief

Afilias took no steps for over two years following its letters to ICANN to initiate an IRP or pursue any other ICANN accountability mechanism. Instead, Afilias sat on its supposed rights, relying on Donut’s CEP for a temporary stay of delegation, thereby scheming, along with Donuts, to delay the delegation of .web for as long as it could.

It’s possible that Afilias was free-loading on Donuts’ legal activity with the hope that it would be resolved in its mutual favor, but it certainly looks like it is trying to delay .web for as long as possible. It certainly could have made its own filings concurrent with Donuts’ activities.

Afilias files for Independent Review on .Web, further delaying domain name

by — Policy & Law 2 Comments

It’s still going to be a long time before .web domain names are available to register.

Following a lengthy ICANN process and failed lawsuit filed by Donuts, Afilias has filed a complaint about .Web under ICANN’s Independent Review Process.

Here’s the backstory:

Nu Dot Co, a business founded by .Co’s founders, applied for the .web top level domain. At some point after applying, 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 won the auction for $135 million, which was the amount of the second highest bid placed by Afilias.

Donuts subsequently sued, upset that Nu Dot Co pushed for an ICANN auction-of-last-resort in which the losers didn’t get to split the proceeds. Donuts lost its battle.

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

In its filing, Afilias wrote:

…by failing to implement faithfully the New gTLD Program Rules, ICANN is enabling VeriSign to acquire the .WEB gTLD, the next closest competitor to VeriSign’s monopoly, and in so doing has eviscerated one of the central pillars of the New gTLD Program: to introduce and promote competition in the Internet namespace in order to break VeriSign’s monopoly.

It’s worth noting that neither Donuts nor Afilias filed complaints over an auction for .blog that had similar circumstances. The only differences were that it was a private auction and Automattic (WordPress) backed the winner.

Donuts loses appeal in .Web case

by — Policy & Law 3 Comments

Court of Appeals agrees that covenant not to sue is valid.

The United States Court of Appeals for the Ninth District has ruled against top level domain name company Donuts over the .Web domain name.

Donuts was one of the applicants for the .web domain name. Nu Dot Co won the auction for $135 million after Verisign (NASDAQ: VRSN) struck a deal with it to transfer the ICANN agreement for .web to it after the auction.

Donuts was upset that Nu Dot Co wouldn’t participate in a private auction for the domain name. Instead, Nu Dot Co pushed it to an ICANN “auction of last resort”. Had the auction been private, Donuts would have received about a $22.5 million payoff for losing.

Donuts went through ICANN’s normal appeals channels. When that failed, it sued ICANN in District court. The judge tossed out the suit because the application for new TLDs included a clause that the applicants would not sue ICANN. Donuts argued that this agreement not to sue is invalid.

The Appeals Court agreed with the lower court that the covenant not to sue was valid (pdf) in a decision published yesterday.

.Web still doesn’t have a green light, however. Afilias was the runner-up in the .Web auction and it is fighting the auction result through ICANN’s appeal processes.

While Donuts was upset about missing out on a payday by losing the auction, Afilias was upset that it didn’t win. Regardless of the outcome, both may benefit and get some satisfaction out of the delay they are causing Verisign. After all, Verisign did all it could to delay the launch of new top level domain names.

It will be interesting to see if Donuts’ strategy around .web changes when Akram Atallah takes over as CEO. Either way, Donuts’ fight against .web might be over. It will probably just hand the baton off to Afilias.

 

 

Afilias plans to file IRP to halt .Web

by — Policy & Law 10 Comments

More slowdowns for .web domain name.

A lawyer for domain name registry Afilias says the company plans to file a Cooperative Engagement Process (CEP) and subsequent Independent Review Process (IRP) should ICANN move forward with delegating .Web to Nu Dot Co.

Nu Dot Co won the auction to operate .web for $135 million. It was bankrolled by Verisign (NASDAQ:VRSN), and Nu Dot Co had an agreement with Verisign to assign rights to the domain after it completed contracting.

Afilias was one of the companies that was upset; it was the runner-up in the auction.

Donuts pursued the matter as well. It was disappointed that Nu Dot Co forced an auction of last resort rather than a private auction in which Donuts would get to split the proceeds. After going through ICANN’s accountability processes it sued ICANN. A court tossed the case out because new TLD applicants agreed not to sue, but Donuts appealed.  The appeals court has yet to hand down its decision. Oral arguments will likely occur this fall.

Adding to the delays was the U.S. government, which launched an antitrust investigation into Verisign running what many people think is the best new top level domain. The government closed its investigation without taking action.

Afilias is asking ICANN to give it a 60 day “heads up” when it starts contracting with Nu Dot Co so that it can file for CEP.