10 July 2016

News Review: EU & Brexit, IANA Transition, ICANN & Cruz, $NSR, $NAME

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Domain Mondo's review of the past week and look ahead [pdf]:

Brexit and the Future of Europe"... The EU’s response to Brexit could well prove to be another pitfall ... But the implications for Europe could be far worse. Tensions among member states have reached a breaking point, not only over refugees, but also as a result of exceptional strains between creditor and debtor countries within the eurozone. At the same time, weakened leaders in France and Germany are now squarely focused on domestic problems. In Italy, a 10% fall in the stock market following the Brexit vote clearly signals the country’s vulnerability to a full-blown banking crisis – which could well bring the populist Five Star Movement, which has just won the mayoralty in Rome, to power as early as next year. None of this bodes well for a serious program of eurozone reform, which would have to include a genuine banking union, a limited fiscal union, and much stronger mechanisms of democratic accountability. And time is not on Europe’s side, as external pressures from the likes of Turkey and Russia – both of which are exploiting the discord to their advantage – compound Europe’s internal political strife ... Admittedly, the EU is a flawed construction ..."--George Soros | Project-Syndicate.org 25 Jun 2016 (emphasis added).

Brexit, the UK vote to leave the European Union (EU), has become the global watershed event of 2016 as I noted might happen prior to the vote on June 23rd. Some have even said Brexit is "one of the most important geopolitical and geo-economic events of ...[our] lifetime. It ranks right up there with the fall of the Berlin Wall and 11 September 2001." 

Even the momentous Chilcot Report on the UK role in the Iraq War (see #10 at the end of this post), was overshadowed this week by continuing developments in the Brexit story:
  • the new UK Prime Minister who will replace David Cameron and lead Brexit negotiations with the EU, will be either Theresa May (currently favored) or Andrea Leadsom, with the final selection now in the hands of 150,000 members of the Conservative Party in the UK. The final result is expected to be announced by September 9thUPDATE (July 11): Theresa May will become UK Prime Minister on Wednesday (Andrea Leadsom dropped out), succeeding David Cameron who gave notice of his resignation after the Brexit vote on June 23. May has said her priorities will be to administer Britain's exit from the European Union (EU), a move approved by voters last month, to unite the country and to create a "strong, new, positive vision for the future," not just for the privileged few, but for everyone.
  • the London Stock Exchange benchmark FTSE 100 continues surging up, ending Friday 4% above where it was prior to the Brexit vote, but German (DAX) and French (CAC40) benchmarks are still in the red, both closing Friday 6% down since June 23. UPDATE: the London Stock Exchange benchmark index, FTSE 100, continues roaring ahead, and at 4:35pm London time (July 11), was UP 5.44% since the Brexit vote on June 23, 2016:
    London Stock Exchange benchmark index FTSE100 UP 5.44% since Brexit vote
    London Stock Exchange benchmark index FTSE100
"... the arguments for big short-run damage from Brexit look quite weak ... Indeed, the rebound in British stocks, which are now above pre-Brexit levels, is already causing some backlash against conventional economists and their Chicken Little warningsSorry, people, sloppy thinking is always a vice, no matter what cause it’s used for."--Paul Krugman, Nobel Prize-winning economist, June 30, 2016, NYTimes.com [end of UPDATES]

Read more on Brexit on Domain Mondo:

•  In the Obama Administration's IANA stewardship transitionICANN issued a Transition Implementation Status Report (pdf) on Friday, July 8, 2016, embedded below:



•  On Thursday, July 7, 2016, the Heritage Foundation (domain: heritage.org) together with TechFreedom (domain: techfreedom.org) hosted What Are the Concerns about Ending the U.S. Contractual Relationship with ICANN? | heritage.org. Keynote remarks by US Senator Ted Cruz (R-TX), were followed by a panel discussion with Berin Szoka (President, TechFreedom), Brett Schaefer (Heritage Foundation), lawyers Paul McGrady and Philip Corwin, and Jonathan Zuck (App Association). The video stream was interrupted shortly after the panel discussion began, but to watch the video replay of Ted Cruz excoriating former ICANN President & CEO Fadi Chehade, and Tarek Kamel (ICANN Senior Advisor To The President And Senior Vice President, Government And IGOs Engagement), go to the heritage.org link above.

•  Notwithstanding efforts by Senator Cruz and others, it looks increasingly likely, unless otherwise extended by the U.S. government (NTIA), the IANA functions contract with ICANN will expire on September 30, 2016. After September 30, 2016, the internet's global DNS (domain name system) will be run by an unregulated global monopoly, the Internet Corporation for Assigned Names and Numbers (ICANN), a California corporation. Unfortunately for the global internet community, particularly domain name registrants, even ICANN stakeholders have acknowledged that there is a "massive power imbalance" within ICANN, and that ICANN's main policy-making body, the Generic Names Supporting Organization (GNSO), is "broken." As I have noted many times, there is no stakeholder group within the GNSO representing exclusively, nor effectively, the interests of the vast majority of domain name registrants. In fact, in an ICANN strategy of "divide and conquer," the interests of domain name registrants are diluted and mixed up with interests of "end users" of the internet--NCUG and ALAC (which is not even part of the GNSO)--while the "commercial registrants" stakeholder group--the so-called "Business Constituency,"--has been almost completely co-opted by corporate and trademark (INTA members) lawyers and lobbyists. ICANN, like the EU, appears incapable of real reform. Caveat Emptor.

•  One current example of ICANN's incompetence and hostility towards domain name registrants is: ICANN’s new transfer policy will impact your business and your customers | OpenSRS.com"... we ended up with a policy that may help to prevent hijacking but it will also make it even harder for registrants to own and manage a domain name. We are cracking a nut with a sledgehammer ..." The new transfer policy is scheduled to become effective on December 1, 2016. Caveat Emptor.

•  Another example of ICANN's incompetence and hostility to the interests of the vast majority of domain name registrants is the Proposed Amendments to Base New gTLD Registry Agreement, public comments to which close 13 July 2016 UPDATE extended to 20 Jul 2016 23:59 UTC. If you are a domain name registrant (particularly a new gTLD domain name registrant), read the comments already submitted by George Kirikos here and here, and submit your own comment by the deadline. All comments submitted may be read on the comments forum. Also note that ICANN said it would hold a webinar in June on the proposed amendments, but that turned out to be just another broken promise by the dysfunctional ICANN, confirming once again, that for ICANN, domain name registrants are just a resource for exploitation in the form of  gTLD name registration and renewal fees, as well as exploitation by ICANN's contracted parties (gTLD registry operators and registrars). Always remember that ICANN leadership (former ICANN President & CEO Fadi Chehade, and his crony, ICANN Global Domains Division President Akram Atallah), referred to new gTLD registry operators as the true "customers" and "partners" of ICANN. Caveat Emptor. 

•  Note that comments also close this week at ICANN on two other issues:

•  A tale of 2 domain name industry stocks: Neustar $NSR and Rightside $NAME:
Left above: Neustar shares ($NSR) are down 15% in 1 year (top), down 1% in the last week (bottom);
Right above: Rightside shares ($NAME) are up 58% in 1 year (top), up 3% in the last week (bottom).
•  Bad News for Neustar (NYSE: NSR) but not unexpected: In a Form 8-K filed with the SEC on July 1, 2016, Neustar disclosed it will lose almost $500 million in annual revenue, possibly as early as 2017:
Excerpt: Form 8-K filed with the SEC on July 1, 2016, by Neustar $NSR
Form 8-K (excerpt) filed with the SEC on July 1, 2016, by Neustar $NSR (highlighting added)
For background, see also on Domain Mondo:

•  On the other hand, Rightside (NASDAQ: NAME) shareholders continue to see gains in the stock (see Rightside $NAME charts above), as the company announced it had rejected the unsolicited proposal from Donuts Inc. to acquire Rightside's entire registry of generic top-level domains (gTLDs) and related assets for $70 million in an all-cash deal.

•  Noteworthy: The World Domain Conference - Host: Yumi.com was held in Wuzhen, China, July 6-9, and by all accounts was a great success.

• Amazon UK (domains: amazon.com | amazon.co.uk) says "it's business as usual" after the Brexit vote: "Amazon has not seen a British sales dip since the vote to leave the European Union ... our sales are in line with expectations... It's business as usual as far as we are concerned ... We're continuing with the plans, we haven't suddenly invented new plans," Amazon UK manager Doug Gurr told Reuters.com on Wednesday, July 6, 2016. Amazon also announced on Wednesday it would create a further 1,000 jobs across the UK this year, in addition to 2,500 announced in January, which will be located at Amazon UK's head office, research and development centers, customer service center, fulfillment centers, fashion photography studio and Amazon Web Services (AWS). Amazon's full time permanent employees in the UK will grow to over 15,500 by the end of 2016. Likewise, Google's (Alphabet) Executive Chairman, Eric Schmidt, has also said that Brexit is 'unlikely' to hurt Google's UK Operations.

• European Commission: adoption by Member States of the EU-U.S. Privacy Shield: "... This paves the way for the formal adoption of the legal texts and for getting the EU-U.S. Privacy Shield [pdf factsheet] up and running. The EU-U.S. Privacy Shield will ensure a high level of protection for individuals and legal certainty for business. It is fundamentally different from the old 'Safe Harbour'..." Background: The European Union's (EU) highest court struck down the previous data transfer framework known as "Safe Harbor," on concerns about intrusive U.S. surveillance, particularly after the Edward Snowden revelations in 2013. US tech companies, including Amazon, Google, Apple, IBM, and Microsoft, benefit from the new data transfer regime which will enable continuation of over $250 billion dollars of transatlantic trade in digital services annually. Pursuant to the Privacy Shield agreement, an ombudsman within the U.S. State Department will handle complaints from EU citizens about U.S. surveillance.

•  It’s a free-for-all over free data platform in India"... The Internet Freedom Foundation [domain: internetfreedom.in], which includes members of the volunteer driven Save The Internet Coalition [domain: savetheinternet.in], said there is no need to have a TSP agnostic platform for free data. "Because when users start deciding which sites to visit based on which sites are willing to subsidise them, we are enabling established or large companies to indirectly choke competition using money power. The Internet should exist as an equal platform where the most innovative succeed, not the richest," IFF said in its submission ... "--economictimes.indiatimes.com

•  SA [South Africa] votes against Internet freedoms at UN | techcentral.co.za: "... Countries such as Russia and China requested four amendments to the draft resolution to remove, for instance, text on freedom of expression and the shutting down of Internet access ... “We are disappointed that democracies like South Africa, Indonesia, and India voted in favour of these hostile amendments to weaken protections for freedom of expression online,” said Thomas Hughes, the executive director of global free press organisation Article 19 [domain: article19.org] ..." (emphasis and link added)

•  Facebook $FB (facebook.com) Tax Avoidance or Tax Evasion? U.S. Justice Department filed a lawsuit on Wednesday in federal court in San Francisco seeking enforcement of IRS summonses related to Facebook's transfer to its Irish holding company rights associated with its worldwide business, with the exception of the United States and Canada. Read more: IRS Wants Facebook's Records on Transfer of Assets to Ireland | NASDAQ.com.

•  Amazon $AMZN is the new Wal-MartAmazon's Chinese counterfeit problem is getting worse | CNBC.com"More than 40 percent of Amazon's unit sales now come through its third-party marketplace. Much of the expansion has occurred since Amazon started opening the floodgates to Chinese manufacturers, who previously had to count on middlemen, brands and private labels to reach global consumers. Sales from Chinese-based sellers more than doubled in 2015 on Amazon's marketplaces, while the company's total revenue increased 20 percent. And recently, Amazon even registered with the Federal Maritime Commission to provide ocean freight, simplifying the process for Chinese companies to ship goods directly to Amazon fulfillment centers, cutting out costs and inefficiencies."

•  Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:
  1. News Review [3Jul]: ICANN56, RZMA & .COM, WS2, IANA Transition, $NAME
  2. Beyond Brexit: Four Forces Shaping the Future of Europe (video)
  3. London Property Market: Massive Undersupply, Cheap Pound, Uncertainty
  4. Deutsche Bank $DB $DBK, Italian Banks, Approaching a 'Lehman Moment'?
  5. 5th Place TieFormer BoE Chief Mervyn King: Brexit, Future of EU and London (videos) and Brexit Postscript: FTSE100 Roars, Theresa May, Sword in Hand, Next PM?
Also of interest was that for the first time in memory, the greatest number of Domain Mondo readers this week from outside the U.S., were from Germany (#2) and Italy (#3), with Norway, France, Netherlands, Ukraine, Japan, United Kingdom, and Australia rounding out the top 10. Other nations often appearing in this website's analytics top 10: Ireland, Sweden, Slovakia, United Arab Emirates, China, and Russia.

  Other Reading Recommendations:
  1. Language: China’s tyranny of characters | Economist.com: "... Like Latin, classical written Chinese was a dead language, spoken by no one. A century ago, when language reformers began to introduce a common nationwide spoken tongue of Mandarin, they also abandoned the classical written language and replaced it with one that mirrored the spoken form, thus trying to synchronise their speech and their script. Some revolutionaries, including Mao Zedong, initially wanted to scrap Chinese characters altogether and replace them with an alphabet. They settled instead for a simplification of the characters and a standardisation of how they are pronounced and written in Roman letters, known as pinyin. Yet despite major success in literacy programmes, there are still 400m people in China who do not speak Mandarin, and some 100m who the government says cannot read at all. The actual number is undoubtedly higher ..."
  2. African fashion: How to turn $500 into $2 million | CNN.com"... When Kelechi Anyadiegwu started her online African clothing store Zuvaa [zuvaa.com] with $500 two years ago ..." 
  3. How China Took Center Stage in Bitcoin’s Civil War | NYTimes.com"China has become a market for Bitcoin unlike anything in the West, fueling huge investments in server farms as well as enormous speculative trading on Chinese Bitcoin exchanges."
  4. Documents Show How Russia’s Troll Army Hit America | BuzzFeed.com"Russia’s campaign to shape international opinion around its invasion of Ukraine has extended to recruiting and training a new cadre of online trolls that have been deployed to spread the Kremlin’s message on the comments section of top American websites ..." See also: Salutin' Putin: inside a Russian troll house | World news | TheGuardian.com"... headquarters of Russia’s “troll army”, where hundreds of paid bloggers work round the clock to flood Russian internet forums, social networks and the comments sections of western publications with remarks praising the president, Vladimir Putin, and raging at the depravity and injustice of the west ..."
  5. SEO is as dirty as ever | SearchEngineLand.com"Search engine optimization has built credibility over the years, but spammers and black-hat practitioners still give it a bad name. Columnist Patrick Stox shares his SEO horror stories..."
  6. HummingBad malware infects 85 million Android devices | v3.co.uk"An Android-based malware campaign masterminded from China has snared as many as 85 million Android devices and is making the gang behind it an estimated $1m every quarter."
  7. EU Competition Regulators Preparing Additional Charges Against Google | WSJ.com"Move will likely sharpen the previous accusations that Google uses its search dominance to favor its own service in the shopping market ... "
  8. Is this What Hit Housing in San Francisco, Manhattan, and Miami? Suddenly, Foreign Investors Pull Back… | WolfStreet,com"... Nearly half (47%) of all sales to foreign buyers occurred in just three states: 22% in Florida [Miami], mostly Canadians, Latin Americans, and Europeans. 15% in California, mostly Asians, concentrated in just two urban areas [LA & San Francisco]. 10% in Texas, mostly from Latin America, the Caribbean, and Asia. The next states in line were New York (4%), mostly just New York City, which attracted mostly Asian buyers, and Arizona (4%). But San Francisco, Miami, and Manhattan are steeped in an epic condo glut ..."
  9. Desperately Trying to Salvage Canada-EU Trade Pact after Brexit, EU Escalates Assault on Democracy | Wolf Street.com"... the EU’s democratic deficit, one of the decisive factors in Britain’s decision to sever the cord from Brussels, just got a whole lot bigger. Yet it was barely reported in the press ..."
  10. Scathing report [Chilcot Report] on Blair’s Iraq War role prompts contrition, defiance and a reckoning | WashingtonPost.com"... the report inevitably also cast light on U.S. decision-making. The United States, which led the march to war, has never conducted a comparably ambitious study of its own failings in Iraq ..." See also:  Bloomberg video | youtube.com "... An intervention that went badly wrong, with consequences to this day ... in March, 2003, there was no imminent threat from Saddam Hussein ..." (emphasis added)
-- John Poole, Editor, Domain Mondo

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