2016-07-31

News Review: Verisign's Big Win of gTLD WEB; ICANN Litigation Report

"Funds must be used in a manner that supports directly ICANN’s Mission and Core Values and also allows ICANN to maintain its not for profit status."--ICANN's new gTLDs applicant guidebook--see this week's FEATURES further below.

Domain Mondo's review and look ahead [pdf], starting first with the macro view, the big picture, after cutting through all the noise:

Democrats nominated Hillary Clinton, during a week of sweltering temperatures in Philly. WikiLeaks' #DNCleaks caused the resignation of the DNC Chair, and even worse, exposed Hillary's "rigged" election in the primaries over rival Bernie Sanders, as well as collusion between the Democratic Party's DNC and establishment mainstream media. Mainstream media distortion and bias are now well-documented and widely recognized, and could backfire this year among a disaffected electorate. TV Ratings: Hillary Clinton's DNC Speech Falls Short of  Donald Trump's RNC Speech in Viewers - HollywoodReporter.com: "DNC Day 4: 33.3 million;  RNC Day 4: 34.9 million." Ipsos poll conducted for Reuters, July 25-29, 2016 (pdf) shows Clinton and Trump tied among likely voters in a 4-way race--Clinton, Trump, Stein (Green), Johnson (Libertarian)--and that Clinton and Trump have identical unfavorable/favorable ratings of 57% Unfavorable / 43% Favorable. See e.g., Clinton yet to tackle voter distrust issue | FT.com. There are 100 days left until Election Day November 8, 2016.

More terrorist attacks again this past week in Europe, see here and hereThousands of German protesters prepare for Angela 'Merkel Must Go' demonstration | dailymail.co.uk"They are calling for her resignation over open door immigration policy - Comes after four brutal attacks leaving nearly a dozen dead in one week - Three of the attackers were among 1.1million who entered as refugees ..."

•  The Rio Olympic Games 2016 begin on Friday, August 5, and end on Sunday, August 21. Many problems, including pollution and crime and terrorism.

•  US economy grows less than expected in Q2 - Business Insider.com; while UK economic growth stronger than expected in Q2 - FT.com. See also Eurozone recovery loses momentum in second quarter | FT.com"Data cast doubt on strength of revival as French economy grinds to halt ...  [failing] to grow at all in the second quarter ..."

• FEATURES: Dot WEB Auction & Verisign; ICANN Litigation Status Report

UPDATE August 1, 2016: Verisign Statement Regarding .WEB Auction Results: "VeriSign, Inc. (NASDAQ:VRSN), a global leader in domain names and internet security, today announced the following information pertaining to the .WEB top-level domain (TLD): The Company entered into an agreement with Nu Dot Co LLC wherein the Company provided funds for Nu Dot Co's bid for the .WEB TLD. We are pleased that the Nu Dot Co bid was successful. We anticipate that Nu Dot Co will execute the .WEB Registry Agreement with the Internet Corporation for Assigned Names and Numbers (ICANN) and will then seek to assign the Registry Agreement to Verisign upon consent from ICANN. As the most experienced and reliable registry operator, Verisign is well-positioned to widely distribute .WEB. Our expertise, infrastructure, and partner relationships will enable us to quickly grow .WEB and establish it as an additional option for registrants worldwide in the growing TLD marketplace. Our track record of over 19 years of uninterrupted availability means that businesses and individuals using .WEB as their online identity can be confident of being reliably found online. And these users, along with our global distribution partners, will benefit from the many new domain name choices that .WEB will offer." (emphasis added)

graphic: ICANN new gTLD Applicant Guidebook (excerpt)
ICANN new gTLD Applicant Guidebook (excerpt)
.WEB Auction: Early in the week, Ruby Glen, LLC (Donuts affiliate), applicant for new gTLD .WEB, struck out in its attempt to stop the new gTLD .WEB auction but the U.S. District Court threw it a "bone"--"the Court grants Plaintiff leave to amend the Complaint to attempt to establish federal subject matter jurisdiction" (more in ICANN Litigation Status Report below). See also: New gTLD WEB, Ruby Glen, LLC v. ICANN, Complaint & TRO Request.

.WEB Auction Results--New gTLD dot WEB 'Last Resort' ICANN Auction: and the Winner Is?--according to ICANN, Nu Dot Co LLC was the winner of the .WEB auction on July 27th with a "winning price" of $135 million. Reportedly, Nu Dot Co may have an agreement to assign its contractual rights in .WEB to Verisign, registry operator of .COM and .NET. If so, this is a real win-win-win for:
  • ICANN which will receive the net .WEB auction proceeds to be used for beneficent purposes in accordance with the new gTLD guidebook (pdf) (graphic above); see below.*
  • The millions of domain name registrants of more than 143 million .COM & .NET domain names, who will be assured that a trusted registry operator will be operating .WEB in a way that is complementary to existing gTLDs .COM and .NET; and
  • Verisign and its shareholders, for adding what many consider the most valuable of all new gTLDs, .WEB, to its offerings. The existing market potential for .WEB is HUGE--for example "web" -- site:*.com - Google Search: returns "about 1,900,000,000 results (0.48 seconds)"--examples: web.airdroid.com and web.whatsapp.com are potential customers for airdroid.web and whatsapp.web respectively. Also don't be surprised to see more new keyword+web .COM domain name registrations before .WEB even launches.
UPDATE: *What happens to the .WEB net proceeds out of that $135 million "winning price"? 27 July 2016 New gTLD .WEB Auction | ICANN.org"The proceeds from New gTLD Program auctions, which will total more than $230 million [with .WEB net proceeds included]--[UPDATE: Total Net Auction Proceeds now held by ICANN $233,455,563]--are being reserved. The multistakeholder community will develop proposals for how these proceeds could be distributed. A community-based drafting team is currently working on a charter for a Cross-Community Working Group that will create recommendations for Board consideration"

ICANN Litigation Status Report (July 31, 2016):

Ruby Glen, LLC v. ICANN lawsuit filed in United States District Court for the Central District of California re: new gTLD .WEB. Status: Plaintiff's motion for TRO denied; Plaintiff granted leave to amend its Complaint and establish federal subject matter jurisdiction, by August 8, 2016, failing which, the action may be dismissed without prejudice. Analysis and opinion: this case was a loser from the get-go unless Plaintiff, an affiliate of new gTLDs registry operator Donuts, has more facts in support of its claims than indicated in the pleadings thus far. Plaintiff's failures to 1) properly plead federal subject matter jurisdiction, and 2) promptly serve and give notice to ICANN, as required by the court's rules, are telling.

DotConnectAfrica Trust v. ICANN lawsuit filed in United States District Court for the Central District of California re: new gTLD .AFRICA. Status: jury trial (10-12 days) scheduled to begin February 28, 2017. Interlocutory appeals re: preliminary injunction are pending before the U.S. Court of Appeals for the Ninth Circuit. Dismissed defendant and appellant ZA Central Registry's opening brief was due July 22, 2016, but has not yet been posted on ICANN's website. The answering brief from appellee DotConnectAfrica Trust is due August 19, 2016, with optional reply brief due September 9, 2016. Analysis and opinion: this case stands as a black-eye and stain upon ICANN under the leadership of former CEO Fadi Chehade and his crony, Akram Atallah, who is still President of ICANN's Global Domains Division (which administers the application process for new gTLDs such as .AFRICA). In this case, ICANN--its Board of Directors, officers, staff, as well as the GAC--failed the global internet community. Hopefully ICANN has learned from this experience and will, in the future, maintain fairness, impartiality, objectivity and transparency, and also be cognizant of the inherent conflicts of interest, in all of ICANN's processes. ICANN should steer clear of geopolitics. Full Stop. Period. It is not the job of ICANN management to curry favor with governments--Brazil, China, U.S., France, E.U., etc.,--or any special interests, e.g., TheDNA.org, INTA.org, InternetAssociation.org, or any other particular party or stakeholder(s), on any matter within the scope and mission of ICANN. The job of ICANN is to carry out its mission only in accordance with the global public interest. That said, this litigation may produce good legal precedent for future enforcement of ICANN's release contained in the new gTLD guidebook (pdf). Ultimately, I expect .AFRICA will be delegated to ZA Central Registry unless this litigation produces more revelations of misconduct by ICANN or other parties.

Ben Haim v. Islamic Republic of Iran; Calderon-Cardona v. Democratic People's Republic of Korea; Rubin v. Islamic Republic of Iran; Stern v. Islamic Republic of Iran; Weinstein v. Islamic Republic of Iran; Wyatt v. Syrian Arab Republic filed in United States District Court for the District of Columbia re: whether ccTLDs .IR (IRAN), .SY (SYRIA), and .KP (North Korea), are property subject to judicial attachment. Status: on appeal, oral arguments were heard January 21, 2016, now waiting for a decision from U.S. Court of Appeals for the D.C. Circuit. Analysis and opinion: This case is a wild card with potentially negative ramifications for ICANN. The U.S. government intervened with its own amicus curiae brief (pdf) in support of ICANN, but its motion to participate in oral arguments was denied by the appellate court. Ultimately, this case could end up before the U.S. Supreme Court. UPDATE August 2, 2016US Court of Appeals Decision re: ICANN & Iran, Syria, North Korea ccTLDs | DomainMondo.com - Court of Appeals affirms District Court decision that the ccTLDs are unattachable, handing ICANN and the "global community" a legal victory in a case that could have jeopardized the IANA stewardship transition.

Other News:

TheDomains.com reported this week that top-level domains .COM and .NET, both operated by Verisign, were the first "foreign" TLDs to be added to China's government-required real name verification (RNV) system, for use inside China by Chinese citizens.

Comments close this coming week at ICANN on:

• Q2 2016 Earnings Releases & Webcasts with coverage on Domain Mondo this coming week:
  • GoDaddy $GDDY Aug 3
  • Web.com $WEB Aug 4

Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:
  1. News Review [24Jul]: IANA Transition & ICANN Corruption, Capture, and Control
  2. Q2 2016 Earnings Webcasts July 28: $GOOG $AMZN $NSR $VRSN
  3. New gTLD dot WEB 'Last Resort' ICANN Auction: and the Winner Is?
  4. Facebook $FB Q2 2016 Earnings Results & LIVE Webcast July 27
  5. New gTLD WEB, Ruby Glen, LLC v. ICANN, Complaint & TRO Request

5 Other Reading Recommendations:
  1. Amazon’s Profits Grow More Than 800 Percent, Lifted by Cloud Services | NYTimes.com: "... big profits thanks to the lucrative cloud computing business. On Thursday, Amazon reported net income of $857 million in its most recent quarter, the third quarter in a row in which it has shown a record profit. Its net income for those three months was also more than nine times the amount for the same period last year ..."
  2. Yahoo And Verizon | SeekingAlpha.com: "The deal puts the price tag at $4.83 billion. The move pulls Verizon further into the digital media realm. For Yahoo, it's a stunning fall from an Internet giant to a has-been put through a long sale process." See also: Rise and Fall of Yahoo $YHOO, What Happened, Missed Opportunities.
  3. Made in China: Four horsemen of the iPhone apocalypse | ZDNet.com"Today it's the $100 value handset. Tomorrow it will be the $200 premium smartphone. There's nothing left for the traditional device OEMs with those kind of margins. Huawei, ZTE, Xiaomi and Lenovo are coming, and Apple and Samsung can't stop them."
  4. Why [Public] Pensions’ Last Defense Is Eroding | WSJ.com: Low interest rates "... pension critics have more ammunition to argue for more aggressive benefit cuts, said Daniel DiSalvo, a senior fellow at the Manhattan Institute, a conservative think tank that supports 401(k)-style options for public pensions." See also Congress must address public pension plan unfunding - Pensions & Investments | pionline.com.
  5. What this divergence of margin debt and stock prices tells us--prior peaks in margin debt were followed by a collapse in margin debt, and a spectacular crash in stocks--"But this time, it’s different ... Seven-plus years of “whatever-it-takes” central-bank-created global liquidity, QE, and interest rate repression to zero, and below zero, have changed the assumptions and dynamics of everything ... business sales have been declining since mid-2014. Earnings have been declining for about that long ... the S&P 500 aggregate price-earnings ratio, based on GAAP, has soared to over 25, a dizzying number that sets off all kinds of alarm bells. And yet, the global flood of liquidity keeps pouring into this market, and fundamentals no longer matter, sales and earnings no longer matter, risks no longer matter, and money is free, or nearly free, for institutional investors ... foundations have crumbled. And all bets are off."-- WolfStreet.com
Keep up with the U.S. Election 2016 on Domain Mondo's election page.

-- John Poole, Editor, Domain Mondo 

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