18 September 2016

News Review: After Cruz Attack, What Now For ICANN & IANA Transition?

Shining A Light: © DomainMondo.com Domain Mondo's weekly review of the news, analysis, and look ahead [pdf]: 

UPDATE Sep 22, 2016:  IANA Transition: Dead or Alive? High drama in D.C. TheHill.com reports that Republican Senate Majority Leader Mitch McConnell (R-KY) has "dopped a provision championed by Sen. Ted Cruz (R-Texas) and backed by Republican presidential nominee Donald Trump to block the Obama administration from ceding oversight of internet domain names to an international body." POLITICO.com confirms that: "Gone is the so-called ICANN provision, an internet-domain issue that had become a top priority for Sen. Ted Cruz (R-Texas) and other GOP senators and just got the seal of endorsement from GOP nominee Donald Trump." However, NYTimes.com reports the short-term spending bill that Congress is set to pass next week "will most likely include a provision championed by Senator Ted Cruz ... While many Democrats oppose the [Cruz] provision, it is not clear how many care enough to make it stop" (emphasis added). POLITICO.com does concede Cruz is urging allies in the U.S. House of Representatives to fight on and stop the IANA transition. We may not know for sure until next week.

UPDATE Sep 21, 2016: It appears the pro-transition lobbyists have either dropped the ball or didn't come to the game ready to play:
  1. Trump enters the arena on ICANN | TheHill.comPress release of September 21, 2016: Trump Opposes President Obama's Plan to Surrender American Internet Control to Foreign Powers | Donald J Trump for President | DonaldJTrump.com by Stephen Miller, National Policy Director for the Trump Campaign; TheHill.com also reports FCC Commissioners Ajit Pai and Michael O’Rielly now also want to delay the IANA transition;
  2. Senate leaders say they are close to deal to prevent government shutdown: "The latest GOP offer also included a provision sponsored by Sen. Ted Cruz (R-Texas) that would delay plans for the U.S. government to give up control over a global nonprofit that oversees the internet domain system. Cruz told reporters that he is “cautiously optimistic” that it will be included in the final package."--WashingtonPost.com [Domain Mondo Editor's Note: read the WaPo article and one is left with the impression that Democrats are now willing to "trade away" their stance on the IANA transition for something else.]
UPDATE Sep 20, 2016: U.S. Senate lays groundwork for spending deal--"It's not [time for] a big debate for talking about how we change the internet forever ... It's not a time to try to satisfy Cruz because he doesn't get along with the caucus and they're trying to shut him up."--U.S. Sen. Harry Reid (D-NV), Senate Minority Leader in TheHill.com.
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Original post of Sep 18, 2016:
Feature   After Cruz Attack, What Now For ICANN & IANA Transition? For more than a week U.S. Senator Ted Cruz (R-TX) has been dominating the news related to the IANA stewardship transition scheduled to be completed October 1, 2016 (after expiration of the IANA functions contract on September 30). From September 9th's US Senator Cruz Attacks ICANN, Fadi Chehadé, IANA Transition (video) through yesterday's Sen. Cruz Questions NTIA's Strickling, ICANN's Marby & Witnesses (videos), Domain Mondo's coverage has included a daily posting on this topic almost every day.

But now with less than two weeks left before September 30, the chance that Republicans in the House and Senate will actually derail the IANA transition is unlikely, for the following reasons:
  1. The fact that this is an election year works in favor of the IANA transition--Republicans are looking to leave Washington soon to return to the campaign trail, reports TheHill.com.
  2. The IANA transition is not a hot-button issue in this campaign season. Most Americans don't even know who or what ICANN is, much less the IANA transition, and don't care. The headline in the Washington Post sums it all up: Ted Cruz has made an obscure Internet agency his first post-presidential crusade. In Election 2016, it's about the economy, stupid:
  3. Election 2016 top issues in search by state, past week (graphic)
    Election 2016 top issues in search by state, past week | Google Trends 
  4. Ted Cruz is a pariah even in his own party. Cruz was invited and spoke at the Republican Convention in July but refused to endorse the Republican Party's Presidential nominee. Subsequently he was deemed persona non grata at the GOP gathering and even barred from entering GOP mega-donor Sheldon Adelson's suite at the Convention hall.
  5. Cruz's grandstanding this past week may have been the "kiss of death" to the effort to delay the IANA transition. Although four key House and Senate Chairmen have indicated a preference  to extend the IANA functions contract for one year, how much political capital will they be willing to expend when it comes down to the wire?
  6. Washington runs on lobbying money. I noted Friday that "preventing a 'competing' internet root may be the most compelling reason to not delay the IANA transition despite misgivings about ICANN or the IANA transition plan." None of the tech giants in the world, including those in China, want a competing root and everyone is looking to the U.S. tech giants (Google, Facebook, Amazon, etc.) who are hardwired into K Street to "get the job done" (i.e., get the IANA transition completed).
  7. Trump has no love for Cruz and now Trump is leading in the Presidential Race according to several polls: Trump cracks the Electoral College lock | POLITICO.com Sept. 15, 2016: "A new round of state polls shows Donald Trump suddenly has a path to 270 electoral votes [to win the Presidency] ... state polling averages, which can be lagging indicators, are beginning to show Trump in the lead."  Trump has never stated his position on the IANA stewardship transition and there is no reason for him to now. As I have previously noted, the Trump campaign's lawyer is Jones Day Partner Don McGahn (Jones Day is also legal counsel for ICANN). Perhaps even more important, Trump's go-to guy on tech matters is Peter Thiel who certainly doesn't want a competing internet root. If asked, Thiel would probably say ICANN, after 18 years, must have reached minimal viable product stage, so don't delay the IANA transition--see Can Monopolies Save The Internet? | BigThink.com at Harvard's Berkman Center: Peter Thiel vs. Jonathan Zittrain on globalization, monopolies, internet, Facebook, etc. (April 13, 2009). See also: Bilderberg People: Elite Power and Consensus in World Affairs | books.google.com. Under this reasoning, if ICANN falters post-transition, the U.S. government has an implied right to step back in as "historic steward of the internet" and do whatever is necessary to "right the ship." A key to this may have been the testimony of NTIA's Larry Strickling at the Cruz hearing that the U.S. did not want a registry agreement with ICANN for either .MIL or .GOV because the U.S. government did not want to concede or give up its "sovereignty" in those TLDs (top-level domains).
  8. The most powerful person in the Republican Party right now may be Reince Priebus, Chairman of the Republican National Committee (RNC). The Trump campaign's national finance chairman (and likely future Secretary of the Treasury should Trump win) is Steven Mnuchin who has a lean staff but is using the RNC and all of its resources to raise money, not only for Trump, but for the Republican Party and all its candidates in all 50 states. While Hillary Clinton's campaign is running a separate huge fundraising operation out of the campaign headquarters in Brooklyn, Trump's fundraising flows through the RNC in Washington, D.C. They know all of this on Capitol Hill, and as Churchill said, “Never let a good crisis go to waste.” For that reason, you may continue to hear "noise" about the IANA transition but the real question is: "To whom should we make the checks payable?" See U.S. technology companies lobby for ICANN transition | SeekingAlpha.com.

Other ICANN, Internet Governance, and Domain Name News:

•  The Catalyst For The IANA Stewardship TransitionNew Film Tells the Story of Edward Snowden; Here Are the Surveillance Programs He Helped Expose | TheIntercept.com.

•  DNS Forum | InternetPolicyForum.com: On September 14-15, Public Interest Registry, CENTR, LACTLD, i2Coalition, and ISOC-DC brought together a diverse group of experts to discuss the impacts of policy on DNS (domain name system) technical operators.  Panelists and audience members discussed the implications of privacy, security, and content policies for these technical operators and how the technical community can best engage in the evolving multistakeholder model of Internet governance. For complete agenda, video replay, and more information, go to the link above.

•  Verisign Inc. (NASDAQ: VRSN) reported this week that at the close of Q2 2016 (June 30, 2016):
  • The total number of registered domain names rose to 334.6 million worldwide across all top-level domains, of which new gTLDs (ngTLDs) domain names comprised only 22 million or 6.6% of all TLDs' domain names, and the top 10 ngTLDs represented 61.5 percent of all ngTLD domain name registrations.
  • 7.9 million domain names were added to the Internet in Q2 2016: • This increase globally equates to a growth rate of 2.4% over Q1 2016 • Domain name registrations have grown by 38.2 million, or 12.9 percent, year over year.
  • The .com and .net TLDs reached a combined total of approximately 143.2 million domain names in the domain name base in Q2’16 • The base of registered names in .com equaled 127.5 million names, while .net equaled 15.8 million names • Verisign processed 8.6 million new domain name registrations for .com and .net, as compared to 8.7 million domain names for the same period in 2015.
  • Verisign’s average Domain Name System query load was 130 billion across all TLDs operated by Verisign, with a peak of 179 billion.
  • Total ccTLD domain name registrations were approximately 149.9 million in the first quarter of 2016, with an increase of 1.4 million domain name registrations, or a 1.0 percent increase compared to the first quarter of 2016. ccTLDs increased by approximately 11.7 million domain name registrations, or 8.5 percent, year over year. Without including .tk, ccTLD domain name registration growth quarter-over-quarter was 1.2 percent and growth year-over-year was 10.7 percent. 
  • The top 10 ccTLDs, as of June 30, 2016, were .tk (Tokelau), .cn (China), .de (Germany), .uk (United Kingdom), .ru (Russian Federation), .nl (Netherlands), .br (Brazil), .eu (European Union), .au (Australia) and .fr (France).
  • As of June 30, 2016, there were 292 global ccTLD extensions delegated in the root, including Internationalized Domain Names (IDNs), with the top 10 ccTLDs composing 67.3 percent of all ccTLD domain name registrations
Verisign had previously reported that at the close of Q1 2016 (March 31, 2016), the base of registered names in .com equaled 126.6 million names, while .net equaled 15.9 million names. Accordingly, .net registrations decreased by about 100,000 (net) in Q2 2016, while .com registrations increased by about 900,000 domain names (net) in Q2 2016. For more information, copies of the Q2 2016 DNIB, or to view past reports, go to VerisignInc.com/DNIB.

•  ICANN's new consolidated page for community feedback on various issues: Operational Consultations | ICANN.org.

 ICANN published its Global Registrant Survey Final Phase Results (pdf). More information here. Results may be questionable based upon methodology alone:
ICANN Global Registrant Surveywave 2 | AUGUST 2016, p. 5
Apparently ICANN commissions these kinds of studies to generate a mostly useless report in an attempt to justify ICANN's mistakes or reinforce existing policies. Vendors, like Nielsen, usually understand this. Manipulation ("adjustment") of methodology and data are well known techniques. In this case, the report did confirm a few things we already knew:
  • Reported registration of new gTLDs is highest in the Asia Pacific region.
  • ".COM continues to be the most favored legacy domain name among registrants. Declines are seen for several of the less common gTLDs but these already have very low reported registrations." (p.22 of 182)
  • Many would-be registrants choose alternative identities (e.g., social media handles) over domain names.
  • About 17 percent of the respondents said they did not renew a domain in favor of using an alternative method for managing an online identity.
•   TheDomains.com reports Frank Schilling's North Sound Names is dropping 230,000 new gTLD domain names from its portfolio, which probably accounts for the decreases we are seeing in Uniregistry's new gTLDs' registration numbers like .FLOWERS and .PROPERTY.

•  No Comments close this coming week at ICANN.

Tech News:
  1. Fans cheer, but iPhone 7 gets a subdued welcome--Reuters.comSee also Apple Japan unit ordered to pay $118 million tax for underreporting income: media | Reuters.com.
  2. Coaltion for Better Ads (IAB, Google and others), formed as a direct response to ad blocking, the coalition will act as a "kind of regulator for internet ads"--BusinessInsider.com.
  3. The Internet’s Own Instigator | BackChannel.com: "Malamud can’t abide 112's waffling on the copyright issue, saying that “to the extent the material is subject to copyright protection, the agency must get authorization…for public access to that material.” To Malamud, if the standard is part of the law, there can be no copyright. Period."
  4. Project Sand Hill: Google’s Unknown Campaign to Track the World’s Hottest Startups | WIRED.com. See also: Thoughts on Alphabet, one year in | BusinessInsider.com: So far it's been a BIG Loser but see The Wall Street Veteran Who's Helping Google Get Disciplined | Fortune.com.
  5. The blockchain industry is either hugely under-resourced or hugely over-optimistic. Probably both--Blockchain's Numbers Don't Add Up | Bloomberg.com.
  6. GM Bolt vs Tesla Model 3? Metrics Make The Difference | SeekingAlpha.com.
    • Deal of the MonthHP Enterprise [US] strikes $8.8 billion deal with Micro Focus [UK] for [HPE's] software assets | Reuters.com.
    • Yahoo Inc. ("RemainCo") after the Verizon sale? Cash + marketable securities + shares in Alibaba, Yahoo Japan, other minority equity investments + IP assets held in Excalibur, AND it will be a company with a new ticker.--SeekingAlpha.com 

    Four most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:
    1. News Review [11Sep]: IANA Transition Drama in D.C. and ICANN & Zika
    2. IANA Transition Hearing: Implications of Ending US Oversight of the Internet
    3. U.S. Senator Ted Cruz vs ICANN and IANA Transition: Veni, Vidi, Vici ?
    4. US Senator Cruz Attacks ICANN, Fadi Chehadé, IANA Transition (video)

    Macro view:
    1. Deutsche Bank will most likely be bailed out by the German government or the ECB. It will not be allowed to topple and shatter the global financial system but its shares and CoCos will be “bailed in” before taxpayers get hit.--Deutsche Bank’s CoCo Bonds Speak of Fear of the Worst | WolfStreet.com
    2. Federal Reserve policy affecting elections is hardly a novel concept. At the recent central banker’s summit in Jackson Hole, former Democrat Congressman Barney Frank, told the Fed, “Don’t raise rates before the election.”--Why The Fed Destroyed The Market Economy | ZeroHedge.com
    3. Tax Avoidance Is Part of the Recipe for National & Global Income Inequality: 1) The less affluent must pay their payroll taxes and income taxes in full; 2) The more affluent utilize tax avoidance schemes conveniently provided by governments, that also allow corporations to utilize offshore companies to "hide" or "transfer" profits to low-tax and no-tax jurisdictions; 3) Total effect of the taxation system is regressive, even without adding the inherently regressive effects of sales and value-added taxes. "The phenomenon of rising inequality in affluent societies may not need much additional explaining – and it hardly matters if those were tax-avoidance or tax-evasion trillions."--Hidden assets from the Panama Papers | the-tls.co.uk.
    4. Central Bankers, Savers & Investors: Martin Lück, strategist at Blackrock: the ECB's actions are having the opposite effect of the spending spree intended. Falling interest rates cause people to save more rather than less in order to secure their pensions, while investors, including insurers and pension funds, have to enter ever higher risks to secure ROI.--Deutsche Bank CEO Warns Of "Fatal Consequences"...| ZeroHedge.com

    4 Other Reading Recommendations:
    1. Peter Thiel in the WashingtonPost.com: "The establishment doesn’t want to admit it, but Trump’s heretical denial of Republican dogma about government incapacity is exactly what we need to move the party — and the country — in a new direction. For the Republican Party to be a credible alternative to the Democrats’ enabling, it must stand for effective government, not for giving up on government."
    2. "Two basic principles of management, and regulation, and life, are: 1. You get what you measure. 2. The thing that you measure will get gamed ... "--Wells Fargo Opened a Couple Million Fake Accounts | Bloomberg.com.
    3. Why One Hedge Fund Is Once Again Preparing For The End Of The Euro | ZeroHedge.com
    4. What successful and happy people focus on"They don’t let anyone limit their joy. When your sense of pleasure and satisfaction are derived from comparing yourself to others, you are no longer the master of your own happiness."--weforum.org

    -- John Poole, Editor, Domain Mondo 

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