News Review: Internet Boom Is Over, New gTLD XYZ Domains $0.01 Each

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

• For a moment, forget about the spin at ICANN (e.g., read this, then this), about the IANA stewardship transition, the BIG news this week came on two other fronts:

 Growth rate of internet users worldwide is essentially flat, and smartphone growth is slowing. Those sobering insights were among the hundreds packed into the much-awaited Internet Trends report, an annual tech industry ritual led by Mary Meeker, a general partner at Kleiner Perkins Caufield & Byers (kpcb.com). Bloomberg's Lizette Chapman and Bloomberg Intelligence's John Butler discuss on "Bloomberg West" with Cory Johnson, in the video below, June 1, 2016:

Mary Meeker, KPCB: "Easy growth is behind us ... newest internet users are coming from less developed and less affluent countries ..." See: 2016 Internet Trends Report, Smartphone Growth Slowing, Video & Slides | DomainMondo.com. Related: Apple's iPhone had only 8.2% share of the China smartphone market in April 2016. In Greater China, Apple’s revenue is down by 26%. Leading Chinese manufacturers' shares were Xiaomi (26%), Huawei Honor (15.7%), Letv (10.5%), and Huawei (8.0%). South Korea's Samsung, which once led the Chinese domestic market, had only 3.2% share. Source: ChinaInternetWatch.com
The headlines were screaming this week on the domaining blogs about Daniel Negari's new gTLD XYZ and its latest XYZ.COM LLC registry promotion with some registrars, offering .XYZ domain names for as little as $0.01 each (first year registration), which by the end of the week, had reportedly moved .XYZ ahead of .INFO as the fourth-largest generic top-level domain (gTLD) in total domain name registrations. In addition, a promotion of $0.22 per XYZ domain name continues at some registrars. If you have some loose change burning a hole in your pocket, and have a hankering for a XYZ domain name, here's your chance. How many of these millions of XYZ registrations will be renewed or dropped a year from now is unknown. In China, which has the majority (over 56%) of all registrations in the XYZ extension, the largest XYZ registrar West.cn announced a special subsidy for renewals at 18 yuan ($2.74). But some domainers maintain that aggressive promotions end up trashing the brand with many used by spammers and scammers. On the other hand, ICANN Global Domains Division President, Akram Atallah, who apparently just cares about the 'numbers', must be very happy receiving $0.25 for each XYZ domain name registered or renewed! Remember, for ICANN and its new gTLDs program, "it's all about the money."

• Whether these new gTLDs will ever be of practical use inside China is unknown right now: China might be inching closer to granting licenses for new TLDs | DomainNameWire.com: "This might be a sign that the licensing process is moving forward. A lot of people have their fingers crossed." And  "... a ray of hope emerged today in China ... "--allegravita.com. As they say, hope is NOT a strategy but it might bring in enough money for the hucksters to keep the creditors at bay.

Speaking of new gTLDs and pricing, ICANN dropped a bombshell this week, opening for comment its Proposed Amendments to Base New gTLD Registry Agreement, which according to George Kirikos, would not be in the global public interest, and would be very bad for new gTLD domain name registrants, in particular, and further, calls into question ICANN's fitness as an organization to operate without governmental oversight:

"This proposed change (in both section 2.10(a) and 2.10(b) is perplexing and shocking. It would have the effect of registry fees being kept secret from the public (since agreements between registrars and registries typically contain confidentiality terms). This is unprecedented, and would be anti-competitive, and against ICANN's mission. Indeed, one of the ways ICANN is supposed to measure competitiveness is through things like wholesale pricing, yet now ICANN proposes to keep that valuable information from the public's eyes? Truly unbelievable, and unacceptable. TLDs are a public resource, not the private property of registry operators. They knew of the public notice requirements when they applied for new gTLDs. This is a one-sided change in favour of new gTLD operators, that does nothing for the public, and indeed will have harmful and anti-competitive impacts on consumers. And ICANN now proposes to deprive the public the ability to even measure that level of anti-competiveness, by removing the ability to see the true fees being charged to registrars (and the increase in those fees), which provide the baseline by which consumers ultimately get charged ... It is mind-boggling that ICANN would even propose such a "negotiated" change, when it is supposed to act in the public interest. This change alone provides strong evidence that ICANN has been captured by the "contracted parties" to the detriment of consumers (and registrants in particular) and the public. It violates all of the principles in the Affirmation of Commitments regarding transparency, competition and consumer trust. Given the "revolving door" between ICANN and its contracted parties, it really calls into question ICANN's independence and how hard it "negotiates" when it would think that such a change, making registry fees a secret unavailable to itself [and] the public, would be acceptable to anyone but a few ICANN insiders.

"(b) Section 6.7 (fee reduction waiver). Obviously this is a one-sided change that is unacceptable. New gTLD registries signed a contract. ICANN should not be granting any fee waivers whatsoever, especially ones that are at its discretion and on terms that it "negotiates." ICANN staff (see revolving door comment above) have long shown an inability to properly negotiate agreements in the public interest ....

"Combined, the proposed changes in Section 2.10 and Section 6.7 reinforce the view that the new gTLD experiment has failed, and that ICANN and its contracted parties know it. They are clear attempts to hide that failure from the public. Given that new gTLDs were the biggest decision ICANN has ever made, a decision that they got wrong, they should not be permitted to cover up that failure at this critical juncture, when the US government is assessing whether its oversight should continue in the future. Indeed, these proposed changes demonstrate that ICANN has not learned anything from past mistakes, and that they hope to continue with "business as usual" in a less transparent future where they can cover up mistakes and make new mistakes with impunity." (Emphasis added.) Read more here and here. ICANN has said it plans to hold a webinar in June 2016 (date and time not yet disclosed) on the proposed amendments. Comments close 13 Jul 2016 23:59 UTC.

• Pre-ICANN56 Policy Update Webinar | ICANN.orgThe ICANN Policy Development Support Team will provide a Policy Update Webinar on Thursday, 16 June 2016 at 10:00 UTC and 19:00 UTC, in preparation for the upcoming ICANN Policy Forum in Helsinki. The purpose of the webinar is to summarize policy activities across the ICANN policy development community and briefing the community on the Cross-Community sessions taking place in Helsinki. RSVP via this form by 10 June 2016. Remote participation details will be sent the week of 13 June 2016.

• Via @EyeOnICANNIs the ICANN Board too embarrassed to tell us they paid the former CEO [Fadi Chehade] a performance bonus for his last 4 months? https://www.icann.org/resources/board-material/resolutions-2016-05-15-en#3, and ICANN bylaws state the Annual Report shall be delivered no later than 120 days after the close of the fiscal year. Today [June 3, 2016] is 339 days. Nearly a year since close of FY15 [June 30, 2015] for ICANN and still numerous financial reports are missing. https://www.icann.org/resources/pages/fiscal-2015-07-10-en

UPDATEICANN (as of June 6, 2016): "Future reports to be posted for FY2015 (ending June 30, 2015):
  • Annual Report 
  • Federal and State Tax Filings 
  • Board Compensation Report 
  • ccTLD Contributions Report 
  • Financial Analysis: 1) Quarterly Reports (Unaudited); 2)Meetings Analysis"
•  Comments close this coming week at ICANN on Release of Country and Territory Names within the .HYUNDAI, .KIA and .GODADDY TLDs - ICANN: Close Date 9 Jun 2016 23:59 UTC.

•  DotConnectAfrica Trust vs ICANN and ZA Central Registry (ZACR) - Hearing on ZACR's Motion to Reconsider and Vacate Preliminary Injunction re new gTLD .AFRICA - Monday, June 6, 2016, 9:00 AM PDT, Courtroom 850, United States District Court at Los Angeles.

• CWG-Internet: Online Open Consultation (February- September 2016) | ITU.int: "Following the instructions of Council Resolution 1344 (Mod. 2015), the ITU Council Working Group on International Internet-related Public Policy Issues (CWG-Internet) decided on 18 February 2016 to hold an open consultation (online and physical) on the following topic:  ​ Building an enabling environment for access to the Internet - What are the elements of an enabling environment to promote Internet connectivity? What are the elements of an enabling environment to promote an affordable Internet? What are the elements of an enabling environment to promote the quality of access to the Internet? What are the elements of an enabling environment to build confidence and security in the use of the Internet? What is the role of Governments in building an enabling environment? Accordingly, all stakeholders are invited to provide their answers through the link provided [here] ..."

•  Internet Fragmentation via Taxation? India's `Google Tax' May Backfire | Bloomberg.com"... Starting June 1, Indian advertisers must withhold the levy from the money they pay websites that aren't taxable entities in India, and hand it over to the government ... India's homespun solution to the problem of taxing cross-border online advertising risks clashing with a new OECD framework on base erosion and profit shifting, which urged countries to avoid working at cross purposes. To avoid artificially inflating the cost of doing business online, New Delhi should either press the OECD to accept the equalization levy as a global standard, or re-introduce the measure as a tax ..."

•  Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:
 Other Reading Recommendations:
  1. Minimal Competition vs. Excessive Competition: How Miami's Condo Glut Differs From ICANN's New gTLDs GlutMiami’s Condo Frenzy Ends With Inventory Piling Up in New Towers | Bloomberg.com"“There’s always a glitzy selling process that happens, and they [buyers] believe it,” he said. “They don’t think about the economy -- they think about the building and how wonderful it will be.” Manageable Inventory --While some new towers have a large number of condos being flipped by their owners, an inventory glut will be mitigated by minimal competition from developers, who have a majority of their units under contract, data from Miami’s Downtown Development Authority show."
  2. When 'Expertise' Is Of Little ValueThe Seersucker Theory | blogs.cfainstitute.org"I have come up with what I call the seersucker theory: No matter how much evidence exists that seers do not exist, suckers will pay for the existence of seers. One would expect experts to have reliable information for predicting change and to be able to utilize the information effectively. However, expertise beyond a minimal level is of little value in forecasting change. This conclusion is both surprising and useful, and its implication is clear: Don’t hire the best expert, hire the cheapest expert.”"
  3. Dinosaur WatchMicrosoft sells patents to Xiaomi, builds 'long-term partnership' | Reuters.com
  4. Easy Come, Easy GoFrom $4.5 Billion To Nothing: Forbes Revises Estimated Net Worth Of Theranos Founder Elizabeth Holmes | Forbes.com. See alsoWho Gets Venture Capital Funding? | Bloomberg.com: "... more founders of companies on our list dropped out of school than graduated from top universities ..." and: No Venture Capital Needed, or Wanted | NYTimes.com
  5. The Structure of Collapse: 2016-2019 | charleshughsmith.blogspot.com: "... 2. Emergency measures [e.g., low (or even negative) interest rates] become permanent policies ... 6. Strapped for cash ... the state borrows more money and devalues its currency as a means of maintaining the illusion that it can fulfill all its promises..."
  6. DoubleLine’s Gundlach Says Chanos Is Greatest Hedge Fund Manager | Bloomberg.com"''The greatest hedge fund manager in the world is Jim Chanos,' says Jeff Gundlach, chief executive officer of DoubleLine Capital ... 'Jim Chanos is a permanent bear. He’s dour, he’s curmudgeonly, he’s bearish as hell all the time.'"  And Chanos might be right about Alibaba: More Alarm Bells | SeekingAlpha.com: Is it $BABA or SoftBank or China or the SEC investigation? See also: DoubleLine's Gundlach calls May employment report 'real body blow' | Reuters.com.
  7. Pentagon: Special Ops Killing of Pregnant Afghan Women Was “Appropriate” Use of Force | theintercept.com".... The internal investigation ordered by Gen. McChrystal into the Gardez raid is an incomplete accounting of this horrifying incident. It is also based on the word of the force that carried out the killings, whose personnel could have faced serious charges under the Uniform Code of Military Justice if investigators had taken seriously the survivors’ allegations."--Jeremy Scahill
  8. Amid a Growing Movement to Close Rikers, One Prisoner Approaches Six Years Without Trial | theintercept.com:  Alice Speri reports from New York City’s Rikers Island, where more than 300 prisoners have been detained without trial for more than two years."“When the National Institute of Corrections came to Rikers, they told them, ‘When are you going to get with the rest of the country?’” Greene recalled. “You guys are 50 years behind.”"
  9. Jeff Bezos on Peter Thiel Gawker revenge | BusinessInsider.com"I would say that as a public figure, the best defense to speech that you don't like about yourself as a public figure is to develop a thick skin because you can’t stop criticism. You are going to get it. If you're doing anything interesting in the world, you are going to have critics. You can't stop it. Move forward. It's not worth losing any sleep over. This country has the best free-speech laws in the world, you don't want to erode those. You don't want to create fear or chill."
Have a great week!

-- John Poole, Editor, Domain Mondo

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