New gTLD dot WEB 'Last Resort' ICANN Auction: and the Winner Is?

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)

UPDATE August 2, 2016: Total Net Auction Proceeds now held by ICANN $233,455,563 (including .WEB).
Original post starts here:

"An auction will be facilitated by Power Auctions LLC on 27 July 2016 to resolve string contention for one new generic top-level domain (gTLD) contention set: .WEB/.WEBS. This set is an indirect contention set consisting of both the WEB and WEBS strings. An indirect contention set is when two applications are both in direct contention with a third application, but not with one another. Eight applicants have completed all necessary prerequisites to participate in the “method of last resort” auction, and the auction will proceed on 27 July 2016. Within seven days after the completion of the auction, the results, including a results report, will be posted to the Auction Results page of the New gTLD Microsite. In addition, the Auction Proceeds page will be updated within seven days to reflect the proceeds and costs related to the Auction."--ICANN

UPDATE July 28, 2016: ICANN reports *NU DOT CO LLC is the Winning Bidder of .WEB with a winning price of $135 million,  and in addition "The Application in the “B” position was eliminated after Round 10, causing the Contention Set to divide and causing the Application of Vistaprint Limited (for .WEBS) to be deemed a Winning Application." See embed below:



*Nu Dot Co may have an agreement to assign its contractual rights in .WEB to Verisign, registry operator of .COM and .NET, based upon a report in DomainNameWire.com. The Verisign 10-Q filed July 28, 2016, disclosed:

"Subsequent to June 30, 2016, the Company incurred a commitment to pay approximately $130.0 million for the future assignment of contractual rights, which are subject to third-party consent. The payment is expected to occur during the third quarter of 2016." FORM 10-Q - VeriSign, Inc.

If true, the third-party referred to above, would be ICANN. In addition, all of this may have some bearing on whether Ruby Glen (Donuts) decides to amend its complaint and continue its U.S. District Court case--see New gTLD WEB, Ruby Glen, LLC v. ICANN, Complaint & TRO Request | DomainMondo.com.

Is $135 million too much to pay for new gTLD .WEB? That depends. As Warren Buffett says, "Price is what you pay, value is what you get."  Finally, to put this in historical perspective:

Verisign acquires Network Solutions for $21B - March 7, 2000: "VeriSign Inc. agreed to acquire Network Solutions Inc. for $21 billion in stock."

8 Applicants (for more info on each applicant see the bottom of this post):

1. Nu Dot Co
2. Charleston Road Registry (Google)
3. Web.com
4. DotWeb (Radix)
5. Ruby Glen (Donuts)
6. Afilias
7. Schlund Technologies
8. Vistaprint (WEBS applicant)

Contention Set WEB/WEBS (source: ICANN.org)

How we got here--an abbreviated history--there's a long history to new gTLD .WEB and not just beginning in 2012 with ICANN's expansion of gTLDs from 22 generic Top-Level Domains (gTLDs) to more than 1000:

• New gTLD WEB, Ruby Glen, LLC v. ICANN, Complaint & TRO Request | DomainMondo.com (2016)
• Vistaprint Loses New gTLD dot WEBS IRP, dot WEB SCO, ICANN Prevails | DomainMondo.com (2015)
• IMAGE ONLINE DESIGN, INC. [IOD] vs. ICANN (2013) (pdf) see also IMAGE ONLINE DESIGN, INC. v. INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS | Leagle.com: "... On November 16, 2000, ICANN's Board of Directors issued its decision on new TLDs, identifying seven selected for the "proof of concept phase." The TLD .WEB was not selected. (Id.) At some time during the deliberations in 2000, the then Chairman of the Board of Directors Dr. Vincent Cerf stated, "I'm still interested in IOD. They've worked with .WEB for some time. To assign that to someone else given that they're actually functioning makes me uneasy ..."
• A recent comment on CircleID.com: ".web may not be usable in California ... IOD had an operational .web registry here in California dating from a very long time ago ... Whether you believe in competing root systems or not, .web by IOD was an operating business here in California well before ICANN, and it has existing contractual relationships. One (such as myself) might consider anyone operating another .web named service in California as an interference with my existing contractual relationships ... in which an established, older business has established a common law use of a name in business. One would hope that rather than stomping on pre-existing, and quite legal, prior business uses of .web in California that the new aspirant would reach out to the prior vendor and users and seek an accommodation or release."--Karl Auerbach

See also: New gTLD Program Auctions | ICANN New gTLDs | ICANN.org
and for more info on each applicant, click the link(s) below:

• 632 WEB 1-1296-36138 (In Auction) NU DOT CO LLC
• 868 WEB 1-1681-58699 (In Auction) Charleston Road Registry Inc. (Google)
• 946 WEB 1-1009-97005 (In Auction) Web.com Group, Inc.
• 986 WEB 1-956-26846 (In Auction) DotWeb Inc. (Radix)
• 1218 WEB 1-1527-54849 (In Auction) Ruby Glen, LLC (Donuts)
• 1360 WEB 1-1013-6638 (In Auction) Afilias Domains No. 3 Limited,
• 1717 WEBS 1-1033-73917 (In Auction) Vistaprint Limited
• 1750 WEB 1-1013-77165 (In Auction) Schlund Technologies GmbH

feedback & comments via twitter @DomainMondo
Follow @DomainMondo

DISCLAIMER

Vistaprint Loses New gTLD dot WEBS IRP, dot WEB SCO, ICANN Prevails

UPDATE July 28, 2016: Vistaprint ends up winning .WEBS because .WEBS was only in direct contention with Web.com's application for .WEB. Vistaprint prevailed at the "last resort auction" on July 27-28, 2016, because Web.com dropped out of the bidding for .WEB "causing the Application of Vistaprint Limited (for .WEBS) to be deemed a Winning Application" said ICANN. See: New gTLD dot WEB 'Last Resort' ICANN Auction: and the Winner Is? | DomainMondo.com.

UPDATE: ICANN Board Resolution 03 Mar 2016: "Resolved (2016.03.03.02), the Board concludes that the Vistaprint SCO Expert Determination is not sufficiently "inconsistent" or "unreasonable" such that the underlying objection proceedings resulting in the Expert Determination warrants re-evaluation."

UPDATE 2 December 2015: ICANN: "Resolved (2015.12.02.05), the Board defers to a subsequent meeting its consideration of the Panel recommendation in the Final Declaration that the Board exercise its judgment on the question of whether an additional review is appropriate to re-evaluate the Expert Determination. All members of the Board present voted in favor of Resolution 2015.12.02.05. One member of the Board abstained. Three members of the Board were unavailable to vote on the Resolution. The Resolution carried."

UPDATE: October 22, 2015 - at the ICANN 54 public ICANN Board Meeting, the Board accepted the IRP declaration and:

Resolved, the board accepts the panel's recommendation that ICANN's board exercise its judgment on the question of whether an additional review mechanism is appropriate to re-evaluate the third expert's determination in the Vistaprint SCO, in view of ICANN's bylaws concerning core values and non-discriminatory treatment, and based on the particular circumstances and developments noted in this declaration including, one, the Vistaprint sco determination involving Vistaprint's .webs applications; two, the board's and ngpc's resolutions on singular and plural gtlds; and, three, the board's decisions to delegate numerous other singular/plural versions of the same gtld strings. Final declaration, page 70. The board will consider this recommendation at its next scheduled meeting to the extent it is feasible. 

Resolved, the board directs the president and ceo or his designee or designees to ensure that the ongoing reviews of the new gtld program take into consideration the issues raised by the panel as it relates to SCOs. [String Confusion Objections]

-----end of update-----

Original post as corrected:

Contention Set Diagram for WEB / WEBS new gTLDs (source: icann.org)

Web.com, one of seven applicants (see diagram above) for the pending .WEB new gTLD (new generic top-level domain), filed a string confusion objection (SCO) to new gTLD ".WEBS" applied for solely by Vistaprint (NASDAQ: CMPR) (2 applications). The SCO filed by Web.com was ultimately upheld by ICANN and Vistaprint filed an IRP (Independent Review Process), which has now been decided in favor of ICANN:

".... FOR THE FOREGOING REASONS, the IRP Panel hereby:
(1) Declares that Vistaprint’s IRP Request is denied; 

(2) Designates ICANN as the prevailing party; 

(3) Recommends that ICANN’s Board exercise its judgment on the question of whether an additional review mechanism is appropriate to re-evaluate the Third Expert’s determination in the Vistaprint SCO, in view of ICANN’s Bylaws concerning core values and non-discriminatory treatment, and based on the particular circumstances and developments noted in this Declaration, including (i) the Vistaprint SCO determination involving Vistaprint’s .WEBS applications, (ii) the Board’s (and NGPC’s) resolutions on singular and plural gTLDs, and (iii) the Board’s decisions to delegate numerous other singular/plural versions of the same gTLD strings; 

(4) In view of the circumstances, Vistaprint shall bear 60% and ICANN shall bear 40% of the costs of the IRP Provider, including the fees and expenses of the IRP Panel members and the fees and expenses of the ICDR. The administrative fees and expenses of the ICDR, totaling US$4,600.00 as well as the compensation and expenses of the Panelists totaling US$229,167.70 are to be borne US$140,260.62 by Vistaprint Limited and US$93,507.08 by ICANN. Therefore, Vistaprint Limited shall pay to ICANN the amount of US$21,076.76 representing that portion of said fees and expenses in excess of the apportioned costs previously incurred by ICANN upon demonstration that these incurred fees and costs have been paid; and 

(5) This Final Declaration may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute the Final Declaration of this IRP Panel." (emphasis added)

The recommendation in paragraph (3) of the Final Declaration is not binding on the ICANN Board, however it may merit consideration due to the lengthy record of this case and due to the "particular circumstances and developments noted in this Declaration."  The documented inconsistencies (pdf) in delegation of numerous other singular/plural versions of the same gTLD strings, are indicative of the many problems with ICANN's new gTLDs. Most people acknowledge that the ICANN new gTLDs policy, program, and implementation have been, in sum, a "fiasco"--even ICANN insiders who are honest admit this--see, e.g., on Domain Mondo: ICANN Insiders On New gTLDs: Mistakes, Fiascos, Horrible Implementation. Anybody want to talk about dot GAY (pdf)?  

The full Vistaprint IRP final declaration may be read here (pdf). More information: Vistaprint Limited v. ICANN (documents from the Independent Review Proceeding filed in accordance with Article IV, section 3 of the ICANN Bylaws).

Many observers (including Domain Mondo) think the .WEB new gTLD auction will likely bring the highest price among all new gTLDs--Google (Charleston Road Registry Inc.) is one of the 7 applicants for .WEB. If Google is serious about acquiring .WEB, expect to see an ICANN last resort auction, since Google would unlikely agree to a private auction which would only encourage other applicants to drive up the price* in order to "make Google pay the highest price" (in private auctions the "net proceeds" are split among the losing bidders unlike "ICANN last resort auctions" where ICANN receives the net proceeds [update] to be held in escrow for public beneficent purposes). 

*You can read about one unfortunate here: ICANN New gTLD Private Auctions, 2015 Patsy of the Year Nominees? 

Caveat Emptor!


Follow @DomainMondo

DISCLAIMER