News Review: Post-Transition ICANN & The Global Public Interest

Domain Mondo's weekly review of the news, analysis, and look ahead [pdf]:

Feature •  Post-IANA Transition Worry: Will the internet, as we know it, survive a 'privatized' ICANN? Or instead, could the internet be run as a 'public good'?

RFC 1591: "... 1) The key requirement is that for each domain there be a designated manager for supervising that domain's name space ... 2) These designated authorities are trustees for the delegated domain, and have a duty to serve the community. The designated manager is the trustee of the top-level domain for both the nation, in the case of a country code, and the global Internet community .... 6) For any transfer of the designated manager trusteeship from one organization to another, the higher-level domain manager (the IANA in the case of top-level domains) must receive communications from both the old organization and the new organization that assure the IANA that the transfer in mutually agreed, and that the new organization understands its responsibilities ..."--Jon Postel, March, 1994

"The free-market triumphalism of the 1990s, and the intensely deregulatory political climate fostered by Bill Clinton’s Democrats and Newt Gingrich’s Republicans, framed full private ownership of the Internet as both beneficial and inevitable .... But the fight is not over. The upcoming ICANN handoff offers an opportunity to revisit the largely unknown story of how privatization happened — and how we might begin to reverse it, by reclaiming the Internet as a public good."--Ben Tarnoff, JacobinMag.com (emphasis added)

Now that the IANA stewardship transition is finished, and the U.S. government is out of the way, what will happen to the internet as we know it?  ICANN insiders may think, with the transition now complete, it's all over.  Sorry, it's just beginning, as I noted March 24, 2015:

ICANN CEO Fadi Chehade's View of the IANA Transition is Shortsighted and Naive | DomainMondo.com: "I think if we get rid of that [IANA] contract we will be free of the pressures."--Fadi Chehadé, (then) ICANN President and CEO, February 10, 2015.

Contact ICANN in a few weeks and ask anyone there (assuming they'll be honest), whether they think ICANN is now "free of the pressures."  I like that quote of Chehadé's above because it is a prime illustration not only of the Peter principle, but also the fact that no one can hide their own incompetence.

I also intentionally chose the quotes first above from Jacobin which, if you are not familiar with that publication, describes itself as "a leading voice of the American left, offering socialist perspectives on politics, economics, and culture" and carries an endorsement from Noam Chomsky, just to put into perspective the IANA transition, and wipe the conceit off the faces of ICANN insiders and their allies from Washington, D.C., to Silicon Valley, who gloat in their own self-deception that opposition to the 'privatization' of ICANN only comes from the likes of Ted Cruz and the right.

The challenges ICANN faces at present, and those yet to unfold post-transition, are manifold, and for regular readers of Domain Mondo there is no need, nor the space, to provide a laundry list of present problems, much less speculate on the future.

However I will note that the public interest (or public good as Tarnoff calls it) is in direct contrast to the profit-seeking, special interest stakeholders who dominate ICANN processes, structures, and policy-making today.

ICANN is hardly indispensable to the world, which may be a relief to those worried about an organization like ICANN operating without any governmental oversight, a global monopoly that "taxes" domain name registrants who are largely, and intentionally, excluded from ICANN's so-called "community," and which grants exclusive global monopolies to gTLD registry operators with carte blanche permission to engage in predatory pricing practices that exploit registrants worldwide. Is it any wonder why ICANN engenders so much mistrust, not only from those within its own "ICANN community" but also among most domain name registrants?

While ICANN is supposed to serve as a useful and convenient artifice for managing the global DNS and coordinating names, numbers, and protocols of the internet, it has a troubled history and a sick organizational culture. ICANN could be replaced by one or more successors, and already some hope that happens sooner rather than later. The IANA transition may in fact hasten this. ICANN, left to its own devices, with a "community" largely controlled by a few dominant voices, along with a dysfunctional Board of Directors, may not be around for long.

If ICANN, by chance, does make it another 18 years (ICANN was incorporated in 1998), it may be a testament that it adapted and changed to actually serve the global public interest, the needs of the global internet community, not just the special interests who today dominate ICANN structures. But changing organizational culture is hard, and impossible in many cases. Peter Thiel says you have to "fire everybody and start over." Today the culture of the organization known as ICANN is predominantly characterized by its real core values of dishonesty, cronyism (see below), deceit, arrogance, elitism, obfuscation, incompetence, greed, and above all, an ingrained organizational value of evading accountability at all cost, and at all times--just read the IRP declarations in the DotConnectAfrica Trust and Dot Registry cases.

Is there a better way? Yes, and you don't have to look far: The Public Interest Standard in Television Broadcasting:

"The government's exclusionary licensing arrangement was justified by requiring that broadcasters act as public fiduciaries. Their primary duty would be to serve the "public interest, convenience and necessity," as expressed in both the 1927 and 1934 Acts. The Federal Radio Commission that was created by the 1927 Act described the "public trustee" model in this manner: "... the station itself must be operated as if owned by the public" .... The FCC's authority, while extensive, is constrained by traditional First Amendment principles. Government may not censor broadcasters (under Section 326 of the Act), for example, nor may it regulate content ... The public trustee model has given rise to a distinct genre of First Amendment jurisprudence ... Despite the philosophical complications and political tensions that this arrangement entails, the U.S. Supreme Court has repeatedly upheld the public trustee basis of broadcast regulation as constitutional. [Citing Red Lion Broadcasting Company v. FCC, 395 U.S. 367 (1969)]."

Other ICANN, Internet Governance, and Domain Name News:

•  Twitter $TWTR (twitter.com) Refuses to Block Account of US-based Turkish Journalist: Motherboard.vice.com reports a Court in Turkey ordered Twitter to block the account of Washington DC-based journalist Mahir Zeynalov, accusing him of “instigating terrorism.” Despite receiving the court order, Twitter refused to comply:

"This is just the latest blatant online censorship attempt from the Turkish government, which has become one of the worst offenders on the internet when it comes to quashing dissenting voices. Last week, in its latest transparency report, Twitter revealed that—once again—Turkey was by far the country that sent the most censorship requests. In the second half of 2015, Turkey tried to censor 8,092 accounts. In the first half of 2016, the country almost doubled that number with 14,953 censorship requests."

ICANN has its EMEA (Europe, Middle East, and Africa) hub in Istanbul, Turkey. ICANN's 3 hubs (LA, Singapore, Istanbul) were set up during former ICANN CEO Fadi Chehade's tenure. Chehade had a grand vision that ICANN would have 3 headquarters (called "hubs") instead of just a global headquarters in LA. He even said he would move to Singapore and would disperse ICANN staff from LA to the other 2 hubs thereby increasing ICANN's inefficiency, costs, overhead, and complexity.

Chehadé, it seems, thought by wasting a lot of money doing this, ICANN would become a more "global" organization, and unfortunately, the ICANN Board of Directors was too inept or "calcified" (Fadi's term for the Board), to stop him. But Chehade never moved to Singapore, and his visions were anything but grand, most notably, his NETmundial Initiative, which finally "crashed and burned" this year after wasting hundreds of thousands of dollars in ICANN funds on a project outside the scope and mission of ICANN. Fortunately, Chehadé quit as ICANN CEO 3½ years into a 5 year contract, but unfortunately, he left behind his legacy of cronyism at the organization:

"... Chehade and COO Akram Atallah – who are old friends – brought in more and more of their own people ... Not all of them were best suited or qualified, but real frustration developed when jobs were filled without the job even being posted internally. Nora Abusitta-Ouri, a former classmate of Chehade’s, became vice president of public responsibility programs. Former neighbor Susanna Bennett became Chief Operating Officer. Former co-worker Chris Gift became vice president of online community services. Former co-worker Allen Grogan became chief contracting counsel and then when that job finished, chief contract compliance officer. Neighbor of Atallah, Elizabeth Hoover became HR manager. Former co-worker Cyrus Namazi became vice president of industry engagement. Old friend Ashwin Rangan became chief innovation and information officer. The wife of a former co-worker, Maguy Serad, became vice president of contractual compliance. Another former neighbor, Christine Willett, became vice president of gTLD operations. In all, only one member of the C-suite hired since Chehade came on board has not been a friend or former co-worker ..."--IoNmag.asia

As for ICANN's hub in Singapore, the situation is "not good" there either-- Singapore’s wrong turn on the Internet | AEI.org: "Singapore is creating what, in jargon, is termed an “air-gap” between government computers and the global internet. As a result, work computers inside ministries can communicate with each other but not with the outside world ... Air-gapping is common at high-risk targets like intelligence agencies and nuclear plants, but, as a Cisco System official put it, the approach is “most unusual” government-wide."... Freedom House, found in 2015 that internet freedom had declined for the fifth year in a row. (Singapore, by the way, ranks as only “partly free,” according to Freedom House. Among other actions, the government has cracked down on dissident bloggers and shut down a site under the Sedition Act.) ..."

Singapore warns on Pink Dot sponsorship:

The government of Singapore has warned big business against their sponsorship of a gay pride rally. Pink Dot’s sponsors include global corporate powerhouses such as Goldman Sachs, JPMorgan, Barclays and Google. Video above published by FT.com. See also: pinkdot.sg.

•  The sad saga of dot GAY continues at ICANN: 13 September 2016 Letter from Arif Hyder Ali to the ICANN Board (pdf) re: New gTLD application for .GAY. (Ali is Partner, Co-Chair of International Arbitration Group, Dechert LLP.)

•  New gTLDs: "The trend is not looking good for the new domain extensions. Overall, the total number of registrations for the top 10 extensions has been down -- from 14.7m on September 10 to 14.1m today [Oct 1, 2016]."--Coreile.com (emphasis added).

•  ICANN Independent Review Process (IRP) and Cooperative Engagement Process (CEP) Status Update (pdf; highlighting added) as of Sep 26, 2016, noted: 1) CEP requested Sep 14, 2016, by DotMusic Limited re .MUSIC; 2) .AMAZON IRP Second Administrative hearing Sep 30, 2016.

•  U.S. jurisdiction: 9/11 Families May Not Be Able to Sue Saudis After All--Bloomberg.com.

Tech News:

1. End of the Google Search Monopoly: 55% of people in the U.S. start their product searches on Amazon.com $AMZN--prnewswire.com; Google $GOOG can withstand the pressure from Amazon because its advertising revenue is diversified (e.g., video ads on streaming site YouTube.com), says Ali Mogharabi, analyst at Morningstar--Bloomberg.com. But maybe not: Amazon’s Echo is the Next Search Bar--Variety.com: "Google is telling home audio vendors they won't be allowed to add competing smart assistants like Alexa if they want to continue to use Google Cast;" and note Amazon's new Twitch Prime: "... free game loot every month ... discounts on new-release box games ... an ad-free viewing experience, exclusive emotes and chat badge, and one free channel subscription every 30 days ..." 
2. Samsung's new 'safe' Galaxy Note 7 phones reportedly overheat, explode--telegraph.co.uk.
3. Google will release 'Pixel 3' laptop with 'Andromeda' OS in Q3 2017--AndroidPolice.com. Watch the Google's October 4th event online. Note also Google Neural Machine Translation system (GNMT)--research.googleblog.com; and G Suite | gsuite.google.com (formerly Google Apps for Work).
4. Twitter $TWTR in Play: Is the Price Too High? (video)--DomainMondo.com. 
5. Facebook Profits over Privacy? $FB appeals German order on WhatsApp data--Reuters.com.
6. India made the biggest leap in the 2016-17 global competitiveness index--Quartz | qz.com. In the 2016-17 rankings, U.S. ranked 3rd, China 28th, and India, Asia’s third-largest economy, ranked 39th among 138 countries. Last year, India was at 55.
7. How one Amazon Kindle scam made millions of dollars--ZDNet.com: "For years, thousands were tricked into buying low-quality ebooks." [Sounds like one of ICANN's shadier new gTLD Registry operators must have previously sold 'low-quality ebooks.']
8. NPR.org: "We are on the threshold of possibly understanding both now and the flow of time."

MacroView:

1. Deutsche Bank: What the Hell is Going On?--MishTalk.com. See also I’m in Awe of How Fast Deutsche Bank is Falling Apart--WolfStreet.com: "This is how Lehman came unglued. Slowly and then all of a sudden;" and EU Banking Mayhem--WolfStreet.com: "The can has been kicked down the road for years. Now negative interest rates appear to have inadvertently crushed the can." Express.co.uk: "Eurozone's banking system could implode, dragging the euro down with it, if Angela Merkel's government allows Deutsche Bank to fail." Finally, Deutsche Bank's Troubles, Europe's Failures | Bloomberg.com Editorial: "... recapitalization. That means performing stress tests that reveal the true scale of banks' needs, figuring out which institutions can and should be allowed to fail, and providing public funds to shore up the rest if necessary."
2. Near ‘Collapse,’ Minnesota to Raise Obamacare Rates by Half | Bloomberg.com: "The increases range from 50 percent to 67 percent, Commissioner Mike Rothman’s office said in a statement. Rothman, who regulates the state’s insurers, is an appointee under Governor Mark Dayton, a Democrat. The rate hike follows increases for this year of 14 percent to 49 percent."
3. Election 2016's BIG BUCKS: Wall Street's favorite Hillary Clinton (raising and) outspending Trump 3 to 1 ($526 million vs $182 million, including SuperPACs) through August, 2016 says Bloomberg.com but is it enough to "buy the election?" See also This Chart Predicts Trump Will Win, Unless the S&P Rallies in October | Bloomberg.com and The Debate | Lefsetz.com: "I can’t remember a thing Hillary Clinton said ... Hillary’s out of touch. She’s so focus-grouped that she’s lost her identity ... [and] I want Hillary Clinton to run my government ..." see also Fed on ropes as Yellen seeks to fend off Trump blows--FT.com: "Populist attacks from all sides make central bank [US Federal Reserve] vulnerable to calls to rein it in, say analysts." Finally, more on why you should be "skeptical of polls" from Bloomberg.com.
4. Reckoning Comes for U.S. Pension Funds as Investment Returns Lag: "It’ll require increased pension contributions on the part of the states and local government, but most state and local governments don’t have the ability to do so."--Bloomberg.com. See also How a pension deal went wrong and cost California taxpayers billions | LATimes.com: "It was a deal that wasn’t supposed to cost taxpayers an extra dime ... California [Democrat] Gov. Gray Davis signed legislation that gave prison guards, park rangers, Cal State professors and other state employees the kind of retirement security normally reserved for the wealthy ... taxpayers will bear the consequences for decades to come."

Four most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:

1. News Review [25Sep]: BIG Winners of the Week ICANN and TRUMP
2. Twitter $TWTR in Play: Is the Price Too High? (video)
3. GoPro CEO on New Camera Drone, Company Performance (video)
4. End of the BlackBerry Phone and How Smartphone Batteries Catch on Fire

Honorable mention: IANA Transition: What the U.S. Government Is Really 'Giving Up'

• 4 Other Reading Recommendations:

1. Meet the California Couple Who Uses More Water Than Every Home in Los Angeles Combined | MotherJones.com: Meet "the top 1 percent wrapped in a green veneer, in a veneer of social justice."
2. The Financial Basket Of Deplorables | tonyisola.com: "... choose transparency, low fees and an investment advisor who will look out for your best interests."
3. Taking the Stealth Out of [Stealth] Editing | NYTimes.com re: the New York Times' bad habit of changing stories and acting as if nothing was changed. 
4. The Top Idea in Your Mind | PaulGraham.com: "I'd noticed startups got way less done when they started raising money ... The problem is that once you start raising money, raising money becomes the top idea in your mind. That becomes what you think about when you take a shower in the morning. And that means other questions aren't ... I've found there are two types of thoughts especially worth avoiding ... One I've already mentioned: thoughts about money ... The other is disputes ... avoid disputes if you want to get real work done ..."

-- John Poole, Editor, Domain Mondo 

feedback & comments via twitter @DomainMondo
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DISCLAIMER

News Review: ICANN, New gTLD Domain Names, Consumer Fraud

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

Consumer Fraud, ICANN, and new gTLD domain names? A lot of misinformation has been propagated about new gTLDs (new generic top-level domains), by both ICANN and its domain name industry partners a/k/a ICANN's customers, and at the same time, important information for consumers (domain name registrants) concerning universal acceptance issues in new gTLDs--new gTLD domain names "failing to work as expected on the internet" or "break stuff,"--has not been fully disclosed by either ICANN or its partners.

New gTLD domain names and Google Search Rank: here's the truth--What The New ICANN Domain Names Mean For Google Rankings & SEO: Nothing | SearchEngineLand.com--read that June 20, 2011, posting for all the particulars. But below is an example of the misleading, deceptive, false, unfair or fraudulent claims that ICANN's partners are still pushing in the marketplace to an unaware, uninformed consumer public:

False claims about ICANN's new gTLDs exposed--new gTLD hucksters slapped down again by Google's John Mueller--

"Google says keywords in the TLD part of your URL are ignored for ranking purposes | SearchEngineLand.com: "Google’s John Mueller confirmed yesterday in a Google Hangout that keyword-rich TLDs, such as the new top-level domains that have keywords in them — like .LIVE, .NEWS, .ATTORNEY and so on — do not count for ranking purposes. Mueller said Google completely ignores that for ranking purposes. He said this at the 12:45 minute mark into the hangout: “The TLD is not something we take into account there,” he said, and added that they [Google] “completely” ignore the words in the TLD portion of the URL. There was some controversy recently around a sponsored article published here on Search Engine Land, Can moving to a new TLD boost search rankings? That article [purportedly] showed how one lawyer switched from a .COM to a .ATTORNEY domain and saw a nice lift in organic traffic. Both Mueller and Gary Illyes from Google said this is not true and urged webmasters not to switch from their current TLDs to the new TLDs for “vague promises” of ranking boosts." (emphasis added)

If you dig down into that "sponsored article" cited above and its underlying "report," you 'discover' how the results are tainted by comparing a stale .COM website and a redeployed new gTLD website utilizing a SEO (search engine optimization) content strategy:

"In addition to the relaunch, Eric’s team concentrated on posting blog entries (initially about seven per month) containing keywords they hadn’t yet been ranked on search results. Very quickly, Jacksonville.Attorney started seeing fantastic results in organic Google listings." (emphasis added)

That's no surprise to anyone familiar with search engine optimization and improving Google search rank by regularly posting fresh original content. When it comes to "Google search rank," having a new gTLD (new generic top-level domain a/k/a domain name extension) will not help you. No matter how many times the new gTLD hucksters try to mislead you, no matter that ICANN does nothing to stop this misinformation from being propagated by its "partners," no matter how much Akram Atallah or others at ICANN, or Rightside, or Donuts, or Afilias, or ARI Registry Services n/k/a Neustar might wish it to be true, it just isn't. Listen to what Google and others have confirmed over and over again. Don't listen to the people trying to make a buck by misleading you. For ICANN and the hucksters, it's all about the money.

ICANN doesn't care about consumers (domain name registrants or internet users) other than to help its "partners" exploit domain name registrants for purposes of monetary gain. See also Consumer Trust? Not at ICANN Compliance | circleid.com and ICANN Fails Consumers (Again) | circleid.com: "The Compliance department of ICANN is an unmitigated disaster when it comes to earning the consumer trust."

I doubt this will be the last time Google has to "correct the record" concerning search rank and new gTLDs. The new gTLD hucksters continue spreading this same big fat lie, over and over again. Eventually the FTC (Federal Trade Commission) or state consumer protection agency(s) or one or more state attorney generals, or some Attorney in a court of law, will hold them accountable via an award of money damages or imposition of fines and penalties for consumer fraud. One would think that new gTLD hucksters realized by now that their phony baloney about new gTLDs and Google search rank just paints them as pathetic liars.

Today, even when a domain name registry operator representative tries to impart useful information for domain name registrants--see, e.g., 7 Key Questions to Ask When Choosing a Domain Name Extension | circleid.com--she (or he) is immediately attacked by one or more new gTLD trolls--my published comment to the article cited above:

"Useful information Jeannie, particularly for domain name registrants (and please ignore the new gTLD trolls). But you could have also added "pricing predictability" in renewing .COM domain names compared to new gTLDs. One issue you did raise, known as the "universal acceptance" problems of new gTLDs "failing to work as expected on the internet" and "breaking stuff" is very problematic for both domain name registrants and end users. ICANN tried to absolve itself of all liability for universal acceptance problems in its registry agreements with new gTLD registry operators. One or more class actions on behalf of new gTLD domain name registrants may be forthcoming once the IANA transition is complete." (link added)

See also on Domain Mondo:  New gTLD Domain Names, Defects, ICANN Liability, FTC Complaints and ICANN, Domain Registry Operators, Monopoly, Antitrust, FTC Statement.

********

•  Different strokes for different folks re: IANA stewardship transition--

• Bloomberg | BNA.com: "[Larry] Strickling told reporters June 9 that NTIA is also studying a provision in pending appropriations legislation that would prohibit the agency from spending money to effect the transition. But he said the contract will expire of its own accord Sept. 30, and he didn't believe allowing the contract to expire would violate the prohibition." (emphasis added)
• The Battle Over Obama’s Internet Surrender | WSJ.com: "... Time is running out for Congress to insist that the U.S. continue to protect Americans and everyone around the world who values the open internet."  See also Opinion Journal: Adios, Internet Freedom? (video) | WSJ.com:  Columnist Gordon Crovitz on the Obama Administration's decision to give up control of the Internet's domain name system.

ICANN Hub Offices & Engagement Offices (source: icann.org)

• ICANN & Online Censorship: Other than LA, ICANN also has "hubs" in Istanbul (Turkey) and Singapore (both selected while Fadi Chehade was ICANN President & CEO--he planned on "moving to Singapore")--both of which appear to be actively censoring the internet: Singapore cuts off web access for government workers | CNN.com: "... The move was criticized online as being a retrograde step and one that could lead to wider restrictions on internet freedom in the city-state."  As for Istanbul, since 2013, Freedom House ranks Turkey as "Not Free."

• Shuffling chairs on the deck of the Titanic: Changes to ICANN’s Global Leadership Team | ICANN.org.

• Governance Risk: ICANN's Board of Directors should be held to the standards of a fiduciary (stewards of a global public resource). Unfortunately, ICANN Directors fall far short in executing their duties as fiduciaries--Three Ways to Identify Governance Risk | cfainstitute.org: "The recent tribulations of Zenefits, a San Francisco start-up operating in the health insurance and human resources space, demonstrate how analyzing a firm’s culture can help identify potential red flags. Earlier this year, Zenefits’s replacement CEO announced that the company suffered from issues with its culture and tone, writing that “our internal processes, controls and actions around compliance have been inadequate.” One month later, Fidelity announced that it was marking down its investment stake in the company ... As a fiduciary, ... once you’ve identified something as a risk, you have no choice but to look at it.”--London-based Newton Investment Management recommends before investing conducting thorough research to analyze and understand a company on three particular levels:

• Board of Directors: How is the board composed in terms of diversity, tenure, and independence? [In the case of ICANN you should probably add as important criteria both competence (it's not an 'honorary' appointment) and conflicts of interest.] 
• History: Does the company have a track record of ... carelessness or infractions [e.g., dot SUCKS, dot AFRICA, dot AMAZON, NETmundial Initiative (outside mission and scope), secrecy (see ICANN Internet Governance Initiatives Sanctioned by Secret September Board Resolution | InternetCommerce.org), new gTLD fiascos, conflicts of interest, etc.]?
• Culture: How does the firm engage with the [global internet] community and exercise stewardship over shareholder [stakeholders, domain name registrants, et al] resources [e.g., the global DNS, and millions of dollars in fees collected from registrants worldwide from each gTLD domain name registered]?

•  Cybersquatters beware: Cyber-pest ordered to pay $1,946 in legal costs to Donald Trump | NYDailyNews.com: "... Yung sued Trump to overturn a judgment by the World Intellectual Property Organization to transfer four domain names he owned bearing the real estate mogul's name: trumpindia.com; trumpmumbai.com; trumpabudhabi.com; and trumpbeijing.com. Trump counter-sued under the Anti-Cybersquatting Consumer Protection Act. Federal Judge Dora Irizarry ruled in 2014 that Yung was trying to profit off Trump and ordered him to surrender the infringing domain names plus $32,000 in legal fees ..."

•  Still no word from ICANN about the new RZMA (Root Zone Maintainer Agreement) with Verisign.

•  Still no word from ICANN about date/time of its webinar re: Proposed Amendments to Base New gTLD Registry Agreement (comments close 13 Jul 2016 23:59 UTC).

•  Comments close this coming week at ICANN on Revisions to ICANN Expected Standards of Behaviors 25 Jun 2016 at 23:59 UTC.

•  U.S. Court of Appeals affirms FCC on net neutrality - next stop Supreme Court? Maybe not.

•  Russian State Censor Can Now Un-Delegate Website Domain Names Extrajudicially | Global Voices.org.

•  Intellectual Property Rights? Jack Ma Says Fakes “Better Quality and Better Price Than the Real Names” | WSJ.com: "They are exactly the same factories, exactly the same raw materials but they do not use the names.” Mr. Ma’s comments caused social-media outrage among some who felt he was dodging responsibility for the longstanding presence of counterfeit goods on Alibaba’s online bazaar Taobao [taobao.com]..."

•  Apple $AAPL & China: The intellectual property regulator of Beijing orders Apple to stop selling the iPhone 6 and iPhone 6 Plus | WSJ.com.

•   Nothing Succeeds Like Failure--at Yahoo--“Her core mistake was this belief that she could reinvent Yahoo”--Yahoo’s Marissa Mayer Stumbled After Secret Truce With Investor | WSJ.com:  "As tough as her job was from the start, Ms. Mayer made things even worse ... She failed to produce the pledged cost savings, plunged even deeper into her turnaround efforts and clung to the idea that she was going to save Yahoo, even when it became clear to insiders and other observers that the company was beyond saving ... If Yahoo is sold and Ms. Mayer is terminated as a result, she stands to receive about $55 million. Since joining Yahoo, she has received $118.2 million in cash and equity compensation ..." See also: How Yahoo derailed Tumblr | mashable.com and Here's What Happened To All 53 of Marissa Mayer's Yahoo Acquisitions | gizmodo.com.

• Bad Bots Behavior: On Artificial Viewers, Followers, and Chat Activity | blog.twitch.tv: "We at Twitch are well aware that view-bots, follow-bots, and chat-impersonation bots are a persistent frustration ... For those unaware, these bots are used to artificially inflate the apparent view count, follower count, and chat activity on a Twitch channel ... Other times, bots are used to harass other broadcasters in order to attempt to deny them partnership, or get their channel suspended. All of this is enabled by bot services offered by a handful of sellers who make misleading claims for their own commercial benefit." (emphasis added)

•   Brexit Vote is Thursday, June 23, read more at:  Brexit: EU Referendum Was A Terrible Mistake by David Cameron (video) | DomainMondo.com.

•  Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:

1. News Review [12Jun]: IANA Transition Has Already Cost ICANN Over $28 Million
2. Systemic Risk and Asset Management in the Post Crisis Era (videos)
3. New gTLD AFRICA Litigation: Defendant ZACR Dismissed as a Party
4. WeChat, China's Everything App, Why Facebook Is Very Jealous (video)
5. TIE: a) Marc Andreessen on Twitter $TWTR, Startups, Technology, IPOs (videos) and b) FIFA Corruption Scandal A Warning for ICANN Post IANA Transition (video)

•  8 Other Reading Recommendations:

1. Internet of Things (IoT): Nest’s Biggest Problem Wasn’t Tony Fadell | technologyreview.com: "... most of us still aren’t convinced that we need or want all of our home appliances to be connected to the Internet."
2. Why Startups Are Struggling | technologyreview.com: "...“Even as the number of new ideas and potential for innovation is increasing, there seems to be a reduction in the ability of companies to scale in a meaningful and systematic way.” As many seeds as ever are being planted. But fewer trees are growing to the sky."
3. Dinosaur watch: 4 Reasons Microsoft Wasted $26.2 Billion To Buy LinkedIn | Forbes.com.
4. Easy Come, Easy Go: Li Ka-shing’s Fortunes Slide - China Real Time Report | WSJ.com: "Mr. Li was once Asia’s richest man, but is now third behind Alibaba Group Holding Ltd. Chairman Jack Ma and Dalian Wanda Group Co.’s Wang Jianlin, according to Bloomberg."
5. " ... This Looks Terrible | WolfStreet.com: "... the Fed’s Industrial Production Index has been falling since November 2014. In May, it dropped to 103.6, down 2.9% from its peak in November. It has been in decline for 18 months! Every time this kind of decline occurred in recent decades, it was associated with a recession ..."
6. The World Nears Peak Fossil Fuels for Electricity | Bloomberg.com: "... eight massive shifts coming soon to power markets. 1. There Will Be No Golden Age of Gas ... costs of wind and solar power are falling too quickly for gas ever to dominate on a global scale ... rock-bottom prices won't be enough to derail a rapid global transition toward renewable energy ... peak year for coal, gas, and oil: 2025 ... 2. Renewables Attract $7.8 Trillion ... 3. Electric Cars Rescue Power Markets ..."
7. How to Psychologically Prepare Clients for Bear Markets | AdvisorPerspectives.com: "... it helps to understand that you, your clients and all the investors who are panicking as the bear claws its way through the markets are operating with three very different brains: (1) the Neo-cortex; (2) a set of ganglia below it that has the processing power of an unusually smart cat; (3) below that at the top of the spine, a cluster of neurons which, together, possess roughly the thinking power of a lizard ..."
8. Ego is the Enemy: The Legend of Genghis Khan | farnamstreetblog.com: "No matter what you’ve done up to this point, you better still be a student. If you’re not still learning, you’re already dying."

Have a great week!

-- John Poole, Editor, Domain Mondo

feedback & comments via twitter @DomainMondo
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One 'Must Read' For Those Attending ICANN55, Marrakech, March 5-10

Are you attending, in person or remotely, ICANN55 in Marrakech, Morocco, March 5-10?

Are you troubled by ICANN's pivot towards, and 'unrelenting propaganda' about, new generic top-level domain names (“new gTLDs”)?

Are you tired of ICANN pushing 'garbage extensions' to a user base that 'quietly knows better' ?

Isn't it time for ALL of the failed leadership at ICANN, including its Board of Directors, to resign?

Below is the Rightside (NASDAQ:NAME) shareholder letter published by the S.E.C. on March 1, 2016. A similar letter could also have been sent to the ICANN Board of Directors for their failed leadership and corruption of ICANN (ref. also Dr. Paul Vixie), in propagating the new gTLDs program. The ICANN Board has failed to act in the global public interest as steward of the global DNS.  Highlighted sections of the letter below are as applicable to ICANN as they may be to Rightside. Like Rightside, ICANN is a U.S.-based corporation, legally controlled by its Board of Directors.  Directors owe fiduciary duties. ICANN stakeholders do not owe fiduciary duties. 

EX-99 2 Exhibit_99.htm EXHIBIT 99 (source: U.S. Securities and Exchange Commission) (emphasis added)

February 19, 2016

Mr. David E. Panos
Chairman of the Board
Rightside Group, Ltd.
5808 Lake Washington Boulevard NE
Suite 300
Kirkland, WA 98033

Dear Mr Panos

I am troubled by the pivot toward, and unrelenting propaganda about, new generic top-level domain names (“GTLDs”). Whilst I concede that new GTLDs are one of many opportunities in the emerging market for second generation domain names, Rightside Group, Ltd. (“Rightside”, “NAME”, or our “Company”) is the second-largest domain name registrar, a business that is here and now. I don’t hear Rightside speaking to this strength. Our Company glosses over this critical revenue component and plays up new GTLDs at the expense of the revenue contribution made by the traditional registrar business.

The user interfaces at eNom and Namejet look and feel clumsy and stale. Looking past the main page of NAME’s sites, the logged-in front-end infrastructure is untouched and acts like time capsule to what existed half a decade ago. Most of our growth in names under management is coming from a reseller channel that is out-executing your own in-house registrar eNom.

While I am a believer in new GTLDs, it is going to be many years before their revenue in any way materially approaches the revenue potential of our registrar operations. In my view, NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.

Rightside is a gem in that it has many assets which are unique or difficult to duplicate. Cannell Capital LLC would not have acquired 1,389,953 shares otherwise. We have some good new domain-endings as well, with .news being one example, but this particular domain-ending and a clutch of others like it do not constitute enough of a “front” to gloss over the majority of your extensions which are low in value and should be spun-off. I believe that we should sell or even abandon some of our worst extensions. They should not consume all the resources of our Company at the expense of the assets that are currently profitable.

The current members of the Board of Directors and indeed many of your shareholders don’t seem to recognize this. I do. Today I stand up to be that paladin. To wit, I submit both a plan and a request: (i) Unify all Company products under the eNom.com brand; (ii) Terminate no less than 20% of your weaker staff; (iii) Move the Name.com entity to Seattle under the eNom.com brand and close expensive ancillary offices; (iv) Rebuild and relaunch the front-end infrastructure at eNom.com to bring it to the current standard expected by consumers; (v) Refinance all debt; and (vi) Add two new board members with a suggestion, but not a requirement that two incumbents resign.

I would prefer to avoid waging an expensive proxy battle to elect my own slate of directors. Such a fight would be costly to both myself and our Company. It is my sincere hope that substantive discussions between myself and the current Board of Directors could result in the infusion of fresh blood without such a fight.

Best Regards!

Sincerely,
/s/
J. Carlo Cannell
Cannell Capital LLC

--end of letter--

See also on Domain Mondo: ICANN Damaged a Competitive Domain Name Market With Its New gTLDs

Editor's note: a copy of this post has been sent to Steve Crocker (Chairman of the iCANN Board of Directors), Larry Strickling (NTIA, US Department of Commerce), and select members of the U.S. Congress. 


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IANA Transition, ICANN Accountability, "Has Always Been About POWER"

How to capture ICANN: "The first thing we do, let's spill all the Board members."*

*With apologies to William Shakespeare: Shakespeare's line ''The first thing we do, let's kill all the lawyers,'' was stated by Dick the Butcher in ''Henry VI,'' Part II, act IV, Scene II, Line 73. Dick the Butcher was a follower of the rebel Jack Cade, who thought that if he disturbed law and order, he could become king. Shakespeare intended it as a compliment to attorneys and judges who instill justice in society. (source)

"... At least the USG (US government) offers some accountability. ICANN's primary active stakeholders are businesses making money off the DNS; most users are too busy elsewhere to pay much attention..."--Esther Dyson, ICANN's founding Chairman, Sept 22, 2015

"Sole Member given reserved power under Bylaws to override Board decision directly, regardless of Board fiduciary duties." - Legal counsel for CCWG-Accountability (pdf) opinion on 2nd draft

"WS1 has always been about power"--Jonathan Zuck, CCWG-Accountability participant, infra 

The biggest problem that the global multistakeholder community (a/k/a the global internet community which is a lot larger and broader than just ICANN's relatively small "stakeholder community"), has right now is that so many members and participants comprising the CCWG-Accountability are engrossed in their own groupthink that they apparently have not taken the time to actually read and analyze all the public comments to their own "fundamentally flawed" 2nd Draft Report which is supported overall by only 19 out of 90+ comments. If you read the CCWG mail list regularly, you will discover that many, if not most, CCWG members are actually operating under the delusion that the global multistakeholder community supports their proposed "power grab." 

Indicative of this state of "denial" or what might be called ignorant arrogance among CCWG-accountability members and participants are the remarks made on the CCWG public mail list by Philip Corwin, who represents a group known as the "Internet Commerce Association," of which major supporters include new gTLDs registry operator Donuts, and other domain name industry "players." Here's an excerpt from Corwin's response to Domain Mondo's post China (CAICT) Objects to ICANN CCWG Accountability 2nd Draft Proposal:

"If the CCWG Proposal is a "power grab" then it's the sorriest excuse for one I've ever seen. It is almost exclusively a proposal for greater defensive rights in reaction to ICANN Board/corporate actions, and would hardly put "vested self-interested special interests ("ICANN stakeholders" or "lobbyists")" in charge of the enterprise." -- Phil Corwin, September 25, 2015 

I suggest Mr. Corwin, (and all other CCWG members and participants), take the time to read carefully all the comments to the 2nd draft report and then take note of the following post on the CCWG mail list by the President of the Association for Competitive Technology (ACT), after which, hopefully, they might actually be more "informed and enlightened" and less consumed by their own "ignorant arrogance"--

"WS1 has always been about power and WS2 about implementation. WS1 was never going to be complete and, for that matter, WS2 won’t ever be complete either. That said, if we have the power to spill the board with relative ease, we can easily reconvene, flesh out the member model, submit it to the board and spill them if they aren’t constructive. We don’t need to worry about deadlines, the Congress, NTIA, etc. the whole point of WS1 is to ensure the capability to do just this." Jonathan Zuck, President of ACT and CCWG participant, September 29, 2015 (emphasis added)

Clearly and succinctly said Mr. Zuck! Sounds like a neat way to hijack or supplant ICANN Board authority and bypass any encumbering "fiduciary duties." The use of the word "constructive" above is clearly a euphemism for "submissive." It's all about the "power." The problem, as noted, is that the mostly profit-seeking, self-interested ICANN stakeholders, or "lobbyists," do not have the ICANN Board of Directors' fiduciary duties to the global internet community, nor the fiduciary duty to operate in the "global public interest." By their own self-admission, most ICANN stakeholders are self-seeking, self-interested, profit-making individuals and enterprises, who are primarily interested in their own "agendas" not what is in the "global public interest." That job is usually left to either governments, trustees, or a carefully selected Board of Directors held to fiduciary standards. While ICANN stakeholders should have input into ICANN policy-making, (and I know this may come as a "shock" to some of those stakeholders), they are hardly "infallible." Of course, directors, even though held to fiduciary standards, can still, from time to time, "fail," which is why "enhanced ICANN accountability," in the absence of US government oversight, needs to have "means or methods" whereby any member of the global internet community can seek redress of a Board decision, action, or adopted ICANN policy, which violates ICANN's articles, bylaws, or the Board's fiduciary duties to the global multistakeholder community and the global public interest. The ICANN Board says they agree and have offered suggested "means or methods" by which such redress can be provided. Other accountability "enhancements" or requirements, including, for example, transparency (e.g., record requests etc.), can easily be provided to any member of the global internet community by having appropriate provisions in ICANN's bylaws, none of which requires implementation of the proposed Single Member Model (SMM or CMSM) which, understandably, the ICANN Board does not support.

(Updated October 1, 2015)

-- John Poole, Editor, Domain Mondo

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China (CAICT) Objects to ICANN CCWG Accountability 2nd Draft Proposal

Fiduciary Duty: "Definition: A fiduciary duty is a legal duty to act solely in another party's interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals' express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries' other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system. Examples of fiduciary relationships include those between a lawyer and her client, a guardian and her ward, and a director and her shareholders." -- Legal Information Institute (link above) (emphasis added)

CCWG's CMSM to #ICANN Board: "Forget Your Fiduciary Duties, Do As We Say OR You Are Fired!" http://t.co/cg0ecAUiHR @realDonaldTrump

— DrivingTheDay (@DrivingTheDay) September 24, 2015

UPDATE September 24, 2015: CCWG-Accountability "On the Way to LA" to hijack the Global DNS from the Global Multistakeholder Community through their deceptively named CMSM or "Community Mechanism as Sole Member" Model which allows select groups of ICANN "stakeholders" to override ICANN Board decisions and disregard the ICANN Board's fiduciary duties to the global multistakeholder community including the Board's fiduciary duty to act in the global public interest at all times.

"... At least the USG (US government) offers some accountability. ICANN's primary active stakeholders are businesses making money off the DNS; most users are too busy elsewhere to pay much attention..."--comment of Esther Dyson, ICANN's founding Chairman, in The Guardian, Sept 22, 2015

"Sole Member given reserved power under Bylaws to override Board decision directly, regardless of Board fiduciary duties." - Legal counsel for CCWG-Accountability (pdf) opinion on CCWG 2nd draft

China's CAICT has joined others in objecting to the power grab by the "ICANN community stakeholders" a/k/a ICANN insiders to the exclusion of the "global Internet community" in the most recent CCWG-Accountability 2nd Draft Report (pdf) which proposed a Single or "Sole Member" Model (comprised by only select ICANN stakeholder groups) to be "on top" over the ICANN Board of Directors and control ICANN, said Sole Member having no accountability to the global Internet community nor fiduciary duty to act in the global public interest--in fact one leading member of the CCWG has responded to an ICANN Board Member on the CCWG mail list and noted that with the "Sole Member Model" the ICANN Board will no longer have to worry about breaching "fiduciary duties" (to the global multistakeholder community a/k/a global internet community, e.g., or to act in the global public interest)--

"Members don't owe fiduciary duties generally speaking, just as the organisations that would comprise the member (the SOs and ACs) don't today. The [ICANN] Board's members do. The existence of a membership system modifies those duties for Board members - they do not breach fiduciary duties in implementing a decision a member has made. This could be a rabbit hole but the point is that the member option has more flexibility in determining matters and does not create impossibilities for the Board where it does so. That's a design feature of the choice of membership." -- Jordan Carter, CCWG-Accountability member (emphasis added)

Rabbit hole? "Down the rabbit hole" - a metaphor for an entry into the unknown, the disorientating or the mentally deranging, from its use in Alice's Adventures in Wonderland. source: Rabbit hole - Wikipedia

Meanwhile, China's CAICT has joined with others and objects to the CCWG's 2nd Draft Report--

"... We believe, in designing a voting system, the most important element that need to be considered is the representation of the global Internet community, instead of the representation of the ICANN community. Therefore, geographical balance should be an important element in terms of allocating the votes in the community; users' representation and the interests of developing countries should be properly considered too. For instance, Internet users in Asia exceed 1.4 billion, accounting for 45% of the world users. If there's no votes or extremely limited votes for Asian representatives, then this voting system is not appropriate..." -- Comment (pdf) submitted by China Academy of Information and Communication Technology (CAICT), September, 2015, Beijing, China, in response to CCWG-Accountability's 2nd Draft Report (emphasis added)

The above echoes other comments made, including the following submitted to the ICG mail list by Richard Hill on September 20, 2015:
Dear ICG,
A portion of the work of CCWG-Accountability is directly related to the transition proposal that you are coordinating. CWG-Accountability does not have, as far as I know, a public comments forum
such as the this one, and it does not accept comments from the general public, so I'm posting this message here and requesting that it be forwarded to CWG-Accountability. I refer to the draft summary of comments on the CWG-Accountability proposal published at: http://mm.icann.org/pipermail/accountability-cross-community/attachments/20150915/8167a9d5/2nd-draft-CCWGtrends-v4-0001.pdf
I detail below my concerns.
1. Who are the stakeholders? [in other words, the Global Multistakeholder Community or just certain "ICANN stakeholders"?]

Slide 2 of the PDR referenced above presents a "Stakeholder Distribution of Comments Received". The identified categories of stakeholders are:
* Governments
* ccTLDs
* Advisors to the CCWG-Accountability
* Chartering Organizations
* CWG-Stewardship
* Technical Community
Does this imply that individuals and civil society organizations are not stakeholders? Does this imply that comments from individuals and civil society organizations were not considered?
2. Misleading statistics
Slides 8 ff. of the PDF present breakdowns of responses. For example, it is stated that 27 responses agreed that the CCWG-Accountability proposal enhances ICANN's accountability while 61 did not provide an answer. It may be correct that 61comments did not explicitly answer that question, but at least six responses did answer it negatively, albeit implicitly ... The statistics presented are misleading because they imply that "did not provide answer" implies support for the proposal, which is not necessarily the case ..."

Domain Mondo has previously noted the CCWG-Accountability publishing misleading representations of the public comments received to the 2nd Draft Report. The CCWG-Accountability is scheduled to meet with members of the ICANN Board this Friday and Saturday. Maybe the ICANN Board of Directors can at least do something about the CCWG leadership publishing "misleading statistics." The CCWG-Accountability is looking more and more like an "insider deal" favoring the vested self-interested special interests ("ICANN stakeholders" or "lobbyists") who have always wanted to totally control and financially benefit from ICANN policy-making, to the exclusion of "outsiders" (a/k/a global multistakeholder community or "global Internet community") and to the detriment of the "global public interest." With US (NTIA) stewardship in place, the lobbyists could never totally control ICANN--now is their chance.

See also on Domain Mondo:

• Only 19 of 90 Comments Support ICANN Accountability Proposal Overall (Sept 22, 2015) 
• ICANN CCWG-Accountability Co-Chair Comments on the Public Comments (Sept 15, 2015) 
• FIFA Corruption Scandal, Lessons For ICANN and IANA Transition (May 27, 2015)

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