News Review: .AFRICA Update, ICANN Annual Report, ICANN.org 404

Domain Mondo's weekly review of internet domain news:

Features •  1. .AFRICA Update; 2. ICANN Annual Report 1 July 2015– 30 June 2016, follow the money; 3. ICANN.org 404; and 4. .SPORT, .MUSIC, .GAY--more ICANN incompetence:

1.  New gTLD .AFRICA litigation update: DotConnectAfrica Trust vs ICANN and ZA Central Registry, pending in the Superior Court of the State of California, County of Los Angeles, Central District:

UPDATE Feb 9, 2017: ICANN [Finally] Free to Proceed with the Delegation of .AFRICA Following Court Decision | ICANN.org: "LOS ANGELES – 9 February 2017 – The Internet Corporation for Assigned Names and Numbers (ICANN) announced that a California Superior Court has denied DotConnectAfrica’s (DCA’s) second Motion for Preliminary Injunction to stop the delegation of the .AFRICA generic top-level domain (gTLD) to ZA Central Registry (ZACR). DCA’s first Motion for Preliminary Injunction was denied by the Superior Court in December 2016. Among other things, the Judge found that it appears the "Covenant Not to Sue" found in the New gTLDApplicant Guidebook is enforceable, citing to the recent Federal District Court Order in the Ruby Glen, LLC v ICANN matter, wherein the Court held that the “covenant not to sue” in the Guidebook is enforceable. Accordingly, the Superior Court Judge ruled that “DCA's claims against ICANN for fraud and unfair business practices are likely to be barred. As a result, DCA cannot establish that it is likely to succeed on the merits.” View the Court Order here [embedded below]. In accordance with the terms of its Registry Agreement with ZACR for .AFRICA, ICANN will now follow its normal processes towards delegation." (emphasis added)

--End of update--original text below:

On Feb 3, 2016 ICANN updated its litigation page to indicate that on 4 January 2017, Court Order: Plaintiff's Ex Parte Application for Temporary Restraining Order is denied; Plaintiff's papers are deemed to be a new preliminary injunction motion; Parties are to submit supplemental briefs; and Preliminary Injunction hearing set for 31 January 2017 (which the Court later moved to 3 February 2017).  No further update as to the Feb 3rd hearing (as of Feb 5, 2017, 00:00 UTC).

2.  Want to know where the money is going at ICANN from all those domain name fees paid by registrants despite the fact that most domain name registrants have no representation within ICANN's so-called multistakeholder community?  Follow the money:

ICANN Annual Report: 1 July 2015– 30 June 2016 (pdf) excerpt below:

Advice equally applicable to the stakeholders of ICANN and its Global Domains Division (GDD): When shareholders aren’t watching, managers misbehave | ChicagoBooth.edu: "Perhaps the best advice to a distracted shareholder is to assume that management is misbehaving when no one is looking."

3.  ICANN.org 404 | The page you were looking for doesn't exist (404)

Above is the result if you go to https://www.icann.org/resources/board-material/minutes-brc-2017-02-01-en cited by ICANN as the proper link for Board Risk Committee (BRC) Meeting – Minutes 4 November 2016 --[published] Wednesday, February 01 2017 11:45 PM--BRC Attendees:  Rafael Lito Ibarra, Ram Mohan (Co-Chair), George Sadowsky, Mike Silber (Co-Chair), Jonne Soininen, Kuo-Wei Wu, and Suzanne Woolf Other Board Member Attendees: Asha Hemrajani Board Member Elect Observing: Maartern Botterman, Akinori Maemura, ICANN Organization Attendees:  S...  --Oh well, so much for ICANN transparency and accountability! 

4.  .SPORT, .MUSIC, .GAY--more ICANN incompetence:

a)  New gTLD .SPORT--ICANN loses, yet again, another IRP (pdf)--ICANN also ordered to pay (i) fees and expenses of the Panel and (ii) fees and expenses of the ICDR acting as administrator of the proceedings in the sum of US$152,673.26.

"7.90. Accordingly, the IRP Panel is of the view that in order to have upheld the integrity of the system, in accordance with its Core Values, the ICANN Board was required properly to consider whether allegations of apparent bias in fact gave rise to a basis for reconsideration of an Expert Determination.  It failed to do so and, consequently, is in breach of its governing documents."--IRP Final Declaration, p.43 (pdf)(emphasis added) 

b)  Letter 30 Jan 2017 (pdf) from Arif H. Ali, Partner, Dechert LLP, to Göran Marby and Members of the ICANN BGC re: New gTLD Application for .MUSIC:

"We are writing on behalf of our client, DotMusic Limited (“DotMusic”), to remind ICANN about the Board Governance Committee’s (the “BGC”) delay in making a final recommendation to the ICANN Board (the “Board”) regarding DotMusic’s Reconsideration Request 16-5 (“Reconsideration Request”). Over 11 months have passed since DotMusic submitted the Reconsideration Request to the BGC, however, the BGC has not made a final recommendation to the Board with respect to DotMusic’s Reconsideration Request. This is inconsistent with the BGC’s obligation under ICANN’s Bylaws to review a reconsideration request on a timely basis ...." (emphasis added)

c) Letter 30 Jan 2017 (pdf) from Arif H. Ali, Partner, Dechert LLP, to Göran Marby and Members of the ICANN Board re: New gTLD Application for .GAY:

"... We are writing on behalf of our client, dotgay LLC (“dotgay”), to complain about ICANN Board’s (the “Board”) failure to issue its final decision on the Board Governance Committee’s (“BGC”) 26 June 2016 Recommendation on Reconsideration Request 16-3 (“Reconsideration Request”). Pursuant to Section 4.2(r) of ICANN’s Bylaws (October 1, 2016): The Board shall issue its decision on the recommendation of the Board Governance Committee within 45 days of receipt of the Board Governance Committee's recommendation or as soon thereafter as feasible ... Here, seven months have passed since the Board received the BGC’s final recommendation on Dotgay’s Reconsideration Request, yet the Board has failed to make a final decision on dotgay’s Reconsideration Request ..."

Other Internet Domain News

•  Does the U.S. have new clout over the global internet? | FCW.com--John Kneuer, former head of the NTIA at a Feb. 2 U.S. House hearing--"Kneuer told the [House Energy and Commerce] committee [video here] that it would be "absolutely" appropriate for President Donald Trump or other U.S. official to back Amazon's effort to obtain a dot-Amazon top level domain name. "With the conclusion of the transition of the IANA contracts … the U.S  government can take, counterintuitively perhaps, a more proactive role for domestic companies…" Kneuer said. "When the U.S. government had its exclusive contractual relationship with ICANN, there was some hesitancy to be perceived as abusing that authority or overplaying that role." Some Republican lawmakers were highly critical of the [IANA transition] transfer and sought to block it, calling it essentially a giveaway of U.S. power ..." (emphasis added)

•  Special-Use Names Problem Statement (Jan 31 update) | ietf.org: 4.3 Summary: "... The assignment of Internet Names is not under the sole control of any one organization. IETF has authority in some cases, but only with respect to "technical uses." ICANN at present is the designated administrator of the root zone, but generally not of zones other than the root zone. And neither of these authorities can in any practical sense exclude the practice of ad-hoc use of names. This can be done by any entity that has control over one or more name servers or resolvers, in the context of any hosts and services that that entity operates. It can also be done by authors of software who decide that a special-use name is the right way to indicate the use of an alternate resolution mechanism."  See also Domain Name System Operations (dnsop) WG Virtual Meeting: 2017-02-16.

•  Quick Takes:

• Thick WHOIS Registration Data Directory Services Requirements to Take Effect | ICANN.org
• ICANN CEP and IRP Status Update – 31 January 2016 | ICANN.org (pdf, 438 KB) (does not include .SPORT IRP final declaration referenced above).
• MarkMonitor New gTLDs Q1 Report--info.markmonitor.com
• Are Domain Names Contract of Services or Property Rights? | circleid.com
• Protecting your website from user generated spam--webmasters.googleblog.com
• Ransomware Freezes Eight Years of Police Evidence | bankinfosecurity.com
• GoDaddy (NYSE:GDDY) reportedly hires adviser for sale of Host Europe Group's PlusServer business--SeekingAlpha.com

•  Q4 2016 Financial Results & Webcasts this coming week:

• Tucows (TO:TC) (NASDAQ:TCX) Feb 7
• Twitter TWTR Feb 9 before market open
• Verisign VRSN Feb 9 after market close

•  Domain registry and technology services provider Neustar NYSE: NSR--Neustar: Investor Relations - News Release Feb 2, 2017: "On December 14, 2016, Neustar announced that it had entered into a definitive merger agreement to be acquired by a private investment group led by Golden Gate Capital. Under the terms of the merger agreement, Neustar’s stockholders will be entitled to receive $33.50 per share following the closing of the proposed merger. The merger, which is expected to close no later than the end of the third quarter of 2017, is subject to approval by Neustar’s stockholders, regulatory approvals and other customary closing conditions. In light of the proposed merger, Neustar will not be providing guidance for 2017 and will not hold a conference call to discuss its results for full-year and fourth quarter 2016."--NeuStar (NYSE:NSR) Q4 2016 Results: EPS of $1.38 (missed estimates by $0.01); revenue $324.9M (+16.0% Y/Y) (miss by $1.08M).

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

1. NewsReview: Ruby Glen Appeals .WEB ICANN Case to Ninth Circuit
2. Apple $AAPL Q1 2017FY Earnings, LIVE Stream Jan 31st Replay
3. Amazon $AMZN Q4 2016 Earnings LIVE Webcast Feb 2, 5:30pm ET
4. Facebook $FB Q4 2016 Results, LIVE Webcast Feb 1, 5pm ET

-- John Poole, Editor, Domain Mondo 

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News Review: ICANN Accountability WS2 & Consensus 'ICANN Style'

Domain Mondo's weekly review of internet domain news:

First Feature •  ICANN accountability workstream 2 (WS2) Dashboard--The ICANN Cross Community Working Group on Enhancing ICANN Accountability (CCWG-Accountability) Work Stream 2 (WS2) is "focused on addressing accountability topics for which a timeline for developing solutions and full implementation may extend beyond the IANA Stewardship Transition."--here's the latest WS2 subgroups progress update from ICANN:

CCWG-Accountability Workstream 2 Dashboard (pdf) (Dec 2016, updated 11 Jan 2017) embed:

Second Feature •  Consensus 'ICANN Style'

Decision-Making Methodologies:In developing its Proposal(s), work plan and any other reports, the CCWG-Accountability shall seek to act by consensus. Consensus calls should always make best efforts to involve all members (the CCWG-Accountability or sub-working group). The Chair(s) shall be responsible for designating each position as having one of the following designations:
a) Full Consensus - a position where no minority disagrees; identified by an absence of objection; b) Consensus – a position where a small minority disagrees, but most agree. In the absence of Full Consensus, the Chair(s) should allow for the submission of minority viewpoint(s) and these, along with the consensus view, shall be included in the report.
In a rare case, the chair(s) may decide that the use of a poll is reasonable to assess the level of support for a recommendation. However, care should be taken in using polls that they do not become votes, as there are often disagreements about the meanings of the poll questions or of the poll results.
Any member who disagrees with the consensus-level designation made by the Chair(s), or believes that his/her contributions are being systematically ignored or discounted should first discuss the circumstances with the relevant sub-group chair or the CCWG-Accountability co-chairs. In the event that the matter cannot be resolved satisfactorily, the group member should request an opportunity to discuss the situation with the Chairs of the chartering organizations or their designated representatives.

How does this play out in reality? Here's a snapshot: Jurisdiction Meeting #16 (10 January @ 13:00 UTC) chat transcript--"threaten me that we have consensus or nothing, and I will join the objectors"--

Note that the Jurisdiction subgroup is "behind schedule, but recovery is still possible" according to the subgroup progress update graphic at the top of this post.

Other Internet Domain News:

•  Neustar acquisition: Friday (Jan. 13) was the preliminary proxy and FCC filing deadline for the Golden Gate acquisition of Neustar (neustar.biz | NYSE:NSR), a domain registry services and technology company. The go-shop also expired Friday (no alternative bids anticipated according to SeekingAlpha.com).

•  Rebrand--New Domain Name--Yahoo! Inc. will be changing its name to Altaba Inc., a portmanteau of "alternative" and "Alibaba" and has registered the domain name altaba.com:

The name change is required because Yahoo's operating businesses are being sold to Verizon which will retain the Yahoo! brand. See also: Marissa Mayer to Leave Yahoo Board  | WSJ.com.

•  Domain Register Pty Ltd accused of conning millions of dollars from unsuspecting businesses ... | HeraldSun.com

•  Nigeria’s .NG suffers patronage, as firms, others adopt foreign domain names | guardian.ng

•  Where is the most affordable internet in Africa? | Quartz | qz.com: If you want affordable internet in Africa, move to a country on the coast.

•  Obama Opens NSA’s Vast Trove of Warrantless Data to Entire Intelligence Community, Just in Time for Trump | TheIntercept.com

•  The 13th Annual State of the Net Conference | StateoftheNet.org will be held on January 23rd at the Newseum’s Knight Conference Center, Washington, D.C. More info here. On Twitter: @SOTN #sotn

• Real Innovation and Domain Names--Startups overwhelmingly choose .COM domains--Which Extension Was Most Popular With Startups in 2016? | NamePros.com.

•  ICANN FY17 Q2 Stakeholder Call, 15 February 2017 at 15:00 UTC. "The call will focus on how ICANN has implemented community policy for the quarter ending 31 December 2016. The call will also provide an Africa and Middle East update, as part of a new format aimed at spotlighting regional activities." Click here to register for the call and to receive joining instructions. If you are unable to access the form, email ICANN [ icann.communications @ icann.org ] to register with your full name and an email address.

•  ICANN Policy staff will be holding its annual Policy Workshop in Los Angeles from Monday 23 January 2017 to Friday 27 January 2017. Staff will be replying to email requests, but there will be delays.--GNSO SO/AC Support

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

1. US Intel Community's 'Nazi-like' Tactics, Media Hysteria & Trump (video)
2. News Review: New gTLD .AFRICA Plaintiff Files for New TRO vs ICANN
3. TechReview | 2017 Will Be The Year Of Amazon $AMZN (video)
4. LIVE Video Stream: Donald Trump's First Press Conference Since Election
5. MacroView: UK Economy Defies Economists' Dire Brexit Predictions (video)
6. Alibaba's Jack Ma Meets With Trump, Discuss 1 Million New US Jobs

-- John Poole, Editor, Domain Mondo 

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Strange Bedfellows: Vanke, Chinese Tycoon Wang Shi, and China (videos)

Strange Bedfellows: A Chinese Tycoon and the State:

Wang Shi is the head of Vanke (Domain: vanke.com), the world's largest home builder by sales. After decades of success, the star Chinese entrepreneur is fighting to retain control of the empire he created from scratch. Published  August 5, 2016, by WSJ.com.

China’s largest developer, Vanke (see stock chart below), has been involved in an eight-month takeover battle for control when conglomerate Baoneng Group emerged as Vanke’s largest shareholder with a 25 per cent stake. To fend off Baoneng, Vanke’s chairman Wang and his senior management team have sought out Shenzhen Metro, the state-owned city subway operator, as a white knight.

Bloomberg.com video August 21, 2016:

If above video does not play on your device, go here.

Stock chart of China Vanke Co., Ltd.

Vanke (Chinese: 万科) is a large residential real estate developer in the People’s Republic of China. It is engaged in developing, managing and selling properties across more than 60 mainland Chinese cities in the Pearl River Delta, Yangtze River Delta and Bohai-Rim Region, with the provision of investment, trading, consultancy services and e-business. It also has expanded into Hong Kong, the United States, and Malaysia since 2012. It is headquartered in Shenzhen, Guangdong province. Vanke was listed on the Shenzhen Stock Exchange in 1991, the second listed company in the Shenzhen Stock Exchange after Shenzhen Development Bank. It had the largest market capitalization in 2006 on the Shenzhen Stock Exchange. source: Wikipedia

Vanke holds its ground, reiterates management’s preference for Shenzhen Metro as its white knight | South China Morning Post | scmp.com August 22, 2016: "Vanke’s founder and chairman Wang Shi and president Yu Liang both skipped the company’s Monday earnings press conference in Hong Kong, instead leaving it to other executives to face the media ... the intrigue continues over Vanke’s control ... the uncertainties are distracting it from the business of building and selling real estate ... As many as 31 of Vanke’s projects have been affected, and the developer has faced “suspensions or even terminations because of uncertainties over the company’s future,” said Zhang Xu, executive vice president. Some senior staff are heading for the exit ..." See also Shareholder dispute dents China Vanke results | FT.com: "Banks have reduced Vanke’s access to loans, according to its interim report, and global rating agencies have warned that the group’s corporate rating could be affected."  See also bloomberg.com video (Aug 21) here.

Evergrande Raises Vanke Stake to 5% by Purchasing More A-Shares | Bloomberg.com August 8, 2016: "Vanke has been at the center of a battle for control since last year when Baoneng Group displaced China Resources (Holdings) Co. as the largest stakeholder. The emergence of Evergrande as a shareholder was among recent twists in a dispute that has drawn scrutiny from China’s securities regulator."

China Vanke chief Wang Shi raises the stakes | FT.com June 28, 2016: "... In addition to maintaining his sense of humor amid the drama, Mr Wang appears philosophical about it all. In a social media post at the weekend, he noted that “sometimes the heavens will rain and brides will run away” — a flowery way of saying, in effect, whatever will be will be. The stakes are in fact rather higher than his casual tone suggests. The stage has been set for a remarkable showdown that will test the resolve of the Communist party to stand aside as market forces, depending on its viewpoint, either work their magic or wreak their havoc." See also: Baoneng raises stake in Vanke with $223m sneak attack - FT.com July 6, 2016.

#Vanke Tweets

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ICANN Quarterly Stakeholder Call, Q4 FY2016, Presentation Slides

ICANN held its FY16 Q4 (ending June 30, 2016), Quarterly Stakeholder Call, on August 18, 2016. There were no surprises in the reports presented, which covered the IANA stewardship transition, global engagement activities, policy updates, and financial reports:

• President & CEO Overview- Göran Marby, President & CEO (10 min)
• Board Update - Steve Crocker, Chair, ICANN Board of Directors (5 min)
• Policy Update - Bart Boswinkel for David Olive, Sr. VP Policy Development Support; Adiel Akplogan, VP Technical Engagement (10 min)
• Management Update - David Conrad, Chief Technology Officer (15 min)
• Financial Update - Xavier Calvez, Chief Financial Officer (10 min)

The recording of the call, the presentation (embed below), and transcripts, are (or will be) posted on the ICANN website.

Highlights from the presentation slides:

ICANN Q4 FY2016 Stakeholder Call Presentation (pdf)(slides), 18 August 2016 (embed below):


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News Review: ICANN, IANA, NTIA, Congress, the American People

Domain Mondo's review of the past week and look ahead to the coming week [pdf of this post here]: The IANA transition and ICANN accountability proposal is currently being assessed by the U.S. Department of Commerce's NTIA, while implementation work proceeds within ICANN and Cross-Community Working Groups.

"As NTIA embarks on its work, I want to reiterate what I have been saying throughout this entire process. This IANA transition is far too important to be rushed by any artificial deadline. Much work still remains, and if needed, NTIA should take the steps to extend the contract. It is more important to get this done right, than to simply get it done. Lastly, while we await the analysis of the proposal from NTIA, it is important to stress the important role that Congress plays during this process. The bipartisan work reflected in the DOTCOM Act maintains our oversight authority to ensure the requirements of a transition established by NTIA are met by the proposal." --Chairman Greg Walden, March 17, 2016, Opening Statement - Communications and Technology Subcommittee Hearing “Privatizing the Internet Assigned Number Authority” (emphasis added).

"... Unfortunately, much of the ICANN community has been acting in haste and urgency based on a belief that the transition will not occur if the process extends beyond the expiry of the Obama administration. In reality, this haste and the inevitable imprecision and pressure-induced compromises that result is probably the greatest threat to the transition. The best prospect for the transition being approved is if it is sound, complete, and addresses the concerns of NTIA and Congress. The NTIA has emphasized over and over again, the U.S. government “has not set any deadline for the transition.”... ICANN accountability and insulation from undue government influence is critically important to the future vitality, stability, and openness of the Internet. It is far better to get this process done right than it is to get it done on time."--Congress Should Reject ICANN Transition Proposal Unless Significant Changes Are Made | The Daily Signal (written by Brett Schaefer and Paul Rosenzweig (CCWG-Accountability participants) December 22, 2015, emphasis added). UPDATE March 20: see also ICANN and the IANA Transition -- Proceed With Caution - Lawfare (Rosenzweig) and Stop Obama’s Internet Giveaway - WSJ (Gordon Crovitz)

"The [multistakeholder] process is an ugly process ... the fact that everyone is dissatisfied with this [IANA Transition & ICANN Accountability] proposal is a testament to its success ... there is no one that is happy with everything in this proposal."-- Jonathan Zuck  (CCWG-Accountability participant), President, ACT, The App Association, speaking March 17, 2016, at ITIF

"The devil is in the details"-- Victoria Sheckler, Sr. V.P and Deputy General Counsel, RIAA, speaking March 17, 2016, at ITIF

"... no consensus was reached about the proper role of the Governmental Advisory Committee (GAC) ... it is key that any amendments to the ICANN bylaws be carefully crafted ... This may be the most critical time of the process..."-- J. Scott Evans, Trademark Director and Associate General Counsel at Adobe, writing in CircleID.com (emphasis added).

Congress held an introductory hearing on the IANA stewardship transition proposal (IANA transition + ICANN Accountability WS1) on Thursday. Witnesses were a select group of participants from the ICANN community in support of the Proposal. Issues raised included questions about timing for implementation--can this all be accomplished prior to September 30, 2016? The witnesses all testified "yes" even though in reality the Cross Community Working Groups have missed every deadline in this whole process thus far.

Work Stream 2 (WS2) issues such as jurisdiction, human rights, ICANN staff accountability, accountability of AC/SOs to the global internet community, and transparency of ICANN (corporate, management, staff, Board of Directors), were barely touched upon. Ranking member, California Congresswoman Eshoo, asked about “vulnerabilities” of the proposal, Illinois member of Congress Shimkus asked about who the IANA functions operator would be if  the community selected a provider other than ICANN (or its PTI), and Chairman Walden asked about transparency regarding ICANN’s dealings with foreign governments. There were no clear answers given by the witnesses to those questions, part of the problem being that the Proposal is still incomplete, not yet implemented, with many details yet to come ("the devil is in the details"), untested, unproven, and as I pointed out last week, critical and fundamental accountability issues were postponed to a later WS2 stage, to be completed after  the U.S. has given up all oversight. As I wrote last week:

"... there is always the possibility that Congress--both Democrats and Republicans--will realize it is in the best interests of not only the American people, but also the global internet community, to insist upon the completion and implementation and a subsequent evaluation of both Work Stream 1 (WS1) and Work Stream 2 (WS2) accountability mechanisms, and whether they are actually effective and working, and then decide whether ending U.S. oversight is appropriate and in the best interests of both the American people and the global internet community."

Why would Congress be concerned about the global internet community? Because the U.S. government is ceding its role as steward of the global internet to ICANN: "No government owns or controls the root level of the Internet. Nor does ICANN or any other single entity .... In effect, ICANN serves as a trustee of the Internet’s unique names and numbers in service to all Internet users." --source: Weinstein et al v Iran and ICANN - U.S. Amicus Curiae Brief (pdf).

Although NTIA said in its March, 2014, announcement, it was transitioning its stewardship role to the global multistakeholder community, in reality, this whole process has been about NTIA transitioning its stewardship role to ICANN, the California corporation. Note that sole control of the Internet root zone will soon be ICANN's alone--ICANN is currently drafting a new contract for Verisign, the current Root Zone Maintainer (RZM), that will allow ICANN to make changes in the future, including taking over that additional role itself. That is an unprecedented concentration of power that NTIA is proposing to give to ICANN, the California corporation, in perpetuity. Why shouldn't the operators of the ccTLDs (ccNSO), and gTLDs (Registries Stakeholder Group), as well as the Root Name Server Operators (there are 12 including Verisign and ICANN), the IETF and RIRs, select the Root Zone Maintainer (RZM)? What happens, if and when, the "community" decides to change the IANA functions operator (IFO) from ICANN (or its PTI), to a new third party, only to discover that ICANN, in its new future role as Root Zone Maintainer, is now blocking or overwriting the work of the new IFO? Note also that ICANN has been aggressively expanding the number of its L Root Server sites, which according to this map now total 143 globally, far exceeding the number of sites of any other Root Server Operator which range from only 1 (ISI "B") to 109 (Verisign "A"+"J"). Whether or not it is ICANN's intention (now or in the future) to not only replace Verisign as Root Zone Maintainer, but also become sole operator of the Internet's root servers, once this transition is completed, ICANN will have that capability, thanks to the Obama administration, the bureaucrats at NTIA, a complacent and compliant Congress, and this flawed IANA Transition process.

Recall that this whole process started with the NTIA announcement in March, 2014, which only covered U.S. oversight of the IANA functions via the IANA contract. At that time, ICANN directors and officers were confident that a proposal could be delivered within a year, obviating any need to extend the IANA contract beyond September 30, 2015. In the summer of 2014, at the insistence of the "ICANN community," ICANN accountability was added as a separate, but equal, component of the whole IANA transition process. Today, ICANN accountability issues are the sticking points in the whole process. In comparison, the elimination of the U.S. government role in the IANA functions is a piece of cake, after all, the IANA functions used to be run by just one person, Jon Postel (see this pdf, p.5), and, as testified this week before Congress, the IANA functions are clerical in nature, not "rocket science."

One thing is now clear, Larry Strickling, and indeed, all of NTIA and the U.S. Department of Commerce, were, apparently, clueless about the extensive problems the "ICANN community" had with ICANN--the California corporation, its directors, officers, and staff--which is somewhat hard to understand since NTIA had threatened to remove ICANN as the IANA functions operator in 2012:

The New York Times March 18, 2012: "A boardroom dispute over ethics has broken out at the organization that maintains the Internet address system after its most important supporter, the United States government, reproached the group for governance standards said to fall short of “requirements requested by the global community.”..."

Part of the systemic and continuing problems at ICANN is the failure of both ICANN, and the "ICANN community," to understand their respective roles and responsibilities. ICANN is not an example of a multistakeholder-run organization and never has been. ICANN is an example of a California non-profit corporation controlled by a Board of Directors that have legal fiduciary duties including the duty to act in the global public interest, albeit in an environment where various designated stakeholder groups have policy-making roles, and some of those groups have a right to elect some of the corporation's directors. This leads to tensions, e.g., when special interests, such as the domain name industry, dominate and control the GNSO and advocate for policies that may not be in the global public interest, or disagree with other Board decisions. While bringing the Advisory Committees, particularly ALAC and GAC, into the "empowered community" may improve ICANN, the CCWG-Accountability, unfortunately, completely neglected issues concerning selection and qualification of ICANN Directors, other than removal.  This is tragic because so many of the problems at ICANN stem from a Board of Directors whose members appear to be passive, or lacking in an understanding of their important and vital legal role within ICANN's corporate governance structure, or their fiduciary duty to the global internet community. In particular, the failure of the ICANN Board of Directors to hold ICANN officers and staff accountable, has been striking. Just one example (of many): Why would any competent ICANN director allow an ICANN President to spend his, and ICANN staff time, and hundreds of thousands of dollars in ICANN funds, to establish and bankroll organization(s) outside the scope of ICANN's mission? For more see: ICANN President & CEO Fadi Chehade's Last Letter to Dilma Rousseff.

In any event, that is where we are now, more to come. See below the tentative timeline going forward (source: from the prepared testimony at this week's Congressional hearing):

• March 11 – June 11: NTIA assesses transition plan
• April 15: Draft revisions to ICANN bylaws released
• April 15 – May 15: Public Comment on ICANN bylaw revisions
• Mid – April: Root Zone testing begins
• April – May: Public review period on the RZM Contract (ICANN & Verisign)
• May 31: ICANN Board approves draft bylaw revisions
• June 15: NTIA submits plan to Congress for review
• June 16: Congressional review begins
• August – September New agreements are executed:
o Relationship agreements for the IANA including establishment of the PTI
o New RZM Contract
• October 1 Transition complete

Week ahead: Subject to future editorial changes, coming up on Domain Mondo:

• Fintech Startup, Investment App, Millennials
• Mobile Connectivity, Internet of Things
• Massive Revaluation: Tech Valuations
• Digital Currency, Blockchain Technology

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

1. News Review [March 13]: ICANN, IANA Transition Plan, NTIA, and U.S. Congress
2. U.S. House Subcommittee, IANA Transition Hearing, March 17th Video
3. ICANN President & CEO Fadi Chehade's Last Letter to Dilma Rousseff
4. Brazil Insulted by ICANN President & CEO Fadi Chehade Farewell Letter
5. WIPO: Domain Cybersquatting Cases Up in 2015, Driven by New gTLDs

Final Note: Don't miss Domain Mondo's post yesterday: NTIA's Larry Strickling Et Al: Internet Governance in a Post-American World (video)

Have a great week!

-- John Poole, Editor, Domain Mondo

UPDATE March 29: News Review: France Blasts IANA Proposal, Berkman to Assess ICANN | DomainMondo.com (March 27, 2016)

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DISCLAIMER

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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DISCLAIMER

Former GNSO Chair Jonathan Robinson Interview from ICANN54 (video)

"

An ICANN interview of Jonathan Robinson at ICANN 54 in Dublin. Robinson is now former Chair of ICANN's GNSO Council--note: GNSO failed to elect a Chair to replace Robinson at ICANN 54, so the GNSO's Vice Chairs are presently doing the Chair's duties--

No candidate achieved threshold for GNSO Council Chair - new election will take place no sooner than 30 days from today #ICANN #ICANN54

— GNSO (@ICANN_GNSO) October 21, 2015

Transcript of video above:
I'm here at the ICANN 54 meeting in Dublin with Jonathan Robinson the Chair of the GNSO Council. Jonathan ... your time will come to an end in Dublin, what are you thoughts of the GNSO and the state its in at the moment? I think we're in a good state in many ways. I mean we we've done a lot of work to make sure that things operate smoothly and that we work in an effective way and that that goes through many different layers, that's in terms of the personal relationships with, between the councillors through to our understanding of each other's constituencies and stakeholder groups, knowledge of processes and procedures, effective working with staff, so feels to me that we're in pretty good shape and I feel proud to be handing over the chair of a critical organ in the ICANN infrastructure to a successor Chair, so I think we're in good shape. Over the past three years changes have taken place ... I think the overarching theme we tried to put in place at three years ago was to look at a process of continuous improvement and in doing so we looked at a number of different areas it was was in terms of the underlying processes what we with within the operating procedures of the way in which the council manages the policy, how we could do any of those things more efficiently and more effectively. For example when we now do the preparation of an issue report with a draft charter in there that the council is not obliged to accept that has the opportunity to accept if the council accepts that we end up with a more efficient start to the PDP process ...  we've concentrated on a number of different areas we concentrate on where we can improve those processes and we can get greater throughput. We've concentrated on how we might best rely on the staff that support the council and staff were able to take on significant amount of work provided we trust and had an effective working relationship with the staff . We need to have good interpersonal relationships between those Councillors because we're often dealing with quite contentious matters and so one of the things we've done is concentrate on making sure when we know and understand one another from both a constituency and stakeholder group level. We try to understand the way in which the different groups work, in which they come to decisions in which in which they empower the councillors to work, but also we spent some time out of council meetings getting to know one another in making sure we know and understand each other as individuals. What are your thoughts for the incoming Chair? I feel like I'm handing over something in good shape, but that doesn't mean there isn't lots of work to be done. And I think one of the one of the key areas that might help will be to start to think of the work of the Council as being managed and handled by not only the Chair alone, but the Vice Chairs and a competent policy staff. So I think the critical thing to do, because one of the key challenges is dealing with a high and increasing volume of work is to pull together with the Vice Chairs and support staff and see that as the team through which that increased throughput is generated. Thank you very much for your time and good luck for the future. Thank you very much.

GNSO - Generic Names Supporting Organization: http://gnso.icann.org/en/
GNSO Wiki: https://community.icann.org/category/gnso
On Twitter: @ICANN_GNSO

About the GNSO | Generic Names Supporting Organization: "The Generic Names Supporting Organization fashions (and over time, recommends changes to) policies for generic Top-Level Domains (e.g., .com, .org, .biz). The GNSO strives to keep gTLDs operating in a fair, orderly fashion across one global Internet, while promoting innovation and competition. Sample GNSO issues: When you register a domain name, what services must the registrar provide? If you forget to renew your domain name, and it expires, can you get it back? What happens if someone registers a domain name that is confusingly similar to yours? Resources posted here will help you learn more about the GNSO and its policy development process."

The GNSO is comprised of Stakeholder Groups--"constituency" is a technical term referring to a group of Internet users united around a particular common interest or perspective, formally recognized by the GNSO Council.

• Commercial Stakeholder Group
• Commercial Business Users
• Intellectual Property
• Internet Service Providers
• Non-Commercial Stakeholder Group
• Non-Commercial Users
• Not-for-Profit Operational Concerns

• Registrars Stakeholder Group
• Registries Stakeholder Group

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DISCLAIMER

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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DISCLAIMER

ICANN Q4 FY15 Stakeholder Call August 20, Registration Deadline

ICANN has announced its FY15 Q4 Stakeholder Call, which will take place on 20 August at 14:00 UTC - time converter - 10:00am ET (US). The call will cover how ICANN has progressed against its strategic and operating plans for the Quarter ending 30 June 2015 and will cover some of the information from the latest KPI Beta Dashboard, anticipated to launch around the same time.

Register to attend the call no later than 16:00 UTC, 12 noon ET (US), August 19th, at: http://goo.gl/forms/4T76Zn1ulT and to receive joining instructions.

If you are unable to access the form (at the registration link above), email ICANN at icann.communications@icann.org to register--include your full name and email address where to send joining instructions.

The call is open for all to attend, including press, and there will be ample time for Questions & Answers (Q&A). A recording of the call will also be available online on the ICANN website here.

These calls were set up to enhance ICANN's accountability and transparency efforts by making it easy to follow ICANN's progress toward fulfilling its mission of keeping the Internet secure, stable and interoperable.

Agenda

• President's Overview (10 mins) - Fadi Chehadé, ICANN President and CEO
• Policy Update (10 mins) – David Olive, VP Policy Development Support and Adiel Akplogan, VP Technical Engagement
• Management Update (15 mins) – David Conrad, CTO
• Financial Update (10 mins) – Xavier Calvez, CFO
• Q&A (30 mins)

More information:

Visit ICANN's Quarterly Reports page 24 hours before the call to pre-read the presentation. You may also find other useful recourses and background information there, as well as archived transcripts and recordings of all previous Quarterly Stakeholder Calls. A recording will also be made available after the call on that page.

(source: ICANN.org)

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