Russian Cyrillic TLD Launch Tainted By Scandal

The recent launch of Russia’s Cyrillic top level domain, where over 600,000 domain names have been registered in less than three weeks since its launch, has been touched by scandal. According to the registry, tens of thousands of domain names have been registered by the biggest registrar in .РФ, RU-CENTER, allegedly with the aim of auctioning them off at higher prices among its clients at a later date. The auctioned domain names have now been blocked until their rightful holders have been determined, the Russian registry the Coordination Center for TLD RU, the registry for .RU and .РФ (.RF), has said.But the scandal is denied by RU-CENTER, who says they have acted within global best practice by auctioning off the domain names in demand. And it becomes more complicated with allegations of collusion between the registry’s website designer, CETIS, and a prominent registrar REG.RU, who are affiliated.The auctions came about following the RU-CENTER rules where when there was more than one request for a domain name, an auction would take place with the domain name going to the highest bidder. This is what was to happen with around 24,700 domain names that were registered through RU-CENTER. During the auctions, approximately 200 domains were withdrawn on the basis of item 4.1.3., the Domains Preorder Registration Schedule in РФ TLD. Domain names withdrawn from the auction have been given to governmental and municipal authorities, trademark owners and other individuals.Auctions on the first day, 23 November, conducted by the registrar RU-CENTER, resulted in 1446 domains being sold with an average price of approximately $100. The most expensive domain was “лото.рф” (lotto.rf), sold for $1,000.However domain names auctioned were blocked by the .РФ registry late on the afternoon of 22 November with requirements to cancel all remaining auctions over allegations of cybersquatting and inflating the prices of domain names.The registry has ordered RU-CENTER, who put up 25,000 domains with several pre-orders on the auction, to return the domains to those who were the first to apply for the domains.RU-CENTER though claims that global best practice where the auctioning off of domain names in demand to its clients was followed, something the Coordination Center for TLD RU supported RU-CENTER, the registrar claims. To resolve the situation with the auctioned domains a special commission has been organised.But the general availability launch on 11 November was not so simple. The registry imposed a limit of 4,800 .РФ domain names per hour, which was fine for smaller registrars, but for larger ones such as RU-CENTER caused problems as they could in no way meet the demand of their clients. A way around this was for the largest registrars to take advantage of standard reseller agreements with smaller registrars so they could meet the requests from their clients. Using such agreements helped RU-CENTER to meet the requests of its clients, and also to registrar a larger than anticipated number of domain names. After several days of open registration the registrar was accused by the Russian anti-monopoly service in illegal collusion. Currently the investigation is in process.However there are other problems. It has been noticed that CETIS, the website designer for the registry, managed to register domain names such as Секс.рф (Sex.rf), quite possibly the most valuable .РФ domain name going by the recent record sale of sex.com, during the sunrise period. When this was noticed the sunrise period was temporarily suspended. It is alleged that CETIS obtained trademarks similar to keywords and then applied for the same domains. Formally everything was done correctly, so the company’s application was approved.CETIS has also registered other valuable domain names via REG.RU, one of the registrars in .РФ, who, further investigation shows, are affiliated with CETIS. And it becomes more complicated with allegations of collusion between the registry’s website designer, CETIS, and a prominent registrar REG.RU, who are affiliated.